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The Worst Financial Decision Of My Life

The Worst Financial Decision Of My Life

August 02, 2022
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Hindsight is always 20/20. It has the accuracy of a Navy Seal Sniper. Hindsight has a particular advantage when exposing your faults, it is never wrong. This blog is about “the decision”. What could be my worst financial mistake yet?

At the time of “the decision”, which was mutually agreed upon by my wife and I, we thought we were doing the right thing. I genuinely thought we were doing what most people couldn’t and wouldn’t. We were making a sacrifice. 

What’s funny is that “the decision” wasn’t about the decision itself. It was about the series of events that led to up to making the decision. 

The process ended with us essentially becoming aware, like an A.I. becoming sentient, and trying to correct our mistakes. 

The Backstory Of My Worst Financial Decision

In 2017, my wife and I bought our first home. Let’s give a round of applause for us doing big kid things. 

My wife was pregnant with our first child and at the time was renting a 1000-square-foot townhouse. It was great. I loved it. In that townhome we got married, I got my MBA, my wife got her MBA, and I had a home gym in the garage, it was low maintenance, and low cost. That is my jam. 

After living in that townhouse for 3 years, we thought it would be time to become adults and start “building equity” by buying a home. We were about to have a baby. We thought we needed a bigger place to raise our kids and let our two big dogs roam. Because I mean, two dogs can’t survive in a townhome.

Looking back, we should have just bought the townhouse. I digress.

Behavioral Error 1 - Framing Bias.

After finally agreeing to buy a home, we started the hunt. We found a few that we liked. Then we found the one we loved!  

It was 1700 square feet, one story, two car garage, huge backyard, a side yard with an RV gate, pool, grass, and enough room for our 2 dogs, my home gym, and our kids. 

The problem? It was in a part of town that I hated. Not a bad part of town. Just the part of town that would subject me to at least 45 minutes of traffic each way to work. I hated that every damn day. This hatred toward traffic wouldn’t ever leave.

Behavioral Error #2 - Settling.

The purchase price was $296,000. We went FHA with 3.5% down. This means we had primary mortgage insurance and our monthly payment was $1900 per month. That was just the payment. The utilities increased at least $300 per month. The water bill changed dramatically. The total housing expense was closer to $2800 per month. 

We had the house but couldn’t afford the extra furniture for the house twice the size. We couldn’t afford the two leaks in our ceiling. We couldn’t afford the pool repairs. The nail in the coffin? We couldn’t afford the $6000 pool fence we needed to protect our child from falling in.

Let’s break it down.

Reviewing Our Cash Flow

At that point, our gross household income was about $110,000 per year. Between both of our incomes, we were not rolling in it. 

Gross Income

$ 110,000.00


$   20,130.00


$   10,000.00

Take Home

$   79,870.00

Take home per Month

$ 6,655.83

Less Housing Expense

$ 2,800.00

Less Student Loans

$    900.00

Less Car Payment

$    800.00

Less Gas

$    600.00

Less Food

$ 1,000.00


$    555.83

So let’s say we were extremely diligent with the extra $555. Which we really weren’t. We had a kid at this point. 

Between formula, clothes, other paycheck deductions, and other expenses… no chance we had the extra $555.

For argument's sake, let’s say we did have it and saved that for 6 months. The pool fence, for example, was $6000. We would have needed to save that for 10 months just to pay for the damn fence!!

Behavioral Error #3 - Buying before we were ready.

The Moment of My Worst Financial Decision

I can remember it like it was yesterday… The decision. August 2018. 

We just had the pool guy come over and give us a quote for the $6000 fence. And before you start giving me the “that is too high of a price” crap. The backyard was huge and the pool was right in the middle. In addition, the pool was big and in an odd shape. We needed a long fence. 

The pool fence quote came as the final straw after months of living with the bare amount of furniture, having a bunch of repairs, needing more repairs, and overall monetary stress.

It was in the late summer, August. It was really warm out. I had just completed my Crossfit journey by going to Regionals in May. I just started the CFP program in July. At this point in time, I was extremely motivated to do big things but the stress of money was weighing us down.

One night, our 9-month-old finally went to bed, it was dark out but our yard lights gave us a great look at what we had. A huge corner lot with overgrown mesquite trees and palms. It was beautiful.

My wife and I started talking, expressing our concerns, we both turned and looked at each other, “Let’s Sell.”

The BIG mistake? We sold our home. 

The Home Selling Process

From September to November, yes 3 months on the market which seems crazy now since houses are purchased faster than a second-generation iPhone, we showed the house and got the house under contract. 

Our original plan was to sell the house, take the proceeds, and downsize. We thought we had a great grasp of what we wanted next.

