Timely Advice: Consider What Mom Would Have Told you

Updated July 2026

Before you tell yourself you’re too old for this, stop. Age has nothing to do with it. You’re never too old to listen to what mom told you.

My own mother was a saint. She knew a lot, though I’ll admit I doubted plenty of her sayings at the time, things like “an hour of sleep before midnight is worth two hours after it” never quite tracked for me. Didn’t matter. She only needed to be right most of the time.

So I started wondering, lately, what she’d have made of real estate investing at our age. Long past the years when bedtime was even a question.

The phrase that comes to mind first: take the cash and let the credit go. Sounds like something a game show host would say to a contestant deciding whether to walk away or risk it all on one more question. The Consumer Financial Protection Bureau (CFPB) makes basically the same point, warning against overextending credit even when the market looks friendly.

But mom surely had more to say than that. She never sat me down for a lecture on real estate, but I know her general philosophy well enough to guess. So, mom, what’s your take on real estate investments now that we’re a bit more “advanced” in age?

“Never borrow more money than you can afford to lose.” Harsh rule, on the surface. Follow it strictly and you’d borrow almost nothing, or only pocket change. Right?

Not quite. There’s a caveat: unless it’s a sure thing. And a sure thing means something like a 99% chance of a good outcome, seriously stacked odds. An FDIC-insured certificate of deposit clears that bar. So might a property in a steady market like Charlotte, North Carolina, where median home prices climbed 6.2% from 2011 to 2012, per the Realtor.com 2013 housing report.

Always have a backup plan. Say you buy a foreclosure cheap, fix it up with a trusted repairman for next to nothing, rent it fast, then sell in three years for a 30% profit. Great, take the win. But build in room for things to go sideways, a job loss, repair costs that double, rental demand drying up.

Plan carefully. Set goals, realistic ones, for whatever you’re investing in. Experian’s 2013 credit report found that 62% of people with a FICO Score above 700 keep their DTI under 36%, which is exactly the benchmark lenders care about.

Don’t expect to get rich fast. That’s a fool’s game. Invest for the long haul instead. Mom might’ve put it this way: “He who buys quickly often regrets just as quickly.” The Federal Reserve Board (2013) backs this up in its own way: only 39% of households had a three-month emergency fund saved. That leaves 61% exposed to a single bad month.

Go with the odds. Mom never said this outright, she wasn’t a gambler, but I bet she’d have agreed with it. Hard to argue with playing the odds, honestly.

Why mom’s rules still hold up in 2013

Her line about never borrowing more than you can afford to lose lines up almost exactly with the CFPB’s 2013 guidelines on responsible lending. The bureau tells consumers to check their income, expenses, and credit history before taking on new debt, same idea, more paperwork.

Here’s a number worth sitting with: the average credit card APR hit 14.48% in 2013, per NerdWallet’s data from that year. Roughly 1.2% a month. Pay only the minimum on a $5,000 balance and you could rack up over $1,400 in interest across five years, money that could’ve gone toward a down payment instead.

That’s part of why SoFi and Chase both push borrowers to keep their debt-to-income ratio under 36%. Cross that line, monthly debt payments above 36% of gross income, and lenders start saying no.

And yet 55 percent of Americans saved something out of their 2012 income, according to the Federal Reserve Board (2013). Only 2 percent of that income, on average, actually got saved. Something doesn’t add up there.

It’s not that people don’t want to save. Most are just stretched thin. The average American earned around $44,000 a year at the time, yet 40% of households said they couldn’t cover a $400 emergency without borrowing. That’s a liquidity crisis in miniature, and it’s exactly why mom’s push for an emergency fund matters so much.

Do the math on someone earning $44,000 a year, that’s $3,667 a month, and one month of expenses runs about $1,100. Only 39% had three months covered, roughly $3,300. Saving just 2% of income means $88 a month, which means nearly four years to hit that emergency fund target. Save more now, or gamble on avoiding a shock later. That’s the real trade-off.

Running real estate through the mom test

Let’s put mom’s rules against real estate directly. Rule one: never borrow more than you can afford to lose. Not just caution, actual math.

