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

Post by CycloRista »

random_walker_77 wrote: Fri Dec 18, 2020 1:57 pm
Godot wrote: Fri Dec 18, 2020 12:51 pm
JiggsJazzCar wrote: Fri Dec 18, 2020 12:41 pm
Godot wrote: Fri Dec 18, 2020 12:29 pm Selling 1,000 shares of Apple for $10 a share, after buying them for $8 a share in the 90s.
Not to make you feel sick or anything.... but how much would that be worth today?
A lot more than 10k.
From https://investor.apple.com/faq/default.aspx:
"Apple’s stock has split five times since the company went public. The stock split on a 4-for-1 basis on August 28, 2020, a 7-for-1 basis on June 9, 2014, and split on a 2-for-1 basis on February 28, 2005, June 21, 2000, and June 16, 1987."

So 4 x 7 x 2 x2 = 112x
So 1000 shares x 10 = $10K
112,000 shares x $126 = $14.11M
So that's a difference of $14.1M, if held without selling any. Ouch indeed.
Yes- AAPL is among my greatest blunders. I had 400 shares in early 2000. Certainly made money selling them over time but should not have listened to an idiot stock broker in my office building. I've made my own financial decisions since then (at that same job, I sold a couple thousand NQSO's at 555% gain... a few years later that company was delisted).

In general: not getting out when something was too good to be true and also not holding on longer to some big gainers. There is no way to know- overall, I came out way ahead during .com times, in 2007-8 and the past year so I remain grateful and have zero regrets.
Willmunny
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Willmunny »

I quit my job at the end of April 2009. I was 30. I knew I that it would be a good idea to roll over my 401(k) and convert it to a Roth IRA at that time. It was down nearly 50% when I quit. I would have had to deplete my emergency fund severely to have the extra cash to pay the tax on the conversion, so I didn't do it. The job market and the nature of my occupation (not much job security) made me afraid not to have a decent cash cushion.

Today it is 5.5x what the balance was in 2009 (with no new contributions). Who knows where it will be in retirement. Every year in retirement that I pay taxes on the distributions and/or take RMDs will be a reminder of this lost opportunity :(
JeepDaze
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JeepDaze »

Didn't sell a biotech stock after FDA approval. Had a 7,000% gain and held it trying to get more gains (got greedy). Eventually kept holding as the price went down, hoping for a rebound. Ended up selling everything for an almost 100% loss (like 99.9% loss). Total loss was something like $40k, so not earth shattering. But lesson learned.
flyingaway
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by flyingaway »

If I have to say something here in a different way.

I wish I had invested all my money in SP500 index funds from the beginning. That I did not do that might be considered as the worst financial mistake.
RXfiles
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by RXfiles »

Maxing out student loans and going to a private school
Bogle_Bro
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Bogle_Bro »

aktx97 wrote: Fri Dec 18, 2020 6:12 pm I graduated high school in 2008 and wish I had started investing then and gone to a MUCH cheaper college. I missed out on the decade-long bull market and ended up with school debt instead. Lesson learned. :beer
Wow me too, exactly.
techrover
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by techrover »

Being financially illiterate earlier in life....till stumbled upon Bogleheads.

Not taking advantage of Deferred Compensation Plan at job when initially eligible. I took it few years later and am still getting the returns till date even after leaving that job. For lot of highly compensated management positions, this is a perk offered that is least understood and taken advantage of. If I took it when initially eligible, I could easily have made about 100K extra.

Not negotiating very hard the joining date for a new job offer - ended up loosing about 80K of RSU that was to vest in 3 weeks.
njdealguy
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by njdealguy »

Attempting to market time earlier this year by converting all my investments and 401k holdings to cash accounts on March 4th was at 3130 and then waiting too long to buy back in asssuming a bigger crash is coming post March 23rd which it didnt! Got back in (fully in VTI) when S&P was back to nearly 3000 and missed out on potentially a extra 30% in total yield!

