Soul Shelter

In less than 48 hours it will be the New Year, which means making resolutions, turning a new leaf, cleaning the slate, and starting anew. Prioritizing becomes a matter of great importance for most of us at the outset of each year. But do you ever have trouble deciding what things to do first, and why?

Setting priorities—a cornerstone of achieving prosperity—was a struggle for me until I came up with a new policy a few years ago.

So here, revealed in print—or pixels—for the first time anywhere, is Clark’s Rule About Priorities (CRAP™): Do First What You Want to Do Least.

The logic is simple: What we most dread doing is usually the thing we should do soonest.

What do you want to do least today? Apologize to your spouse? Write that report? Make an appointment for that colonoscopy? Well, do it first thing in the morning, and watch your productivity soar.

Clark’s Rule About Priorities applies equally to personal, professional, and spiritual activity.

For example, about five years ago it became apparent that I needed to start exercising regularly if I wanted to maintain my health. I pushed through the dread and started going to a gym, but that meant time-consuming mid-day commutes, two showers on gym days—and spending money.

About a year later, I realized that exercise, as the most crucial foundation of health besides diet, was, quite literally, the most important thing for me to do each day. So I switched to a daily, at-home regimen, instead of three-times-a-week at the gym. Do First What You Want to Do Least.

Now I exercise first thing each weekday morning, in the comfort of home, while watching the news. It costs nothing, no travel’s needed, and I take only one shower a day. And the habit’s so ingrained now that I no longer dread it—though I love taking weekends off from my regimen.

I still struggle to apply Clark’s Rule About Priorities to work, but I’m improving. So it’s back to my dissertation research, just as soon as I finish this post …

Say, that gives me an idea for a new post—about procrastination …

Happy New Year!

“Fourteen hundred dollars?!”

Suzanne’s reply stunned me. I turned my gaze away from the window that allowed us a view into the next-door room where our kids were enjoying a pottery lesson, and looked at her in disbelief. “You’re paying $1,400 a month for health insurance?”

Yes, she nodded. Even though both her employer and her husband’s offer opt-in health insurance plans, the combined monthly cost is $1,400.

How could this be? That’s four times what we pay, even though demographically, Suzanne’s family is almost a perfect match for us: the adults are close in age—in fact, they’re slightly older—and their two kids are in exactly the same grades as ours.

The answer is simple. Many of us are conditioned to avoid spending anything out of pocket on medical or dental care. Our internal definition of “health insurance” is “never seeing a medical bill.” But you pay an enormous premium to avoid any and all out-of-pocket medical expenses.

Our Blue Cross policy, for example, costs $343 per month. That’s for a family of four, the head of whom is—how shall I put it—edging into AARP territory.

Why so cheap? Because we elected to have a $10,000 deductible, meaning that, in theory, we are obligated to pay out of pocket the first $10,000 of medical bills each year before our insurance kicks in.

That may sound scary, but this choice has some powerful, money-saving, prosperity-building effects.

First, it dramatically reduces our monthly health insurance premium. Sure, in addition to the fixed monthly payment we spend $75 in cash for each teeth cleaning, and a couple of hundred dollars each for checkups. But actual budget tracking over the years shows that, on average, we only spend between $300 and $400 a month out-of-pocket in addition to our insurance premium. So our total “health spend” is still about half that of Suzanne’s family.

Second, even though we have a $10,000 deductible, Blue Cross still covers a solid chunk of many of our bills. I get the distinct impression that the team of six experts who writes these policies actually understands them, while the 9,999,994 people affected thereby remain clueless as to how they work. The armies of clerks who process medical claim forms certainly must have fairly simple criteria for determining what charges are reimbursable, and it seems they consistently decide in our favor. And earlier this year we experienced a minor miracle: Blue Cross actually lowered our premium.

But isn’t it risky to leave yourself open to a whopping bill for, say, emergency medical services? Well, if you’re poor, a lower monthly premium will be more manageable, and at least will protect you against potentially ruinous bills exceeding $10,000. And if you’re prosperous, you can afford to pay cash.

