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For years, buying a home has been treated like a rite of passage—a sign you’ve made it. Kevin O’Leary says it’s more like walking into a financial trap with a granite countertop.
In a December YouTube video, the “Shark Tank” investor took a wrecking ball to one of the most deeply held beliefs about wealth: that your house is your greatest asset.
“We’ve been fed this lie for generations that your home is your biggest asset. Wrong,” O’Leary said. “Your home is your biggest liability.”
And he doesn’t mean in theory—he means in monthly payments. “An asset puts money in your pocket. A liability takes money out,” he explained. “Your house, the one you live in, takes money out of your pocket every single month.” He listed it all: mortgage, property taxes, insurance, maintenance, utilities. “It’s a money pit. And the bigger the house, the bigger the pit.”
O’Leary then addressed a belief that’s shaped how millions justify overspending on housing: the idea that real estate always appreciates. Buy a home, wait a few years, and sell it for more than you paid. But he quickly dismantled that too.
“Real estate always goes up in value, does it?” he asked. “Ask the people who bought in 2007 and watched their home values collapse.”
It was a pointed reference to the housing crash that caught an entire generation off guard. In the years leading up to 2008, many first-time buyers—especially Gen Xers in their 30s and early Millennials—were encouraged to stretch their budgets in pursuit of homeownership.
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When the market turned, they were left holding mortgages worth more than their homes. “Ask the people who are underwater on their mortgages right now,” O’Leary said.
Even when property values do rise, he argued, you can’t actually use that equity unless you sell your home—or borrow against it. “Which is just more debt.”
“And let me tell you something about debt,” he added. “Debt is a tool that makes rich people richer and poor people poorer.”
O’Leary took aim at the way banks fuel the problem. “The bank approves them for $500,000. So they buy a $500,000 house. That’s insane,” he said. “The bank doesn’t care about your financial future. The bank wants you in as much debt as possible because that’s how they make money.”
He laid out the real cost: a $500,000 home with a 30-year mortgage might end up costing you over $800,000 once you add up all the interest. “You’re paying $300,000 extra just for the privilege of borrowing money,” he said. “That’s not building wealth. That’s transferring wealth from your pocket to the bank’s pocket.”
His advice? Flip the script. “Buy half the house the bank says you can afford.” If you’re approved for $500,000, aim for $250,000. “Buy the house you need, not the house you want,” he said. “Then take all that extra money you’re saving every month… and invest it.”
“Put it in the stock market. Build a portfolio. Buy dividend-paying stocks. Let that money work for you instead of working for the bank.”
And for those who still believe in real estate but don’t want to be buried under a roof they can’t afford, there’s another route. Arrived Homes offers fractional investments in residential real estate from as little as $100. No mortgage, no lawn to mow—just exposure to city-based housing markets through slices of home equity. It’s real estate on your terms: an asset, not a liability.
O’Leary wrapped it up with a nod to Warren Buffett, who still lives in the modest home he bought for $31,000 decades ago. “Because he understands that every dollar spent on an unnecessarily big house is a dollar that can’t compound in his investment portfolio.”
And that’s O’Leary’s bottom line. Your home doesn’t define your wealth. The smartest financial move might be to live smaller, invest earlier, and stop confusing square footage with success.
Real estate is a great way to diversify your portfolio and earn high returns, but it can also be a big hassle. Luckily, there are other ways to tap into the power of real estate without owning property. Arrived Home’s Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100.
This article Kevin O'Leary Insists Your Home Isn't an Asset — Real Estate Always Goes Up? 'Ask the People Who Bought in 2007 and Watched Their Values Collapse' originally appeared on Benzinga.com
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