Robert Kiyosaki is Wrong: My House IS an Asset & Carl’s NOT a Loser

Robert Kiyosaki is a world renowned  real estate investor and best selling author. Some of his most notable works include Rich Dad, Poor Dad and Cash Flow Quadrant.

Many of his teachings are great. In fact, his book  Cash Flow Quadrant was the basis for my post Passive Income: The Holy Grail of Financial Independence and Retiring Early.


Robert Kiyosaki is Wrong

‘Your home is not an asset’ is one of Kiyosaki’s most well known teachings. Well, I am here to tell you that’s wrong. Yes, Robert Kiyosaki is wrong. My house is an asset and your home can be too.

First, let’s discuss why Kiyosaki believes homes are not assets. He defines an asset as anything you acquire that puts money into your pocket.

Basically anything that you buy or own that PAYS you to own it. Dividend stocks, bonds and real estate are examples of assets.

Remember that assets provide money flowing in.

house hacking

Assets put money in your pockets. When you have lots of assets, you are swimming in money.

If something is not an asset then it’s a liability. Robert Kiyosaki defines liabilities as anything you own that takes money out of your pockets.

Think of cars, boats and houses. All of these items require upkeep and maintenance. The upkeep and maintenance requires time and money, which is money leaving your pocket.

Robert Kiyosaki is wrong

A liability takes hard earned money out of your pocket. It’s like throwing money out the window.

Liabilities cause money to flow out of your pocket.

She is right. Avoid liabilities and collect assets. This will help you build wealth.

Now that we clearly defined the terms ‘assets’ and ‘liabilities’ – let’s revisit Robert Kiyosaki’s belief that a home is not an asset.

For most people, their primary home takes money out of their pockets. Homeowners are on the hook for their mortgage every month. If that wasn’t enough, homeowners also pay for insurance.

Repairs and maintenance are unavoidable. Oh, and let us not forget home improvements. Homeowners love, love, LOVE to upgrade their home.

New granite counter tops? Sure.

Renovating the guest bathroom that no one actually uses? You bet.

Lastly, we all have that uncle. You know that greedy uncle…. Uncle Sam. He is the one who always has his hand in your pockets. Homeowners pay real estate taxes as well.

Robert Kiyosaki is wrong

Uncle Sam is greedy and wants your money.

Wow, when you look at a home like this…. Robert Kiyosaki might be on to something. That sounds like cash leaving your pocket every month.

No, let me rephrase that – that sounds like a shit ton of cash leaving your pocket every month.

If you would like to dive further into this debate, I would recommend  the ChooseFI podcast episode 47 – The Cult of Home ownership & Crushing Geoarbitrage – with Millennial Revolution. The episode discusses why homeownership is a BAD investment.

Hint: its because the average person’s home is a liability.

Listen to episode 47 here:

I would also recommend listening to episode 47R which is a detailed ’round-up’ of the episode by the podcast’s hosts. The round-up discusses how homeownership generally sucks as an investment but how real estate investing can be a great wealth creator.

House Hacking: Why My House IS an Asset

Now, let’s discus why Robert Kiyosaki is wrong.

I live in a house hack and have been house hacking for almost four years. Every month, I get PAID to live in my house as my roommates/tenants rents are almost double my mortgage payments. Even after repairs and expenses I am getting paid to live.

Question: Does this sound like an asset or a liability? Is the money flowing in or out of my pocket?

Answer: Asset. The money is flowing in.

Now, you may be asking yourself – What is a House Hack or House Hacking? – simply put:

House hack noun – an owner occupied property that keeps the owner’s cost of living low. This is achieved by renting out extra rooms or apartments. In some cases the owner makes a profit while living at the property.

House hacking verb – the act of living in a house hack to keep one’s cost of living low or getting paid to live while living in said house hack.

When you are house hacking, does your home sound like an asset or liability? It appears Robert Kiyosaki is wrong; my house puts money in my pocket. By his very own definition, my house is an asset.

I have found house hacking as the greatest way to generate wealth and income. In fact, house hacking has allowed me to go from a negative net worth to over $500k in four years.

Benefits of house hacking

Are you still not sold on house hacking? There are tons of benefits to house hacking. Hopefully the list below convinces you to buy a house hack.

