Sometimes, It’s Better To Be Lucky Than Good

I wanted to take a moment to write a little more about our personal story. Early in our relationship we had what I would consider an amazing run of luck that would shape our financial lives. While the events were planned, the timing of those events coincided with significant runs in different markets that helped launch our financial portfolio and shape our lives to this day.

Before my wife and I got married in 1999, we had acquired a decent amount of stock in Intel (INTC). Little did we know this investment would blossom into an actual portfolio and set us on the path to financial freedom before we even considered the possibility.

We knew that someday this money would be what we use to buy a home once we got married. At the time, tech stocks were all the rage. This was an exciting time! And because we worked together, we would go home every day for lunch. I would go straight to the television and turn on CNBC to see where our investment stood.

Our investment continued to grow and in April 1999 the stock split when it was at about $130 a share. It was a month before our wedding and we were seriously consider purchasing a home. While we were considerably ahead, we knew we would have to sell eventually to fund our home purchase. We continued watching the market daily and often wondered if it was time to let go. We were shopping for homes and didn’t want to lose out on the gains or our down payment. Eventually we found a home that was being built and the time came when we had to sell the stock. We ended up cashing in for about $36,000 which was a 110% gain from where we started only a couple of years prior.

We didn’t sell out at the peak of the run, but we surely got out before disaster struck and took the stock down not too long after. It was great timing for us and we considered ourselves lucky to have exited when we did.

Fast forward from 1999 to 2006. Our son was getting close to starting kindergarten and it was becoming very apparent that our neighborhood was heading in the wrong direction. After speaking with neighbors about the school, we knew it was not a place we wanted to send our child. We were considering private schools, but that was very costly. Then one day, the land across the road from our community had a new sign. The property had been sold to a developer and they were preparing to build a large home improvement warehouse type store. That’s when we knew it was time to go.

In late 1999 we had paid $209,000 for our home and used the money from the stock sale for the down payment. We never bothered to monitor what was going on in the housing market because we never planned on selling. Once it became obvious that the area was no longer the place we wanted to be, we started researching the market and what we found took our breath away. The market for homes in our area had been on fire for quite some time and the prices were beyond what we expected. If we had any doubts about moving on, they were erased immediately.

We contacted a realtor and put the house on the market. Within a week we had an offer of $625,000! Wait, did we just make a 300% profit on our home? Um, yes we did! It was completely unbelievable that our home was valued at that price. But, who are we to argue.

We found a new home in an area that had very good schools. The purchase price was high, but we decided not to use a lot of the money from the sale of our home for the down payment. I felt the best thing we could do was bank the money and invest some in mutual funds for the long term. Of course in 2007, the housing market came crashing down. I looked up the value of our first house and it lost over 60% from where we sold it and has never recovered to this day. We ended up losing some of the money when we used it to buy the new house years later when we again moved on.

Our decision to not put more into the new house at the time of purchase was the best decision we ever made. It saved our financial lives and also benefited us. In fact, when the stock market tanked in 2008, I dove in headfirst to buy more shares of the mutual funds I had purchased after the sale. That has worked out very well for us.

We often look back and think about the incredible run of luck we had during this time of our lives. I don’t attribute it to anything more than that. It wasn’t brilliant stock picking skill or a divine ability to time everything perfectly. We just happened to get in and out of a stock investment and then a real estate investment at the optimum time to benefit us. Somehow the events of our lives managed to perfectly coincide with market events and bull runs. You can’t plan for that.

It will be our 20 year anniversary this coming week. Time flies and I can’t imagine life any other way.

If I look back further, my personal lucky streak started when my wife walked into my life. Every other event after that, personally and financially, would never have occurred without that moment.

Sometimes, it’s better to be lucky than good. That is exactly what I am.

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