I see many people taking huge online loans to buy a personal home to live in and I wonder - is that home an asset for them or a liability? This article looks at the difference and it guides you towards making the right decision that will be beneficial to your financial future.
I know you have heard lots of financial planners saying that a home is an asset and so you should take a loan to buy one, but is that really the truth? What really is an asset? Like the great writer and financial expert, Robert Kiyosaki, has said many times in his books - an asset is something that puts money in your pocket while a liability takes money out of your pocket. More so, to him - when you stop working an asset feeds you while a liability "eats" you!
So, before you take out that huge loan online to buy that big house, you should ask yourself whether the house will put money in your pocket or take money out of your pocket. If the house is going to be rented, and it would be giving you stable and profitable cash flow every month, which will be more than the monthly expenses, then it's an asset.
But if it's going to be taking more money than necessary out of your pocket every month, it's a liability, even if you think it's going to be more valuable in the future. This is because no one can really guarantee that the house will go up in value tomorrow, especially with the financial uncertainty faced all over the world today.
As simple as this tip is, it can save you from making real financial blunders when taking out online home loans to buy that dream house of yours! Instead, if you must take a loan to buy a house, it should be putting money in your pocket!
Autor: Carol Stone
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Added: November 14, 2009
Source: http://ezinearticles.com/
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