Opher, yes, I’m using a more practical definition of assets and liabilities rather than the strict accounting definition. Assets make you money and liabilities drain your money. Owning a home and renting are both expenses. Some choose to rent and invest the remainder of the down payment. If they are good at investing they can come out ahead.

Many people think buying a big personal home and nice cars is how to accumulate assets, so they don’t progress much in life. This is the fallacy of the American middle-class dream, so many people are stuck on a treadmill of debt and going nowhere, despite having good salaries.

Real assets generate cash flow and increase in value over time like investment real estate (where someone else pays the bills), stocks, owning a business, etc. The point is that your own home (owned or rented) is not a good investment.

In the end, it is by improving our financial education that we can start to understand these things and actually start to build wealth.