That’s why in my view, the prerequisite for choosing a high deductible is not financial status—it’s good health. So if you and your family are healthy, be grateful, count your blessings, and brush off fear of medical bills. Retool your definition of health insurance and consider a new plan—one that works for the poor and prosperous alike.

Postscript: By no means am I endorsing Blue Cross with these comments; in fact, my wife and I are thinking of changing providers next year— so we’d love to hear which carriers you like and why. Finally, take a look at this chart from Providence comparing rates with deductible amounts. It showed up in the mailbox just as I was preparing this post …

See “Risk of Happiness” and “A Moment of Fulfillment”

Someone once asked Billy Joel about the peak moment of his musical career. Was it hearing one of his songs on the radio? News of a tune cracking the Top 10? His agent calling with a long-awaited recording offer?

No, replied the multimillionaire pop sensation. It was when he scored his first-ever paid music job, $25 or $35 for playing the piano for a few hours in a dingy bar. Even decades later, winning that humble gig remained the high point of Billy Joel’s career—because it validated his life’s ambition and passion: to become a professional musician.

I know the feeling.

The height of my entrepreneurial career wasn’t the day I signed the contract to sell my company. It wasn’t when the first payment hit, adding another zero to my bank account balance. Both were exciting events, but after all the due diligence, negotiations, and paperwork, they had a feeling of weary inevitability.

The high point came more than a decade ago, when a reporter from the Nihon Keizai Shimbun—Japan’s counterpart to the Wall Street Journal—called to request an interview. Somehow he’d stumbled upon the soft-launch version of our Do-it-Yourself Import Center, a Web resource for Japanese consumers wanting to purchase goods directly from overseas vendors.

That call validated everything my wife and I had worked so hard to achieve. We exulted, holding hands and jumping up and down in our 90 square-foot office, whooping like junior high school kids.

At the time I had no idea that phone call would trigger a chain of events that eventually brought us fortune through the sale of our company. I hadn’t even conceived of selling our company (when that idea finally became conceivable to us, it also became achievable, but that’s another story). We were simply high on our own enthusiasm. There’ve been other peaks, but nothing yet has matched that moment.

Albert Einstein said it well:

We act as though comfort and luxury were the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about.

Something to be enthusiastic about. ’Nuff said.

Holiday postscript: Billy Joel was quoted in the International Herald Tribune recently. The voice on his new anti-war single, “Christmas in Fallujah,” is not his own—he gave the recording session to a 21-year-old singer-songwriter from Long Island. The 58-year-old Piano Man felt he was too old to sing the song himself. Here’s what he wrote about it on his Web site:

I thought it should be someone young, about a soldier’s age. I wanted to help somebody else’s career. I’ve had plenty of hits. I’ve had plenty of airplay. I had my time in the sun. I think it’s time for somebody else, maybe, to benefit from my own experience.

That’s the spirit of gratitude Mark and I worked so hard to capture in The Scroll of Fortune, which you’re welcome to read online or download.

Now, we’re going to give ourselves the gift of turning off our computers for a few days over Christmas—a highly recommended technique for balancing fortune and fulfillment.

More great posts will follow the holiday. Check back with us on December 26, when we tackle the heady topic of Health Insurance for the Poor—and the Prosperous.

And on December 30, we take up the timely issue of New Year resolutions, examining How to Set Priorities.

Happy Holidays!

In the vocation of writing, poverty is a prerequisite for greatness. At least that’s what I told myself back when I was nineteen or twenty years old. I had only recently committed myself wholeheartedly to “becoming a writer.” I harbored a zealous admiration for literature’s impoverished, ill-fated greats: John Keats, Stephen Crane, Henry David Thoreau—all were paupers, and all died young.

As I saw it, those literary greats were able to remain intensely focused on the eternal verities because they weren’t after fame or fortune—just beauty, just truth. It was their raw existences, lives close to the bone and suffused with awareness of nature’s riches, that made possible their immortal works. I eventually came to realize I’d romanticized their poverty, but even today I believe my naivete served a powerful purpose, and laid a

foundation that has helped me for a decade now.

