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Your decision to downsize, in my opinion for what its worth, is a sound and good one.
Happiness does not come from all the stuff we have. As you yourselves have discovered the “dream home” did not create the dream but a burden of anxiety. That’s the thing with stuff, more often then not, instead of enjoying it we live the fear of losing it.
I’m 55, sole bread winner, prone to depression, and getting tired – ready to re-tire. Ready or not the next sage of life is before us and the questions start to arise, what do we want it to look like? Do we continue to strive and push… how much do we really need? What is truly important. Its understandable as we grasp and hold on to the illusions of the past, how things should be even suspecting that we don’t really want those things that we fall into depression.
There is no reason for regret. Nothing stopping you from pursuing a new dream house, but you already know that you wont, its not what you or your family needs or wants. The dream “home” your seeking in the second half of life isn’t about brick and mortar and stuff.
“The feelings that hurt most, the emotions that sting most, are those that are absurd – The longing for impossible things, precisely because they are impossible; nostalgia for what never was; the desire for what could have been; regret over not being someone else; dissatisfaction with the world’s existence. All these half-tones of the soul’s consciousness create in us a painful landscape, an eternal sunset of what we are.” ― Fernando Pessoa