From the Editor’s Desk: Fear (Premium)

We had an interesting conversation with a couple we met in Mexico City who were looking to buy an apartment in our area. In some ways, they are a lot like Stephanie and me, but a bit older and already retired. And they already split their time between the U.S. (San Diego) and Mexico (Puerto Vallarta), but are looking for a place with more moderate weather, which I certainly understand.

Anyway, it’s always interesting comparing notes with people who have had similar life experiences, and there was plenty to discuss. They had made an offer on an apartment in the northern part of Roma Norte with a nice view of the Reforma skyline, the same row of skyscrapers we can see from our own apartment if we stick our heads around the corner of the building from the balcony. (Our place faces south and is further away.) But when the owner made a counter-offer, the price he came back with was higher than the original selling price.

I almost spit out my drink at that. Wait, what?

From what they could gather, the seller had discovered they were American and had jacked up the price. This was a private sale, with no intermediaries, and this couple had reached out to us because they had seen our YouTube channel were curious if we knew people in the area—someone to negotiate on their behalf, and a notario, which in Mexico is the equivalent of a lawyer—who could help them. We have good references for both, which is mostly luck on our part, but they certainly helped with our own purchase, so we texted them the contact info.

I was a bit outraged by news of the price hike, but the husband of this couple was more concerned about what this meant for the apartment they had fallen in love with. From what they said, they could still afford the new selling price—which was now about $70,000 more than before in U.S. dollars—but they were worried about what this meant down the line. What would happen later if they ever wanted to sell the place?

Sorry, what?

This confused me. A back and forth ensued in which the four of us tried, badly, and using the calculators on our phones, to figure out how some future change in the peso to dollar exchange rate might or might not impact them—and, on that note, my wife and me too—in the future. I have a hard enough time doing math at the even 20-to-1 peso to U.S. dollar exchange rate that no longer exists, given the relative strength of the peso these days. But at a bit under a 17-to-1 exchange rate, I’m in over my head: A rounding error on a dinner tab is one thing, but when you’re spending hundreds of thousands of dollars, you need to get this right.

So we all did math, and we all blurted out mostly innacurate results, guessing what the world would look like if this exchange rate trend continued and, alternatively, what things would like if the dollar rebounded. The truth is, no one knows what’s going to happen. And of the four people at the table, only my wife understood that selling the apartment now would be good for us, given that we had exchanged the money we used to buy it at a time when the exchange rate varied between 20- and 21-to-1. Or, more generally, that any rise in the value of the peso would be advantageous to anyone who owned property there. Assuming one wanted to sell.

This kind of math hurts my head, so some internal defense mechanism kicked in, and I pushed back from the table, both literally and rhetorically, and told the group that I could solve this problem, and that it magically wouldn’t require any math.

“Can you afford this place?” I asked.

“Yes.”

“Do you want to own this place?”

“Yes, very much so.”

“Then who cares about the future, or how much the place may or may not be worth?”

Met with blank stares, I pressed on. I said that not everything we do in life has to be logical. And that, in this case specifically, not buying a place you want and can afford because of what may or may not happen to something as unknowable as the exchange rate is a decision based on fear. And fear is no way to make a decision.

Go figure, I’m an expert on that topic. I make too many decisions based on fear. And then I second-guess them later, which is like relitigating a previous decision based on doubt. Trust me, being dominated by fear and doubt is a horrible way to go through life.

This message was well received, at least. And in a weird coincidence, the almost casual tossing aside of fear was how my wife and I decided to buy our own place in Mexico City two years ago. We both wanted to buy it, but we both also knew, and expected, that the other would lay out some rational explanation for why buying it was either financially impossible or at the very least a bad idea, one we would regret later, something that would be a cause of ongoing friction.

Inexplicably, that’s not what happened. Yes, I still second-guess this decision all the time—that’s how I’m wired, sadly—but in this one case, this one time in our lives, my wife and I just acted impulsively and did it. And it was my wife’s certainty over the course of that month’s long process and ever since that provided the only answer I ever needed to my own doubts.

“Let me ask you something,” the husband said, shaking me out of this memory.

I nodded. Go on.

“If you lost your place, however it happened, and were out the amount of money you had paid, would that ruin you financially?” he asked. “Was that your life savings?”

Stephanie and I looked at each other. We had had this conversation before. And though we had debated it many times, the answer was clear: Losing that much money would be horrible, but we could recover from it. We have retirement savings that aren’t wrapped up in the value of some property, and if we really did the math on this, we could almost certainly draw a straight line from the money we made selling each of our homes in turn to the purchase price of the apartment. In fact, it was less: We still have money left over from our last house sale. We have, to date at least, come out ahead.

“No,” we explained. We’d be OK.

And that was that: They were in the same position, and unburdened by worries, logical though they may be, about the continued collapse of the exchange rate—which, as Steph explained, would actually benefit them if that happened—they resolved to go for it. They really did want the apartment, enough to put up with a little price-gouging. (Well, more than a little. That still bothers me, frankly.)

And off they went.

We promised to stay in touch, and I’m particularly interested to hear how it went. (We’ve not yet heard.) But being a doubter, I’m more than a little worried that something I said somehow put this over the top. As always, it’s easier to give advice than to take it.