Your Mortgage Is An Asset

The greatest lie ever told about a half-truth in finance? Your low-interest rate mortgage IS valuable, but not an asset.

This is going to be a fiery one. 🔥 You’ve heard that your home is an asset. That’s true. The physical property is definitely an asset. But brace yourself, some folks on Twitter/X are saying that your mortgage is ALSO an asset. Not true.

Specifically if you have a low-interest mortgage while interest rates soar, that’s what they say. But it's time to separate financial fact from fiction. 💣

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Debunking the Asset Myth 📉

This little confusion often arises from a misunderstanding of accounting principles. In the world of finance, assets and liabilities are distinctly different creatures.

An asset is “money in your pocket”, while a liability is “money that will come out” of your pocket. At least for the lay person.

Your mortgage? It's a classic example of a financial liability, here's why. 📚 Money comes out of your pocket because it exists. Classic liability.