5 BIG Purchases Retirees (Almost) Always Regret!

[00:00:01] Hey everyone, welcome to another episode of Retirement Made Simple, a podcast dedicated

[00:00:06] to helping 8 million people retire without worry.

[00:00:11] I was working with a group of retirees and I asked this question.

[00:00:16] I said, do you ever regret how you spend your money?

[00:00:18] I wasn't expecting the flood of answers that begin to pour out as people begin to share

[00:00:23] the purchases that they've made that they later regretted.

[00:00:26] And when I found out that day when I find over and over with clients is that many people

[00:00:31] end up regretting their big retirement purchases.

[00:00:34] Not only because it reduces the retirees' security, but most importantly because

[00:00:38] it doesn't actually bring them happiness and bring them joy.

[00:00:42] The big purchase they expected would bring fulfillment often just provides a short period

[00:00:47] of joy at that is just one more thing to take care of.

[00:00:50] So today I want to talk about the five common retirement spending traps where the five big

[00:00:55] expenses that people later regret.

[00:00:57] And then I want to tell you about a conversation I had with a researcher from Harvard

[00:01:02] University about money and happiness that completely changed my perspective.

[00:01:07] So to start, I want to ask you a question you can pond to this why chat.

[00:01:11] But the question is this and I think this is a question that I would encourage you to come

[00:01:14] back to but it's, are you spending money on things that actually bring you joy that

[00:01:19] actually bring you happiness?

[00:01:21] Because here's the truth.

[00:01:22] Our spending isn't the biggest concern that I see with my clients.

[00:01:26] It's spending our overspending on things that don't actually add to their long-term

[00:01:31] haps.

[00:01:32] So let's look at a few of the items that retirees often regret purchasing.

[00:01:37] In honestly, there's nothing wrong with any of these purchases and many people are glad

[00:01:41] they made these purchases but for the right reasons.

[00:01:44] Okay, let's dive in.

[00:01:45] The first thing that people tell me that they regret buying is a boat.

[00:01:48] This isn't the most common retirement purchase but it's definitely up there in the

[00:01:52] story goes something like this.

[00:01:54] You finally quit working your free of the work week and you've always dreamed of owning

[00:01:58] your own boat.

[00:01:59] You have these images of you sailing off into the sunset.

[00:02:03] But then you purchase your boat and you realize that a lot goes into owning a boat and those

[00:02:08] costs can add up really quickly and they can end up being a drain in the care and the

[00:02:12] upkeep take away from your mental energy and your time and then all the other costs begin

[00:02:17] to drain your retirement savings and before you know it, what was supposed to give

[00:02:21] you joy and freedom in supplying you down and also draining your bank account.

[00:02:27] Now if you were really into the water where you think you might want to purchase a boat,

[00:02:31] there's nothing wrong with that but I would dip your toe into the water.

[00:02:35] Little pun, I promise I won't be that corny through the rest of this.

[00:02:39] But I might consider dipping your toe into the water and purchasing a fractional boat or maybe

[00:02:45] even before that, ran a boat for a weekend or for a week or a couple weeks.

[00:02:49] There's a number of services out there that will allow you to rent a boat.

[00:02:53] So you can kind of see, do I enjoy this?

[00:02:55] Am I actually a boat person?

[00:02:57] Does this bring joy?

[00:02:58] Is this what I imagined it would be like or is it just a big pain and is it going to sit

[00:03:02] in the slip of most of the time?

[00:03:04] The second regret and this is a big one.

[00:03:07] Bequint essential retirement dream at RV.

[00:03:11] You get all the comforts of home and you don't have to worry about watching.

[00:03:15] You imagine yourself traveling across the country visiting the National Parks and all the

[00:03:19] amazing places that we have to visit in the United States.

[00:03:23] But as someone who bought an air stream during COVID, let me tell you it is not all roses.

[00:03:28] Now that doesn't mean I don't enjoy having an RV and that doesn't mean you won't

[00:03:33] enjoy having an RV.

[00:03:34] But like a boat before you buy fry, I think I might pat in that phrase.

[00:03:39] I promise no more cheesy puns.

[00:03:42] But before you buy, you really should try it out.

[00:03:44] Find a place that rinse an RV.

[00:03:46] Ren it for a month.

[00:03:47] Go on the road.

[00:03:48] See whether you enjoy it.

[00:03:50] Are you an RV person?

[00:03:52] So that's the second regret.

[00:03:53] First regret is they regret buying boats.

[00:03:55] The second thing they tell me they regret buying is RVs.

