What is the Worst Financial Decision/Mistake You Have Made?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
finite_difference
Posts: 3633
Joined: Thu Jul 09, 2015 7:00 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by finite_difference »

Harmanic wrote: Sun May 22, 2022 9:00 pm Starting an HD-DVD collection.
At least it wasn’t LaserDisc! I mean even if you went Blu-Ray you’d need to upgrade to 4K Blu-Ray?
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
sherwink
Posts: 332
Joined: Mon May 28, 2007 9:48 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by sherwink »

Trust me, I'm still recovering from that beating!
sphinx2020
Posts: 48
Joined: Mon Sep 28, 2020 10:27 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by sphinx2020 »

I was defrauded out of about $5k by a scam artistic roofing contractor in Los Angeles that I suspect was run by the Armenian Mafia. Like most fraud victims, I’m embarrassed I fell for the scam.

In the grand scheme of things it wasn’t a huge loss and it was better to pay that to settle the contract than to take it through arbitration at the contractor’s board, deal with a mechanic’s lien, or have a few thugs come by and break my legs.
Nicolas
Posts: 4923
Joined: Wed Aug 22, 2012 7:41 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Nicolas »

This is one of the most entertaining threads I’ve come across. I’m enjoying the schadenfreude.

Mine would be pouring half of my money into the tech sector just before the dot.com bubble burst, followed by subscribing to IBD (Investors Business Daily) and trying to follow their buy/sell system.
Last edited by Nicolas on Mon May 23, 2022 8:26 am, edited 2 times in total.
Nicolas
Posts: 4923
Joined: Wed Aug 22, 2012 7:41 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Nicolas »

finite_difference wrote: Sun May 22, 2022 9:12 pm
Harmanic wrote: Sun May 22, 2022 9:00 pm Starting an HD-DVD collection.
At least it wasn’t LaserDisc! I mean even if you went Blu-Ray you’d need to upgrade to 4K Blu-Ray?
Building any kind of video collection must be considered a mistake now that everything most things can be streamed.
RetiredCSProf
Posts: 1228
Joined: Tue Feb 28, 2017 3:59 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by RetiredCSProf »

I may have made financial mistakes with lost opportunities, but I cannot, in hindsight, know how those paths would have turned out; e.g., career change or job change.

I have made three expensive financial mistakes since retiring (ten years ago):

1. I allowed my siblings to talk our Mom into gifting us her property before she passed away -- they feared taxmageddon in 2013 -- they were convinced that the limit on estate taxes would drop to $1M -- it did not, instead, we each paid about $60K in cap gains tax on the sale of the gifted property

2. I hired a crook to remodel my house -- I should have listed my house "as is" and bought another house that better met my needs -- I paid the contractor $380K when the bill should have been $250K (cost plus contractor fee) -- but at least I have a nicer house and I can add the cost of home improvement to the cost basis when I sell (reducing cap gains)

3. Biggest mistake: I hired a crook to sue the contractor who remodeled my house -- I finally fired the first lawyer and hired a second lawyer to "stop the bleeding"
secondopinion
Posts: 6011
Joined: Wed Dec 02, 2020 12:18 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by secondopinion »

Buying a stock suggested by the news. Lost $20. :P

Not buying CDs back in my college years to duration match my expenses.

Making a debit card payment with no money in checking (there was plenty in savings).

Nothing much yet.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
Mr. Buzzkill
Posts: 305
Joined: Mon Mar 28, 2022 8:23 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Mr. Buzzkill »

invest2bfree wrote: Sun May 22, 2022 9:43 am
Mr. Buzzkill wrote: Sat May 21, 2022 7:15 pm Biggest financial mistake?

Loaning a little money to a good and dear friend when he and his family were about to evicted. A months rent turned into multiple months rent and I allowed my own good fortune and planning to make me feel guilty.

Then i saw him make bad decisions out of desperation and his ego which I had never before seen. He used my generosity for things other than what he persuaded me that he needed; not luxuries but instead of necessities like getting his car fixed so he could get a new job, he spent money (my money!), out of guilt on private school tuition to keep his kids in a school they liked instead of withdrawing them in favor of free public school. Then asking me for more money!

When I loaned him the original and subsequent funds, I always mentally wrote it off as a loss so I could only be pleasantly surprised to be repaid someday.