Well guess am still lucky to have got in and did 3% better than "staying the course" (maybe less than that if there were dividend payments not received)
Last edited by njdealguy on Sat Dec 19, 2020 12:50 pm, edited 2 times in total.
ROIGuy
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by ROIGuy »

MrBobcat wrote: Sat Dec 19, 2020 11:06 am
Mr.BB wrote: Sat Dec 19, 2020 10:41 am
MrBobcat wrote: Fri Dec 18, 2020 4:36 pm Letting an Ed Jones rep talk me into buying a bunch (relative) of Worldcom "the backbone of the internet" shortly before it went kaput. That really hurt as we didn't have a whole lot at the time.
What was your rep's response/excuse when Worldcom went belly up?
It's been such a long time ago, most of it was no sense selling now as it was going down, ending with well these things can happen. Anyway the fella did so well for EJ that he eventually got promoted to corporate.
:oops: It figures.
backpacker61
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by backpacker61 »

I joined 'United Consumers Club' in my mid-20's. It's now called 'DirectBuy'. I imagined then I would be in the market for more in consumer goods than I really did. I just didn't purchase enough "stuff" for it to justify the membership $$.

Also, I invested in actively managed mutual funds for many years (1980's-1990's), before (mostly) transitioning to index funds.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
Aged Maduro
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Aged Maduro »

The worst financial decision i ever made was to become a real estate agent after college. I did both commercial and residential sales and leasing. Like many, i had delusions of making lots of money and "being by own boss". Realtors are independent contractors who pay self employment taxes while having to pay endless fees and dues to their broker and the real estate association. They split up to 50% of every commission with said broker. They have to pay for the suits, the lunches and the fancy leased car. They get no benefits whatsoever, so they have to fund their own retirement plan and health insurance. According to the National Association of Realtors (who typically overinflate everything) the average Realtor in the United States makes about $40,000 a year. Keep in mind that these are the people who actually MADE it and have a lasting career in the business. Most don't even get that far. When you factor in the mentioned expenses, the typical agent is flat broke. In most markets there are only a handful of people who are making any real money and most are people whose dad owned a real estate company. The desperation and cut-throat tactics i saw turned me off to that business. Most agents never get off the hamster wheel, believing their own b.s. and forever chasing the next sale. Divorce and alcoholism is rampant. Fortunately, i was able to parlay my experience into a real estate related government career and becoming a property investor myself. So it wasn't all for naught, but it certiainly set my earnings back a few years.
gator15
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by gator15 »

Though I love cars, the purchase of several cars over the last 18 years probably wasn’t the smartest decision I’ve made. I’ve owned 10+ cars including some expensive cars during that time frame. I didn’t help the matter as I bought another vehicle in March. Up until August of this year I had four cars and a motorcycle. After some nudging from my wife, I did sell one of the cars in August.
soccerbogle
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by soccerbogle »

Invested very (very!) conservatively the first 5-ish years of my career. Fortunately at that point,investment returns are very tiny compared to contributions, and now I am on the right track. :sharebeer
sschoe2
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by sschoe2 »

Chicken Little wrote: Sat Dec 19, 2020 7:49 am
beachairs wrote: Fri Dec 18, 2020 4:25 pm
sschoe2 wrote: Fri Dec 18, 2020 12:40 pm I've said it before; major in chemistry/biochemistry. Even with over 10 years experience and a MSc most companies want to pay me $40-50k and contract no benefits. I have a good job currently and may be able to ride it to retirement but I am seriously looking for a plan B that will get me away from science.
As a fellow scientist, that's sad to hear :( Are you in a LCOL area? Job market is hot in SoCal right now in pharma/biotech.
Yeah, there's huge demand in biotech sector right now.