In my twentieth year I packed a large cardboard box with belongings and headed east by train to begin my artistic life in Massachusetts, 3,000 miles from California, where I’d been born and raised. I wanted to live near Walden Pond and commune daily, in nearby Concord, with the wise ghosts of Thoreau and Emerson. The closest I could get was the city of Lowell, birthplace of the American industrial revolution—a ramshackle town cluttered with eerie decommissioned factories and mills. But from Lowell I could get to Concord by train as often as I liked.

I set up my new life in a 300 square-foot studio apartment 14 miles from Walden Pond as the crow flies. My sole furnishings were an inflatable mattress, a plastic patio chair, a small lamp, a pile of books, and a radio/cassette player. In the cardboard box, I had packed the essential kitchen wares: a can opener, a spatula, two plates, two cups, two forks, two knives, two spoons, and a frying pan. More importantly, I had packed a word processor and a ream of paper.

I was determined to begin my writerly life in the spirit of Thoreau’s proclamation in Walden: “Give me that poverty that knows true wealth.” Thoreau, living for two years in his tiny cabin on the shores of Walden Pond in the mid-19th century, had proven conclusively to the industrialized world that simplicity and “mean living” were the highest spiritual ideals, for they refined one’s sense of beauty and truth. “Simplify, simplify,” said Thoreau, and I wanted to heed his advice. The fewer my possessions and the smaller my quarters, the loftier my hopes could be—and the freer I could remain to realize them.

My rent in Lowell was $400 dollars a month. With roughly $1,500 in bank savings, I could conceivably live and write—and do nothing else—for about three months. I set to work. I spent nearly every day clicking away on my word processor, and every evening reading. Intellectually, I’d never been wealthier. It was an education unlike anything provided by my years of schooling.

Practically everything in my life had been cleared away for the sake of writing. And only years later would the true nature of this apprenticeship period become clear to me: more than learning how to be a “starving artist,” I was learning how to be grateful for what little I possessed.

The residence in Massachusetts proved successful. I returned home that autumn unafraid of poverty, able to work for five to six hours at a stretch, and in possession of a 150-page personal manifesto. I’d become a writer.

Maybe it’s needless to say that my “manifesto” never saw the light of day. At the sentence-level it was truly awful, but however far I remained from producing publishable work, I’d committed myself to my craft, and knew that if I nurtured this commitment my words would find their way, sooner or later, into print. Four years later that’s what happened, when my first short story was published in a national literary magazine.

Since that idealistic Massachusetts adventure, I’ve never lost my grasp on the importance of simplicity (though living simply remains a day-to-day challenge). Simplicity frees one to make any range of choices and pursue any range of possibilities. And such freedom is hindered by complexities like financial demands, time constraints, and the baggage of material belongings. By consciously seeking simplicity in life, one places oneself in a condition of gratitude. And gratitude, by instilling an awareness of one’s blessings, clarifies one’s vision and helps one establish goals. (Chapter 5 of our book further explores gratitude, and can be read online).

I’m lucky that I had the opportunity, back at age twenty, to romanticize things and be naive. Through the years since, those early ideals have helped me recognize real happiness. I continue striving to be grateful, and to live up to Thoreau’s wise exhortation: “Simplify, simplify!”

See also: “The Barn of Fortune?” and “How Much is Enough?”

What is prosperity? Is it a measure of the personal freedom your finances have won you? Freedom to work when you want, where you want—or to not work at all? And if so, how much money is enough?

Many books on personal finance say you’ve “made it”—achieved financial independence—when income from your assets is sufficient to support you without working. In other words, if interest, stock dividends, rental property income, and other so-called passive income covers all your expenditures each month (plus taxes, remember), you’ve made it.

That’s a reasonable definition, and one that allows each of us to define “financial independence” according to our unique income needs. A family with a big mortgage, two cars, and children approaching college age needs far more than a childless couple with modest housing requirements.

So the first step is to get a good grasp on how much you need to survive—and thrive—each month. Let’s call this your “Prosperity Point.”