Say a home costs $200,000 and you put down $20,000, 10%. A 10% drop in value puts you underwater already. Drop 15%? Half your equity is gone. That’s exactly why lenders like Chase and Bank of America want a FICO Score of at least 620 and a DTI under 43% before they’ll approve you.

Rule two: have a backup plan. You don’t flip a house and just hope for the best. You plan around delays, repair overruns, and markets that shift underneath you.

Realtor.com reported in 2013 that the average U.S. home took 110 days to sell. Bank on a quick flip and you’re gambling with your cash flow. The Federal Reserve report found only 39% of households had three months of expenses saved. That’s nowhere near enough to survive a 110-day dry spell in the market.

Rule three: don’t expect to get rich fast. Real estate returned an average of 4.1% annually between 2000 and 2012, per the U.S. Bureau of Labor Statistics (BLS). Not a 30% flip profit in three years. Slow, steady growth, nothing more dramatic than that.

Location changes the math, though. In 2013, Portland, Oregon; Denver, Colorado; and Boise, Idaho were the standout markets, with home prices climbing 8% to 12% for the year. Not luck. Data.

Picture a $200,000 home in Denver rising 10% in a year, that’s $220,000, or $20,000 in appreciation. Compare that to the 4.1% national average and you’re looking at nearly 2.5 times faster growth. Still not a lottery ticket, though. It’s a steady bet backed by numbers, and one that still demands a plan B.

Building an investment plan mom would approve of

Start with the emergency fund. Only 39 percent of Americans had three months of expenses saved, per the Federal Reserve (2013). If you’re not in that group, fix that first.

From there, build a real savings habit. The average person saved just 2 percent of their 2012 income. Not close to enough. Aim for 10% to 15%, and set it up to happen automatically.

Route a chunk of every paycheck straight into a high-yield savings account through SoFi or Bank of America. Accounts like these usually pay 1.5% to 2.0% APY, far ahead of the roughly 0.5% you’d get from a standard savings account.

Next, be honest about your risk tolerance. Past 50, you don’t have unlimited time to recover from a real estate misstep. That’s precisely why mom’s warning about over-borrowing matters more, not less, as you get older.

A FICO Score of 700 or above gets you better rates; above 740 is ideal. Experian reports that 70% of consumers scoring above 740 carry no delinquencies at all.

One more practical rule: refinancing a mortgage is usually only worth it if your new rate beats your current one by at least 0.75 percentage points, or if it cuts your monthly payment by $100 or more. Clear, testable, no guesswork.

How real estate stacks up against other investments

Frequently Asked Questions

What percentage of Americans saved in 2012?

55 percent of Americans saved at least some portion of their 2012 income, according to the Federal Reserve Board (2013).

How much did Americans save on average in 2012?

The median amount saved was just 2 percent of 2012 income, per the Federal Reserve Board (2013).

What percentage of people had a three-month emergency fund?

39 percent of respondents had set aside enough to cover three months of expenses, according to the Federal Reserve (2013).

Is it safe to borrow more than you can afford to lose?

No. The CFPB warns that over-borrowing increases financial risk, especially when markets decline. Mom’s rule applies.

What is a healthy DTI ratio for loan approval?

Most lenders prefer a DTI below 36%. SoFi and Chase both use this benchmark to assess creditworthiness.

How long does it take to sell a home on average?

The average time to sell a home in the U.S. was 110 days in 2013, according to Realtor.com.

What’s the average interest rate on a credit card in 2013?

The average APR was 14.48%, according to NerdWallet’s 2013 data.

How do FICO Scores affect loan approval?

A FICO Score above 700 increases your chances. Experian reports that 70% of consumers with a score above 740 have no delinquencies.

What’s the best way to start investing for retirement?

Begin with an emergency fund. Then contribute 10% to 15% of income to a retirement account. Use a provider like Fidelity or Schwab.

How does real estate compare to stocks over time?

From 2000 to 2012, stocks returned 7.3% annually, while real estate returned 4.1%. Stocks are more volatile, but real estate offers steady cash flow.