Anything to do with cell and gene therapy, particularly manufacturing. There are so many companies that you might be able to target an opportunity in your area, otherwise very high demand in major centers; west coast, Philadelphia, Boston.
Good luck.
All skills that were a major part of ms MSc work. Culturing cells including E Coli, mammalian, and insect (sf-9), molecular cloning/DNA work, protein expression and purification. All skills I had clearly on my resume and application and biotech/pharma couldn't have shown any less interest in other than the crap contract jobs for $15-20/hr no benefits that I consistently turned down. I haven't heard any offers from recruiter contacts I have that have made me want to move to a HCOL area. Frankly, the pay rates I've been quoted are lower than public school teacher salaries out there.

I am satisfied enough with my job running a lab in the food industry though I detest living in Illinois. Although I don't have nor plan to have children if my child told me he wanted to major in the sciences I would tell him/her not with any of my money you're not!
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Abe
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Abe »

Godot wrote: Sat Dec 19, 2020 11:39 am
Abe wrote: Fri Dec 18, 2020 3:19 pm I wish I had invested in the Vanguard S&P 500 Index Fund back in 1976. I bought a house to rent out in 1978 and paid $32,000 for it. That house is probably worth around a $100k now plus I've collected rents all through the years. If I had invested that $32k in the S&P 500 Index fund and reinvested dividends, I would have roughly $3.7 million now instead of a $100k house. :(
Yes, but you've had forty years of rent from that house, and I'm sure some of that rent made its way into your investment accounts, or paid your expenses so that other monies could be invested.
Yes, it's true that I had rental income from the house through the years, and this is partly why its hard to compare a rental house investment to say the S&P 500 index. In my case and I'm sure it's the same for others as well, the money I received from rent sat in my bank account for a while. Some of it was spent for living expenses and some of it was eventually reinvested. When I look at the future value of the S&P 500 investment, my calculator tells me my $32k investment would have grown to roughly $3.7 million with dividends reinvested. With the house investment, the rental income was not automatically reinvested. Even if I factor in the future value of my net rental income, the house investment comes out short of the S&P index investment on a dollar for dollar comparison. Having said all this, I don't feel that investing in the house was necessairly a mistake. It was a learning experience for me. Just an observation I made based on the benefit of hindsight.
Slow and steady wins the race.
Chicken Little
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Chicken Little »

sschoe2 wrote: Sat Dec 19, 2020 1:36 pmI am satisfied enough with my job running a lab in the food industry though I detest living in Illinois.
Running a lab sounds great.

The contact thing is annoying, but contract-to-permanent is pretty common.
sschoe2
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by sschoe2 »

Chicken Little wrote: Sat Dec 19, 2020 2:14 pm
sschoe2 wrote: Sat Dec 19, 2020 1:36 pmI am satisfied enough with my job running a lab in the food industry though I detest living in Illinois.
Running a lab sounds great.

The contact thing is annoying, but contract-to-permanent is pretty common.
Not really common. My previous job I worked for 3 years contract no benefits for a big soft drink, OJ, snack, and oatmeal company that starts with a P and the only way I was made permanent was by leaving them. Awful experience, I never fully recovered my passion from science after spending 3 years detesting coming to work every morning and reading the propaganda emails stating what an ethical company they are and all the fake awards they got for it while hanging signs all over stating we're having a nice social event for "EMPLOYEES ONLY" nor spending my 30th birthday burning my diplomas in the backyard grill for a morale boost. For an added bonus the slimy contract agency declared me 1099 so I SS-8'ed them to the IRS who naturally ruled in my favor but I was gone by then.

Anyways according to the WE Upjohn Institute for Employment Research only 27% of contract/temp to hire job really become permanent and 18% of contract jobs overall.
tibbitts
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

Halicar wrote: Sat Dec 19, 2020 11:54 am
tibbitts wrote: Fri Dec 18, 2020 6:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Do you mean contributing too much into a 401(k)? Can you elaborate on that?
Mostly not a 401k, but other deferred accounts: SEP, MPP, 457, 403b, traditional vs. Roth, etc.
Galaxy8
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Galaxy8 »

calvin+hobbes wrote: Sat Dec 19, 2020 6:52 am
Galaxy8 wrote: Sat Dec 19, 2020 6:46 am Went to medical school.

