Personal finance is not just about the math. While I coach people on how to evaluate the math, I also coach them to make money decisions that fit their entire life. Money is a tool that helps you build the life you deserve. That means that you deserve to spend your money on your highest priorities that will intentionally improve your life. The math is only one aspect of a personal finance decision.


Gino enjoying the backyard at our multi-family when we lived there.

The most important part of any decision is that you are building towards a life you want to be a part of. When Kayla and I made the decision to purchase a multi-family for our first home, it fit with our current lifestyle. We’d been living in an apartment building, already sharing walls with others, so that part did not bother us. While we were ready to buy a place, we still had a few years before we’d be ready to start trying to expand our family.

Living in the multi-family improved our life in so many ways. We’d been living in a studio and suddenly had two bedrooms! The second bedroom then became an office during the pandemic. We finally got a yard for us and Gino to enjoy. On top of that, we were both closer to work, shortening our time on the road. That quickly became irrelevant for me in 2020, but still helped Kayla. My point is, keeping in mind the aspects of your life like your physical comfort is important. Living in a multi-family just may not suit your lifestyle and that is totally understandable.

Be careful not to compromise with yourself over the long term just for financial gain. This is markedly different than doing something in the short term like working a second job on the weekends for a little while to get out of credit card debt. Short term sacrifices for financial improvement are meant to be sprints, not a whole marathon. Burnout is more likely in this situation, which will lead to other issues and your ability to make decisions.

Risk Tolerance

Risk tolerance is the level of risk that an individual is comfortable tolerating. This could mean the level of risk between purchasing individual stocks or keeping your money in a savings account. In the case of owning a multi-family home, this is being able to tolerate the risk of having multiple units’ worth of appliances, utilities, etc, break or having terrible tenants or any other number of things that could go wrong. If the thought of this stresses you out to the point where you think it could negatively impact your lifestyle or health, move on. If this challenge is something that interests you, keep going.

The challenge of having tenants was something that I was excited about, along with the possibility of fairly steady passive income. There is a risk for things to go wrong, but a well-stocked emergency fund and a bit of googling have served me well thus far *knocks on wood*. The best part is that I know if at any time the risk outweighs the benefits or we are no longer interested in managing a home there are options. We can hire a property manager or move towards selling the home and use those funds elsewhere.

Short Term vs Long Term Math

Even when taking a look at the math, it’s important to look at how your decision will impact you both in the short term and the long term. For example, in the short term, purchasing a multi-family required a large outflow of cash. This was especially true when we discovered an $11,000 plumbing issue just one month after moving in when we still had no tenants to help offset those costs. Moving forward in time to where we are now (3 years later) the multi-family cash flows well. Even further into the future this home will make a significant impact on our net worth and ability to spend more time with our future kids while they are still living at home.

If you need help in determining how a decision will affect you in both the short and long term, I recommend working with a financial coach or other professional to make sure you’re considering all options and have a complete picture.

Just a Piece of the Pie

Personal finance is not just about the math. It is just a piece of the pi (see what I did there? ahh… math jokes.). Seriously, the personal finance portion of a decision is just one part. If everyone based all of their choices off what was best for their money, everyone’s life would look suspiciously similar to one another. So, be careful to check not just how the math will affect you in both the short term and long term.

Remember, just because you’ve made a decision, doesn’t mean that you can’t change it in the future. Many seem to think that major decisions, like buying a new home are “one and done”. There may be costs associated with changing your mind, but at that point you’ll have to weigh if that new decision meets your lifestyle, risk tolerance and budget in the short and long term. With all of this in mind, you can be configent in your decision making process and use your money as a tool to build the life you deserve!