I’m sitting here thinking about all the ways we torpedo ourselves – financially and otherwise. No doubt about it, we all suffer from self-destructive behavior.
I’ll be the first to admit that I’ve done it (and I have to watch myself constantly to make sure I don’t do it again). My most expensive mistake was when I sold my last house in 1997. The market was terrible. I had almost no equity in the home and I had a great renter lined up. I had no financial reason to sell the home, and my wife told me I was crazy to get rid of it.
But I’m the financial advisor. I’m the brainiac. I knew better. Stand back and watch me work!
If anyone needed a cure for their self-destructive financial behavior, it was me.
I sold it because I was afraid. If the renter moved out (he hadn’t even moved in yet!) I’d have two mortgages to pay, and I told myself that I couldn’t afford that situation. (I actually could have easily managed to pay the two mortgages for six to 12 months, but didn’t bother looking at the math.)
So I sold the house and watched the values promptly go up 150%.
I gave in to my fear. My emotions torpedoed my finances. I bring this up because emotions are running high right now. Have your emotions gotten the better of you in the past? How? In the past, have you paid the price for letting your emotions take the controls? Will those mistakes keep you from being able to retire rich? What steps have you taken to make sure your fear doesn’t take over now?