Managing your personal finances is crucial. From saving money, living below your means, staying out of debt, and investing early and often with an eye on retirement, taking the right financial steps throughout your career can help ensure financial security (which, in reality, is the ultimate purpose of money).
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For many people, part of feeling financially secure means owning a home, which is the cornerstone of the classic American dream. However, according to financial guru Suze Orman, the idea that homeownership is necessary to build wealth is simply not true.
In an episode of Orman’s podcast, she discussed this concept and explained the one thing that she believes is the “biggest mistake in life.”
Don’t Make the Mistake of Comparing Yourself to Others
In the podcast episode, Orman and her partner, Kathy Travis, addressed a couple from California who reached out looking for financial advice. The couple explained that to gain any real net worth, they thought they had to purchase a home, so that one day they could sell it and “actually be able to afford to retire.”
“Although I know so many do live this American dream of owning a home, of course, I’ve never been one to follow the traditional path,” the couple wrote.
In today’s world, Orman stressed that’s not totally the case. Rising homeowners’ insurance costs, an uncertain housing market and the cost of property taxes and maintenance combined mean that owning a home is very expensive. She explained that she doesn’t think homeownership is necessary to build wealth.
Instead, she advised the couple not to make what she views as the biggest mistake in life — comparing themselves to others.
“As long as you compare yourself to what other people are doing, you are making the biggest mistake in life,” she said. She explained that you should never try to be someone other than who you are. Be sure to think twice about making a huge financial decision, such as purchasing a home — especially if you’re doing so just because it’s what everybody else around you might be doing.
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Keep Your Eyes on the Prize
Orman said that the ultimate goal of money is for you to be secure. So, work toward accumulating money in your Roth IRA and 401(k), keep your expenses low, stay out of debt and be sure that when the time does come your Social Security and distributions from your retirement accounts pays for all your expenses.
“Stop wanting to be somebody other than who you are and know one day you will realize your retirement dream,” Orman said.
When you stop comparing yourself to others, you can start focusing on your financial wellness and securing your future.
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This article originally appeared on GOBankingRates.com: Suze Orman: If You’re Doing This, You’re ‘Making the Biggest Mistake in Life’
