Hello everybody, it's Sam and Sydney from the Financial Samurai podcast. And in this episode, I want to talk to my wife about what the latest thoughts are regarding upgrading homes. A couple of months ago, I had an episode that talked about trying to convince my wife, Sydney, to upgrade homes, and I was met with a lot, a lot of resistance.

But two months later, it seems like things have changed a little bit. And I wanted to ask you, Sydney, what has changed? Why do you think upgrading homes now could be a good idea? Well, like you said, a lot has changed. And the main thing that comes to mind is when we had our initial conversation, I was not in a good headspace.

The timing was off for me. I had a lot going on with my mom, because I was preparing for a big trip overseas to Japan. I had a lot of issues preparing for it and dealing with logistics. And mentally, I was at capacity. I just couldn't envision doing anything besides getting through that trip and getting back.

So that was my main thing. I just mentally, I couldn't comprehend having to think about moving, because moving is a big deal. I mean, some people are used to it, but for me, I'm not so used to it. Okay, so you're back from Japan, and things went well. So it's been, what, a month since you've been back?

And so now, how is your headspace? It's a lot better for sure. I have done a lot of thinking, a lot of talking with you. And once I felt calm enough to actually recognize that this was something that you are definitely taking very seriously, I sat down and put together a list of pros and cons of staying versus moving, and really put a lot of thought into it.

And I felt like you, after going through everything, that yeah, it could be a wonderful change for us. What are some of the pros and some of the cons? Let's just talk about three pros and three cons. One pro is that we like the area. It's new for us.

It's quieter, and it's just very peaceful there. Second pro would be the layout and the space is different than what we have, and I think it would be really fun. The third one would be just going on a new adventure, like you were saying. I think we're ready for something new.

And then some of the cons? Just the fact that we are happy here already. We don't feel like we're unhappy, so we are taking a risk of going somewhere new where there could be some unknowns. So there's that potential of being in a different type of environment for us.

Another one would be we don't know the neighbors. That's always a risk, right? Sometimes you could end up having a crazy neighbor. We've talked to some people in the area, and they seem to be great, so I think it would be fine, but that's still an unknown. The con of spending time and money to go through a move.

It takes a lot of time to go through that. What's interesting is one of the cons you don't bring about is the cost of actually paying a lot more for a new house. And I wonder, is it because you don't feel the responsibility of generating the income to come up with the funds to buy the house?

Because for me, that is one of the top three cons for sure that kind of weighs on me in terms of, man, I've got to spend a lot of money, and then there's more property taxes, more maintenance, and that's going to be a heavier or brighter burn in terms of monthly expenses.

We have definitely talked about this, and that was one of my biggest holdbacks initially is that the numbers were not something that I felt comfortable with in the beginning. And that's why, on top of the stress, I just couldn't imagine it being the right move for us at the time.

However, we had a lot of discussion since then. We looked carefully at the numbers, and I feel that we arrived at a place together where we both felt comfortable with it. But yes, it's obviously a significant factor in moving houses, and I do think that's the main thing that you bear, your responsibility.

And I obviously am involved with that as well. But I feel that I'm in a much more comfortable place about the finances now than before we had a lot of discussions about it and really dug into the numbers. Just for our listeners, if you're interested, we plan to pay cash for the house.

We plan to pay cash by selling some stocks and some various bonds, perhaps, some treasury bonds for sure, that have expiring maturity dates. And so the way I think about it is it's almost like just an asset transfer. Since 2022, stocks have rebounded. They're definitely up more than 20% since October 2022.

And in terms of house prices, the house prices in the segment that we're looking at have come down. San Francisco overall, I think from 2022 to 2023, home prices are down about 8.5%, the median home price. And it started to take back up a little starting in the second quarter of 2023.

So the way I see it is, OK, we can upgrade homes. One of the biggest complaints is there's not a lot of inventory. But if you can find that perfect home in a low inventory environment, right now I think could be a great time to buy because you've identified that home.

And there's not a lot of competition because mortgage rates are up. And so if you have a lower priced home while your stocks are rebounding, then it's kind of like, wow, my stocks have rebounded and I actually buy something that I want. This sounds like a good asset transfer.

So it's not taking on debt at this point in the cycle. It's just transferring assets from stocks and treasury bonds to a home that we would live in. So just FYI for those folks listening. In terms of one of your main concerns on whether this is the right move or not, you talked about just the uncertainty of the move and whether because we're already happy in our existing home.