Here’s an example. By tracking actual expenditures—Step One on the Prosperity Path—let’s say you determine that the Prosperity Point for your family is $5,000 per month. In other words, you’ll need assets that throw off $5,000 in cash each month, or $60,000 per year, in order to be financially independent.

Now let’s figure out the assets needed to produce $60,000 per year in income. It’s an easy calculation, but let’s assume you dislike risk as much as I do, and agree to keep the money in essentially risk-free financial instruments: money market funds and CDs.

Such risk-free assets pay about 5% yearly at the moment. Therefore you need $60,000 divided by 0.05 (60,000/.05), or $1.2 million in order to achieve a passive monthly income of $5,000. Let’s call the $1.2 million figure your “Prosperity Pillow”:

In other words, you’ll need to accumulate 20 times your Prosperity Point to reach financial independence. If you achieved a 10% rate of return, you’d need only ten times your Prosperity Point, or $600,000:

But peace of mind is a big part of prosperity, so let’s stick with risk-free assets.

Note I don’t use the term “net worth” when describing the Prosperity Pillow because net worth includes your primary residence (less any outstanding loans). But you must exclude the value of your primary residence when calculating assets needed to achieve your Prosperity Pillow, because your home costs you money, it doesn’t produce cash (see Why Your Home is a Liability). And it goes without saying you won’t count cars, boats, tools, jet skis, musical instruments, and other such stuff. Remember: Assets pay you money.

Imagine now that you’ve achieved your Prosperity Pillow of $1.2 million, excluding your primary residence, and every month $5,000 comes flying into your bank account, without a minute of effort on your part. A good feeling, to be sure! But wait a second. Last time I checked, the IRS taxed interest and other short-term passive income just like ordinary (active) income, at an adjusted rate of somewhere around 14% for someone earning $60,000. If you pay state income taxes as well, you might see 20% or more of your monthly $5,000 eaten up in taxes. So your actual take-home earnings would be $4,000 rather than $5,000. Ulp.

Taxes. It’s a nasty word, but I said it. Can your family live on $4,000 a month? Hmm. Maybe $1.2 million isn’t quite soft enough a Pillow.

Now consider this. You might get by on $4,000 monthly now, but how about five years from now? Or ten? Prices are going up. If your Pillow just throws off cash without increasing, how will it keep up with inflation?

Many families living not-particularly-extravagant lifestyles have monthly cash needs of $6,000, $7,000, or more. Imagine the kind of Pillows they need to become “financially independent.”

Here’s my point: Focusing on the Pillow alone is daunting. Rather than defining “enough” in terms of pure financial independence, we’ll do better to create a more holistic definition—one that considers not only income, but spending, work, retirement, and other lifestyle choices.

In short, as we go forward, we’ll seek to define true prosperity, rather than simply asking, “how much is enough?”

See also: “Why Your Home is a Liability” and “A Gift From My Father”

I’m very familiar with the age-old conflict between the desire to do work that most fulfills you, and the need to do work that earns an income. For the last ten years I’ve led what some would call the life of a starving artist. I’ve striven to arrange my financial demands and daily habits in service to my vocation as a novelist, in order to avoid expending time and energy in other irrelevant jobs. It’s been impossible to avoid non-writerly employment altogether, but I’ve made sure such work remains minimal (for nearly two years, for example, I delivered newspapers in the dead of night so that my days could be spent writing). I’ve been immeasurably lucky, all the while, to have a spouse who shares my vision and has willingly supported us both while my writing career has slowly taken shape.

Several years ago, my wife and I faced an extremely difficult decision, one that forced us to define our main priorities, and ultimately taught us that no financial benefits could outweigh the importance of quality of life.

We’d lucked into a live/work situation that seemed the stuff of dreams. A wealthy aging couple hired us to serve as caretakers on their 40-acre estate in a rural area of Northern California. In exchange for 10 to 15 hours of work per week we would be housed rent-free in a sparse but roomy apartment built into the side of the owners’ huge red barn. Work around the property would consist of hauling firewood, feeding the cats and dogs, clearing the vast driveway of leaves, and assisting with various other minor repairs and maintenance jobs. Otherwise, I would be free to write, and the money we were saving in rent could be put away for the eventual purchase of our first house (a financial step which, in the real estate madness of the Bay Area, would be otherwise impossible on our meager household income). How could we say no?