But someday never came. He died in middle age without telling his wife and kids what I’m owed. Though I’ve documented the loan amounts and have an email trail, I can’t bring myself to ask his adult children and widow for repayment. They’ve had a hard enough life.

I’m out low-mid five figures plus interest plus opportunity cost of use of the money.

It’s an expensive lesson but it taught me no more unsecured personal loans to anyone except maybe immediate family. And the spigot still gets turned off the first time I’m lied to.

The lesson saved me years later from loaning to another friend to save his business. He found another lender but his business still went under. So I’m break even on the lesson learned, so to speak.
Sorry, Loaning a friend who is down and out is not an expensive mistake.

If you are in his shoes then you want your friends to help you.

Think of it as Good Karma you have earned and will be recycled back to you in some other ways.
I don’t regret the initial loan to keep a roof over his head. I regret the additions to that amount after I realized that he wasn’t being honest with himself much less with me.

I allowed my own good fortune, my personal frugality leading to good financial status, and my closeness to him and his family to make me feel guilty by comparison.

Additional lesson: it’s not enough to avoid comparing yourself to to others who have more. One must avoid comparing oneself to others who have less, which is a recipe for guilt-driven decisions.

By all means, give gifts and charity as long as it makes you feel good. But do not let others problems become your problems. I let that happen and it cost me a lot financially.
Emotionally, I’m now at peace with it all. But it was my biggest financial mistake. Will not do it again.
A strategy that works only in bull markets isn’t much of a strategy. Anyway, four dollars a pound.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by stoptothink »

Mr. Buzzkill wrote: Mon May 23, 2022 3:56 am
invest2bfree wrote: Sun May 22, 2022 9:43 am
Mr. Buzzkill wrote: Sat May 21, 2022 7:15 pm Biggest financial mistake?

Loaning a little money to a good and dear friend when he and his family were about to evicted. A months rent turned into multiple months rent and I allowed my own good fortune and planning to make me feel guilty.

Then i saw him make bad decisions out of desperation and his ego which I had never before seen. He used my generosity for things other than what he persuaded me that he needed; not luxuries but instead of necessities like getting his car fixed so he could get a new job, he spent money (my money!), out of guilt on private school tuition to keep his kids in a school they liked instead of withdrawing them in favor of free public school. Then asking me for more money!

When I loaned him the original and subsequent funds, I always mentally wrote it off as a loss so I could only be pleasantly surprised to be repaid someday.

But someday never came. He died in middle age without telling his wife and kids what I’m owed. Though I’ve documented the loan amounts and have an email trail, I can’t bring myself to ask his adult children and widow for repayment. They’ve had a hard enough life.

I’m out low-mid five figures plus interest plus opportunity cost of use of the money.

It’s an expensive lesson but it taught me no more unsecured personal loans to anyone except maybe immediate family. And the spigot still gets turned off the first time I’m lied to.

The lesson saved me years later from loaning to another friend to save his business. He found another lender but his business still went under. So I’m break even on the lesson learned, so to speak.
Sorry, Loaning a friend who is down and out is not an expensive mistake.

If you are in his shoes then you want your friends to help you.

Think of it as Good Karma you have earned and will be recycled back to you in some other ways.
I don’t regret the initial loan to keep a roof over his head. I regret the additions to that amount after I realized that he wasn’t being honest with himself much less with me.

I allowed my own good fortune, my personal frugality leading to good financial status, and my closeness to him and his family to make me feel guilty by comparison.

Additional lesson: it’s not enough to avoid comparing yourself to to others who have more. One must avoid comparing oneself to others who have less, which is a recipe for guilt-driven decisions.

By all means, give gifts and charity as long as it makes you feel good. But do not let others problems become your problems. I let that happen and it cost me a lot financially.
Emotionally, I’m now at peace with it all. But it was my biggest financial mistake. Will not do it again.
Agree with this. I went through the same mental exercise, feeling guilty because I was not in the same situation as them (losing their house and cars). BUT I was going through the same thing and not losing my possessions because I did not buy fancy possessions. I'll never feel guilty because I am financially stable again.
Nowizard
Posts: 4842
Joined: Tue Oct 23, 2007 5:33 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Nowizard »

Long ago, we had a stock acquired in a spin-off from another with a value of approximately $10,000 that accelerated rapidly to $80,000 over about two years before turning downward. We "knew" it would recover but ended up selling it for about a 10% profit. Though we invest very infrequently in individual stocks, we sell part or all if it makes major moves, eschewing "momentum investing" for concrete profits and accepting the resulting taxation if the sale cannot be paired with TLH.

