Real Financial Lesson: Money, Mindset, and Mortgages
Sometimes the most valuable financial advice isn’t just about saving more or investing smarter it’s about how we think. In a recent session packed with insights, Ric Edelman and entrepreneur Ted Leonsis tackled topics ranging from real estate appraisal quirks to retirement strategies, parenting prep, and even the business of happiness.
If you’re navigating big life changes or just trying to make smarter financial decisions, these nine highlights offer real-world takeaways worth knowing.
1. Why Your Basement Bathroom Might Not Count
Let’s start with a surprise from the world of real estate. Ric Edelman explained that when banks appraise your home, they only count above-grade bathrooms so that fancy half-bath in your finished basement? It won’t show up in the official count.
This happened to John and Kathy, who assumed their 3.5-bath home would be appraised accordingly. The bank only acknowledged 2.5 baths, which could lower the valuation. Appraisers can note basement features, but they carry less weight in property value.
Key Takeaway: When buying, selling, or refinancing, understand that not all upgrades are created equal especially below ground.
2. You Paid for the Appraisal, But You Don’t Own It
Even if you foot the bill, the appraisal technically belongs to the bank that ordered it. That means if you switch lenders, you’ll need to get another one and pay again.
Some banks may agree to transfer the report for a fee, but there’s no guarantee. It’s a small but important detail that can delay or derail your financing plans.
3. Financial Prep Before Having Kids
Planning to start a family? Ric advises acting now as if one spouse has already left the workforce. That means saving 100% of the second income and building a 12-month cash reserve to soften the blow of reduced household income.
From medical expenses to job transitions, this buffer can prevent the stress that derails many new families.
Bonus Tip: Practice living on one income for six months before the baby arrives.
4. Should You Borrow Against Your Paid-Off House?
One caller asked about taking out a loan on a fully paid home. Ric’s take? Don’t fear the mortgage use it strategically.
A $100,000 loan with a $700 monthly payment could create flexibility for emergencies or lifestyle upgrades in retirement. With investments possibly earning more than the loan’s interest rate, this move could add liquidity without selling assets.
5. How to Ask Parents for Help—The Right Way
Elizabeth wanted to know how her sister should ask their parents for help with buying a home. Ric suggested framing it as an advance on inheritance, with the focus on benefits for the grandkids (like safer neighborhoods or better schools).
Most important: Make the request in person, not via text or email, and consider involving a financial advisor to reinforce credibility and minimize family tension.
6. Yes, Save for Retirement Before Paying Off Debt
It may feel wrong, but Ric insists: contribute to your 401(k) before aggressively paying off student loans or credit cards.
Why? Delaying retirement savings now could leave you financially vulnerable later when you can’t earn more or borrow. Let compound interest do the heavy lifting for your future.
7. Entrepreneurship and the Power of Tech, with Ted Leonsis
AOL veteran and sports franchise owner Ted Leonsis reflected on how the internet evolved from a niche tool to a life-essential utility driven by Moore’s Law and an explosion of venture capital.
His message? Vision, strategy, and execution still matter. But today’s entrepreneurs have more tools and fewer barriers than ever before.
8. The Business of Happiness
Ted also discussed his book The Business of Happiness, arguing that fulfillment not just success should be the goal. He advocates for empathy, purpose, and self-actualization in both personal life and business.
Companies that prioritize happiness, like Meta and Patagonia, tend to outperform because they attract purpose-driven employees and loyal customers.
9. Don’t Let Politics Wreck Your Portfolio
Ric wrapped with a critical insight: investors tend to perform 2.7% better annually when their preferred political party is in office not because markets change, but because their outlook does.
Investing is about green, not red or blue. Let data not emotions drive your strategy.
Final Thoughts
Whether you’re preparing for a baby, planning retirement, or just trying to stay objective in a politically noisy market, these lessons underscore a central theme: financial clarity begins with mindset.
From managing real estate expectations to embracing personal growth, your money habits are as much about your emotions as your spreadsheets. Get both in sync and watch your life change.
All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.
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