[00:03:58] The third thing people say they regret is building a dream house.

[00:04:03] Many people decide their retirement is the time to build their dream home.

[00:04:06] That house that they've always dreamed of on a piece of property.

[00:04:09] But then you end up stuck with the house that's too big for you and a giant yard to

[00:04:13] take care of.

[00:04:15] And it's not a bad idea, per se.

[00:04:17] But people often regret it because they don't actually count the cost and they don't

[00:04:21] think through it.

[00:04:22] Now this is very near and dear to my heart because my family went through this.

[00:04:27] Not too long before my dad passed, he bought a piece of property in him and my mother

[00:04:31] began to build out their dream house, the place they thought they would retire.

[00:04:34] And then he ends up passing and my mom has a property that is simply too large for her.

[00:04:40] And she just couldn't keep it up and ended up having to sell it, which made her feel bad

[00:04:43] because it had been their dream.

[00:04:46] Same thing goes for a house that's too large for you and it's just hard to keep up or

[00:04:51] you know you build a two story house and then as you age you can't go upstairs and downstairs

[00:04:55] and all the bedrooms are upstairs.

[00:04:56] And so people often regret building their dream house because they don't think through

[00:05:00] the future.

[00:05:01] And it's not that you shouldn't build the home of your dreams when you have the money

[00:05:05] and the resources but you also want to think about your future self.

[00:05:09] Is this some place that we're going to be able to stay for a while?

[00:05:11] So the third regret is building a dream home.

[00:05:14] The fourth regret is something that actually has a lot of positives and that's supporting

[00:05:18] family members.

[00:05:20] Investing in your family is one of the greatest things you can do.

[00:05:23] But what often happens is it can create dependency when you most need financial independence.

[00:05:30] And most people don't regret giving money to their family members to help them buy their

[00:05:34] first home or for a large purchase or to send the grandkids for college.

[00:05:39] But the regret is more around giving money that causes financial dependence, which has two

[00:05:46] issues.

[00:05:47] The first is it causes the kids to fail to thrive because they always think well mom and dad

[00:05:51] will support me.

[00:05:52] And then the second issue is it can often strain the gift-givers finances.

[00:05:57] It can strain your finances.

[00:05:59] And honestly, I see this way too often.

[00:06:01] Just in the past month multiple clients have called me and asked me to take out large

[00:06:06] distributions from their retirement accounts to support their family.

[00:06:10] And to the extent to where they pulled out such a larger amount that I'm worried about

[00:06:14] their retirement plan.

[00:06:15] I'm worried about their retirement being okay.

[00:06:18] But as a parent, I also understand when your kid comes to you and ask you for money or ask

[00:06:24] you for help.

[00:06:25] It's really hard to say no.

[00:06:26] Now look for me.

[00:06:27] My daughter's seven.

[00:06:29] It's a Barbie doll that she's asking for.

[00:06:30] So that's not going to break my retirement plan.

[00:06:33] But if you create dependency, a financial dependency, it can end up causing problems in the

[00:06:39] long run.

[00:06:40] I am in no means telling you that people regret just giving a gift to their family to help

[00:06:45] support their family at certain times.

[00:06:47] But they do regret creating a sense of dependency and their family.

[00:06:51] Now the fifth regret, this one is a no-brainer.

[00:06:54] Now a few of these regrets you might be arguing with me about.

[00:06:57] And so I think you're wrong.

[00:06:58] The fifth one, I think is almost universal.

[00:07:01] We all agree that a time share is often a regrettable decision.

[00:07:08] The presentation makes it seem so attractive but talk to almost anyone who has purchased

[00:07:12] a time share and they will tell you they regret it.

[00:07:15] My family bought a time share once and literally as we drove off the property and the

[00:07:20] glow of the beautiful grounds begin to wear off.

[00:07:23] We realize what if we just done this was a massive mistake.

[00:07:27] Because the problem is not only do you have upfront costs but you also have all these ongoing

[00:07:32] costs and you'll maintenance fees and utilities and taxes and all these very expenses

[00:07:36] which can add up and then you get tired of going to the same time share at the 50 second

[00:07:40] week of the year or whatever the case might be and I know they tell you you can switch it

[00:07:44] but most people end up regretting purchasing at time share.

[00:07:48] And if you do decide to purchase a time share, purchase it on the second during market because

[00:07:53] people are almost giving them away.

[00:07:55] Why?

[00:07:56] Because, well, those people regret purchasing a time share.

[00:07:59] I'll cover some of the financial regrets.

[00:08:01] Let's talk about what brings financial joy or financial happiness.