After finishing engineering school, my friends were getting $80k+ jobs.

I took on $500k of debt to make $200k/year.
Your debt to income ratio is pretty rough, my med school was considered expensive and I “only” graduated with 275k of debt. Is there a school charging 125k/yr for tuition and living expenses?
$30k total undergrad and then $65k a year for school and lived on $15k/year in a MCOL area. ~$120k is interest. My income should go up another $100k in 2-3 years, but we're also hoping for PSLF. Definitely don't have the $400-500k / year job I thought a doctor would have. :oops:

I wish my med school only cost me $275k. That's what my wife made it out with on in-state tuition. :shock:
Last edited by Galaxy8 on Sat Dec 19, 2020 4:52 pm, edited 1 time in total.
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Halicar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Halicar »

tibbitts wrote: Sat Dec 19, 2020 3:21 pm
Halicar wrote: Sat Dec 19, 2020 11:54 am
tibbitts wrote: Fri Dec 18, 2020 6:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Do you mean contributing too much into a 401(k)? Can you elaborate on that?
Mostly not a 401k, but other deferred accounts: SEP, MPP, 457, 403b, traditional vs. Roth, etc.
What is the disadvantage of investing too much in those?
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FlatSix
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by FlatSix »

Aged Maduro wrote: Sat Dec 19, 2020 1:06 pm The worst financial decision i ever made was to become a real estate agent after college. I did both commercial and residential sales and leasing. Like many, i had delusions of making lots of money and "being by own boss". Realtors are independent contractors who pay self employment taxes while having to pay endless fees and dues to their broker and the real estate association. They split up to 50% of every commission with said broker. They have to pay for the suits, the lunches and the fancy leased car. They get no benefits whatsoever, so they have to fund their own retirement plan and health insurance. According to the National Association of Realtors (who typically overinflate everything) the average Realtor in the United States makes about $40,000 a year. Keep in mind that these are the people who actually MADE it and have a lasting career in the business. Most don't even get that far. When you factor in the mentioned expenses, the typical agent is flat broke. In most markets there are only a handful of people who are making any real money and most are people whose dad owned a real estate company. The desperation and cut-throat tactics i saw turned me off to that business. Most agents never get off the hamster wheel, believing their own b.s. and forever chasing the next sale. Divorce and alcoholism is rampant. Fortunately, i was able to parlay my experience into a real estate related government career and becoming a property investor myself. So it wasn't all for naught, but it certiainly set my earnings back a few years.
Wow, that's really illuminating. I had no idea it's so tough to make it as a real estate agent. I have a high school friend who seems to post about selling or finding a new home for her clients about once a week in a medium to high COL area. I assumed she was probably killing it just thinking about her 3% share of commissions (I guess 1.5% after splitting with her broker), maybe I'm underestimating some of the downsides you mentioned above. Glad you're on a better track now.
Aged Maduro
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Aged Maduro »

