MoneyLab

"Is your house an asset or a liability?" is a question that can spark endless debate. Some argue that the answer depends on the situation and perspective, while others firmly believe that the definition is not subjective and wonder why there is room for debate. To properly address the question, we first need to know the difference between an asset and a liability. What is an asset?   According to Investopedia, an asset "is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit." Asset can be in the form of physical property such as a piece of land, inventory or equipment, and they typically depreciate over time due to wear and tear or expiration of legal rights. It can also be intangible such as patent, trademark, brand name, etc. Another class of asset is financial asset, which include stocks, bonds and cash. What is a liability? Liability is "something a person o...

  Investing in property is one of the most popular choice for many people in Singapore, with the promise of high returns and stable investment being a major draw. The staunch belief that property is a 'sure-win' has been ingrained into many, especially for the older generation who witnessed the phenomenal rise in property value as Singapore transited from a third world to first. The recency bias due to the surge in housing prices over the past 2 years also reinforced this view. However, the reality of the property investment today may not be as rosy as portrayed by the media and real estate industry. Opaque costs of property investment Whenever I hear people share about their property gains, they only focus on two numbers: purchase price and selling price. However, when investing in property, there are many hidden costs to consider, including: Stamp Duty: A tax paid when purchasing a property, based on the purchase price or market value of the property, whichever is higher. Leg...