I was talking with a buddy today about my rental property. I’ve called it the dumbest thing ever before, but I’m committed to coming out strong at the end. But what got to me a bit was one question he asked:
What would you have done with the money if you hadn’t bought the property?
It was funny that he asked me that question because seven years ago when I bought the property I was struggling between buying that three-family property or an apartment in NYC. The deal breaker was the year between when I was looking at the NYC apartment and the time I would move in. It turns out that it probably was the wrong decision to buy the three-family.
When I told him the details about the other scenario he felt bad for me. First he laughed at me. Then he felt bad for me.
Here are the two key details about the NYC apartment:
- Price of condo when I was looking at it: $300,000
- Price of condo when I moved out of my studio apartment and into a larger place in NYC (when I likely would have sold – and not bought again because I was planning a family and wasn’t sure what I wanted for housing): $600,000.
Here are the details about my three-family:
- Property might be worth what I owe on it.
- I’ve had tax deductions but paid money out-of-pocket, so probably haven’t made or lost a penny.
- I’ve had quite a bit of stress because of it.
So why am I not kicking myself? Because I made the decision that made the most sense to me, based on my knowledge at the time. I did some homework back then. I learned quite a bit before I bought it. I’ve learned a lot since then. Knowing what I know now I probably would make the opposite (or no) decision. I probably would have waited until I moved back and then bought an apartment in that building for $350,000. The same “sale timing” and price scenario would apply. I just would have borrowed more against the place.
But I just don’t know. That’s the key. So I don’t kick myself. I used to kick myself. But I’m over it.
So please stop kicking yourself for decisions you made. And start working your way out of them. Stop punishing yourself by saying something like “I knew the iPod was going to be the best thing ever and I should have bought Apple stock in 2003. If I had just put the bought it in 2003 I would be rich now!” Just stop! It’s not worth it. (In response to that statement – It would not be wise to just hang onto one company’s stock with all of your money anyhow, so you probably would have done something different even after the run.) Just stop! Please!
So, yeah, looking over my shoulder it appears that it would be the wrong decision. And while “they say” hindsight is 20/20, looking over your shoulder is not “hindsight,” especially with financial “non-decisions.” And putting on “best case scenario” glasses is not hindsight either. You just don’t know.
This applies to almost every financial decision you made (and especially those you didn’t make).
By the way, if I put the $50,000 into Apple stock on December 31, 2003, and held it all until now, it would be worth more than $1.3 million. But so what? I didn’t. I wouldn’t have. And I shouldn’t have. Because what if I put that $50,000 into a company that didn’t have a run like Apple. There are plenty of them out there.
So I’m working hard to save up money, invest the smart way, semi-slow and steady and reducing stress as much as possible. I’m not looking over my shoulder. I’m looking in front of me and trying not to walk into any new walls.
Until next time, keep your head up. Look forward. What you see there is what you can change. And, of course, put your credit card down and slowly step away from the mall!
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