Lower cost of living – house hacking you will reduce your cost of living. Housing expenses make up about a third of the average American’s budget. In higher cost of living cities Like San Francisco, New York, or Chicago, housing consumes 50% or more of the average monthly budget.

Why would you want to spend HALF of your money on a place to live?

Most house hacks reduce your cost of living. The best house hacks eliminate your housing expense and actually put money in your pocket every month.

My first property was a house hack. The home had 3 bedrooms and 2 bathrooms. I rented the two extra rooms out to friends. Their rents covered most of the mortgage and I paid a few hundred dollars a month to own a house.

This was a bargain as I was living in an expansive area (DC) where the average one bedroom apartment rents for about $2,000. The house provided a positive cash flow when I moved out and rented all the rooms.

My second property was also a house hack. This was the best kind of house hack. I eliminated my housing expense. The house rents for about double the mortgage. I get paid to live in the house. Life does not get much better than that.

Increased savings rate – living in a house hack will allow you to save more. Increasing your saving means you are able to save more of your paycheck every month (take home pay). The increased savings can (and should) be turned into increased investing. Savings rates are the biggest factor in determining how long you will need to work.

Interested in learning more about savings rate? Checkout:

Joel from FI 180 – How Long Will You Work?

Miss Mazuma’s – Why My Savings Rate is so High

J Savvy’s – Your Saving Rate is More Important Than Your Return Rate

Grant from Millennial Money’s – How I saved $1.25 Million in 5 Years


Others pay down your debt – What is better than getting paid to own something? How about buying something with someone else’s money. That’s what happens when you get a loan for a house. You are buying the house with the banks money.

And you know what’s better than that? Having your renters pay back the bank AND pay you every month. House hacking provides you with monthly income and your renters pay down your debt. Over time, your renters will pay down and eventually pay off your mortgage. If that is not winning, I am not sure what is.

Tax benefits – home ownership or owning real estate in general provides several tax benefits. The interest payments for the mortgage provide a dollar for dollar tax deduction. Real estate also allows you to claim depreciation of the building (read another fancy word for a tax break).

Tax benefits should never be the reason you buy an investment. However, they can be a nice bonus to an already kick-ass investment. Consult your tax advisor for more details.

Why are you not house hacking? Are you still not sold yet?

Why you should house hack

House hacking can be achieved by most anyone and I highly recommend everyone consider house hacking.

If you are younger, single or without kids house hacking provides a great way to start creating wealth at an early age. House hacking is especially great for recent college graduates; you are already use to living with roommates. Lets keep the party going!

House hacking is not just for the young, single and childless crowd. Middle age or older people can house hack. The same holds true for married people or parents. However, house hacking may be less appealing when you have a crying baby on your hands.

House Hacking Course

We are developing a House Hacking 101 course. The course will educate you on how to buy your own house hack. You will learn how to analyze neighborhoods and properties. We will discuss the various ways to house hack, like a house hacking duplex. By the end of the course you will have all the tools necessary to create your own path to financial independence.

If you are interested in the course, please complete the form below. 


If you cannot wait for the course you can also listen to a house hacking podcast interview I had on the FIRE Drill Podcast.

Carl’s NOT a Loser

Oh, and most importantly. Carl from 1500 days is NOT a loser. This is another false teaching of Kiyosaki.

In fact, there is nothing ‘loser’ like about retiring at 43 and enjoying your life. That’s right, he retired earlier this year in his 40s. So, yeah, Robert Kiyosaki is wrong yet again.

Most people would find retiring so early cool. In fact, many would be jealous. Carl is living the dream. Oh, and he also invested in real estate 😉 

Congrats Carl.

18 thoughts on “Robert Kiyosaki is Wrong: My House IS an Asset & Carl’s NOT a Loser

  1. Yeah, I appreciate Kiyosaki for helping people rethink their relationships with money, but so much of his advice is just ridiculous. I couldn’t even finish Rich Dad, Poor Dad because I got so fed up with it. I think Your Money or Your Life is a much better intro book to give people.

    As for houses being an asset or not, I think you break it down well. It really has a lot more to do with your individual situation and your intentions for how you’re buying and using the house. House hacking is clearly a great option if done right.

      • It may not blow your mind, as someone well along the path towards FI, but I think it really frames the meaning of money well, in a way that’s fundamentally different from our culture’s normal approach. I see it as a guide to FI from a time before our blogger community was even a thing.

