Confusing Working Assets With Personal Use Assets

I am having a hard time shifting my mindset about our house.  I know I’m not alone.  I have lived in Seattle for 21 years, and in all that time the housing market (until 2 years ago) has been nothing short of insane.

It seems weird to think about it now, but people used to buy houses with no inspection.  It was common to make an offer for more than it was worth, and you likely had competition for the house.

The new reality is so painful, I am definitely in denial.


Because, as a result of that experience, I have to rehabilitate from seeing a house as more working asset than personal use asset.

It’s easier for me to tell you that that is very likely how you need to see your own house than for me to admit that is how I honestly truly view my own house.

Allow me to step back for a minute to explain.

Put simply, a working asset is an asset that works for you: Appreciating assets such as securities, commodities, income producing real estate.

A personal use asset is one that you work for:  Depreciating assets such as vehicles, clothing, furniture, jewelry, boats, collectibles.

A primary residence has tended to be a hybrid of the 2: A personal use asset, but one that was appreciating in value.

True, some of the assets I just listed in depreciating assets could be appreciating, but those are the exception, since  people tend to overinflate their fair market value (no one wants to admit that the painting or jewelry they spent so much money on and was told would appreciate with time is not).

I take some consolation in the fact that we have well over 70% equity in our house based off recent appraisal (we are in the process of refinancing to a lower fixed rate…small recompense).

But…..still….it’s hard to write off the Balance Sheet the appreciation that has been wiped out in the last couple of years.

 (Disclosure: I am an Hourly Fee-Only Financial Planner: Here’s my website)