The Best Piece of Financial Advice I Ever Received
Listen to your wife.
The Spanish painter Joan Miro said about his work: “Like or dislike it. Being indifferent is the worst response.”
My Story
My wife and I lived a charmed life 10 years ago. We made a lot of money in the stock market and our future looked bright.
Our fortunes changed in 2008 when we had the global financial crisis. This crisis was the worst economic disaster since the Great Depression of 1929. We lost a significant amount of our stock market assets. We didn’t sell any positions but we were a lot poorer on paper.
Three years later in 2011, the financial crisis recovered. We regained the money we had lost and started having some gains.
My wife asked me if we could sell some of our winning positions and pay off our debts. I resisted. I’m a believer in staying invested in the stock market.
One month later, my wife asked me again if we could sell some of our winning positions and pay off our debts. She believed we never know when the next financial crisis will occur. We have no control over this. She did believe we can control our personal finances. She said that if another financial crisis occurs, we can always survive on top ramen noodles if we own our house. We would be devastated if we couldn’t make our monthly mortgage payments and lose our house.
So I said, “OK, we’ll do it your way.” We sold some of our winning positions in 2011 and paid off our home mortgage. My wife calls selling some of the profit from our winning positions “taking the cream off the top of the coffee.” This was the best piece of financial advice I ever received and implemented. I immediately felt relieved because I didn’t have to worry about a $3,000 monthly mortgage. I lifted a giant burden off my shoulders.
I know the opposing argument. Your house is a liability, not an asset. Mortgage rates are low. You can deduct some mortgage rate interest on your taxes. You can make more money in the stock market. You can manage debt.
I disagree with all these arguments. My house is a sanctuary, not a liability. I want to spend the rest of my life here. I enjoy my house even more now that I own it.
I love the stock market. But investing in the stock market will always involve some risk.
I’d rather keep my financial life as simple as possible. I am more peaceful being debt-free than when I had debts.
For this, I thank my wife. I am a better husband and investment advisor when I listen to my wife.
What’s the best piece of financial advice you ever received?
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