We accepted the position and promptly relocated to the barn. Though we’d viewed the three-room “apartment” prior to moving in, it took a few weeks of living in the place to realize just how shoddy the quarters were: particle-board walls, no insulation, industrial carpet laid straight onto cold concrete, a 5-gallon water heater that supplied no more than 90 seconds of hot water for every 2-hour period. We did our best to make the spartan rooms habitable by dressing them up with paint, throw rugs, space heaters, etc. Still, our first months were a cold and wet November and December (the place was not without its leaks).

But we were more than happy to skimp on creature comforts if it meant we’d finally get a financial leg up in the overpriced Bay Area, while continuing to concentrate on the work we found so personally fulfilling (I writing books, my wife teaching high school). We were tough people. My wife had lived for three months in a raw room in Indonesia, and I, too, had endured periods of moderate squalor. We believed in sacrifice.

So we kept the space heaters running, developed a knack for quick showers, stayed always bundled up in several layers, and set out buckets for the leaks. We were pretty happy at first, and I took pleasure in my manual labor around the ranch.

In our third month, however, the property owners switched from Jekyll to Hyde. Suddenly we could do no right. They began bossing us about in the most uncivil manner, berating us for irrational reasons of all kinds. We were lambasted for feeding the cats at 6:25 p.m. instead of 6:45. We were verbally punished for “letting the dogs pee” on the oddments of cobwebbed junk strewn behind the barn. We were blamed, in no uncertain terms, for the ceaseless barking of the Australian Shepherd penned on the hillside (a watch-dog so starved for attention that getting close enough to put the food in its bowl was nearly a life-threatening task). The owners’ behavior became so erratic, so far from reasonable, that it finally dawned on us they were raging alcoholics.

We continued fulfilling our required duties, but otherwise tried to keep to ourselves, hoping to endure the unpleasantness this way. But there were other disturbing problems–for example, our manic employers’ refusal to give us a key to our own apartment door. We’d mentioned our wish for one on the day we moved in, and were told the locks would be changed before long and we’d receive a key as requested. By the end of our fourth month, after repeated requests, it was clear that they’d never intended to supply one.

“The door locks from within,” they finally said. “Just lock it when you’re home, and keep it unlocked when you’re out.”

We said, “Shouldn’t we be worried about prowlers?”

They said, “Nobody ever comes onto this property.”

This dumbfounded us, as we recalled their reason for hiring us in the first place. As they’d explained it, they hoped the presence of caretakers would discourage the suspicious people they’d caught “casing the property.”

In January we went out of town for a week, and returned to find ourselves locked out of the apartment. Somebody had clearly been inside while we were away. What were they doing in there? We began to wonder if these people were just harmlessly crazy, or might we have real reason to worry?

The following month we were finally forced to confront the unsustainable nature of our situation when the old man came to our door in a rage to reiterate that we were letting the dog “bark to no end.” He ended by telling me that I was as dumb as his 12-year-old grandson, and storming away.

My wife and I sat down to talk. We were becoming miserable. Was misery a part of the sacrifice we were making for the sake of happiness and financial stability somewhere down the road? Could we continue living under the dark cloud of these psychologically abusive people? If not, could we really give up the huge financial benefits we were reaping as caretakers and go back to paying rent and struggling to stay afloat?

Well, within 3 days we were settling into a new overpriced apartment (every apartment for a radius of 60 miles was overpriced). The financial benefits of living in that barn and suffering the poisonous influence of the property owners could not outweigh our crucial need for peace of mind and quality of life.

We had learned conclusively that the price of financial “freedom” is sometimes far too high to pay. And though our decision ensured that we would remain poor in funds, we had one savings account whose assets we wished to protect above all others. You might call it a PHAF account, for “Personal Happiness and Fulfillment.”

Those priceless savings have continued to grow, thanks in large part to our decision to vacate the Barn of Fortune, and we’ll continue to protect them above all else.

