I’ve made 3 financial decisions in my life that have literally added hundreds of thousands of dollars to my net worth.

When you get these decisions wrong, they can do a lot of damage to your financial future.

What do all three decisions have in common?

They’re all tied to the primary principle that I teach in my Foundation to Financial Freedom course:

Build assets first, then spend. 📊

Before I dive into the three decisions, let me ask you this:

When it comes to your personal finances, what’s an asset?

🏡 Is your house an asset?

🚗 What about your car?

I’ll answer these questions below, but before we dive in, remember my motto: No Shame, No Blame, No Judgment.

Put on your researcher’s hat as you read about my choices. I’m sharing them to help you identify areas where you can save some major dollars.

Don’t use my examples to beat yourself up if you feel you might have made different choices in the past.

Let’s leave the past behind and empower ourselves for a wealthier future.

On to those 3 decisions.

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Wealth-building Decision #1:

We bought the least expensive house that met our minimum needs.

{Think of this as a kind of Minimum Viable Product for housing.}

We bought houses that were well below what we could afford, which meant that our monthly cash flow was not affected by the purchases.

I’ve been married to my Mr. YFL for 22 years now. In that time we’ve bought 2 houses.

The first house was modest with a lot of ugly features – including an unfinished, postage-stamp-sized yard – but it was in a great neighborhood with a lot of upside potential.

We stayed in that house for 9 years and made superficial improvements (nothing expensive).

Then we moved to bigger house in a nicer neighborhood in the burbs – without spending a dime of extra money.

We’d made enough improvements in the first house – without taking on any debt – to crank up its value, and we used that value to buy the second house outright.

We could have bought a more expensive house with each purchase, but we chose to get just enough house to meet our minimum requirements…

… while allowing us to keep:

✅ maxing out our tax-advantaged investment accounts;

✅ investing more money inside our businesses;

✅ enjoying nice trips with our girls.

The problem with houses:

Everybody talks about houses being an asset.

On paper, a house looks like an asset because you have equity (i.e. what you’re left with once you sell the thing and pay off all the debts tied to the house), but in reality it behaves like a liability.

Probably the best definition I’ve ever heard for the word “asset” is this:

An asset is something that puts money into your accounts.

❓ When was the last time your house put more money into your checking account than it cost you?

It doesn’t until you sell the thing.

Even then, most people overestimate their profit by underestimating the true costs of:

• the mortgage interest,
• repairs,
• renovations,
• and ALL the things they bought to go into that house.

The entire time you live in your house, it costs you money on a monthly basis.

{Sobering strategy: When you talk about how much you paid for your house, don’t talk about the purchase price; talk about the purchase price + all the accrued interest payments to date. That’s how much you’ve paid for the house – so far, not including all the other costs I mentioned above.}

My husband and I chose to minimize the impact of that liability by buying a lot less house than we could afford.

As a result, we had more than $100,000 of freed-up money to invest for our future, which has compounded significantly over two decades. ✨

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Wealth-building Decision #2:

We chose to be a one-car family and drive boring, reliable vehicles.

When Mr. YFL and I got together, we each had a car and we held onto our individual cars until we had our first daughter.

At that point, we figured that having a child will add to our expenses. If we wanted to keep up our level of investments and start up an RESP on top of that, we’d be better off ditching the several thousand dollars of annual expenses associated with one of our cars and become a one-car family.

On the occasions where we needed access to two vehicles, we would use a taxi (Uber wasn’t an option back then.) Spending money on a few taxi rides a year was far cheaper than maintaining a second car.

It seemed counterintuitive to our friends.

Don’t most people buy another car – or a bigger one – when they have kids?

But we were working from a “Build assets first” model, which meant minimizing unnecessary expenses that added no real value on the one hand, to preserve our ability to keep investing.

Our girls are now 20 and 17, and we are still a one-car family.

And the cars aren’t sexy. Our first car was a Hyundai Elantra Touring, which lasted ten years before we sold it.

Our current car is a Rav4 Hybrid. We plan to hold onto it for ten years as well.

All those years ago I did some rough, back-of-the-envelope math to calculate how much we would save by only having one car. ✍️

It’s in the tens of thousands of dollars by now.

Again, the savings have gone into investments to build our nest egg. 📈

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Wealth-building Decision #3:

I learned to invest.

When I was with my first husband, I deferred all investing to him because I assumed he’d do a better job of it.

Which is kinda crazy because at that time, he didn’t know more than I did. 🤦🏻‍♀️

What he had, though, was confidence.

I made the mistake of conflating confidence with competence.

That mistake cost me nearly $50,000, something I only discovered after his death.

When I remarried, I was determined to figure out investing, especially when I read the stats about the fact that women, on average, have half the wealth that men have. 😠

And that makes us vulnerable.

I’d already experienced financial trauma – to the tune of $400,000 of inherited debt after my first husband died.

I swore that I would never again be financially vulnerable.

So I hunkered down and spent the next five years learning an evidence-based system for investing.

{My research background came in handy. 🤓}

Honestly, this has been the single most important thing I’ve done.

Because it allowed me to put all our extra cash straight to work, compounding over the long term. 📈

Twenty dollars here, a few hundred there, and the occasional chunks of thousands as we saved money on housing and car expenses.

Those small sums started to grow…

… and they became the multi-seven-figure portfolio we have today.

Here’s the thing:

💡 It’s not enough to save money; you also have to put it to work for you by investing it.

One of the most powerful things you can do for yourself, outside of locking in BIG WINS like👆 is learn how to become a confident investor.

Then funnel as much money as you can into your investments to build wealth.

When you’re wealthy, you can have the fanciest car around or the high end home of your dreams.

But I’m guessing that by the time you get there – having wealth that sets you free to do, be, and have whatever you like – you probably won’t care about the fancy car and the big house.

You’ll be too busy enjoying all the things that matter most to you and spending your money on your values.

That’s what taking a Build Wealth First approach does for you.

If you want my help to learn how to invest, get on the waitlist for my Investing Made Simple course. I’ll let you know as soon as the doors open later this month.

One last thing: If you take me up on my invitation to do a spending audit of your housing and transportation costs, send me a quick note to let me know how you make out.

I bet you’ll surprise yourself!

Much love, 💚

Doris

PS Share this message with a woman you love. Let’s help her build her wealth, too! If the content resonates with her, she can hop into my community here.