Growing up, I remember the choose-your-own adventure novels, where at different times in the text you were asked a question and had to make a decision. Your answer would lead you to a different page, however another answer would create an entirely different story. Life is often like those books. You make one decision that leads to one set of outcomes, however if you had chosen differently, you would have been faced with a different set of questions or obstacles. The first decision you made influenced later decisions and your life path.
The same thing can be said of your financial choices: financial choices don’t have just one effect on your finances; any one decision can effect many areas of your financial life. These decisions can use more of your cash flow or provide more investable cash. It is your choice. For example, if you’re buying a house, probably the first thing you’ll ask yourself is, “Can I afford the mortgage?” But buying a house is just not a cash flow decision or a debt decision. It’s also an investment decision, an insurance decision, an estate decision, and a tax decision. There’s a litany of other decisions that come from your first decision of buying a house. There are many financial areas that your purchase of a house is going to affect, and if you’re not looking at all of those areas, you may not make the best financial choice—the choice that will help you to keep building wealth, to get to your goals in life, and to live the life you wish now.
However, with a little foresight and a plan, these decisions don’t have to surprise you. By setting a roadmap of possible outcomes, as well as other decisions you’ll have to make, you can prevent any surprises down the road. Take that house you want to buy, by researching ahead of time the list of decisions you’ll have to make won’t be overwhelming. You’ll know about the insurance and the taxes, the maintenance and the upkeep. By preparing yourself at the start of the decision-making process, you’ll be better apt to handle the decisions later down the road.
For more information about financial decision-making, visit tswealth.com.