calvin+hobbes wrote: Sat Dec 19, 2020 4:56 pm
Aged Maduro wrote: Sat Dec 19, 2020 1:06 pm The worst financial decision i ever made was to become a real estate agent after college. I did both commercial and residential sales and leasing. Like many, i had delusions of making lots of money and "being by own boss". Realtors are independent contractors who pay self employment taxes while having to pay endless fees and dues to their broker and the real estate association. They split up to 50% of every commission with said broker. They have to pay for the suits, the lunches and the fancy leased car. They get no benefits whatsoever, so they have to fund their own retirement plan and health insurance. According to the National Association of Realtors (who typically overinflate everything) the average Realtor in the United States makes about $40,000 a year. Keep in mind that these are the people who actually MADE it and have a lasting career in the business. Most don't even get that far. When you factor in the mentioned expenses, the typical agent is flat broke. In most markets there are only a handful of people who are making any real money and most are people whose dad owned a real estate company. The desperation and cut-throat tactics i saw turned me off to that business. Most agents never get off the hamster wheel, believing their own b.s. and forever chasing the next sale. Divorce and alcoholism is rampant. Fortunately, i was able to parlay my experience into a real estate related government career and becoming a property investor myself. So it wasn't all for naught, but it certiainly set my earnings back a few years.
Wow, that's really illuminating. I had no idea it's so tough to make it as a real estate agent. I have a high school friend who seems to post about selling or finding a new home for her clients about once a week in a medium to high COL area. I assumed she was probably killing it just thinking about her 3% share of commissions (I guess 1.5% after splitting with her broker), maybe I'm underestimating some of the downsides you mentioned above. Glad you're on a better track now.
Realtors feel the need to put on the appearance of success, but very few achieve it. The "fake it till you make it" psychology of real estate sales is often sad and self delusional.
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abuss368
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by abuss368 »

Whole Life Insurance. I once bought it but was smart enough to cancel after 9 months.

Lesson learned? Keep investing and insurance SEPARATE!

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Matigas
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Matigas »

Quirkz wrote: Fri Dec 18, 2020 12:12 pm
JiggsJazzCar wrote: Fri Dec 18, 2020 12:04 pm
Quirkz wrote: Fri Dec 18, 2020 11:57 am Bought a new house thinking I could quickly sell the old house quickly after that. It took a year, was incredibly stressful, and it evaporated about $40k in savings. Even though the numbers have since settled down, I've never been able to regain the emotional feeling of "plenty" that I had before the deal.
Ouch, I did something kind of similar but I had a renter in there for a year. The problem was the renter was horrible. I had to threaten a lawsuit just to get them to pay rent after a few months. Put me off ever thinking of being a landlord though. Was able to sell the house for about what I paid for it so it all worked out in the end.

Were the two houses you owned at least in the same town?
Yeah, same town. We ended up getting a renter for a little bit, and they were pretty good, but ticked off the fussy HOA a couple of times and triggered a couple of maintenance calls. Then when we finally got an offer my real estate agent told them directly and rushed them out of the house 6 weeks earlier than we actually closed, for reasons I still don't understand.

We sold for what we bought the place for, but after 7 years we'd expected some appreciation, and in the meantime got hit with a string of HOA special assessments and emergency maintenance fees, making the whole thing a big, ugly loss.
So your worst financial mistake was not putting a correct market price on your home, or did it not sell for other reasons?
austin757
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by austin757 »

Probably career choice. I’d do something else and focus on self employment. I’m dabbling in that now but could have done it much sooner.
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Matigas
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Matigas »

God, I love rose colored glasses.
slidecreek
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by slidecreek »

I have wasted at least $50,000 over the past 10 years on poor vehicle buying decisions.
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FlatSix
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by FlatSix »

Galaxy8 wrote: Sat Dec 19, 2020 4:45 pm
calvin+hobbes wrote: Sat Dec 19, 2020 6:52 am
Galaxy8 wrote: Sat Dec 19, 2020 6:46 am Went to medical school.

After finishing engineering school, my friends were getting $80k+ jobs.

I took on $500k of debt to make $200k/year.
Your debt to income ratio is pretty rough, my med school was considered expensive and I “only” graduated with 275k of debt. Is there a school charging 125k/yr for tuition and living expenses?
$30k total undergrad and then $65k a year for school and lived on $15k/year in a MCOL area. ~$120k is interest. My income should go up another $100k in 2-3 years, but we're also hoping for PSLF. Definitely don't have the $400-500k / year job I thought a doctor would have. :oops:

I wish my med school only cost me $275k. That's what my wife made it out with on in-state tuition. :shock:
Gotcha. I’ll be eligible for PSLF myself in about three years. Fingers crossed. Building up a side fund just in case. Hopefully you’ve been able to save/invest lately given the suspension on student loan payments since March. I imagine a dual physician household would have a pretty decent shovel to help work towards a your other financial goals.

