It’s Brian Preston, The Money Guy. All right, next up is Billy. He says, “Before I learned about the Financial Order of Operations, my wife and I paid off our house in May 2020, and we were both 36 years old. I feel so bad missing the great bull market years when we were paying off our house. Should I feel this way?”
Here’s what’s beautiful: there are so many paths to wealth. I know tons of folks who found Dave and his structure and strategy, got out of their debt, paid off their house in seven years, and had their other house paid off in their early 30s because that’s what they thought was the best decision for them. They have still been absolutely able to build wealth and be incredibly financially successful. There is no one finite, 100% “this is the only way to do it” strategy to building wealth.
So, I would say, Billy, I would actually flip that and say, you’re 36 years old, you paid off your house in May of 2020, that’s incredible. You’re a 36-year-old who has exhibited the discipline to pay off your mortgage and to actually own your home. That’s amazing. I would not start backtracking thinking through, “oh, well, did I optimize or did I not optimize, should I have done something different?” I would use that to say, “okay, now that I’ve done that and I can’t go back in time and change it, how can I take that discipline and hone that discipline into continuing on my wealth-building journey?”
I think that’s one of the things that’s really different about us, Brian. We’re not so stodgy and stringent that we say, “It’s our way or the highway.” That’s just not the way it is when it comes to building wealth.
I want to do a clarification because I know that there are a lot of people who would be like, “well, because this is the false straw man argument that I hear people make is like, ‘well, should I go take a loan and put that money in the market?'” Absolutely not. Look, unfortunately, real estate has lots of friction costs. If you go refinance and do other things, they’re going to be costs associated with that, and two wrongs don’t make a right. So if you’ve gotten this, and by the way, “wrong” might be a little heavy-handed because you should be commended for the discipline. Yes, maybe it’s not a complete maximization, but you’re way ahead of the curve. So, instead of worrying about the sunk cost fallacy of the decisions of the past, let’s see how we optimize for the future.
You kind of need to know that you’re already in the head-start position. If you have no debt in your life, that’s so much discipline that I bet you can save a large percentage of your income for the future. But you need to know what is actually necessary for your goals. This is one of the things: if you go to learn.moneyguy.com, we actually have a course called “Know Your Number.” Come on, we’re all playing horseshoes here, guys. But if you will go check this out because I think that you need to have a purpose of knowing, “well, how much of my income do I need to be saving, am I at that 25%, am I potentially even lower than that? Oh, do I want to retire earlier?” You need to have some purpose for what your dollars are doing for you.
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