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Where to start with this one - lets start with a few of the folks I’ve seen post on it already - Flexo, LazyMan, Jim, Matthew, Smith Financial Place, MyMoneyBlog, Associated Content, FreeMoneyFinance, Canadian Capitalist, MoneyMonk, Crazy Engineer, Yahoo!, Watson Inc, Project Senso, Google Forum, just to name a few.

Let me precursor this with the fact that I bought my first condo in 2005 for 112k and sold it 1 year later for 175k (Yea, yea, I paid capital gains, but still made 40k in real cash and NEEDED to get out of the small house with the second kid on the way).  Any way you slice that it is an increase in the asset column. 

I too read R. Kiyosaki’s book and was excited at first in digging in to it, but towards the end it found myself curious as to where the meat of the book went. Anyway, yea, he mentions it is a liability, and I agree with him 50% of the way. My belief is that the house itself is an asset, and the mortgage a liability. Could I put that $3200 per month towards something else giving me more return on my investment? Probably. But how do you determine the value?

It’s a real downer when I look up at my Progress Bar in the upper right corner of my page showing I still have a hefty wall to climb to reach the 1MIL mark. I am only at 5.29% today because I have incorporated my home mortgage in on the balance sheet as a liability, because, technically the MORTGAGE is a liability in my opinion. However, how do I compensate for the asset part of it? How do I include the VALUE of the house? Well, here is my new hypothesis to solving the debate:
1. I’m going to log in to all the major players in the “house value” webrings:
a. Zillow.com
b. Yahoo.com
c. MoveUp.com
d. RealEstateABC.com
e. Eppraisal.com
f. Cyberhomes.com
g. Reply.com

2. Then I’m going to take the average of each of them, throwing out the highest and lowest prices to get a better average.
3. Next I’ll take that number and subtract the mortgage payment that I still owe, showing my appreciation.
4. I can then take the total mortgage payments I’ve made that year and assess a value to what I’m getting for my 40k per year I’ve put INTO the house.
5. Rebalance that number into my Net worth statement -

It’ll certainly make the progress bar look a bit healthier.  I’ve been thinking of how I could leverage the MORTGAGE vs. the HOUSE.  They both should be accounted for, but how.  Everyone does it differently and this is going to be my solution to the problem.  Sound like a plan? Feasible? We’ll see!

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