But this time, we were more careful. We evaluated our budget better. We triple-checked our location. Focused on the features we could and couldn't live without.

The problem? There was not much available. But we were determined. 

After hunting for a couple of months, we found nothing, had another famous family talk, and came to the conclusion to just rent. 

“Let’s rent for a bit and put the pieces together.” Done. Let’s choose Scottsdale. We did. We were happy.

Behavioral Error #4 - Not enough emergency funds.

Arizona Small Claims Court

Through the selling process, we found what we thought was a solid buyer. A real estate agent that wanted a new property. Had a great understanding of the property and the repairs. Was ready to take it on. 

The closing date was 12/31/2018.

We signed our papers. Cleaned out the house. Moved out. Got out so they can go in. Like good damn sellers! Bad news: Buyer no-shows us at closing. Literally ghosts us. 

We still have a mortgage, and now have to pay rent. Time to start the selling process over. Shoot me now. Silver lining. We get the earnest money of $3000. Ok, great! A couple of months’ish of extra cash to buy time. 

Nope, it isn’t over. Letter in the mail for Small Claims Court. The buyer wants his earnest money back.

He is crazy. We go to court in March of 2019. We dominate. We keep the money. What a waste of time. While I am studying for the CFP too. Again, I digress.

Finally, find a new buyer. We sell the house.

Hindsight is always 20/20

Let’s create a timeline of how this happens next. 

  • January 2019 - December 2020, we rent.
  • March 2019 - Small Claims court.
  • July 2019 - Pass CFP®. 
  • August 2019 - September 2019. In the apartment, I build ProPath Financial from the ground up.
  • October 2019 - Launch Propath

Our lease is coming up in December of 2019 and we weigh the decision of buying a house or renting. I just started a business with no revenue and buy a house after this last experience? HAHAHA. Get the hell out of here.

We choose to rent another townhouse to keep expenses down. Because remember, like I mentioned above, I will make whatever sacrifice necessary to grow. Including renting.

Behavioral Error #5 - Anchoring

Fast Forward to now.

We are literally priced out of the market of buying a new home. Our old home that we sold for $320,000 is now worth $560,000 and sold in May of 2021 for $425,000. 

I keep telling myself that we made the right decision. The business is going great. Better than expected. Considering my first two years in business had me beating off Covid with a stick.

Do you know how hard it is to build a business with a kid at home, a wife that works, covid restrictions, and another on the way?

We now have 2 children. Utilizing what we know now from our previous experience in creating the proper criteria; enough room, low cost, managing the budget, proper location, no pool; we would still have to spend $600,000 or more on a basic property. 

Sometimes I think, “maybe we should have done what everyone else does and just fought through it.” Maybe we should have just kept the house and fought through the expenses and started the business there. More on this in a second…

My first sentence of this segment said, “We are literally priced out of the market of buying a new home.” This is correct unless we want to make the same mistake… again.

The Only Thing That Makes Hindsight Turn Into Foresight? Learning.

Was it really the worst financial decision I have ever made?

Right now, we don’t have a home that we own. I have rented and missed the couple hundred thousand of dollars in homeownership over the past couple of years. That is a fact.

It eats at me every day about the opportunity cost of the home values over the past 2 years.

However, I have a business that I own. Right now, businesses like mine are selling at 3x multiples. What I have lost in home equity, I have gained far more in business equity. 

I could continue to sit and dwell on what may be my worst financial decision. But the truth is a matter of perspective. 

Behavioral Error #6 - Hindsight Bias

What If We Kept The House?

If my wife and I would have stayed in that home, would I have been able to start the business? Would the business still be in business? Would I have the same clients? Would I have burned through my runway (my own money) quicker during covid (during that whole story, we did have some money laying around. My business money.)?

From a homeownership perspective, selling was a catastrophic decision that will limit our ability to buy a home for potentially years.

From a success perspective, it freed me to pursue a dream. It unlocked the shackles of a useless commute and much more.

I can vividly recall, living in the apartment complex where the business started and not having a care in the world. I was free to operate. Ya, it was small and crowded. I could have easily started to feel sorry for myself as everyone around me, and my clients, are all buying houses.

Nah bruh, that ain't me. I don’t care about your life. I only care about mine. 

My emotional hindsight tells me we made a ridiculous decision selling that home. 

My logical foresight says it was the first step to long-term progress. 

Was It Really My Worst Financial Decision Ever?

I bet you thought the worst financial decision I made was selling the house. No, that wasn't it. It was the dozens of financial decisions leading up to it.

It was the lack of savings for the decade prior. It was the thousands of dollars of student loans that I unnecessarily borrowed and neglected in paying back. It was the extra car payments. It was the apathy that I showed in my 20s when I should have been learning the importance of an emergency fund. It was buying a house when we weren't ready.