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0 pointsmrcode0072y ago0 comments

An asset produces cash flow. Primary residence can only be a speculation device because for a majority of people it does not produce a cash flow. Instead it produces expenses.

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6 comments · 1 top-level

s1artibartfast2y ago· 5 in thread

nonsense. A primary residence obviously provides utility in the form of shelter for the owner.

No assets directly produce cashflow, whether they are factories, tractors, or tools.

mrcode007OP2y ago

Utility is not an asset. When you grow up with your parents they provide shelter, you get a utility of it. No asset for you. Majority of assets produce cash flow (e.g. licensing software - IP asset, renting real estate to someone - you get monthly rent, bond - coupon payments, stock - you get dividends, etc)

throwaway1105q2y ago

Assets don't have to produce any cash flow. Most popularly, gold. Stocks that provide stable dividends are also less and less usual.

Assets can just hold their real value compared to inflation and that's useful enough - even losing value slower than inflation is still good.

s1artibartfast2y ago

I think you have a very skewed perspective of assets, let alone physical assets (which housing is).

A store that owns its own real estate isnt generating cashflow with it. This is the equivalent to a Homeowner living in a home.

If you are deadset on using intangible assets, it is the same a company holding a drug patent and producing the drug. Cashflow comes from sales, not the patent.

an investment property with a renter in it produces rental income for the landlord, and cash is currently giving me 5% returns for just sitting in the bank.

s1artibartfast2y ago

I guess I wasnt very clear. I meant that generating income isnt the definition of an asset.

A house is an asset if you have a renter in it or not. It can also be utilized to generate income.

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