Chip or Putt? / Lease or Purchase?

“Putting is like wisdom – partly a natural gift and partly the accumulation of experience.”

 -Arnold Palmer

Not long ago I was playing golf at a very difficult course, the kind where they have professional caddies, because it would be impossibly difficult without a bit of help.

 On one hole I hit a good approach shot and was about fifteen feet in front of the green. I was left looking slightly uphill at a middle pin, with a winding pathway to par, over some bumps and divots that I would rather chip over, however, there was not much room for error on any side. If my next shot was too strong, I would be in the sand behind the hole, yet too soft, and I would end up no closer than I stood.

As I looked at my bag full of clubs, my caddy chimed in “The guy who wants to make a par putts from here.” He went on to explain that the small divots and bumps in the 15’ between me and the front of the green would likely rule out a birdie by pushing me a little right or left, but that I should end up close enough to tap in for par on the next putt. However, if I chipped over those bumps, while I had a small chance of holing it, there was a significant chance I would be very short or very long and make bogey at best. Simply, the risk wasn’t worth the reward.

“Golf is a compromise between what your ego wants you to do, what experience tells you to do, and what your nerves let you do.” 

-Bruce Crampton

 I relate this story because it is a very similar thought process when deciding to lease or own your real estate. When able, those who putt, or owns their property, makes par most of the time and builds momentum and equity in the process.

On the other hand, the golfer who aggressively takes out the wedge to chip opens themselves to a mistake of chunking the shot short, or hitting it long, and because that one shot is over so quickly, they are forced into another stressful situation before necessary, moving.

In golf, like investing, when looking forward from the tee box, the hole seems to have so many different paths forward. Each with its own hidden pitfalls and challenges that aren’t apparent until a shot or two later. However, after the experience of playing the hole and looking backwards from the green, it looks easy and simple, as if the best path is the only one. This is like leasing versus owning, for those who know where they are going, the bumpy ride isn’t worth it.

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