Contemplating those Spring renovations? or maybe a big vacation? Of course, we have to spend money during our lifetime but there maybe some things to consider in the process.
Landscaping around your new home may cost you in the thousands of dollars so it's important to think not only about the use you will get from the project over the years but what you are giving up to have it. Let's say your landscaping is going to cost you $10,000 and you are planning on retiring in 15 years. If you had invested that money at, let's say a conservative 5% annual return, you would have $20,789.28 (not including taxes or fess). But wait! ~ let's also say your home is an investment so the $10,000 in upgraded landscaping is going to improve your property and if you are planning on selling it within a few years that might translate into some added value. Maybe, at this point, you are shifting assets, hoping that the real estate market will provide better returns than your investment portfolio? If, however, you are thinking of doing renovations to increase the value of your home for selling purposes you may want to research which upgrades provide the most bang for your buck!
Or, maybe, putting off the home upgrades and taking that European cruise that you've always dreamed of may be in order. Spending that same $10,000 (in after-tax income) for something that has virtually no future financial return is a whole other consideration.
Being in the financial business for 27 years I can say that advocating saving for retirement is not a bad thing but your Golden Year's may not be so golden. It's a fine balance of living life and saving for the future. However, I always tell my clients to "make an informed decision" so whether it's the home upgrades or the ultimate trip be sure to weigh all the consequences.