Tim
shell921
Posts: 623
Joined: Fri Jul 06, 2018 5:13 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by shell921 »

Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Carefreeap
Posts: 3899
Joined: Tue Jan 13, 2015 6:36 pm
Location: SF Bay Area

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Carefreeap »

shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Hopefully you invested that money and have a nice retirement portfolio!

I sold my mother's La Jolla Shores condo in 2017 about eight years after she died for about a $300k profit. It wasn't an easy property to manage, partly because of the debt but also the quality of tenant wasn't what you would expect. A lot of entitlement and expectations. The HOA was difficult and there was a lot of deferred maintenance. While I was sad to give it up it sure was an immense relief to no longer deal with it. It hasn't quite doubled in value over those five years but I can just imagine I would have gotten stuck with a tenant who would have demanded Covid relief and while we could afford it paying the mortgage, HOA fees and taxes with no income would have been a strain. Happy to have dodged that bullet! :beer

I'm fond of staying that perhaps I haven't made the best decisions in my life but I sure could have done a lot worse! :wink:
Every day I can hike is a good day.
shell921
Posts: 623
Joined: Fri Jul 06, 2018 5:13 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by shell921 »

Yes I know what you mean. And yes I did invest and my investment grew so it wasn't all bad. My mom died in 1985 and I rented her house out for 2 years. I had a nice tenant for the first 10 months-a visiting professor from Sweden. He was great and then I had a series of less-than-admirable tenants. The house needed a new roof, new fence, kitchen remodel and misc other things. I felt overwhelmed and was working full time so decided to sell it at the urging of the relative I mentioned. If I had borrowed the $$ to improve the house I probably could have made it back in rent in a couple of years but would have been annoyed at having less than great tenants.
Carefreeap wrote: Mon May 23, 2022 10:13 am
shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Hopefully you invested that money and have a nice retirement portfolio!

I sold my mother's La Jolla Shores condo in 2017 about eight years after she died for about a $300k profit. It wasn't an easy property to manage, partly because of the debt but also the quality of tenant wasn't what you would expect. A lot of entitlement and expectations. The HOA was difficult and there was a lot of deferred maintenance. While I was sad to give it up it sure was an immense relief to no longer deal with it. It hasn't quite doubled in value over those five years but I can just imagine I would have gotten stuck with a tenant who would have demanded Covid relief and while we could afford it paying the mortgage, HOA fees and taxes with no income would have been a strain. Happy to have dodged that bullet! :beer

I'm fond of staying that perhaps I haven't made the best decisions in my life but I sure could have done a lot worse! :wink:
deltaneutral83
Posts: 2455
Joined: Tue Mar 07, 2017 3:25 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by deltaneutral83 »

shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Weigh 34 years of rent/expenses plus $3M vs $300k invested in the S&P in 87 with divs reinvested. Probably a horse race when you factor in the "active" part of RE vs index funds.
Wannaretireearly
Posts: 4880
Joined: Wed Mar 31, 2010 4:39 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Wannaretireearly »

probably not jumping to a FAANG, or being more aggressive about it a few years ago. Now i'm just blah, which has it's own (non-financial) benefits.
:sharebeer
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
ThreeFundie
Posts: 35
Joined: Sat Sep 04, 2021 3:42 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by ThreeFundie »

I found MMM and Bogleheads early at 22 (I’m now 23), so I haven’t made any huge mistakes. My biggest regret is not having my financial life together in college from 2017-2021. I had two full-ride scholarships, an on-campus TA job, four well-paid internships, a car from my parents, phone and insurance bills taken care of by my parents, and a cheap apartment in a low/medium cost of living city with roommates. The delta between my minimal living expenses and incoming cashflow was huge for a student! But because I had no financial literacy, I spent most of it on food, gas, and other consumables and invested nothing until my last summer.

