I Bought A Bigger House, And The Buyer's Remorse Hurts. My Family Didn't Need It, But I Still Think It'll Be Worth It.

This essay is based on a conversation with Sam Dozen, a San Francisco writer and former investment banker who is part of the FIRE (Financial Freedom, Before Retirement) movement. As he writes in his blog, he is retiring early to buy a bigger house . The conversation has been edited for length and clarity.

I retired in 2012 at age 34 after 13 years in investment banking. I haven't done anything since. Well, I don't do anything .

I have been a writer and a homemaker since April 2017.

I thought I could buy this good house because I thought inflation had peaked and the Fed was going to cut rates in 2024. I didn't want to buy a house in 2024 because I thought there was going to be a war. Auctions will return - because mortgage rates will fall. .

So I decided to sell stocks and treasuries to buy this house.

Buying any home should be considered an investment. But since I bought the house forever, it doesn't matter if the price goes up or down. I plan to have it forever, really forever.

About 70% of my reasons for buying a house were emotional: to be a loving father and to my family. This is a big house. There are also triple wide views of the plot. I think I will be raising my kids here for the next 12-14 years until they go to college.

Thirty percent, because I thought we'd hit the bottom of the housing market in San Francisco, where mortgage rates were falling. Therefore, I expect prices to recover in the next 10-20 years.

But I don't count it. I have no plans to make a profit. I don't think he's trying to make a profit anymore. A house is primarily an expense aimed at improving my family's standard of living.

The first three months I was stressed and thinking: "What have I done?

It's a paradox we all face. You want to save as much as possible and invest as much as possible, which makes for a simpler, more frugal lifestyle so you can retire sooner. But do you really want to live a frugal life and then retire early and live a very frugal and frugal life?

Some say yes, some say no, I want to live a rich life full of freedom and abundance.

I decided to become financially independent and retire early

In 1999, I had to go to the office at 5 am and didn't leave until 7:30 pm. It was crazy.

From the first month I realized that I will not live to be 60 years old like my parents. That's why I decided: I will save as much as possible.

Basically, I saved every second salary, which means 50%. Then, in most cases, I got a bonus at the end of the year and tried to save and invest about 90% of it.

I worked for 13 years. If I saved an average of 50% per year for 13 years, that's my living expenses for 13 years, right? At least.

When I started writing about my journey to financial freedom at Financial Samurai in 2009, I helped create the Modern Fire movement. Financial independence means having enough passive income-generating investments to cover at least basic living expenses.

You must have money for food, shelter, clothing, transportation and raising children.

Rental real estate gave me the courage to retire in early 2012 while negotiating my divorce. About 53% of my estimated annual passive income comes from a $230,000 rental property.

Another strategy was to invest consistently and regularly in S&P 500 index funds. It pays dividends between 1.6% and 1.8%.

Another strategy was to invest in all the tech companies I applied to and got rejected.

Once you've learned the basics, you can talk about things like "The Big Fire": more investments, more passive income, more expensive lifestyles.

Life got more expensive when I had a baby.

After the FIRE, I was always living well below my means - 30-40% below my financial means.

When I had my kids in 2017 and 2019, I still started living below my means, but not too far below my means - maybe 20% below them. Because they are expensive, I have to spend more money on them.

I haven't spent all my passive income. I probably saved 20%. I spent money on housing, health care, private school, cars, gas, vacations three times a year, entertainment, and college savings.

Since we order so much and I don't need fancy clothes, I've cut back on clothes and food shopping.

Then I decided to buy the bigger house

I bought my new home in October - 14% less than the original asking price

My old house was four bedrooms, three baths and 2,800 square feet. My new home has five bedrooms, four bathrooms and 3,500 square feet.

I managed to close the contract for the house. Prices in San Francisco have increased since 2022, so prices have decreased in 2023.

My new house will cost about $60,000 a year, or $5,000 a month more than my old house.

I have been retired for over a decade, but now I have to go back to work.

I don't have $150,000 in stocks and bonds generating passive income.

So I just had to restore investments and liquidity, so I had a lot of stress and anxiety in the first three months. It's like, "Oh, I don't have these anymore and I have more expenses in this new house."

Of course there are consequences because now I have to go back to work. I hope I can inspire my wife to get a job again or do more with Financial Samurai. He retired at the end of 2015.

The main reason I'm relaxed, if not completely relaxed, is that my four-year-old daughter will be going back to school full-time in September. My son will be 7 years old in April.

Now I will have two extra days off, so it will be five days a week, while my two children are at school 40 hours a week.

I had some buyer's remorse at first, but I think I'll get over it with time.

I felt the pressure after every home purchase.

But buying the most expensive house we didn't need was the most stressful, especially now that I have two kids and more expenses to pay.

The first three months were very difficult because there were new expenses: property taxes, maintenance expenses, unknowns, furniture, etc.

You can crunch the numbers all you want, but you don't know how you're going to feel until you pay and move.

I'm sure I can rent or sell my old house. I can find tenants for the next two to three years to cover expenses - at least to prevent my passive income from falling.

I have lived in this house for almost four months and it is a wonderful house. I wake up every day feeling fulfilled. As a father, I am happy that I am doing everything I can to provide the best quality of life for my family.

I still wonder what life would have been like if we'd just settled down and stayed in our old house - I think our family would be a lot happier, to be honest.

I think my satisfaction will increase with time. My goal is to regain my financial independence and restore that cash flow within three to five years. I feel like the closer I get to being three, the happier I am, the more content I am.

If you can survive the first three years of home ownership, regrets, regrets and feelings of dread generally disappear. What about the first three to six months? Oh boy, you really need to brace yourself for this upset.

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