And so I thought about that a lot. And at a certain point, I think all of us reach a level of financial stability where we're happy being able to provide food, clothing, shelter, transportation, education to our family children. And we really don't need much more than the basics. And so one of the things that I've struggled with the most is buying a home we just don't need.

It's like, we just bought this home in 2020. Why do we have to buy another home in 2023? And so my biggest fear, and I heard you loud and clear back when we started debating about whether to buy another home, was us buying another home, leaving a home that we're already happy with, and you not being happy in the new home.

And the kids not happy in the new home. That's one of my biggest fears. Because then I'll be like, well, I just shot myself in the foot thinking that this would provide for a better lifestyle for our family for the next 10 plus years. And yet we're not happier or you're actually unhappy.

So can you share your thoughts on that worry that I have? Yeah, it's totally understandable. And I think in any kind of huge decision like this, when you're in a partnership, in a marriage, you have to both be on board to successfully take the step forward. And we have had countless discussions offline together about this.

We talked it through and I got to a point where I felt that I could emotionally let go. And I think one thing with me is in any kind of big decision, I don't like to yo-yo back and forth. I can't take that emotional uncertainty. And I wasn't ready to do that when we had our initial conversation on the podcast.

So over time with additional conversations and analysis and thinking about it, I got to the point where I felt that I was emotionally ready to move forward and let go of our current home and welcome the new house. And I am fully on board with that now. And I know that we are going to be happy.

There will be unexpected variables. I'm not going to say that there won't be, that just life, there's always going to be something that you don't expect. And I think there are so many positives. Kids are excited. We're moving forward, united on this decision. And I think it's going to be a lot of fun.

My fear is that I'm too good of a salesman. So if I listen to the podcast regarding our debate, you are no, no, no, no, why move when we're already happy. And I was trying to sell you on the other side. So now that I've succeeded in selling you on the move, now I actually worry.

I worry, uh-oh. I feel like I could sell you going back to staying in our home. That's my problem. I feel like I'm too good of a salesperson to convince you to do something that I am almost like bullying you into doing something that you don't really want to do.

Not at all. And I think what, you know, we've actually had the opposite, right? There were some unexpected things that came up where you were like, "Okay, maybe this isn't the right decision." And I had to explain to you that I am comfortable with it. We're going to work through these issues and that this is the right decision for us as a family.

And as you know, I personally take a longer time to come around to change than you. And I needed, this has happened in the last move that we made, right? You were ready to move and I wasn't. I needed more time. And then I got to the point where I was ready to commit and then we took the steps forward together.

And I think the same thing has happened here. I wasn't ready, you know, several months ago and then now I am. And I just need, I need more time to mentally prepare for change and to think through all of the different pros and cons. And you know, I just take longer to process things.

I guess so. It's interesting because when I was talking to other guys about this dilemma that we have, it was rare for them to say, well, it's rare for a situation where a husband or wife, whatever, has identified a nicer home than they currently exist in and getting so much resistance for wanting to buy that nicer home.

So I think that's rare in the sense that you are, we're creatures of habit, we're comfortable and shows that you're comfortable with what you have. You're happy with what you have, which is a good sign and you don't need more. And that's, that is kind of the conflict internally that I'm trying to think about as we get older and hopefully wealthier.

I think most listeners will get wealthier over time and they'll have an excess amount of money than they figure out what to do with so that they don't waste all that energy and effort that they initially expended to earn and make that money. So in terms of that emotional attachment, you know, I hear you on the emotional attachment, which is why I wrote a post called five ways to overcome emotional attachment to buy a new home.

And one of the ways to overcome that emotional attachment is to tell yourself it's not the home, it's the people around you. And so do you believe it's really you're confusing the attachment to the home that we currently live in versus really it's your attachment to the three of us, your two children and me?

Yeah. And for me, it's also just, you know, how much stress I can handle. At the time, you know, initially I could not mentally take anything else in terms of big changes and I just, I was at my mental limit. And fortunately I'm in a much better headspace now and we were able to have a lot more discussions about everything.

Well, that's the thing. It's very important that you bring up your mental limit because I think we all have different levels of mental capacity, right? Maybe I have like a super tanker storage facility of mental stress that I can deal with. And maybe you have a smaller capacity, right?

So it's very different. So if we have different mental limits, like we have different strengths, different endurance levels, different anything, I think we need to be aware of that because it's not a default setting where we all have the same ability to, let's say, rise early or work certain amount of hours.

And I feel, I'm afraid that one day my mental capacity won't be able to deal with as much stress as possible. So the way I envision it is once your mental stress load or capacity is limited, it overflows into my bucket and it fills up my bucket, right? And so that's my duty as the husband to try to, you know, work harder or try to calm you down or make sure everything's okay, you know, take care of the kids, whatever it is, right?