See also: “Simplify, simplify!” and “How Much is Enough?“

For years I struggled to “find” fulfillment. Then one day I read something that knocked me out: “You don’t find meaning in life, you create it.”

It was an “aha” moment. I recoiled in shame at having taken so long to recognize this obvious truth …

What had I been thinking? That I would stumble upon Fulfillment while pulling clothes from a laundromat dryer? That Fulfillment would suddenly visit me as I delivered free travel guides in my Volkswagen?

That was a long time ago, and I still struggle for fulfillment (at least now I’m working to create, not “find” it). But ten years ago life taught me another big lesson about Fulfillment.

It was after my first child was born. I was sitting in a comfortable chair in the living room, rocking six-month-old Ray, when he went to sleep in my arms. As I looked into his baby face, I was suddenly overcome with a rush of love I could never adequately describe in words. The feeling was overwhelming. Maybe it’s something only a parent can understand; certainly it’s beyond my powers of expression as a writer.

At that moment, I understood very clearly, for the first time, that there was, finally, something in life more important than my so-called “career.” I realized that, for years, I had subordinated everything—my relationship with my wife, my friendships, my personal interests—to the almighty “career” (and believe me, it wasn’t all that mighty a career).

Now, swept by feelings of love, I felt my overblown career aspirations evaporate like fog on a sunny morning. Now there was something greater to live for. Now, if only I could become a decent father to my son, success—real success—would be mine.

What a relief to feel this way! What a comfort to know fulfillment, even for a few brief moments. But most important, what a relief to realize that no, I didn’t have to set the world on fire career-wise to find—make that create—success and fulfillment.

I changed that day. No, I haven’t floated around since in a blissful love-stupor (thankfully, I still enjoy similar, though less powerful, moments). But I relaxed about pursuing my career goals. And you know what? Putting them second to family somehow made them more reachable. Shortly after I “gave up” on my career, it really took off (hmm, maybe you have to give up what you want in order to get it … but that’s another post).

I envy those who find (oops, hard habit to break!) fulfillment in their work, something I’m still striving toward. But I took a big step forward that day, when I first understood that Fulfillment already slept peacefully in my arms, patient for my awakening.

See also: “The Risk of Happiness“

A few months ago my wife and I had our first pre-natal appointment. On the sonogram, we watched a tiny colorless splotch of light flickering like a star. The heartbeat of our first child.

There was a time when the thought of becoming a parent left me stricken with unholy fear. The world around me seemed to say that having children meant bidding an abrupt farewell to youthful dreams and ambitions. It was the old “procreate and perish” mentality. After kids, life would become comprised entirely of self-sacrifice. There’d be simply no more room and no more time for indulging ideas of personal fulfillment. One’s individuality would cease to matter, one’s sense-of-self would die a quick and tidy death, and a primordial archetype called “Parent” would take over. As a parent, you’d spend your days consumed by work you loathed, endlessly fretting over the mortgage, the insurance, the car. You and your spouse would no longer dine out, no longer go to movies, no longer flee on impulsive getaways—or have the freedom to travel at all. You’d no longer even talk to one another except through a child. It was an unpretty picture, and it seemed guaranteed to obliterate every single goal I’d set for myself as a writer.

That was early on, when I was young and newly married and barely believed myself an adult, let alone a potential father. But as the years passed, my feelings began to change. Parenthood became a prospect less terrifying. My wife and I had weathered the challenges that confront every marriage early on, and our bond had strengthened. We had cultivated a shared vision of what our life would be, what our wishes were. We worked together to nurture our vision and support each other. We sacrificed and labored hard. And over time, the life we’d pictured for ourselves began to crystallize around us. Our work was going very well, there were new opportunities on the horizon, we were happy, we felt free. I began to see myself as a father. I no longer believed in those dark joyless images of parenthood, for I’d learned through a strong and happy marriage that any kind of life could be possible. Parenthood, in fact, seemed to promise unimaginable adventures.

But something funny happened. Though in an emotional sense I felt ready for fatherhood, I also felt that I’d gained good momentum in my work (as had my wife in hers), and that if we waited and continued working hard, there would soon come to us some even greater security, some unmistakable guarantee of stability for years to come. This would signify that we could now safely become parents.

