Risks (in your opinion) that you took financially that paid off?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Paid cash for what we thought was an expensive house in 2017. House value has increased by a million dollars in 6 years.

In retrospect that seems like a bad deal, you could've got a mortgage at 3% and let the 80% ride on the stock market and still made your million in equity, but also double the initial 80% in the market.

Nope. Mortgage wouldn’t have been 3% and the stock market was too risky during Covid. Our house has appreciated by 60%. Stock would not have given us that level of return on investment. The house keeps appreciating, I’m not paying a higher price for the house through interest and bank fees, and I have the security of a paid house. I can always take out a line of credit on the house if I need it but we have plenty of money invested in other assets. I feel we got a great windfall.

The S&P500 stock market return rate for 2017-2023 is 104%. If you had put a down payment on the house with a 3% mortgage you would have gotten the 60% return on 20% of your money and the 104% return on 80% of your money. And have a 3% mortgage now when even cds are earning 5%. SO I would reframe this as you made a conservative investment that you are happy about rather than took a risk that paid off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Paid cash for what we thought was an expensive house in 2017. House value has increased by a million dollars in 6 years.

In retrospect that seems like a bad deal, you could've got a mortgage at 3% and let the 80% ride on the stock market and still made your million in equity, but also double the initial 80% in the market.

Nope. Mortgage wouldn’t have been 3% and the stock market was too risky during Covid. Our house has appreciated by 60%. Stock would not have given us that level of return on investment. The house keeps appreciating, I’m not paying a higher price for the house through interest and bank fees, and I have the security of a paid house. I can always take out a line of credit on the house if I need it but we have plenty of money invested in other assets. I feel we got a great windfall.

The S&P500 stock market return rate for 2017-2023 is 104%. If you had put a down payment on the house with a 3% mortgage you would have gotten the 60% return on 20% of your money and the 104% return on 80% of your money. And have a 3% mortgage now when even cds are earning 5%. SO I would reframe this as you made a conservative investment that you are happy about rather than took a risk that paid off.

Clarifying--the full 60% return USING just 20% of your money. So the 104% return on 80% of your money is extra minus what you use of that to pay off the mortgage as you go along.

[Anonymous]

Nothing compared to some of these risks

1. Like many others, stretched on our starter house and got a row house in a gentrifying neighborhood. Our budget was $500k, we bought it for $600k and I was freaking out. It's worth a million now. But even more importantly, we've stayed in it for over a decade because it had room to grow our family. I'm sure that's saved us so much money I couldn't even quantify.

2. Sent my H to a top tier business school. I was sick over the loans but he's made it all back and then some. Smartest thing we did.

[Anonymous]

I bought a horse for $750 once, trained it and sold for 120k 3 years later.

Current horse is also a bargain, paid $8k and worth around $100k 2 years later. Holding on to him a bit longer though, a couple more years and he should be more like $500k.

[Anonymous]

Holy moly horses are expensive!

[Anonymous]

Sold my car for about $3k, and bought a one way ticket to the US. Bought remainder of the cash and a large suitcase. (This was 25 years ago, now have $3m net worth).

Bought a foreclosure in Shaw in 2003 when no one wanted to live there and I heard gun shots regularly. Sold that house for $1.2m.

[Anonymous]

Anonymous wrote:I bought a horse for $750 once, trained it and sold for 120k 3 years later.

Current horse is also a bargain, paid $8k and worth around $100k 2 years later. Holding on to him a bit longer though, a couple more years and he should be more like $500k.

Love this one! What a cool thing to know how to do.

[Anonymous]

Anonymous wrote:Sold my car for about $3k, and bought a one way ticket to the US. Bought remainder of the cash and a large suitcase. (This was 25 years ago, now have $3m net worth).

Bought a foreclosure in Shaw in 2003 when no one wanted to live there and I heard gun shots regularly. Sold that house for $1.2m.

I wanted to do all that, but I was still illegal in 2003. I kept asking Americans why they were not doing it. Most were just too high and drunk to even think. The townhouses in Colombia Heights were at give-away prices and people knew metro was being built. Nobody cares, or I ran in circles where nobody cared.
Ex should have sold his dump townhouse in 2006/7 for a million. It was upraised for a lot more at some point. He could've rented a nice place and dumped the money into market from 2009-2010. He would have a lot of money.
He got a 2nd chance this time around, but again, nothing. Still lives in that cold dump and pays high taxes and utilities. He says he doesn;t care about capitalism and money.

[Anonymous]

Anonymous wrote:I bought a horse for $750 once, trained it and sold for 120k 3 years later.

Current horse is also a bargain, paid $8k and worth around $100k 2 years later. Holding on to him a bit longer though, a couple more years and he should be more like $500k.

My father had such skills back in a day, but we lived in Soviet Union and making money was not a thing. He is too old now at 72.

[Anonymous]

We overstretched to buy our house in 2006. Considering the leverage (we put down 3%), that has worked out OK. Like my Mom said, "you need a place to live." (even if it is a 1940s brick rambler with the original kitchen and bath)

Other than that, nothing has paid off. Not working for a startup, not moving for my career, not buying tech stocks and not working for a company with an Employee Stock Ownership Plan. (zero, nearly zero, zero and zero)

[Anonymous]

In my 20s I chose stock options trading. It was a hobby at first that produced a side income which was reinvested as a way to scale my income in my later years. By age 35 it easily outgrew my income by 1-2X. Now Mid 50s it has replaced my income entirely. I'm not rich but had plenty of money to walk off the job which I did at 52.

[Anonymous]

The whole I took a risk by stretching to buy a house is gross. You had advantages that allowed you to afford one. Some posters make it sound like they went out west in a covered wagon looking for gold. Also a house is a place to live. It's equity is useless unless you sell it or take out a high interest loan against it.

[Anonymous]

Anonymous wrote:The whole I took a risk by stretching to buy a house is gross. You had advantages that allowed you to afford one. Some posters make it sound like they went out west in a covered wagon looking for gold. Also a house is a place to live. It's equity is useless unless you sell it or take out a high interest loan against it.

Gross is a weird word for it. Most financial risks required some advantages in the first place. Taking out a big mortgage is a risk. Not a covered wagon, but there's a risk you can't pay it off, your house will lose value, etc. It feels scary when you do it. It might not be your definition of a risk but calling it gross is weird.

[Anonymous]

I spent $500 to take 12 online graduate credit courses to put me in the next salary lane on the teacher payscale earning me a raise of $6,000.

[Anonymous]

Left my full time job to be a SAHM. I was able to pick up some occasional freelance work and ended up having no trouble finding a FT job when I was ready (youngest in kindergarten). I had 7 years at home and I loved that time. So glad I did it.

At the same time, I was glad to return to work when I did, happy with my job and have advanced in the organization and we were able to meet our financial goals. DH is now retired, we live on my salary, and have the kids' college fully paid for (one currently in college, the other a senior).