Hi Dave,

Thanks for the comment!

I’d say if Robert isn’t considering it an asset he does not consider it an investment either. I’d actually consider what Robert describes as an asset as an investment. But a small quibble. I like the idea of not including any non income producing assets as part of your wealth.

Your example of using home equity to buy a real investment is good. But two things, to acquire the $80,000 property you need to take out an $80,000 loan against your house. On day one you technically have zero equity in the second property (you borrowed every penny against your House go get it)

If you had $80,000 in stocks sitting around you could sell those and buy the income property. No debt required.

Economic policy wonk by day. Personal finance writer by night. I write about investing, debt, and all things related to money. Editor of Making of a Millionaire

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