  2. Thanks for the shout out, friend! Everyone knows I have a sugar daddy. This flight attendant thing is just my cover…

    Books are great to give you ideas but they contradict so much that you need to be able to make your own mind up about what is right or wrong for YOUR situation. I learned that houses are NOT an asset when the market is crashing. 😉 However, it can be a great wealth builder if you manage your leverage properly.

  3. Thanks for posting this blog. I’m absolutely confused by people who continue the narrative that owning a home is a terrible investment and it’s clear, to me anyway, that they don’t know about FIRE or FI. I’ve written, in a reply to one of your previous posts, that I own a couple of homes and it’s quite the opposite of being a liability.

    My 3-bed, 1-bath home in Ames, Iowa is doing great after just two years and the renter is paying my mortgage every month. Other than the occasional low-cost and tax-deductible maintenance issue, I’m actually making money on the home.

    My 5-bed, 2 and 1/2 bath home in Falls Church, VA is a house-hacking dream come true. My wife and I live in the main floor and our “guests” live in the basement. Because of house-hacking, we only play 1/2 the mortgage and have great people sharing our home with us.

    Again, thanks for the great blog post.

  4. I totally agree. House-hacking is one of the best ways to get started in real estate investing. And if you don’t ever want to share your residence with roommates or tenants, consider the Live-In Flip House-Hack.: basically, buy a rehab property as your principal residence, move in, rehab, increase value, then move out, sell at a profit or rent out for income. Yes, there is some work and inconvenience involved, but there usually is in making money. Andy, for the record, I also hate the way Dave Ramsey scares the hell out of people about using mortgage debt. His advice is on that front is adverse to wealth creation for savvy investors. And don’t even get me started on Suze Orman…hahah

  5. Carl is definitely not a loser…….. but I have a sticker that says he’s a dick! (also not true. Super nice guy!) Great article as usual, Drew!

    • I dunno Gwen. If it’s on a sticker, it MUST be true. Fun fact, Coach Carson had one of those on his back @ FiNCon.

      Thanks for reading 🙂

  6. Great post, you can choose to make your house an asset or a liability. It’s not black and white and people have reasons for doing both. There are many journeys and people should dig deeper when someone declares an absolute-type statement.

  7. While we don’t own real estate. Nor are interested in it… And we just had a room mate, don’t know that we’re going Dow. That path again. You have a point. Everything can be made how you spin it.

    You need to use your head and think. Figure out what works for you and ignore the noise.

    And yes, that guy is wrong … Carl is not a loser.

  8. I mean, Kiyosaki started my whole FIRE journey with his books/cashflow game. But yeah, by the definition of asset and liability, you are living in an asset. Everyone’s situation is different, like you said kids and whatnot, but if you’re willing & able to live with roommates/have a multiplex then rock on!

  9. It’s funny – my wife isn’t really big on personal finance, real estate, or anything, but she was an accidental house hacker from day 1. She bought a house in 2010 when she started dental school, then rented out the other rooms to grad students she found on Craigslist. They paid enough that it fully covered her mortgage, and utility costs were lower because they split all utilities 4 ways.

    Today, we’re still house hacking, although on a much smaller scale – just renting out the spare room in our house on Airbnb. It brings in significant income and gives us a lot of flexibility in terms of having the house for ourselves when we want it.

  10. Thanks for the mention, GoF! Interesting take on the Robert K argent that a house is not an asset. I would say that “house hacking” does give you cash flow and that’s great, but let’s not forget that an good investment is also diversified
    House hacking may be a way to help you pay off your mortgage but it does come with it’s pitfalls, the biggest one being its lack of diversification. This is why, compared to real-estate investing, where you are buying rental properties in different locations to hedge your risk, if you put all your money into one house, you are not diversified. The same can be said of buying one stock that pays dividends. You are investing in the sense that it gives you cashflow but it’s not diversified. Sure, you could get lucky and do better than indexing or real-estate investing, but if the stock tanks or the company goes belly up, you’re screwed. Ditto with house hacking. When everything’s going well, you don’t care about diversification. But all it takes is one bad tenant to completely destroy your investment. Also, if the economic situation of that area turns bad, you’re again caught with your pants down.

    So, I would argue it’s an investment in a sense, but not a good one in terms of diversification.

    Good article! Always good to challenge accepted beliefs, just like Robert K did!

Leave a Reply