I am still in an incredibly fortunate position for a young person, but it goes to show you that learning early makes a huge difference. I would have ~4x my current net worth if I started at 18 instead of 22.
60% VTSAX, 30% VTIAX, 10% VBTLX/G fund
Mitchell777
Posts: 1278
Joined: Mon May 21, 2007 6:32 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Mitchell777 »

Not having 60 - 80% of my investments in equities in my 20's and 30's when I was dollar cost averaging in each paycheck. I was way too conservative with well over half in fixed income. I'd estimate that one cost me close to seven figures, before taxes, over the decades.
Last edited by Mitchell777 on Mon May 23, 2022 4:19 pm, edited 1 time in total.
er999
Posts: 1343
Joined: Wed Nov 05, 2008 10:00 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by er999 »

Following the advice of Benjamin Graham (which is often quoted by financial authors) to never have less than 25% of assets is bonds. I followed it when I started investing in 2005 at age 29 for the next 15 years and always kept 25% of my assets in bonds. I remember every year diligently selling off total market to buy bonds and it was a mistake with a stable job and no need for the money for decades.
RightGuard
Posts: 68
Joined: Thu Aug 23, 2018 3:54 pm
Location: KC to Shining Sea

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by RightGuard »

Bought an extended warranty on a new vehicle.... TWICE! :oops:
finite_difference
Posts: 3633
Joined: Thu Jul 09, 2015 7:00 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by finite_difference »

Nicolas wrote: Sun May 22, 2022 10:15 pm
finite_difference wrote: Sun May 22, 2022 9:12 pm
Harmanic wrote: Sun May 22, 2022 9:00 pm Starting an HD-DVD collection.
At least it wasn’t LaserDisc! I mean even if you went Blu-Ray you’d need to upgrade to 4K Blu-Ray?
Building any kind of video collection must be considered a mistake now that everything most things can be streamed.
I think HD-DVD and Blu-Ray hold up pretty well and have extras. But it’s probably not worth having a huge collection. There are also some very good movies that are not easily found on streaming.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
User avatar
dratkinson
Posts: 6116
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by dratkinson »

deltaneutral83 wrote: Mon May 23, 2022 11:34 am
shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Weigh 34 years of rent/expenses plus $3M vs $300k invested in the S&P in 87 with divs reinvested. Probably a horse race when you factor in the "active" part of RE vs index funds.
+1. You would have won.

Why?

Assume 7% market return, than $300K invested in the market index in 1987, would today be worth $3.2M (=FV(.07,2022-1987,-300000,0,0)). So it looks like a horse race. But!...

You would have won because:
--You avoided 35yrs of rental property expenses (lost compounding effect) which would have reduced your profit on $3M sale.
--You avoided 35yrs of renter headaches. (Priceless.)

So maybe your in-law is not such a bad guy after all.


Now, whether you rolled the 1987 sale proceeds into a market index, or not... that decision is all yours.

So your biggest financial mistake was not in listening to your in-law, but in not knowing a better next investment was the market index. (A common theme for all of our young selves.)


Today, the best we can do is to learn from our mistakes... and teach others to avoid them.

Notice in this, you become the person advising to avoid poorer investments. But you take it a step further and guide them to a better investment. (I'm assuming your in-law didn't advise you to, "Sell rental property, invest in market index.")


Which brings up the topic of giving unsolicited financial advice to anyone.

Long story short: It doesn't work. (Result of many forum posts.)

But if anyone "asks" you for financial advice, then you have a chance of being heard. In this case, you can "tell them what you do and why, and point them to resources." It's then up to them to make their own decision. No other course of action is reported to work.


I've found the folks I meet during the workday are too busy to think about retirement planning, then... maybe later. So to simplify the process of getting the information to them, I created a wallet handout with enough information to jump start their learning... which they can review later.

Wallet-sized personal-investing handout to jump start learning: viewtopic.php?t=261584

I now introduce the topic of them planning for their retirement by asking folks if they "...would like to learn the simple investing method used by Warren Buffett to win a $1M bet against 5 hedge funds?" If they say "Yes", then I give them a handout.



Edit. Clarity. Link to handout.
Last edited by dratkinson on Fri May 27, 2022 12:36 pm, edited 2 times in total.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
User avatar
Taylor Larimore
Posts: 32842
Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Taylor Larimore »

Bogleheads:

I've made many financial mistakes but probably my worst mistake was attempting to market-time stocks and bonds.

