Failing to Achieve the Highest Returns

I’m going to let you in on a little secret. I don’t always seek the highest financial returns. I know, I know, it’s shocking isn’t it. How can I blog about money for thirteen years and not put every dollar to work in the most efficient way? Isn’t the goal to accumulate the biggest bank account and the highest net worth?

Here are just a few of the ways I’ve failed to maximize:

Choosing to Become a Stay At Home Parent

If I wanted to make the most of my money I wouldn’t have stopped working when my son was born. I would have continued to earn a six figure salary, set aside the maximum contributions to my 401k and watched as my net worth jumped by a million dollars or more.

Paying off My Mortgage Early

If I wanted to maximize my earnings I certainly wouldn’t pay off my mortgage early. Financially speaking everyone knows it’s smarter to invest money in the stock market. The returns are certainly going to outpace my piddly 3% interest rate.

Buying a Beach House

I wouldn’t have bought a beach house. Properties near the beach are pricey and certainly don’t provide the best returns. I would have purchased a duplex and lived on one side while renting out the other. Then I would have purchased one or two other year round rentals that would earn gobs of money. Gobs I tell you!

Buying a New Car

I would never buy a new car. Only an idiot would drive a brand new car off the lot and pay full price for it, right? Heck, if I were smart I would move closer to work and buy a bike to pedal there.

If you are saving for FI or FIRE you’ve probably run hundreds of calculations to figure out how much you need to pay your bills without ever having to work another day in your life. You may check your bank account balance daily.

You may stare at that number and watch it slowly inch it’s way higher and higher. All the while working your tail off to get promoted, creating side hustles to bring in extra income and cutting back your expenses to the bare minimum.

As that number creeps up you listen to podcasts that tell you how to live in a shack to save on housing. Then you pull that old bike off the rack and dream of a life without the need for gasoline.

Perhaps you fantasize about quitting the workforce or simply finding a job you love. Along the way you sacrifice enjoyment in search of the all mighty dollar, because when you have enough pennies in the bank all will become rosy and clear.

All of your energy and focus may be on earning more money. If only you can snatch that next raise, receive a large bonus or find that perfect dilapidated house in need of a new owner.

But you know what, life is not all about financial returns. At the end of the day you have to decide how to spend the limited amount of time on this earth and you have to balance your current wishes with your future dreams.

If you want to travel the world you certainly don’t need a vacation home. If you are passionate about your work you may not feel the need to stay home with your children. If you don’t mind the risks of the market you may be happy to invest your excess rather than paying off your home early. If you’ve never spent day after day with a broken down car on the side of the road you may consider a new car a complete waste of money.

I get that. It all makes sense to me and being a logical, number crunching kind of girl I don’t disagree. When I look back at these big decisions I recognize that each one greatly impacted my total net worth. Had I chosen differently I could have an extra million or two in the bank.

Think about that for a minute. An extra million or two! I do reflect on that number and ponder the path I’ve traveled.

But I do not regret the choices that I’ve made. They were mine to make. (Well mine and my husband’s.) Receiving the highest return is NOT always the most important factor in my decision making process. I also want to enjoy my life. I know people with very little money that are infinitely more happy than those with bank accounts filled to the brim.

I cherish the time with my children, I feel more secure without debt, I’ve felt a great sense of peace and healing when in my beach house and I no longer worry about getting stuck on the side of a dark road.

Given the same set of circumstances you may make completely different decisions. You may choose higher returns or make choices that lower your net worth all while bringing you peace, strength and joy.

How often do you place the importance of money above your other desires?

My dreams are unique to me. What are yours? How does your desire to save impact them?

2 thoughts on “Failing to Achieve the Highest Returns”

  1. There are a few areas I wrestle with myself between the possibly better for me choice or to take the highest returns.

    We made large payments to principal to nearly halve a horrendously large one. That was not just an elimination of some debt but also to make the payments more manageable monthly. I want to keep on with those payments because I want to debt free but I struggle with also wanting to build capital for future income. I wish it weren’t just one or the other.

    I’ve also not come to a settled conclusion on how to manage our IRAs (mega backdoor or not) but for now I’ve opted not to deal with any conversions to keep it simple.

    We definitely choose to pay for childcare instead of either one of us staying home because one SAHP wouldn’t work out well for our nerves or our physical health, and we need his benefits/paycheck and my paycheck to make it here. So that was only partially a choice but it IS what’s best for us.

    • I always find it difficult to make decisions. Financial ones are even harder for me. I’ve never had the option of using a mega backdoor because we already had too much saved in our traditional IRAs to make the conversion to Roth worthwhile, but I certainly think simplicity is a good reason to choose one option over another. In regards to SAHP I am certainly blessed for having the capability and finances to stay home for a bit. Actually it was your email a few months back that made me realize just how blessed I am. I will always be thankful for that 😉


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