[00:08:06] And I plan on doing an entire video on this later but as I mentioned in the beginning

[00:08:10] I had the opportunity to talk with a researcher from Harvard University and what she told

[00:08:14] me about money and happiness kind of surprised me.

[00:08:17] But before I dive into that I want to make it quick offer.

[00:08:20] I've started free retirement assessments via video.

[00:08:23] It's just five to ten minutes, basically helping you know how you're doing on your path

[00:08:27] to retire it.

[00:08:28] So in the description below you can just click on the link says free retirement assessment,

[00:08:33] fill out some information and then I will send back a free five to ten minute video just

[00:08:37] kind of giving you an overview of how you're doing on your path to retirement and then if

[00:08:42] you want to set up a call out to that we can do that but just click the link in the

[00:08:45] show that's below.

[00:08:46] Now back to the conversation that changed how I think about money.

[00:08:50] During my conversation with the Harvard researcher I mentioned research that shows it over

[00:08:54] a certain point money doesn't make people happier.

[00:08:57] At the time I think the number of 75,000 or so although I'm guessing that that number

[00:09:02] slightly higher today because inflation but basically a lot of research says that you are

[00:09:07] happier your happiness increases up to a particular level as your income increases.

[00:09:13] And then there's a cap and above that cap then you're not in happier if you go from 75,000

[00:09:18] to 150,000 there's really not an increase in happiness.

[00:09:23] And so I was talking about this study and the researcher said that's partially true.

[00:09:29] She said while having more money doesn't automatically make people happier it he and

[00:09:34] if you spend it correctly.

[00:09:37] And then she said there are three ways that people spend money that increases their happiness

[00:09:42] and so more money does actually make people happier.

[00:09:46] So here are the three areas that they found that spending money can increase her happiness.

[00:09:50] The first is buying time.

[00:09:53] So if you do things to buy back time for example, if you are spending a ton of time working

[00:09:59] on your yard and you're just not at outdoor person you don't enjoy working in your yard

[00:10:04] then for you it might make sense to hire a gardener to care for your yard.

[00:10:09] Now the research is cleared that buying back time and then just sitting inside scrolling

[00:10:14] on Facebook doesn't make you happier.

[00:10:17] But if you buy back time, you know, by hiring a gardener or housekeeper or cooker,

[00:10:21] whatever the thing is that you were spending time on that isn't really bringing you joy.

[00:10:26] If you take that time and then use it to invest in something that does bring you joy

[00:10:31] you can see an increase in happiness.

[00:10:33] So let's say you hire a gardener so you don't have to do your yard work anymore.

[00:10:37] And then you use that free time now to go and play tennis or go hiking or spend time with

[00:10:42] friends that it does increase happiness.

[00:10:45] So the first thing that increases happiness is spending money on buying back your time.

[00:10:50] The second thing they found was people who buy experiences over things.

[00:10:56] So taking a trip to Italy with some of your best friends is an incredible investment

[00:11:00] as opposed to buying a boat.

[00:11:02] Now if you're buying the boat to take your friends out then that might be buying an

[00:11:06] experience and if that is your goal and you are going to consistently be able to take

[00:11:11] other people out in the boat with you then that boat might be a great investment.

[00:11:15] But what they find over and over again that people who invest in experiences over things

[00:11:20] have an increased amount of happiness, things that they can look back on that brings joy.

[00:11:25] I know for us our family we've taken a number of trips with my in-laws and then with my mom

[00:11:31] and those are some of our best memories we took my mother recently to New York City.

[00:11:35] We just spent a week in New York City and took her to all the things she'd always wanted to see.

[00:11:40] We took her to the Plaza Hotel for High Tea and just things that brought her a mince

[00:11:44] amount of joy and created memories in our own life and created memories for our daughter.

[00:11:49] The same thing we with my in-laws to Italy a couple of years ago.

[00:11:54] That created a lasting joyful experience and increased all of our happiness.

[00:11:59] So experiences over things and the final way that they found that money can bring happiness

[00:12:04] is when you invest in others and not simply in yourself so that could be contributing to your

[00:12:08] favorite charity, maybe investing in your church or your synagogue or finding other local

[00:12:13] non-profit that you can be involved with and that you can invest in.

[00:12:17] But they find over and over again that people that invest in others and not simply

[00:12:21] themselves have an increase in happiness. Quickly to recap when you spend money on buying back

[00:12:27] your time, you spend money on experiences and you invest in others, more money does actually increase

[00:12:35] it. Thanks for listening if you found this content helpful,

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