Your primary residence is a liability as long as you owe money on it. If you pay it off, I suppose you could say it is an asset with a low rate of return. However, owning it does save you rent money.
I think having a paid off property makes other investments much easier to achieve. You can use your property as collateral, and not having to pay rent reduces the amount of money that you would bleed if your income were to drop, say if you wanted to start a business. Renting for the rest of your life makes no financial sense to me, even if it requires a 10 to 20 year investment. That is to say, for 10 to 20 years, you will pay more money than if you were renting.
Whoever believes this has *NO* idea what finance is. This is Kiyosaki's problem, he convinces everybody of the utterly wrong thing in life.
Everything you own is an asset, everything. If it can be used, if it has value, it is an asset. Your toothbrush is an asset.
Assets are funded by debt and equity. Thus, A = L + E.
As halik explained, a $500,000 house with $450,000 of debt then has $50,000 of equity. It is still a $500,000 *ASSET* but that is offset by a $450,000 LIABILITY.
While a house may only return inflation, plus some nominal amount, often times that return is higher than the interest rate you are paying on the debt, thus, your leverage (debt/liabilities) magnifies the equity return.
Some people talk about how much a house costs in maintenance, taxes...etc. Sure, it does have those costs associated with it. But so does every single asset you own. Your toothbrush has maintenance. Your stocks have taxes and brokerage fees. Your car has maintenance. Even a gold bar has storage fees, transaction fees, and taxes.
There isn't a single asset that doesn't have costs. Thus, under Kiyosaki's moronic rubric, all assets are really liabilities. Stupid, no?
Now a house may not yield as good of a return as stocks, but it has many positive attributes, many of them mentioned here, such as rental inflation, housing stability, having more "equity" in your asset and eventually having 100% equity, not having to be beholden to a landlord, having your own living space that can be customized to your tastes...etc.
Furthermore, *EVERY* one of those "liabilities" that Kiyosaki carps on about is built into the cost of renting an apartment, PLUS a profit for the landlord. After all, they don't rent to you for no profit, do they?
This is what is moronic about Kiyosaki, he doesn't even look at things correctly. He says something and mindless followers spew the same cud all over the internet and praise him and make him rich while they wallow in the same putrid shit that they have been their whole lives. He laughs the whole way to the bank.