:

1. Loss of time, during which other assets could have grown in value.

2. Loss of additional capital, which could have been invested instead of paying for high-maintenance expenses related directly to the home.

3. Loss of education. Too often, people count their house, savings and retirement plan as all they have in their asset column. Because they have no money to invest, they simply do not invest. This costs them investment experience. Most never become what the investment world calls a "sophisticated investor." And the best investments are usually first sold to "sophisticated investors," who then turn around and sell them to the people playing it safe. I am not saying don't buy a house. I am saying, understand the difference between an asset and a liability. When I want a bigger house, I first buy assets that will generate the cash flow to pay for the house.

My educated dad's personal financial statement best demonstrates the life of someone in the rat race. His expenses seem to always keep up with his income, never allowing him to invest in assets. As a result, his liabilities, such as his mortgage and credit card debts are larger than his assets. The following picture is worth a thousand words:

Educated Dad's Financial Statement

Income=Expense

Asset < Liability

My rich dad's personal financial statement, on the other hand, reflects the results of a life dedicated to investing and minimizin