I was reading the post by Julie Rains, Road to becoming a rich idiot, and the paragraph below triggered the wave of my thoughts.

‘Learn from the “repercussions of your previous actions,” making mental connections to what has succeeded and failed in the past, and always applying what you already know to new business ventures, office procedures, investing strategies, etc.’

There are a lot of things my husband and I don’t talk about at present. The main reason is that we have different view regarding the past. Mine is to learn from the past. His is to simply forget the past.

It’s very hard to talk about the past-especially our stupid financial mistakes-without any thread of negative emotions, I could understand why he would rather not talk about them at all, even though I have no intention to blame or to regret. What matters to me the most is we need to learn from our mistakes, I have learned my lessons, and I need to know that he has learned his. I have tried to get some clues. One year ago, I told him that we would have been much better financially if we only owned our first house and had not purchased the other two houses, he replied, “ how bad is that to make $200,000?” Our point of views were so different that the conversation could not continue. We sold our first house, to say that we made $200,000 from the sale is to dismiss the remodeling costs, the closing costs, new investment costs and the holding costs. That was one of the short conversations we had.

Two weeks ago we had friends, a couple, stayed overnight with us. Michael said to them at dinner, “ her money making ideas got us into trouble.” I did not respond to that remark, since there was some truth in it. If we had not invested in real estate or traded forex, we would be in much better shape now, I agree it’s my fault to sprout those ideas, and yet it is not those ideas that got us into trouble, but how we approached them did, and he contributed to that part more than I did. ( If you have not read my money story, I highly recommend you to check it out, it’s one of my best posts.)

Let me give you some facts first. About real estate, the first house we bought at $299,000 was a very good deal, it is still a very good deal even in today’s market, a totally remodeled 3-bedroom house in the bay area. I had some doubts if we could afford it, but he decided to go ahead and bought it, he deserved to have the credit. After owning our first house we kept on going to open houses on weekends, and on one of the occasions, he heard from the realtor that the housing market in one city was very hot, he was excited and drove us there. I was not familiar with that city, and the books I read about real estate stress the importance of knowing the market, it was not a market I knew, I was not sure about buying a house there, but we did because of him, we bought our second house for $389,000, a partially updated Victorian house with some foundation issue. We kept on going to open houses, the numbers were not making sense to me, I felt relieved when he just passed them on, but one day we saw a major fixer-upper, and he liked the potential of the house very much, so we bought our third house for $452,000. He was the main person who decided to buy these houses.

About forex, in the beginning after I lost $5000, I stopped trading. He did not want me to give up, he jumped in trading himself without demo trading first, and lost the remaining $5000 very fast.I was searching online for ways of making money, and came across one forex trading system, which I demo traded a few months before I started live trades again. I started to make good money, he wanted me to add more fund, I was ok with that since I was making money. After I got margin call and lost most of the money, he wanted me to put $20,000 borrowed from our credit into trading, I did not feel safe about it, and yet I did what he said. We lost that $20,000 too. Trading foreign currency is very risky because of high leverage and volatility in the market, one way to manage the risk is to trade the money you don’t mind losing, which we did not follow.

Knowing these facts, would you say such remark that her money making ideas got us into trouble, if you were him?

He said now that he wishes we have no houses at all. If we rewind time back one year to that conversation I had with him, would he still say, “ how bad is that to make $200,000?” Which is better, to own one house with a mortgage of $299,000 and healthy monthly cash flow, or to own two houses with two mortgages of $763,000 total and cash of $60,000 from the sale of the previous residence? Yes, $60,000 after we took some proceeds and paid off our line of credit on our rental house, which was about $40,000, so we had about $100,000 from the sale, not $200,000. How long did that $60,000 last?

Another short conversation I had with him last year ended in disagreement. I told him that it was stressful when we had a few months of vacancy after we closed escrow on our rental property, that it was very stressful when we spent 9 months renovating our third house and a few more months afterwards trying to sell our previous residence. He replied, “I like it. I don’t mind the stress.” What is there to like about financial stress coming from piling up debts and nearly exhausting all lines of credit and living on the edge of a disaster? It’s beyond me.

Money issue is the number one issue couples have. I can not expect life to go easy on me on this one. I shall talk to him again. To be continued.

Meanwhile you may learn something from other bloggers’ financial stupidity:

•My mistakes on My Open Wallet

•My foolish money mistakes: moves that cost me more than $1000 each on The Digerati Life

•Don’t panic! Coping with financial mistakes and setbacks on Get Rich Slowly

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