Personal Finance is Not About What You Can’t Have


It takes many forms.

“Denial isn’t just a river in Egypt.”
–Stuart Smalley

There was once a time when I pretty much turned a blind eye to what was happening with my personal finances. Well, I didn’t turn a blind eye. I at least paid the minimum payment on my credit card and invested money in my IRAs, but I wasn’t nearly as diligent about keeping my affairs in order as I could or should have been.

Part of the reasoning behind my poor behavior was because I was living in Germany, and Monkey Brain kept telling me that I was only going to be there one time, so I needed to live it up while I could.

For those of you who are new here, Monkey Brain is what I call the limbic system. There are two main thinking parts of your brain. The prefrontal cortex, or Thinking You, is the one that is responsible for making you a higher order of species than the rest of the animal kingdom. It is like the responsible person in a bachelor party – the one that is supposed to make sure that everyone gets home safely and doesn’t have too many scrapes, bruises, and lurid stories. The prefrontal cortex actually thinks and cares about the future. Without the prefrontal cortex, you wouldn’t have literature, music, or reality TV.

The other main system in the brain is the limbic system. The limbic system was predominant when we lived in caves and chased woolly mammoths. It is quick, emotional, and almost entirely unconcerned with anything more than a few minutes into the future. It wants pleasure, and it wants pleasure now, so it affects your actions by whispering sweet little nothings into your ear, and subjecting you to all sorts of behavioral biases that convince you that you can’t live without that man cave or those Jimmy Choo shoes right now.

When I was younger and carefree, Monkey Brain was strong within me. He would portray my situation as me versus them, with them being people who wanted me to be responsible with my money so that I couldn’t do what I wanted to do. It wasn’t like I didn’t have pangs of remorse, guilt, and outright questioning myself for my behavior when I’d open up those credit card bills with ever-increasing balances. I’d wonder if maybe it was time for an intervention when Monkey Brain would figuratively pipe up:


Me: “You’re right. I can’t have fun unless I’m spending every last dollar I have in credit! Charge it!”

I had the wrong mindset. I was framing my choices in terms of denial. To live responsibly, I felt like I had to give something up.

As we saw in “Why Denying Yourself Doesn’t Work in Diets or in Personal Finance,” denial is the wrong approach.

Plus, it’s the incorrect approach.

Personal Finance is About What You Can Have!

Are You Prepared to Deal With the Human Side to Real Estate Investing?

Unwanted Grief

Sometimes, your renters are beset with unwanted grief.

“Tragedy is a tool for the living to gain wisdom, not a guide by which to live.”
–Robert F. Kennedy

I’m a big fan of real estate investing, particularly if one of your financial goals is to achieve PIRE. We own several properties ourselves and continue to accumulate rental properties. Given that I have zero mechanical ability and we have no desire to deal with the 2 AM “toilet is broken” phone calls from our renters, we use a property manager.

We also use a property manager because she acts as a buffer between us and the renters. Even though it’s quite simple to look on the record of deeds and find out that we own these properties, we’d prefer to keep some distance between ourselves and our renters. We try to be good owners and landlords, rent for fair prices, and provide good, clean, affordable housing, and, by and large, our renters stay in our properties for longer periods of time – which I think is a situation that benefits all parties involved.

However, there are times when we can’t maintain that distance.

Investing in rental properties and psychopathic numbing

Does Your Financial Planner Really Need to be Local?

“They usually have two tellers in my local bank, except when it’s very busy, when they have one.” –Rita Rudner I recently attended a seminar about the state of the Fort Worth and Dallas housing market, put on by the real estate editor of the Dallas Morning News. He was talking about how demographic trends […]

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How Much Would You Have to Budget to Go to the World Cup in 2018?

“We’ve prepared the best we can. We’re ready for it. It’s not about talking. It’s about getting out there and showing by our actions.” –Clint Dempsey I’ve been a soccer fan all of my life. My wife and I went to the World Cup in 2010. We didn’t go in 2014; instead, I spent nearly […]

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Beware the Storytellers

“The most dangerous people are those who have been taught some financial literacy.” –Tyler Cowen “You can’t learn how to become a doctor by watching Grey’s Anatomy.” –Charles Barkley Whenever I meet new people, I invariably tell stories. Whether it’s stories about messing with 419 scammers or funny things that happened when I was deployed […]

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Hey, You Paying Off That Debt!

Yeah. You made mistakes. It stinks looking at that long road ahead. Your friends go out. They have a good time. They have nice things. You scrimp and save. You don’t spend on anything that isn’t absolutely necessary to keep your family clothed, fed, and sheltered. You have to say no when invited to join […]

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