Personal Finance

I'm 33 years old and am about to pull $400k from my $2 million portfolio for a home project - will I regret using and enjoying this money now?

David Beren

Published: October 13, 2024 10:30 am

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• This Redditor is thinking about doing a home remodel. 
• He’s fearful of making a large financial decision. 
• He is also fearful of not spending the money and regretting it later. 

Different people love to look at spending differently, and there are many opinions about the right and wrong amount of money to spend on a home. In the case of one Redditor’s post on r/fatFIRE, you have a scenario where the individual has a net worth of $2.5 million, is contemplating spending $400,000 on a home project, and is concerned about spending the money. 

One immediate takeaway from this post is that it’s hardly surprising people often seem afraid to spend money. While any big transaction like this would require at least thinking twice about whether it is the right move, this Redditor seems slightly more fearful than usual. 

What I like about this post is that it’s okay to be scared, but it’s also okay to spend. Sometimes, we have to spend money to make money, which may be what happens to the value of their home. 

The Scenario 

From this Redditor, we know that he is a 33-year-old male with a five-year-old and a three-year-old. The family’s total household income is around $500,000 annually and is expected to grow. They have around $2.5 million in investments plus a “fair amount” of home equity with a low mortgage. 

His thought process is that he would pay cash for the remodel work from a $2 million taxable portfolio. The work is expected to cost around $400,000, leaving him around $1.6 million left for continuous investment. 

As the Redditor is looking to remodel this home, he makes it clear he has no interest in purchasing a larger home or any big purchases in the immediate future. He wants to enjoy his job and look to work part-time somewhere after turning 50. 

The Recommendation 

Based on this post, this individual is scared to spend money. His fear stems from the idea that spending money in the “earlier years” may lead to regrets. He’s also worried about the regret of not spending early enough, so there’s double regret potential here. 

While I’m not a financial advisor, it seems clear that he should be just fine with spending the money. If he isn’t moving and plans to stay in the home for at least another decade or more, there’s a good chance this home renovation can pay off. Not only can they get more from using their home, but the hope is that it will also increase its value. 

Given that he’ll still be left with $1.6 million in his taxable portfolio and approximately $2 million net worth overall, he’s just fine making this work. This would be a much different recommendation if he were considering retiring simultaneously. 

However, he earns enough to make his money back soon enough and plans to increase his income. All signs point to him needing to stop fearing regret and just spending the money and enjoying the home he has today. 

The Takeaway 

The bottom line is that this Redditor needs to stop being fearful and spend the money. He’s in strong financial shape, and if he plans to work for at least another 17 to 27 years before retiring while still keeping the same earnings, the $400,000 should drop in the bucket. 

Thankfully, it sounds like fear of spending aside, but he’s smart enough to recognize that the family won’t need to move after spending this amount. This is probably further emphasized by the idea that they have a low mortgage, something they would not be able to get nowadays. 

Ultimately, he’s in a very safe financial position to make the remodel and should have no qualms about pulling the trigger.