All too often, a house only serves as a vehicle for incurring a home-equity loan to pay for mounting expenses. In summary, the end result in making a decision to own a house that is too expensive in lieu of starting an invest- ment portfolio early on impacts an individual in at least the followinglhree ways: 1. Loss of time, during which other assets could have grown in value. 2. Loss of additional capital, which could have been in- vested instead of paying for high-maintenance ex- penses 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 in- vestment experience. Most never become what the investment world calls a "sophisticated investor." And the best investments are usually first sold to "sophis- ticated 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, under- stand 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 ex- penses seem to always keep up with his income, never al- lowing 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: My rich dad's personal financial statement, on the other hand, reflects the results of a life dedicated to investing and minimizing liabilities: A review of my rich dad's financial statement is why the rich get richer. The asset column generates more than enough income to cover expenses, with the balance rein- vested into the asset column. The asset column continues to grow and, therefore, the income it produces grows with it. The middle class finds itself in a constant state of finan- cial struggle. Their primary income is through wages, and as their wages increase, so do their taxes. Their expenses tend to increase in equal increments as their wages in- crease; hence the phrase "the rat race." They treat their home as their primary asset, instead of investing in income- producing assets. This pattern of treating your home as an investment and the philosophy that a pay raise means you can buy a larger home or spend more is the foundation of todav's_debt-rid- den society. This process of increased spending throws families into greater debt and into more financial uncer- tainty, even though they may be advancing in their jobs and receiving pay raises on a regular basis. This is high-risk living caused by weak financial education. The massive loss of jobs in the 1990s-the downsizing of businesses-has brought to light how shaky the middle class really is financially.