I guess you could say I started looking for a sign. What the sign would be I didn’t know, but it would answer two questions with a conclusive yes:

1. Was now the time?

2. Would we remain financially secure?

Obviously there are very few material circumstances, short of coming into an immense inheritance or winning the lottery jackpot, that can provide a person with an unobstructed view of the future and liberate one from the material worries with which we all have to wrestle. A person can go on forever asking, “Is this it? Have I arrived? Is this the pot at the end of the rainbow?”

I asked it of everything in my life. I’d written and published two novels—did that mean I could be a parent now, or would I feel more secure with three novels? We’d bought a house—did that mean it was time, or did we need to wait till we could afford a bigger house? We owned our first reliable car, but did we need more than one?

There was a significant flaw in my thinking. Somehow, I hadn’t accounted for the fact that life simply goes on, whether one feels fully stable or not.

Though I certainly don’t think it’s a bad idea to seek security and plan a family carefully, there comes a time when one must recognize that the pursuit of happiness, in its multifarious forms, will always involve a feeling of risk, of embracing a financial or emotional unknown (or sometimes both at once).

After a long period of constantly fixing my gaze on the horizon, on the next sure sign of security, this was my realization at last: The horizon always recedes. Now is what we’ve got. Nothing has ever guaranteed our financial stability, and yet we’ve survived—even thrived! We’re happy and secure, and many risks have been required to get ourselves where we are.

So the main question confronting us was not: “Is the future guaranteed?” It was, “Are we ready for the joys of parenthood?” To this our answer was a profound yes, and that meant taking the required risk of embracing the unknown. Life doesn’t wait.

Our joy upon seeing that flickering heartbeat tells us that we’re destined for an awesome return on this latest risk of ours. There are many unknowns ahead, of course—but that’s reason to be excited! What could be more important, for the little one or its parents, than a willingness to embrace life’s great unknowns, and to risk becoming happier than ever?

See also: “A Moment of Fulfillment”

We were in Hawaii recently when I had an unforgettable encounter with a retired gentleman living in Kaimuki, a neighborhood of Honolulu not far from Waikiki Beach and the University of Hawaii.

“I always thought that paying off my mortgage would be enough,” he said wistfully, speaking of his retirement. “It wasn’t.”

We were standing on his lawn, appraising the ramshackle cottage standing next to his home. His dilemma? Though property-rich—his mortgage-free lot is worth at least a million dollars—he’s too cash-poor to remodel and rent the cottage to supplement his Social Security income.

Like most of his generation, he lived under the assumption that, for the average person, home ownership was the key to prosperity. And like many, his only clear financial goal was to pay off his mortgage.

Now, he faced a harsh reality: Until you sell or rent your home, it produces no income for you. In fact, it costs you money: in property taxes, insurance, upkeep, and repairs. In this sense, it’s a liability rather than an asset—again, until you sell or rent it.

And that’s where the problem lay. This gentle man from Kaimuki was healthy and wanted to stay in the home he’d lived in for many years. Selling would bring only enough to buy a comparable house, so the only option he saw for freeing up cash was to sell and move to an apartment or rental condominium. But that would mean an unfamiliar location, less space, no lawn or garden, and most important, the loss of a beloved gathering place for his children and grandchildren.

So there he stood, a millionaire on paper, but a pauper in attractive options. Maybe now he’s considering a reverse mortgage.

Home ownership is important, but it’s dangerous to think of a residence primarily in investment terms (for a devil’s advocate take on the home ownership, see “Rent Forever” at Bargaineering).

In 1990 I bought my first home, a 493 square foot leasehold condominium not far from Kaimuki, for $127,000. Its value promptly dropped by half. Sixteen years later, I finally sold it, at a price that would have meant a pretax annual return of less than 1.5%, had I lived there the entire time.

That was a terrific lesson in home ownership, one that’s persuaded me to stay away from costly “trophy houses,” and to remember that—for most of my life—my primary residence will be a liability, not an asset.

See also: “How Much is Enough“