10 Money Tips that Cost Me $100,000 and a Few Thoughts on Being Rich

What most people fail to tell you about money is that it’s suffocating. The weight of financial pressure robs you of the very breath in your lungs. I remember the feeling of laying in bed at night, staring at the ceiling, playing out the events in my mind as it became more and more difficult to breathe. “What if” was a familiar foe that sang me to sleep with its lullaby of foreclosure and shame.

I hated those nights. But for nearly ten years I lived in fear and called it wisdom. Like a real-life Rocky Balboa that refused to stay down, I continually tried to pick myself up. But this wasn’t a movie, it was my life. How foolish.

It took meeting a true fool, The Extravagant Fool, to understand the error in my ways and gain much-needed clarity. After a  few years, those seeds of true wisdom have begun to take root and bear fruit of their own. I guess it’s easy to see stupidity in the rearview mirror, but it’s rarely obvious when you’re looking through the windshield. I was barreling toward a head-on collision and had no idea until I was pulled from the wreckage.

My $100,000 Mistake

My wife and I bought our first house in sunny south Florida. Less than two months after our wedding, we purchased a $279,000 home on a stated income loan with 100% financing—how convenient. Today, bankers would get nauseated thinking about those terms, but in the days of rapid appreciation and easy money no one seemed to care.

Ten months later, we relocated to a new sales project and our home-sweet-home became a rental. By that time, the market had begun to stall and we weren’t able to sell without taking a loss. Common sense convinced us to become landlords. I guess that’s why they call it “common” sense—common is rarely exceptional.

At the low-point, the home’s value had plummeted $150,000 and the neighborhood was thick with foreclosures. It took eleven years for the market to rebound and I finally sold the home last year for $199,000. The only silver lining was that because we didn’t foreclose, we were able to claim our losses against our taxes. The refund money was nice, but it came with a few hard-earned lessons:

» Equity is never guaranteed
» Small losses today are better than huge losses over time
» Put 80% down and purchase a 15-year mortgage
» Your primary home shouldn’t be justified as an investment
» Never become a landlord by default

That advice is free, but it cost me more than $100,000.

Building My Kingdom

At twenty-four, I cashed my first $30,000 commission check. I did the same the following month. I remember feeling like I had finally made it—like I was finally packing my bags from middle-class America and moving into a better life. The problem was, the income made it easy to justify bad decisions. Instead of dumping the rental house and taking the loss, we just kept pushing through.

Money blinds you to reality because it shifts your focus to who you hope to become. I failed to recognize the great, wonderful life that money couldn’t buy. That’s how money subtly begins to define you—it promises you things it can’t buy. In a world tells us that we’re not enough, money tells us that it can buy what we so desperately long for. We want love or approval or meaning, but we settle for popularity and financial security instead.

We lived like that for nearly ten years. Our family was growing along with my income and we were in the process of building our dream home. On paper, it made complete sense to turn our current home into a rental as well. That would have made three kids, two rental properties, a dream home, and one dog. Until one day, a friend said, “Look at you, just quietly building your empire.” The comment was intended as a backhanded jab, but it completely wrecked me. He was absolutely right.

I had convinced myself that I didn’t need to live on a budget and that I could out earn any bad decision I might make. More importantly, I was trying to buy my identity by building a kingdom for myself. We enjoyed a great life, but I had learned a few more costly lessons:

» Bad money decisions begin with bad thinking
» Money can’t buy your identity
» Everyone needs to be on a budget

» Stupid is expensive
» Whose kingdom are you building?

Again, that advice is free, but you have to be willing to decide for yourself.

When Money Becomes a Resource

As I learned these very difficult and expensive life lessons, I became resentful toward money. I felt guilty for having any and at the same time, my whole life was orchestrated around protecting what I had. But money isn’t bad—it’s simply a resource to steward, not paper to be hoarded. The more you hold on to it, the more it holds on to you. But the more you let it go, in faith, the more it returns.

My wife and I were recently on a date night in downtown Wilmington when a homeless walked by and asked us for money in exchange for a song. I gladly gave him a few dollars to listen to him sing. As soon as he opened his mouth, I was captivated. He had the most remarkable voice I had heard in quite some time. I immediately felt compelled to be generous to this man, but I hesitated for a moment and he walked away.

Not wanting to ignore the whisper of the Holy Spirit, I told my wife to wait and I went to find our singer friend. A few blocks over, I found him talking to two college-age guys who were offering to buy him a meal. As I approached, I called him by name and he walked toward me. I pulled a $100 bill out of my pocket and offered it to the man. He began sobbing as he took the money from my hand. Then, something amazing happened.

The two college-age kids had seen the interaction and began to walk toward us. They looked at me and said, “Are you a Christian?” I told them that I was and that I felt led to pray. Right there in the middle of the sidewalk, we put our arms around each another and we prayed. That night, a homeless man left $100 richer and all four of us were encouraged by the richness of God.

Rich Toward God

I have come to the conclusion that there are two types of rich people: those who are rich in the eyes of the world and those who are rich toward God. I had to become rich in the eyes of the world to understand that I wasn’t rich toward God. Like the “fool” in Luke 12 I was building bigger barns while my seed was rotting inside.

The truth is, every dime I’ve lost is worth it because it has taught me what it truly means to be rich. Being rich isn’t about what you have, or even what you do. Being rich is about who you are. Common sense will tell you otherwise and promise you all things if you seek money first. But it doesn’t work that way. When you learn to be rich toward God and seek the kingdom first, all things will be added to you.

I encourage you is to slow down, step outside of the hamster wheel, and really process your relationship with money and how your heart is tethered to it. Then, you have to decide.

Which type of rich do you want to be?


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2 Responses to 10 Money Tips that Cost Me $100,000 and a Few Thoughts on Being Rich

  1. Christopher Riley April 7, 2017 at 8:09 am #

    This is some of the best advice anyone could receive. Something we would all want our children to know to gain this wisdom without having to “learn the hard way”. God doesn’t reverse rank us based on our net worth. He only asks through Jesus “Where your treasure is, there your heart will be also.” I’m a long way from an answer I’d be proud of on that one. 🙃

  2. lwwarfel April 7, 2017 at 7:09 pm #

    No matter what age we are, we have the responsibility to be wise stewards of all the blessings God gives us. Thanks for sharing this.