It should, if you made any down payment on the house and your home hasn’t declined in value.

That down payment – whether it was from funds out of your own pocket or money secured elsewhere – represents equity in your house. Your equity in a home is defined as the market value of the property minus any mortgages or liens on the home.

So if you just bought a house worth $350,000, and you had a 10% down payment, your current mortgage balance is $315,000, which means you have $35,000 in equity in your house.

Knowing how to skillfully manage that equity – and properly maintain both your home and your finances so that you avoid financial loss or foreclosure – is part of the job of being a successful homeowner.

Why Your Home Is an “Asset” and Not a “Liability”

First, let’s take a look at why you should consider your home an asset – because not everyone views your primary residence as an asset. Some people say a home that you occupy isn’t really an asset because a home is constantly taking money out of your pocket with mortgage payments, insurance, taxes, and so forth.

For this reason, you might hear various assertions that a home is not really an asset, but a liability.

I agree with the obvious conclusion that owning a home entails ongoing out-of-pocket expenses. However, as I explain in my book, Your First Home, I don’t concur with the notion that just because something costs money, it doesn’t qualify as an asset.

Using that line of thinking, one could argue that the $250 sitting in your checking account isn’t an asset since having a low balance means your bank is going to charge you $10 or $20 a month for that account, or nickel-and-dime-you to death with service charges. (See my tips on how to avoid rising bank fees).

Although we know that getting nickel-and-dimed happens all too often, has anyone ever told you that your hard-earned cashed sitting in the bank is a “liability” instead of an “asset” simply because your checking account actually costs you money each month. That would be ludicrous, right?

It’s an Asset if You Can Sell It for Cash

Your home is, indeed, an asset for several reasons. First of all, you can sell the house whenever you choose and put cash in your pocket at closing. (Obviously this assumes that you sell your house for more than you paid for it. Admittedly, that’s not always possible consider about 25% of homeowners are underwater – or owe more on their mortgages than the homes are currently worth).

In any event, whenever a homeowner is able to sell a home for more than the mortgage balance, those are real dollars, not phantom profits.

The fact you’ll likely pay a real estate commission on the sale doesn’t diminish your home’s status as an asset, just like paying a commission to a stockbroker when you sell a mutual fund doesn’t negate that fund’s standing as an asset.

By the same token, it might take you one month or even six months to sell your house, whereas unloading the furniture in your house could be done in one day, at a garage sale. In both cases, a sale is a sale and you’re still making money off the assets that buyers agree to purchase.

It’s an Asset if You Can Borrow Against It

You can also borrow against the value of your home – via home equity loans or lines of credit, attesting to the fact that all bankers consider your home an asset and will allow you to use it as collateral.

Yes, I know we’re in a credit crunch and bank-lending standards are strict now. But you get the point. If your house is worth more your loan (i.e. you have sufficient equity in it), then you can borrow against that house.

It’s an Asset if it Has Increased in Value or Can Increase in Value

Moreover, the home you’ve bought – or may be about to purchase – may appreciate in value over time, holding out the potential for a good return on your investment. Clearly, real estate markets don’t go up every year. One need only look at home prices from 2007 through 2011 to see that.

However, homes have historically risen at a rate of 6.6% annually, according to the National Association of Realtors. This growth has represented a significant form of wealth for countless homeowners nationwide. Meanwhile, stocks have experienced annual appreciation rates averaging 10% when you look at 10-year investment cycles for every decade going back to the 1920s.

Your Home Can Be a Great Asset, But Don’t Make It Your Primary or Your Sole Asset

When you think about your assets, you should now definitely count your home among them, just like the value of any car you own free and clear, the cash value of your life insurance policy, or any retirement money you’ve squirreled away in stocks, bonds, or mutual funds.

As with all assets, you don’t want all your wealth tied up in your home. You’ve no doubt heard the investing advice that you shouldn’t pour all your money into a single stock.

Whether you’re talking about a house or stocks, “putting all your eggs in one basket” is neither safe nor prudent in terms of diversifying your assets. That’s one reason why, if you’re every going to tap your equity, it might be wise to utilize that equity in your home – after careful consideration and planning – for other investment purposes.

I’m not suggesting that you tap into your equity to go play the stock market or make an unwise business gamble. But I am pointing out that for any asset you have – home equity included – you must always think about “opportunity costs,” or what you might be sacrificing by tying up your money in one investment when another, higher-paying alternative might be available elsewhere.

“Ask The Money Coach” is a syndicated column written by personal finance expert Lynnette Khalfani-Cox , co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.

Insurance experts say that Paul-Mensah is ahead of the curve because she realized early on how important insurance is to her company.

“Many small business owners don’t think about coverage until it’s too late,” says Hyacinth Tucker, owner of Tucker Insurance Agency in Crofton, Maryland. The need for an insurance claim could come from something as simple as a broken air conditioner or as devastating as a fire.

If you don’t have a policy in place, you can’t be helped, so take steps now to make sure your company is protected. Decide on a comprehensive policy, find the best price for it, and make ongoing insurance adjustments as your company grows.

Consider a business owner’s policy. Some forms of insurance cover bodily injury claims. Others cover property damage. The business owner’s policy covers both and more, Tucker says. “If something were to happen to your company because of hail, a windstorm, or fire, you’d still need to continue your business. You’d still be responsible for lines of credit, employee wages and benefits,” Tucker says. A business owner’s policy would replace loss of income so those bills could be paid. To have adequate coverage, Tucker recommends having insurance worth $1 million to $2 million.

The costs for these policies are determined in part by the risk factors for business. “The policy for a caterer (who could be sued for food poisoning) would probably cost more than the policy for a seamstress,” Tucker explains. She says that premiums might be as low as $250 a year for low-risk, inexpensive trades, and go up to a few thousand dollars per year for contractors or transportation companies.

Shop around. “There are a big differences in rates from one insurance company to another, so make a few phone calls and get different quotes before selecting one,” says Eric Huffman of Eric Huffman Insurance Inc., a State Farm Insurance company in Detroit, Michigan. “Not only get the rate quote, but also make the insurance companies write out what your coverage, deductibles, and contents would be. Then make apples-to-apples comparisons.”

Part of the policy cost will be based on the amount of inventory you have. When tallying up the value of these goods, be sure to consider seasonal fluctuations. “If you’re a florist, you might only have $10,000 worth of inventory in the fall, but around the holidays, your need for inventory coverage could increase to $20,000,” Tucker says.

Investigate other forms of insurance as your business grows. Once you have an adequate business owner’s insurance policy, consider adding worker’s compensation, disability, and key man insurance, particularly if you plan to hire employees. For more information on these insurance products, check with your industry trade association for guidance, or contact a local insurance agent.

“After you obtain your policies and have correct coverage, it can be smooth sailing from there,” Tucker says.