My second worst mistake was my attempt to invest in individual stocks.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn from the experience of others. It’s cheaper.”
"Simplicity is the master key to financial success." -- Jack Bogle
SuperSaver
Posts: 248
Joined: Sat Aug 23, 2014 8:27 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by SuperSaver »

Investing in digital currencies that were designed to work as a medium of exchange through a computer network that were not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Jeepergeo
Posts: 876
Joined: Sun Dec 20, 2020 1:33 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Jeepergeo »

Taylor Larimore wrote: Mon May 23, 2022 7:51 pm Bogleheads:

I've made many financial mistakes but probably my worst mistake was attempting to market-time stocks and bonds.

My second worst mistake was my attempt to invest in individual stocks.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn from the experience of others. It’s cheaper.”
There is more wisdom in that shared experience than there is in most 400 page books on investing.
User avatar
JazzTime
Posts: 724
Joined: Mon Oct 25, 2021 8:43 am
Location: MA

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JazzTime »

Two doozies:
1. Many, many years ago I heard about making easy money by selling out of the money (OTM) calls on stocks you own. So I tried it. One of the calls I sold was an AMZN call. It had a nice juicy payout and, if it was called, I'd make a nice profit. Too good to be true. AMZN was probably selling somewhere around $50 back then. Well, AMZN suddenly popped and went way beyond the call price. My AMZN shares were called away. Well, I thought, I'll just wait for the inevitable pull back and rebuy the shares. It never pulled back. And I never re-bought the shares. I refuse to calculate the profits I lost as a result.

1. Bad news, good news. After a down draft, I decided I could make some easy money selling well OTM puts on AAPL. I was greedy and sold more puts than a sane investor had a right to sell, figuring it could never fall that low. Surprise, it fell ITM. To make matters worse, the puts were exercised early, before I could extricate myself from the position. So I became the proud owner of a boatload of AAPL shares that were in a significantly negative position. I decided that I would hold on until those shares became profitable. Well, ten years later, those shares became extremely profitable. The lesson is, you can make money even through the stupidest, most boneheaded mistake.
The difficulty with jazz is there are too many notes. (Borrowed from Emperor's critique in Amadeus)
User avatar
AnnetteLouisan
Posts: 7261
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by AnnetteLouisan »

Not buying VTI at $190 last week. Kidding.

In reality my biggest mistakes were investing too late and being way too conservative in my 401k. A close third was overspending on luxury brand names.
Last edited by AnnetteLouisan on Wed May 25, 2022 6:17 pm, edited 1 time in total.
afr
Posts: 684
Joined: Sun Apr 27, 2014 4:01 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by afr »

Purchased a dental practice over 30 yrs ago for 100k@10% interest(seller financed) that essentially failed and I had to walk away from(after 15 yrs)in order to maintain my sanity.
brawlrats
Posts: 542
Joined: Thu Dec 02, 2021 12:06 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by brawlrats »

Fell into gambling addiction. Don't do it...it sucks.

Thankfully my wife helped me get out of it and didn't just walk out the door when I admitted it all to her.
alfaspider
Posts: 4816
Joined: Wed Sep 09, 2015 4:44 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by alfaspider »

Nothing disasterous, but probably getting into cars as a hobby. That reminds me, my project has about $2k in parts that need to be ordered to progress it :mrgreen:
beardsicles
Posts: 415
Joined: Fri Nov 19, 2021 12:38 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by beardsicles »

Graduating from college in 2008. Meant not being able to find financially meaningful work for basically the subsequent five years. Though, to be fair, some of those years were grad school, but went to grad school because if you were 22 in NYC in 2008-2009, you were pretty lucky to be working a real job.
User avatar
quantAndHold
Posts: 10141
Joined: Thu Sep 17, 2015 10:39 pm
Location: West Coast

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by quantAndHold »

From a purely financial perspective, retiring at 53. I probably left $3M on the table. From a life perspective, though, it's been worth every penny. The ultimate luxury acquisition.
Ependytis
Posts: 617
Joined: Mon Oct 17, 2016 11:10 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Ependytis »

brawlrats wrote: Wed May 25, 2022 10:55 am Fell into gambling addiction. Don't do it...it sucks.

Thankfully my wife helped me get out of it and didn't just walk out the door when I admitted it all to her.
Congratulations on overcoming this addiction. Best of luck to you in the future.
muitu
Posts: 108
Joined: Thu Feb 03, 2022 8:48 am
Location: Buffalo, NY

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by muitu »

Going to college due to parental pressure and ending up in close to 6 figure debt. Knew the blue collar world was more of my realm.