To your original point, there’s a reason many people say don’t go in to medicine for the money. Should be okay in the long run but It will definitely take us awhile to catch our friends who got plugged in to good careers right after undergrad.

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

Post by SteadyOne »

JiggsJazzCar wrote: Fri Dec 18, 2020 12:41 pm
Godot wrote: Fri Dec 18, 2020 12:29 pm Selling 1,000 shares of Apple for $10 a share, after buying them for $8 a share in the 90s.
Not to make you feel sick or anything.... but how much would that be worth today?
4 million.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court
tibbitts
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

Halicar wrote: Sat Dec 19, 2020 4:52 pm
tibbitts wrote: Sat Dec 19, 2020 3:21 pm
Halicar wrote: Sat Dec 19, 2020 11:54 am
tibbitts wrote: Fri Dec 18, 2020 6:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Do you mean contributing too much into a 401(k)? Can you elaborate on that?
Mostly not a 401k, but other deferred accounts: SEP, MPP, 457, 403b, traditional vs. Roth, etc.
What is the disadvantage of investing too much in those?
Deferred accounts can grow to the point where you can't perform large enough Roth conversions (or just plain take withdrawals) at reasonable tax rates sufficient to reduce your balance - ever. A better balance of deferred accounts along with taxable equity index funds, where you benefit from low distributions over the years plus (at the moment - could change at any time) lower capital gains tax rates and step-up, provide you and your heirs considerably more discretion in realizing income. With ever-growing deferred balances, once you hit RMDs plus SS, you'll also trigger taxes on your SS, higher IRMAA rates and probably NIIT.
finsterfolly
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by finsterfolly »

Godot wrote: Fri Dec 18, 2020 12:29 pm Worst: Selling 1,000 shares of Apple for $10 a share, after buying them for $8 a share in the 90s.
After playing around with day trading, options, and margin buys in the late 90s, with what little money I had, I went all in on Apple in 1999. I started buying at $12 and ended up with 900 shares when the internet bubble happened. I sold during the free fall and still made money, but it was about 50% off of the highs. After the crash, I bought back in at $14 when apple had about $12/share in cash. I told myself that I learned my lesson and limited my exposure. I then sold and got out after the price tripled and put everything into an S&P index fund.

If I've done my split calculations right, those 900 shares would be 100,800 shares today.
MikeZ
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by MikeZ »

When I was younger I was far too frugal for my own good. I wish I spent more on fun things and hobbies back then. Now that I'm older, working, and married there are so many things I wished I did back then when I had all that free time.

The money I tried to save back then is a drop in the bucket today.
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by capran »

Halicar wrote: Sat Dec 19, 2020 11:54 am
tibbitts wrote: Fri Dec 18, 2020 6:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Do you mean contributing too much into a 401(k)? Can you elaborate on that?
sounds like Tibbitts post was similar to my own, which I went into retail already, so will be interesting to see what they say. we always maxed out our Roths too, but it was specifically deferring too much (IRA/403b/Deferred Compensation Program) while working that resulted in being in a much higher tax bracket in retirement than when I worked.
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

capran wrote: Sat Dec 19, 2020 8:06 pm
Halicar wrote: Sat Dec 19, 2020 11:54 am
tibbitts wrote: Fri Dec 18, 2020 6:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Do you mean contributing too much into a 401(k)? Can you elaborate on that?
sounds like Tibbitts post was similar to my own, which I went into retail already, so will be interesting to see what they say. we always maxed out our Roths too, but it was specifically deferring too much (IRA/403b/Deferred Compensation Program) while working that resulted in being in a much higher tax bracket in retirement than when I worked.
While entirely my fault, it didn't help that over the years, discussions here on Bogleheads, as well as in financial publications, have seemingly put so much emphasis on deferring income whenever possible. There haven't been many discussions about deferring too much, so that just wasn't on my radar until shortly after I retired, and started looking at more of the retirement tax considerations (IRMAA, etc.)
MarceT
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by MarceT »

