There’s the right answer financially.
And there’s the right answer emotionally.
When they line up, the right answer is clear and easy.
When they DON’T line up, the right answer is the emotional side… as long as it won’t blow you up.
A recurring example of this is the age-old question – should I pay down my mortgage?
The right answer financially is “no”. Paying down your 3.5% with money that you’ll earn 10% in the long term is not smart financially.
HOWEVER, often the right answer emotionally is to pay it down because you…
hate debt…
are anxious about a big monthly payment…
aren’t sure you’ll get 10% portfolio returns over the long term…
the list goes on…
As a finance guy, I lean toward left-brain thinking, so in my early days with my shiny, new CFP certification under my arm, I’d try to persuade people to choose the right answer financially. ALWAYS. After all, it IS the right answer.
But what I’ve learned over the last 14 years is – the right answer is whatever will make you sleep best at night. That’s it.
As long as the emotional right answer won’t destroy you, then go for it!
Have a great weekend, everyone!