Don't let people dissuade your own thinking!
"Wealth consists not in having great possessions, but in having few wants." - Epictetus
RoadThunder
Posts: 175
Joined: Sat Dec 11, 2021 8:32 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by RoadThunder »

Honestly none; anything of note I learned from so it was simply the cost of my education.
Apathizer
Posts: 2507
Joined: Sun Sep 26, 2021 2:56 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Apathizer »

muitu wrote: Wed May 25, 2022 2:05 pm Going to college due to parental pressure and ending up in close to 6 figure debt. Knew the blue collar world was more of my realm.

Don't let people dissuade your own thinking!
+1

I was lucky in that I didn't go into major debt. I borrowed 'only' about $20K and was able to pay it off. But college was still largely a 4-yr waste of time and money. Borrowing 6-figures would have been disastrous for me.

I'm not saying no one should go to college, but only if you have a definite career path requiring it. I was unfocused and got a psychology BA that has been mostly irrelevant for the jobs I've had. People should only go to college if they need and want to. Many parents who pressure their kids to do so are doing them a disservice.
ROTH: 50% AVGE, 10% DFAX, 40% BNDW. Taxable: 50% BNDW, 40% AVGE, 10% DFAX.
User avatar
turtlebug
Posts: 202
Joined: Sun May 15, 2022 10:46 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by turtlebug »

When I was young and stupid, I got married, we racked up credit card debt and didn't pay it off in full each month (even though we could have with our combined income), and then to top it off, I cashed out my 401K to pay off 1/2 our credit card debt when we divorced. :oops:
fyre4ce
Posts: 2544
Joined: Sun Aug 06, 2017 11:29 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by fyre4ce »

Signing up with a (commissioned, non-fiduciary) "financial advisor" right out of college. He put me into some very risky commodity-based mutual funds, which actually did very well over the couple years I was invested. But, none of it was put into a Roth IRA when that would have been obviously a good move. I fired him just before crash of 07-09 and reinvested myself in no-load (but actively managed mutual funds). THOSE funds also did quite well and actually paid for their expenses more-or-less, and then in 2015 or so I switched to all low-cost passive funds. So, missing out on the Roth IRA for about 5 years out of college was my worst financial mistake. Assuming we're not counting children...

Edit: oh yeah, and selling a four or low-five-figure amount of AAPL stock as a sophomore in college to pay for food.
er999
Posts: 1343
Joined: Wed Nov 05, 2008 10:00 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by er999 »

Thinking more about it, maybe it will end up being putting $100k into Hedgefundie’s adventure in 12/2022 at near market highes, now down close to 45% in 5 months. Will see in 5 years if it ends up being a mistake.
User avatar
bampf
Posts: 1104
Joined: Thu Aug 04, 2016 6:19 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by bampf »

Finding this forum 15 years after I should have found it. Wish I had been following this set of "rules" since I got my first good job. Would be in a very different place. That being said I am quite grateful and doing quite well based on the principles of keep it simple, low cost index funds etc.
Nescio
Morik
Posts: 1344
Joined: Tue Nov 25, 2014 11:26 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Morik »

Decades ago while playing online poker, I had already lost something like $15k (all my money). So I took the max cash advance I had access to on a credit card (~$8k) because I was SURE I could turn my losing streak around. All on the same day.
A lot of the $15k was prior poker winnings, but still...
You can probably guess what happened.
Last edited by Morik on Wed May 25, 2022 6:12 pm, edited 3 times in total.
User avatar
HMSVictory
Posts: 1715
Joined: Sun Nov 01, 2020 6:02 am
Location: Lower Gun Deck

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by HMSVictory »

deltaneutral83 wrote: Mon May 23, 2022 11:34 am
shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Weigh 34 years of rent/expenses plus $3M vs $300k invested in the S&P in 87 with divs reinvested. Probably a horse race when you factor in the "active" part of RE vs index funds.
Ah actually the $300k invested in VFINX in 1987 is...... (insert drum roll here):

$10,594,746 - you hit a home run if you invested the entire proceeds in VFINX!
Stay the course!
Sheridan
Posts: 40
Joined: Tue Feb 01, 2022 8:02 pm
Location: USA

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Sheridan »

- Lending money to an SO who only paid back a few hundred. But another time I gave money to a good friend and didn't expect it back, but he paid me back with an extra $300 as a thank you. So it's not always a bad thing, but I probably wouldn't lend again.

