Why I Sold My Investments

This time last year we made the decision to sell our rental property, and sell off most of our shares. The rental property was positively geared (fancy accountant talk for actually making money!), in a good location and in good nick. It had the potential for good growth over the longer term and we had no problems with finding really quality tenants over the years.

So why the hell did we decide to sell it? Good question! And trust me, I second guessed myself a lot since we signed the sales agreement with our agent. Even writing this now, part of me thinks ‘what were we thinking? That was a really good investment!’!

Well the decision came down to the fact that investing is not just about the dollars and cents. As someone who spends a lot of my time crunching numbers, finding the best deal, trying to create the best result for my clients or for me, it’s been a strange realisation for me to have.

Your fears, your emotions, your time constraints and your values are all important considerations when you are considering what to do next with your money.

Sometimes gaining a better understanding of an investment can overcome some of these constraints. Other times, you and a particular investment are just not a good fit, or it just doesn’t suit where you are at anymore. Life isn’t static – investing isn’t static!

When I first started doing ‘something’ with my money, my number 1 goal was to multiple my money… more more more. I didn’t have a dollar figure in mind. But that’s what you do right? You invest to make as much damn money as you can. I’ve always been fairly conservative with my investing – I don’t like a lot of risk, and I don’t like a lot of debt. But I was more than happy to invest in managed funds, shares and property with a loan attached.

So what changed?

I’ve become very clear on my values, and how my ideas around money can limit me. I’ve been (perhaps somewhat obsessively) focused on owning our home and living debt free for quite a while now. For me the idea of being debt free gives a sense of freedom and opens possibilities that I’m not comfortable doing with a mortgage.

Now this, I will admit, is completely illogical as our debt levels were so very conservative and our income was more than adequate to service the debt even if we worked less, or took 12 months off to travel, or changed to a lower paying job. But even if it is a psychological one, it has still proven to be a barrier for me to make these changes or take these leaps.

So I’m owning my risk aversion!, and creating a strategy around it. By selling the investment property, we have paid off our mortgage on our family home and are now living completely debt free, (I did a happy dance all the way to the bank to close out our loans), with some extra left over to kick start the next stage of investing. And that for me allows the freedom to play around a little more with life, go on more adventures, try different paths, work less or perhaps work more! – but have the freedom to choose.

I have worked out how much is enough. I’ve crunched the numbers. I know how much we need to live the life we want to live in 15 years’ time, or even in 25 years’ time and I’m confident we will have more than enough.
Chances are we would be financially better off if we had of kept the property, and quite possibly the shares. But we are going to have enough in 25 years’ time – I’m trading the possibility of more money later to live debt free now. What an amazing feeling of abundance to believe you have enough in this very moment.

I’m matching my investment choices to my stage of life and my philosophy. Life for me right now is all about keeping it simple. A less is more approach (check out my decluttering obsession here!). Shares, an investment property and numerous loans to manage just didn’t sit well with me anymore. So I am about to embrace a KEEP IT SIMPLE philosophy with our investments. I’m moving towards a low effort investment – low cost indexed funds.

My objective has changed. When we first started dappling in shares, our approach was a little random. In some cases, we were trying to pick a winner with an unknown mining company. In other instances, we’d read an article in a magazine and buy a banking share or a utility. Ultimately it was a kind of “beat the market” approach. Some have done OK, some not! We didn’t have a solid plan, and we certainly weren’t focused on diversification. Fast forward to today, and I’m recalibrating. I know my objective – I want an investment that provides a solid return over the long term, provides diversity across assets classes, and industries, and is not too time consuming to manage.

I’m certainly not suggesting here that well thought out property investment or shares are a poor investment choice. Just like any decisions in life, they have lead me to where I am today – a financially comfortable (and pretty damn awesome) life that is completely free of debt. A large share portfolio and investment property are just not for me right now!

What are your thoughts on my radical overhaul? Do you have investments that don’t suit you anymore? Have you reached a point of feeling you have enough? Share your thoughts – I’d love to hear them!