Several:

- My first job didn't offer a retirement plan for the first 2 years, I took the job regardless and didn't look into other savings options.
- Invested 75K in an Oil company that went bankrupt.
- Hubby and I gave our IRAs to a financial advisor who bought individual stocks and managed to have 0% returns from 2013 to 2016, in the midst of a bull market.
- Bought too much house in a small town, and sold it for less money 4 years later when I switched jobs.
- Didn't use my prior employer 457 plan for several years because we were saving for the MacMansion mentioned above.


Saving graces:

-Have always been a saver.
- Always maxed out my 403 plan.
-Married a frugal man.
-Had a financial awakening 5 years ago.
RJ2010
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by RJ2010 »

trying to catch a "falling knife" (as Suzie Orman put it) a few times. During financial crisis, I bought some Fannie Mae stocks. During energy down turn, bought energy ETFs. When I lost money on individual stocks on Fannie Mae, I told myself I would not buy individual stocks anymore. When energy down turn came, I bought ETF (not individual stocks but still lost money). Good thing is that those were not big money.

I will not know what my third mistake will be. But after finding this site, I will stick to simple index funds. wrote myself IPS and will serve as a reminder.

I started to learn investing in 2001/2002 right after I started my job. Used Microsoft Money and Quicken to track things. Read millionaire next door, Suzie Orman's book. I tracked my investing and expense every year. Personal finance became (still is) my hobby. Tried to save every penny. But somehow all these years, I tried to search for best funds. My portifolio is not horrible (through savings, they are not in bad shape). But it never beat SP500. Now I surrender :happy
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JiggsJazzCar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JiggsJazzCar »

Cartographer wrote: Sat Dec 19, 2020 10:58 am Whether a decision was right or wrong should be evaluated relative to the available data at the time, not in hindsight. From that perspective, not investing in a particular company or other asset that happened to since skyrocket is not a mistake, as it made complete sense to not invest at the time.
I am going to have to print this out or something, great point.
absolute zero
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by absolute zero »

JiggsJazzCar wrote: Sat Dec 19, 2020 11:01 pm
Cartographer wrote: Sat Dec 19, 2020 10:58 am Whether a decision was right or wrong should be evaluated relative to the available data at the time, not in hindsight. From that perspective, not investing in a particular company or other asset that happened to since skyrocket is not a mistake, as it made complete sense to not invest at the time.
I am going to have to print this out or something, great point.
Ken French discusses this exact topic in his appearance on the Rational Reminder podcast, episode 100, in case any BH forum members here are interested. It’s a valuable and pragmatic way to evaluate decisions.
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anon_investor
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by anon_investor »

Buying a fancy $2k watch when I first started working. If I had only put that money into VTSAX, 10+ years later it would be a lot more than $2k...
fyre4ce
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by fyre4ce »

"Real" mistake - not investing in a Roth IRA in my early working years (invested in taxable instead, at the suggestion of my "financial advisor")

Biggest mistake with benefit of hindsight - selling shares of AAPL in college for meal and rent money.
rene
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by rene »

1. Ingrid
2. Jenny
3. Kirsten

Not necessarily in that order
fyre4ce
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by fyre4ce »

rene wrote: Sun Dec 20, 2020 12:06 am 1. Ingrid
2. Jenny
3. Kirsten

Not necessarily in that order
Are those your kids, or your ex-partners? :D
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Godot
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Godot »

rene wrote: Sun Dec 20, 2020 12:06 am 1. Ingrid
2. Jenny
3. Kirsten

Not necessarily in that order
What about Mimi?
"The day you die is just like any other, only shorter." | ― Samuel Beckett
Derpalator
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Derpalator »

RJ2010 wrote: Sat Dec 19, 2020 8:59 pm But somehow all these years, I tried to search for best funds. My portifolio is not horrible (through savings, they are not in bad shape). But it never beat SP500. Now I surrender :happy
vested1
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by vested1 »

Not the biggest monetary loss in dollars, but the biggest in terms of networth at the time.

