Making decisions while emotional can be dangerous

Making decisions while emotional can be dangerous

The housing market is on fire right now. You might have heard that there’s a housing shortage. Along with that, interest rates are at record lows and there’s a push for remote working. With all those factors combined, people are selling high, buying high, and willing to pay more to get a home. In my neighborhood, homes for sale don’t stay on the market long and people are selling at a high price. This triggered a discussion between my wife and I. Should we sell? We had talked about moving and we see neighbors selling like hot cakes. I got to thinking that how many decisions have I made because there was a wave and I wanted to get on that wave. Rather than making logical rash decisions, I’m making emotional decisions. Making decisions while emotional can be dangerous.

Speaking of waves, I got on the Bitcoin wave when it was all over the news. I invested a little bit and after a couple of months, the value cut in half. Not knowing what Bitcoin really is, I just went with it and when I saw it go down in half, I sold. Many months later, it’s grown 3 times what I sold it for. I let my emotions get the best of me.

When you’re on vacation, how many times have you heard timeshare or something similar? You’re so happy to be on vacation and the resort is offering free incentives to hear their pitch. You’re excited just to be on vacation and emotions are high. Next thing you know, you hear a great deal and you’re signing papers. Majority of the people I know regret their timeshare. They made their decisions based on emotions. I’m not saying all timeshares are bad by the way.

I told my wife that we need to look at what decisions make sense for us. Just because everyone is doing it doesn’t necessarily mean it’s right for us. Just like how we see many neighbors who are selling their homes and moving out. The temptation is there because we see so many who are selling but is it right for us?

I’ve made emotional decisions in my lifetime like buying and selling stocks I didn’t have a clue about. Our investment condo was an emotional decision that was impromptu. Although that decision was hard in the beginning, it has given us exposure to real estate investing and has become an asset. Making purchases and decisions while being emotional can take a financial toll on you. Make decisions that are logical, rational, and realistic. Make decisions that is right for you. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on FacebookInstagram, and Pinterest.

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