Rich Dad Poor Dad - Do you rent or own your primary residence?
For those of you who've read Rich Dad Poor Dad, I have a question. Author Robert Kiyosaki advises to own assets, not liabilities. He says that buying your own house is a liability, since cash leaves your pocket each month for the mortgage. Further, you're locking up your capital (down payment) which you could've invested used to buy an asset. His advice is that you should first acquire all the assets possible, and then when ready, you can buy your first primary residence house, using the money that came from your assets.
I fully agree with him on this, except I'm wondering if this applies to expensive/high-appreciating markets, such as LA or SF.
Let me explain. 5 years ago, you could've bought a house somewhere in the midwest for let's say 100k. If you instead spent those 5 years acquiring investments, and bought that house today, it would cost you 125k. While 25k seems like a lot, if you buy and hold the house for 15 years, it's really not all all that much in the long-term.
However, using the same scenario in the LA or SF market, could mean a HUGE opportunity lost to buy your house as prices are growing so fast. 5 years ago, a house that cost 380k today costs 500k.
Questions:
1. Do you think the advice given in Rich Dad Poor Dad mentioned above applies to high-appreciating markets?
2. Would you avoid buying a house (liability) and instead invest into assets if you live in LA or SF?