Growing Pains

Jonathan Clements

AS WE GET OLDER, the financial hits often grow far larger, for two reasons. First, we’re typically wealthier, which means the potential dollar losses are bigger. Second, as we age, there’s greater risk of hefty health-care costs, notably long-term-care expenses.

Almost everybody endures at least a few big financial hits during their lifetime. Perhaps you lose your job, and it then takes many months to find work. Maybe your parents need nursing-home care and you end up footing part of the tab. Maybe your longtime spouse leaves you, and suddenly you’re saying goodbye to half of everything. Perhaps you buy a home and discover a huge problem, such as a leaking underground oil tank that requires a costly environmental cleanup.

When I lived in New Jersey, I knew two families who suffered this last fate—which is why I breathed a huge sigh of relief when an abandoned oil tank on my property was found to be intact. But while I dodged that bullet, I’ve lately been on a five-year losing streak.

No, I haven’t had any significant health issues, thank goodness. But I’ve suffered some notable financial hits. My younger self would have found the dollars involved unfathomable, and even my current self doesn’t like to dwell on them. Still, today—in my more philosophical moments—I classify these losses as the “price of success,” because they were made possible by the moderate amount of wealth I’ve accumulated.

A failed business. In 2016, I was contacted by two financial planners I knew about getting involved in a financial startup. The project and the participants morphed over time, and the whole thing came to an acrimonious end in early 2018. This debacle cost me around $10,000, plus huge amounts of time.

I would never have got involved in such a longshot venture early in my career—because I simply couldn’t have devoted the necessary time and I would have balked at the financial risk involved. There was, however, a silver lining: The original version of the Two-Minute Checkup was developed as part of the startup, and it now resides on HumbleDollar.

Two bear markets. Like anybody with significant stock exposure, my portfolio took a huge hit during 2007-09’s market crash—as measured by percentages. But my dollar losses in early 2020 and in 2022 were much larger because, by then, my portfolio was far bigger than it had been a dozen years earlier.

But among the misfortunes detailed here, these were the losses I was most sanguine about. Big short-term hits are the price we pay to earn healthy long-run stock market returns, and I’ve never been much bothered by the financial pain involved.

Another divorce. It’s a long and painful story, and—because it’s not solely my story—I don’t feel I can reveal all the gory details. But this much I will share: In July 2019, my second wife demanded a divorce. A member of her family, who had previously been unstinting in his praise of me, advised my then-wife to “hire the best Manhattan divorce attorney you can and screw him over financially”—an incident I heard about not only from my then-wife, but also from her sister.

Fortunately, while the divorce wasn’t cheap, there was no financial screwing over. The marriage had been relatively brief, and I’d been careful to keep my finances entirely separate, so my assets never became our assets. Still, it seems my earlier financial success made me a tempting target—another problem that comes with age and growing wealth.

The long goodbye. Amid the divorce negotiations, I decided to decamp from New York to Philadelphia. In September 2019, I put my apartment on the market. It finally sold in March 2022, a grueling two-and-a-half years later.

Along the way, we had a pandemic that nixed interest in living in close proximity to others in an apartment building. I reached deals with two separate buyers, but both subsequently backed out. I even hired an architect to create plans to turn the apartment—which was really two apartments combined into one—back into two apartments, figuring that way they might be easier to sell. But after paying for all the architectural plans, I discovered the construction costs would be far higher than I was initially led to believe.

Eventually, I reached a deal with a third buyer. The buyers’ attorney conducted not only a title search, but also a municipal records search, which didn’t turn up any paperwork proving that the apartments had been legally combined in 1964, almost six decades earlier. That perhaps wasn’t surprising, given that the town’s records from that time were chaotic. Still, before the apartment’s sale could go through, I had to obtain a certificate of occupancy, which required architectural drawings, some upgrades, and inspections by the town’s buildings department.

To be honest, I can’t bring myself to calculate what all the delays and additional work cost, but I’m confident it’s comfortably over $100,000. It was an expensive apartment in an expensive part of the country, and that meant the various headaches were also expensive. When I was younger, I would have simply stuck it out and stayed in the apartment, because the cost of moving would have seemed so prohibitive. But I wanted to get on with my life and, fortunately, I could afford to do so.

Wall-to-wall problems. In September 2020—for those keeping score at home, this was 18 months before I managed to sell my New York apartment—I bought a small, 100-year-old townhouse in Philadelphia, not far from where my daughter and her family live. The house was a little dated, but it was of the size and in the location that I wanted.

After living in the house for a while, I came to feel it was a bit dark, and Elaine—who was now living with me—agreed. We decided to install much bigger windows at the back of the house, both downstairs and up. As part of the work, which began in May, we opted to upgrade the kitchen. Many Philly townhomes from the 1920s have what my architect refers to as “the shed,” an add-on at the back of the house that was once a mudroom but has since been fully incorporated into the house.

It turns out these sheds often weren’t well constructed—or, at least, ours wasn’t. As the remodeling project’s lead carpenter put it, “Nobody good has ever worked on this house.” I’ll save the full gory details for a future article. But the bottom line is, shoring up the back of the house with a new foundation and new framing will cost at least $33,000.

That $33,000—and the other dollar sums mentioned here—pain me. Could I have avoided the losses involved? It’s a question I’ve asked myself many times.

Maybe I should have pulled out of the financial startup earlier, when my doubts about its prospects first emerged. Perhaps I should never have remarried. What about my two real estate debacles? I’d never heard of a municipal records search and nobody suggested conducting one when I bought the place, so I don’t know how I could have avoided that pitfall. Meanwhile, I had my current home thoroughly inspected by a firm that came highly recommended by an architect. But even a top-notch inspector can’t see what’s under a concrete floor or behind wallboard.

When we make financial decisions, we make the best decisions we can with the information available at the time. But that’s no guarantee of a good outcome—and the more money that’s at stake, the bigger the potential hit. No, we usually can’t predict when these financial hits will strike. But, at a minimum, we can make sure we’re financially prepared.

Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.

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