Finding the Wins amidst the Losses

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In the summer of 2006, at the absolute top of the housing market boom in the SE and literally weeks before one of the biggest housing crashes in history, I purchased my new lakefront house!   The housing market was booming and everyone was making money. Timing was perfect! I figured I’d get a great house, have fun using it and then make a bundle selling it whenever I wanted. Well, things didn’t quite work out the way I wanted. I, like so many, had no idea how wrong I was and how the looming risk was so imminent and so substantial.

As you would expect I grossly overpaid for the house and, today, I’m suffering the consequences as I try to sell it. Twelve-years later and the house is finally under contract to be sold for 30% less than I paid.  Didn’t our parents tell us that real estate is supposed to be a good investment and appreciate ~5% /year?   Well, I guess, like anything, there are good real estate opportunities and bad ones, and so many factors impact the transaction. What makes it worse is that the loss in value of the house is not the only loss. Think of the opportunity cost for the money that has been stuck in a depreciating asset for 12-years. I could invested the money elsewhere where it would have compounded interest for years. Well, enough about the loss.

Interestingly, my misfortune turns out to be a boon for the new buyer who is getting an amazing lake house for tens of thousands less than I paid. One man’s suffering is certainly another man’s fortune. I guess that creates balance in the universe. Furthermore, I’ve learned that I cannot expect to win every time. Other people have to win too!

As I reflect on the lake house transaction further and focus differently, I realize I had substantial intangible gains on the house.   My friends, family and I shared dozens of weekends relaxing, cooking, boating and chatting at the house. It was (and is) a special place that that created indelible memories.   And, if I had not bought the lake house, I would never have met my wife (longer story). Those are some big wins!

When I look back on my life 30-40 years from now, I trust that I will not regret my lake house purchase, despite it being a financial loss. I realize that winning and losing is totally relative. I am grateful for the opportunity to own a lake house and to have shared that with my friends and family. In the scheme of things, I now recognize this as more of a win and great learning experience. Don’t get me wrong… For now, I’m happy to rent a lake house from time to time when the urge arises (and won’t be buying a second home any time soon).

The Smarter Sooner takeaway: be sure to look closely at all of life’s events as there usually are wins (sometimes tucked away) that may just overshadow even the most prickly financial losses. Good luck!



The Zig-Zag Strategy


When most people ‘Zig’, try to ‘Zag’. That’s the Zig-Zag strategy – short and simple.   The idea is to try and structure your life in manner where you can do MORE of what you want to do (and what makes you happier) instead of what you’re supposed to do. If you’re forced to ZIG (move with the masses) all of the time, you’ll feel refreshed and liberated when you can ZAG (do what you want vs. what you’re conditioned to) from time to time. The key is to get creative / innovative and find these ZAG methods. Obviously, there are times in our lives when we have to do certain things – sticking to strict schedules at work, school, etc. I don’t suggest being irresponsible. But, take a moment to see where there might be opportunities to liberate yourself with some less common, less standard, less conformist methods.Read More »

Work More or Retire Early?


If you were given the option to retire early from your career (and could afford it), would you? This seems like a dumb question as most people would jump at the opportunity to quit work.   But, is retirement really better than a working career? After being away from work for almost 2-years now, I would argue that leaving your working career too early might be a mistake.   Now that I’m a bit Smarter Sooner, I suggest carefully contemplating work vs. retirement because it has a lot of implications, well beyond the most obvious factors: free time and money.  Here is my perspective…Read More »