Just to be there as the backup, like the backup generator. And my fear is that as I get older, slower, weaker, less mentally with it, that my mental capacity will decline. Unfortunately, it's sad, but that's kind of the way things are with life. And so if we move and then I have to deal with another set of tenants, if we don't sell our existing house, my ability to take in your stress and deal with my own stresses will decline.

And what's also really sad, I think, but also fascinating is that we both don't have day jobs, right? We both set our -- Traditional day jobs. Traditional day jobs. But still, I don't have to write, I don't have to record a podcast, I don't have to do nothing. I just have to ensure that our finances are stable, you know, I stay healthy, I pick up our son from school and send him.

And now that our daughter's going to school three days a week, we have a lot of capacity. So what is that law? It's like Parkinson's law or something where it's the work fills up the time you have to do the work. It's like it doesn't really matter how much time you have, we're going to fill up that time at the pace that we have.

And so what are your thoughts on, you know, my fears on reaching my mental capacity limit? I think we all, in general, as a society, are under a lot of pressure. And I guess we get so absorbed with so many things that we forget to self-care. And I think, you know, even just taking, you know, two, three minutes a day or every other day to just block everything out and have quiet, I think, is really beneficial.

There's all these little things that we can do to help decrease our stress, clear our heads, you know, and increase that mental capacity when it feels like it's going down. Yeah, I always believe that if you feel mentally ill, treat it as a physical illness, take 24 hours, drink a lot of water, get a lot of sleep, and recharge.

Because it is really interesting for me once we had kids about the stress that increased for me, whereas I thought, "Okay, well, we got kids now, so I got to provide, I got to earn the income, I got to asset allocate." You know, managing money is almost like a full-time job if you want it to be.

And then to do the childcare and then to write on Financial Samurai and then to record and then to write the book, it just keeps on going on and on. So it's an interesting situation where it's almost self-inflicted. It is self-inflicted. It's not inflicted, it's like it's our decision, right?

So for folks who want to work and take care of children and all that, just know what you're getting yourself into. Really carefully plan ahead and think through the steps. Because it's not easy. The more you have, the more stress and the more responsibility you need to take. And if both partners' mental capacity and endurance is not equal, the one who has greater capacity will have to pick up the "slack," right?

To make sure things are going to be okay. And so, yeah, think twice, maybe think thrice about upgrading homes, which is where I'm at right now, right? In the beginning, two months ago or whenever we talked, I was really gung-ho about it. I was like, "Okay, this is a great deal.

This is a house that I looked at last year for a much higher price. It's lower now. Our stocks have rebounded. It's a great layout, large lot, really rare, and I think we'll be happy there." But now I'm thinking, "Okay, is this the right move for us?" I think this is kind of the pattern that you've had in the prior purchases that we've done, where initially it's very exciting, and then the closer it gets to actually happening, the reality of it sets in.

So that's when the anxieties start to come out more than initially when it's just thinking about how fun and exciting that it's going to be. So I think what you're feeling is completely natural. It doesn't worry me because I know this is the pattern that you typically follow before a purchase.

It's good that you're getting all of your feelings out and you're really thinking it through because in any kind of purchase that's this big, you want to really be sure that it is what you want to do. So I think you're just going through all of your thoughts. It's always a little bit scary, as you've told me, before it happens.

And then... Right. No, I hear you. Every single home purchase that I've made, it's been very nerve-wracking, very scary. I remember getting the phone call, something like June 6, 2020. I was at the playground with our son, and I got a call from the realtor saying, "Congratulations. The seller loved your real estate love letter, and they've accepted your offer." And I remember thinking to myself, "Ooh, great.

But okay, thank you so much." And I hung up and I sat on the seesaw, and I just thought about it. I was like, "Oh no. After all that work, they accepted it. Am I really going to go through with this?" And I felt this way with every single purchase since 2003.

Every single property, "Uh-oh. Is this the right move?" And I would say every single one has worked out well, financially at least, but all of them have worked out well lifestyle-wise. I think it's just a little different because of the financial responsibility that I feel the weight on my shoulders.

When we were back in 2012, when I left, I was like, "All right, let's just live a simple life in Hawaii on the mango farm, go surfing, eat off the fruit of the land, and then maybe we'll make $25,000 a year online and have some passive income, and that'll be great." And now life is a little bit more complicated, and I have to be careful not to go overboard because I think a lot of us want to spend our wealth, but a lot of us who are used to being frugal, investing heavily, and not buying things we don't need have this trepidation.