- Buying a small boat and a couple other expensive toys. The total was under $10,000, but still, I wish I hadn't.

- Living with an SO whose out of control spending spilled into my credit cards.

But I don't beat myself up about these things. I learned from them and for the most part, I've made good financial decisions like living frugally, buying a house in 2010 and buying inexpensive cars, new, and taking good care of them. Oh, and not having kids although that wasn't just because of the financial drain.

Thank you to all who shared stories so we can all continue learning.
HootingSloth
Posts: 1050
Joined: Mon Jan 28, 2019 2:38 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by HootingSloth »

HMSVictory wrote: Wed May 25, 2022 5:40 pm
deltaneutral83 wrote: Mon May 23, 2022 11:34 am
shell921 wrote: Mon May 23, 2022 9:24 am Allowing a relative by marriage to convince me to sell my mother's paid for house 2 years after her death. I was 38 and not smart enough to figure out a way to keep the house. Got $300k for the home in 1987 - it recently re-sold for just under $3 million. 2 blocks from the beach in La Jolla California!
Weigh 34 years of rent/expenses plus $3M vs $300k invested in the S&P in 87 with divs reinvested. Probably a horse race when you factor in the "active" part of RE vs index funds.
Ah actually the $300k invested in VFINX in 1987 is...... (insert drum roll here):

$10,594,746 - you hit a home run if you invested the entire proceeds in VFINX!
Was going to say this. Investing $300k in even a 30/70 (i.e. extremely conservative) portfolio over that timeframe would have given you about $3.5M. Missing out on the real estate appreciation was a nothing burger, although failing to invest the money in some sort of reasonable portfolio could have been a big mistake.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
4ransom
Posts: 131
Joined: Mon Jul 30, 2007 3:27 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by 4ransom »

Only 1 mistake in 30 years - not investing in the 3-onley. I ama slow learner.
Mishigami
Posts: 46
Joined: Sat Oct 24, 2020 5:24 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Mishigami »

Worst mistake? Not discovering this forum/philosophy in the late 90's, and allowing a broker to talk me into taking a margin loan rather than selling stocks to pay for a kitchen/sunroom/dining room remodel project. Worldcom, Broadcom, Global Crossing, etc., etc., just before the crash. A very painful lesson. Basically wiped out my taxable account at the time.
User avatar
Elric
Posts: 731
Joined: Fri Dec 07, 2018 11:23 pm
Location: Virginia
Contact:

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Elric »

In dumbest, buying MCI / Worldcom stock about 2 years before it imploded. But it was a tiny amount of "play money" so actual cost was small.

Most costly: Not knowing enough about investing, and being far too conservative with my retirement account for the first several decades of working. Very high lost opportunity cost. But did save, did max out excellent match, plus more, so not really suffering from the mistake.

Unknown cost: Not investing in Oracle when it went public. I was convinced it was a winner back before it went public, looked into it and found out it was private, then didn't check back into it.

So overall, can't really complain.
"No man is free who must work for a living." (Illya Kuryakin)
jef
Posts: 150
Joined: Fri Dec 21, 2007 10:35 pm

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by jef »

well said
Every bull market is a fountain of regret. Every vacation, depreciating consumer good, restaurant meal, indulgence, etc. bought in the 2009-2015 time frame is a huge mistake because its hypothetical future value just keeps growing.
2tall4economy
Posts: 739
Joined: Thu Jan 08, 2015 6:55 am
Location: Global

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by 2tall4economy »

My addiction to cars
You can do anything you want in life. The rub is that there are consequences.
Droyal
Posts: 32
Joined: Mon Jan 24, 2022 9:33 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Droyal »

Making 1m selling a company Dec 1999 and putting all the proceeds into tech at the suggestion of a broker. In a few months my account shot to 1.6m and my wife thought we should sell and move into something more conservative, to which I said "your crazy", I got out with 200K :(
To her credit my wife never said I told you so, but I was pretty discouraged.
manlymatt83
Posts: 1287
Joined: Tue Jan 30, 2018 7:23 am

Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by manlymatt83 »

Buying $10k worth of calls over a few week period and losing it all. Good tuition.
Post Reply