[00:00:00] Eric Brotman: This is Eric Brotman, the host of Don’t Retire… Graduate!: The podcast that teaches you how to advance into retirement rather than retreating. Welcome to Office Hours, where we answer listeners’ questions about personal finance, retirement readiness, and more. We received a question from Grace who asked, what financial advice do you wish you’d never been?
I love this question. It’s incredibly difficult to choose just one thing, because unfortunately, Grace, all of the financial lessons that we learn in life, almost all of them come from the school of hard knocks. It’s not taught in a textbook. It’s not taught in schools. Most of us don’t learn valuable lessons about money from our parents or other family members.
Uh, and we’re sort of thrown to the wolves as soon as we’re making big financial decisions, whether it’s student loans or whether it’s employee benefits or other things. I’ve come up with three things that I think, uh, and I, I don’t think I’ve ever discussed these things on air before. So I’m, I’m kind of excited to share them, but three things that either was a piece of advice I wish I hadn’t been given, or maybe just a mistake or two that I’ve made along the way, because let’s face it. We all make financial mistakes in our careers and in our, in our lives.
And the first thing I would say the advice that I received when I first got into the workforce was to choose the most comprehensive health insurance plan possible to make sure that I didn’t have any, or I had as few out-of-pocket healthcare costs as possible.
Well, the reality is for young people, most of the time, young people are healthier than older people and they spend less on healthcare than older people do. And so the access to a high deductible health plan and health savings accounts is so incredibly powerful for young people to grow money in a tax-free way.
I wish I had done the HSA a lot sooner than I did in my life. Uh, I think I started funding an HSA in my early forties and, quite frankly, had I started it 10 years earlier or even more, uh, it would have made a huge difference in terms of my own net worth. So I think the advice that I received and as I recall, it was from family, was to always choose the top health plan and the most expensive premium, and to make sure you had the best health insurance there is and I’m not sure that that’s, that that was good advice. So that would be number one.
Number two would be more of a mistake and less of a piece of advice. And that is not understanding the value of certain kinds of collectibles. When I was a kid, I had a baseball card collection that I can’t fathom what it would be worth today and I decided as a, as a very mature 11 or 12 year old that I didn’t want baseball cards anymore. And I gave them to another kid. It was a kind gesture. I think I probably have put his children through college now based on the baseball cards alone. And while I didn’t get advice, per se, I wish that my family had been a little more, a little more stern with me about, you know, what you may want to keep these, even if we keep them for you.
Unfortunately, that was something that may have, may have created some real wealth. And I, of course wasn’t thinking that way. I was just thinking I was bored of them. So that was a young decision that I made that was probably expensive in the long run.
And then the last thing, Grace, that I would say is this idea that you should buy as much house as you can afford. I think that’s generally terrible advice. Um, you know, I bought a house in, uh, or I bought a condominium in 1995, which served me beautifully well, and it, it appreciated and it did great things for me. But when I bought my first single family home, I grossly overshot the target and it was 2007. And, you know, in 2007 real estate market was very, very expensive.
And I bought a awful lot of house, my wife and I, and now we have this huge house and it’s really overkill. Uh, and so it’s not really about necessarily the amount of money you spend on the house or the down payment or the taxes, or, or even the mortgage payment. It’s about taking care of a house that size, this McMansion idea.
Um, and if I had it to do over again, I would have been much more space conscious. And I realized that in today in the, you know, 2021 people are really careful about things like, like energy usage and, and how much space is really needed. And of course COVID affected that. I didn’t hate having a larger place during COVID when we were all stuck home.
So that’s a true story rather than say an apartment, but, uh, Grace, I would say that, uh, buying as much house as you can afford and specifically getting as large a house as you can, wasn’t necessarily the best advice. So I hope this was helpful. Um, there are lots of different types of advice that we get over over our history.
I’m glad none of these came from professionals. They came from, from friends and family. And that’s one of the reasons why I think having a financial advisor becomes so valuable because you’re getting objective independent advice and it doesn’t have family baggage attached to it. So I thank you, Grace, for your question.
It was a terrific one. If you’d like to send us a question, which we might answer in a future episode of office hours post it on our Facebook page or tweet us at @Brotmanplanning. If you like what you hear, please subscribe to our podcast and leave a review on apple podcasts or wherever you listen to your favorite shows.
Please also check out our books, workbooks and online financial literacy resources at Brotmanmedia.com. Thanks for coming to office hours. Be sure to tune in every Thursday for new content. For now, this is your host, Eric Brotman, reminding you don’t retire. Graduate!
