When I was around 10, my family took a trip to Las Vegas, and a friend of mine joined us. During some downtime, my friend, my dad, and I ended up in a restaurant that also had a Keno game you could participate in from your dining table. My dad decided to teach us a lesson about the evils of gambling, so he gave us $20 to bet. We played, won, doubled our money, didn’t bet again, and kept the earnings. My dad wasn’t too perturbed, but clearly, this was not his plan. Even at a young age, I realized gambling was statistically inefficient (the house always wins), so why do people do it? Why did my dad gamble?

I found out when I got older.

Many years later, we talked about my dad buying a lottery ticket every week. He’s an aerospace engineer, so he’s all about quantifying things. He had spreadsheets that went on for years that helped guide his lottery number choices. Given his understanding of statistics, I asked him what the point was of buying a ticket every week. He told me, “Between when I buy it and the numbers get read out, I can dream of winning the big one and what I would do with the money.”

He wasn’t buying a ticket to win; he was buying a ticket to dream.

Dreaming About Our Future House

That message stuck with me, and I still appreciate its elegance and value. I’ve “lost” money on my financial journey many times, but two such endeavors come to mind. I put quotations around “lost” because another way to look at it is that I paid to have the dream. The first major “loss” was before we were financially knowledgeable. I noticed more money in my bank account every year, thought that was weird, and had no idea what to do with it. And it just kept accumulating. My wife and I shrugged and thought, “Well, I guess we’ll build a $1 million dream home.” (This was in a small college town where a million dollars really would go a long way.) We bought a two-acre lot in a neighborhood on the east side of town where we wanted to live.

We would drive by the lot sometimes, bring friends around to wander it, and occasionally walk it ourselves. I spent dozens of hours researching zoning and riparian buffers and flood levels and all kinds of other things related to new builds in our town. I did many mock-up builds in Minecraft (one block = 3’). We took pictures of other houses we liked for ideas. It was a nice dream to have for three or four years. 

But our lives changed subsequently, and we became financially educated. I realized we could retire early instead of building a ridiculous castle house. Although it was only a few hundred dollars, paying the property taxes every year began to bother me. We sold it to some friends for what we paid for it years earlier. All told, including transaction costs and the taxes, we were out probably $2,000. Was that worth it? Absolutely. Not money well spent from a purely fiscal perspective but well spent for enabling that dream we had. Even though our life changed and that dream was no longer relevant, it was a pleasant addition to our days for a time.

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Dreaming About a Different Land

The second endeavor was when we decided to emigrate. Although most countries accept “you were born, educated, and have lived and worked in an English-speaking country your whole life” as sufficient evidence that you are fluent in English, Canada does not embrace this philosophy. Instead, even native speakers have to pass an English language test.

Since Canada was on the short list of countries we might move to, we booked a language test as soon as we could and drove to Atlanta, stayed with some family, and took it first thing in the morning. The price was $280 each, so, including the travel costs, call it $700 total. We ended up moving to New Zealand instead of Canada, so the $700 was for nothing. Or was it? It enabled us to take some action to move us in the direction we wanted to take and helped us dream. It also would have cut out one substantial step from the process to get a visa, which made us feel like we were moving in the right direction. We moved the dream of emigrating one step closer to reality. Ultimately, it was money well spent.

Dr. Jim Dahle has said that personal finances are probably 10% mathematical and 90% psychological, and this concept definitely reinforces that statement. These are moves my dad and I have made that have definitely not been wise from a purely mathematical perspective. However, they did provide some psychological value. Also—and this is really important—none of this was a significant financial loss for our family.

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Is the Cost of Your Dream Worth the Benefit?

We have family friends whose father was constantly working on some get-rich-quick scheme. The wife would work whatever job she could while he was sure he had discovered the Next Great Thing. Along the way, they never saved for retirement or invested. Eventually, it became clear he wasn’t going to make the big discovery and make millions, and they settled down to do translation work in their 60s, which continued until they passed. If I had lost $500,000 on some get-rich-quick scheme and justified it as the price of dreaming of making a fortune, that would be very different. I believe that a millionaire is made $10 at a time, but making a few small mistakes or inefficiencies on your path is probably not going to significantly derail your financial path, particularly if you’re a high earner.

It's important to realize when you’re paying for the dream. And then reflect on how much you are paying. Is the cost worth the benefit?

Sometimes, the best decision isn’t the one that makes the most financial sense. Sometimes it’s the one that makes you feel better. Many physicians choose to practice on the coasts where pay is low and the cost of living is high. But it’s worth it because of other intangibles, like family or friends or activities. It’s OK to pay for a dream. It’s OK to spend money you can afford to lose while you figure things out.

Just make sure the price of the dream makes sense. Spend money wisely and intentionally, not flippantly.

Have you ever paid for your dream? What was it? Was it worth it? Would you do it again?

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