July 18, 2025

What It Really Takes to Afford the Life You Dream About

Image from The Truth About Money
Getting the life you want

When people talk about their dreams—owning a yacht, gifting their kids a home down payment, launching a restaurant—it all sounds glamorous. But behind every dream is a reality check, and I’m here to walk you through both sides of that equation. Because yes, dreams are possible—but only with discipline, financial insight, and a whole lot of planning.

Let’s start with the big one: owning a yacht. A recent conversation I had involved a 95-foot beauty with a 2,000-mile cruising range and an Art Deco interior straight out of the 1920s. It’s on the market for $2.5 million—down from $4 million before the 2008 recession. That may sound like a deal, but the annual upkeep runs about $250,000. Between the crew (captain, mate, two stewards), insurance, fuel, and provisions, you’re looking at serious recurring expenses. And chartering it out for $29,500 a week might sound like passive income, but that’s down from $40,000 just a few years ago. In short, this isn’t an investment—it’s a lifestyle expense, and one you need to plan for as such.

On the other end of the spectrum, helping your kids buy a home is a much more relatable dream—but it comes with financial traps of its own. A caller from Annapolis wanted to give his son $250,000 for a $500,000 home. Generous, yes. Smart? Not quite. I recommended giving just 20% for the down payment—$100,000—to avoid tying up too much equity in one property. That frees the rest of the gift to be invested and grow over time. Plus, gift tax rules limit what you can give tax-free: $13,000 per person annually, or up to $52,000 if a couple gifts to a couple. Want to be smarter? Split the gift across two years—say, December and January—and maximize the tax-free benefits.

Now, someone else brought up real estate tax lien investing—and while it can sound like easy money, it’s anything but. When you buy a tax lien certificate, you’re essentially paying someone’s overdue property taxes in exchange for repayment (with interest) or the right to foreclose. Sounds simple, right? But here’s the catch: collecting payments can be a nightmare, and neglected properties often come with expensive problems. This is not a passive investment—it’s more like a side hustle in real estate law, property management, and risk tolerance. Know what you’re getting into before diving in.

Then there’s mortgage refinancing, which isn’t always straightforward in today’s economy. A caller who owed more than 80% of their home’s value wanted to refinance but didn’t qualify. I suggested a “cash-in refinance”—adding cash to reduce the loan-to-value ratio and qualify for a better rate. It’s not ideal for everyone, especially if you don’t have that extra cash lying around. In some cases, selling the house and buying a new one with a more manageable mortgage can be the better financial reset. But you’ll want to run the numbers carefully—and probably loop in a financial advisor.

So why do people fall short financially? Often, it’s not due to a lack of income. It’s procrastination. It’s ignoring inflation. It’s paying too much in taxes. Most of all, it’s not asking the hard questions soon enough. You’ve got to be proactive, not reactive, when it comes to money.

I was especially inspired this week by Chef Jeff Tracy’s story. He went from studying theology to running six successful restaurants in D.C.—not because he chased status, but because he knew his business inside and out. He leveraged failed restaurant spaces with lower rents, understood how to hire and delegate, and most importantly, never underestimated the grind. If you’re dreaming of opening a restaurant, don’t just romanticize the idea. Get in the kitchen, learn the ropes, and go in prepared. And if you’re an investor? Don’t fund someone’s ego project. Fund people who know what they’re doing.

We wrapped with a quick but powerful takeaway: investing a lump sum all at once is usually better than easing in slowly. Markets trend upward over time, and the longer you wait, the more opportunity you miss. If you’ve got the cash and a plan, don’t hesitate—get it working for you right away.

At the end of the day, whether it’s a yacht, a home for your child, or launching your own business, none of it happens without clarity, commitment, and a plan. You can’t shortcut the process, but you can make it work with smart financial decisions and a steady hand. That’s how you turn dreams into reality.

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.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

Author

  • Ric Edelman

    Ric Edelman is an American investor and author. He is the founder of Edelman Financial Services (later, Edelman Financial Engines), the author of several personal finance books, and the host of a weekly personal finance talk radio show called The Ric Edelman Show.

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