And then in the end, we end up with a lot when we're older, and then maybe we will regret not living it up as much as we could. Do you have any thoughts on that? I think what you're saying makes a lot of sense. We typically aren't big spenders, so buying a home feels uncomfortable sometimes because of the significance of it to our financial situation.

So you're gung-ho on moving? Yeah. And again, it took me a while to come around to it, and then I felt once I made my mind up, I felt comfortable with it 100%. And there have been some unexpected things that we've had to consider, but I feel very comfortable with it, and I'm fully on board with the decision.

And let's say we move into the home, and I don't know, goodness forbid our son breaks his arm because he's jumping around the property because it's so much bigger or something. Will you blame me? No, of course not. Okay, because my fear is that one day you'll be like, "Well, you see, if we just stayed at our existing place, none of this would have happened." No, that's not how I am.

That's not how I am at all. Especially in a decision this big, we're not going to move forward if we're not both 100% on board. We are making this decision together, and we're not going backwards. I am not going to ever ... I would never say something like that.

There's no way. Okay. Wow. It's just human nature. Heats of arguments. You just never know the future. For me, I've learned a lot, and I don't know if I've said this already on the podcast, or I said it in a post, but the reason why I'm comfortable moving every two to four years is because that's exactly what I did when I was growing up as a son of two Foreign Service officers.

We moved around every two to four years. And every single move, I was a little bit sad because I had to leave my friends, but I was also happy because I got to meet new friends, go to a new country, new food, new wonderful, wonderful experiences. And I moved around.

I think it was six countries, Malaysia, Taiwan, Philippines, Zambia, America, Japan, and I thought it was a wonderful, wonderful, wonderful experience, full of excitement, full of adventure. Whereas you, you have had a more stable living arrangement where you were in the same house from elementary school up until sophomore year in high school?

Through college. Well, I wasn't living at home during college, but my home stayed the same. Okay. Yeah. Yeah, so I think that is partially why you're more hesitant to move, and you probably have thought why I'm so unstable in terms of wanting to move so much. You probably thought I was crazy for wanting to like, "Wait, you're looking for another house?

We just got here." I don't think you're crazy. I think, yes, we did grow up in different environments, different lifestyles. However, as I said, we're moving forward with this decision together. We're not going to make a decision this big without being on the same page. No. Well, I think this was good therapy for me because I do have a lot of fears, and I think listeners can hear the fears and concerns that I have in my head.

If you're looking to upgrade homes, buy a home you really don't need, have these heart-to-heart conversations with your significant other because there will be good and bad things that will happen on your move and once you do move, and you want to make sure that you guys were on the same page and there was no miscommunication.

I think in a natural way, my trepidation now is to help protect me in the future of frankly you not being happy in the new home. Oh, come on. I'm an easy person to please. I'm very low maintenance. I am not the type to complain or say, "I want this.

I want that." That's not who I am. You know that. It's more my fear of making you stressed and unhappy in those moments because life is full of ups and downs. If we do move, I hope we can look back on this episode and you know that I had fear and I was thinking about you, about your stress levels and the potential for what could go wrong because every single time I do something big, when I move forward, I think, "Well, of course the positives are going to be greater than the negatives," but then the negatives always happen and sometimes I miss them.

When I miss them, then I feel guilty and I feel bad. Hopefully, this conversation will make you realize that I'm doing my best and I have this fear and I'm trying to be as thorough as possible before we move forward. Just on a practical note, for those who are looking to buy homes, I think, and I could be wrong, but now with rates so high, it's a very compelling time.

The competition is way down and rightly so because it's harder to afford a high mortgage rate. It's harder to come up with the funds and so it's less competition. We have less competition, you have more bargaining power. So anybody who's listing now, well, it could be a time to take advantage because I do fear that if mortgage rates come down by 1% to 2% in the future, that frenzy that I have experienced over the past 20 years, it ebbs and flows, will come back and if you identify that nice home during a frenzy market, chances of you actually winning without overpaying or winning a bidding war is very, very low.

So be prepared, folks. Have deep discussions. Get on the same page. Run the numbers. Look at my 30/30, 3-5 home buying rule. Look at my net worth and income rule for buying a home. These are really good guidelines to help you make one of the biggest decisions of your life.

I hope you enjoyed this little banter and you can use it to talk to your significant other about the gravity, the seriousness and the potential joy of buying a new home. Thanks so much everyone for listening and if you want to subscribe to the Financial Samurai newsletter, we're at financialsamurai.com/news and we'll keep in touch.

Bye.