My 1st wife and I were talked into "investing" $2,000 in a plot of land in an uninhabitable area for speculative mining purposes. My 20 year old brother-in-law was the one putting pressure on us, shaming us really. We were in our early 20's (early 70's). He was living with us rent free (#2 worst financial decision) at the time and had no money to invest for himself because he used a fake ID to frequent bars every night. He contended that we should pay for his $2,000 investment since he had brought us this "opportunity", and that he would pay us back when we resold it to the mining company for a huge gain.

It was a total scam, and the 4k was more than we grossed in two months. The two individuals who ran this scam, and who worked in a legitimate low paying job with my bil skipped town with a well known motorcycle gang on their heels that had members who had also fallen for it. My bil never paid us back, saying it was on us that we had been gullible enough to be taken advantage of. He had talked us into buying him a motorcycle as well, saying he would pay us back, which he never did. After the chopper broke down he didn't have the money to fix it and "gave" it to us, calling it even before heading out to one of his brother's houses to take advantage of him.

We couldn't sell the bike in its condition so paid to have it fixed, which was much more than we could afford. We ended up selling it for almost the exact amount of the repair, a huge loss even greater than the mining deal. All in all about 6 months gross wages.

I guess you'd call that a twofer, or a threefer if you count the free rent.
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Michael Patrick
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Michael Patrick »

Piling up credit card debt in my 20s.

The 1980's was my lost decade. More interested in partying than pretty much anything else. Had three or four credit cards that I maxed out, because liquor stores... After I got sober in 1991, one of the things I did was make a spreadsheet that showed the balance of each of the cards and how much interest I was paying each month. It was a sobering (heh!) experience.

I started taking advantage of 0% interest offers. I didn't stop using the cards, but I totally changed HOW I used them. I made sure that the total I owed went down every month, even if it meant eating ramen noodles for a week so I could throw more money at the cards. The amount I paid had to cover any interest plus new charges plus additional money to reduce the balance. It took me until early 1999, but I finally paid off the last of the carried balance, and I've paid the balance in full every month since then.
TheoBanana
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by TheoBanana »

Normchad wrote: Fri Dec 18, 2020 12:31 pm I won;'t know if this was a mistake or not, but I'm certain it would have changed my life in almost every way.....

I graduated in 1992 with a computer engineering degree. The job market wasn't great, but I had a few offer around the country. The offer that paid the most at the time was in San Jose, but I turned it down.

If I had taken it, I might be sitting on millions in appreciate real-estate, or be a start-up IPO gazillionaire, etc etc.
Ha. Similar story. I turned down a job offer in 2000 that would have landed me in Mountain View. Turned in down because of the incremental cost of living increase.

More recently: Moving to a job with a 401k without safe harbor and an average employee deferral of 3%. Having never been in the situation I didn't know it was an issue.
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F150HD
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by F150HD »

Aged Maduro wrote: Sat Dec 19, 2020 1:06 pm The worst financial decision i ever made was to become a real estate agent after college....
per your longer post above, I think this would make a great thread in itself. Pros/Cons of becoming a Real Estate agent and folks related stories (folks in the field)

Seems may on here (self included) have had bad experiences w/ realtors that have left us salty. In todays tech world some (many?) no longer see a need for RSAs & its wasted $$ (from reading other threads)

Movie 'American Beauty' comes to mind :happy
TrustButVerifying
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by TrustButVerifying »

sschoe2 wrote: Sat Dec 19, 2020 3:08 pm
Chicken Little wrote: Sat Dec 19, 2020 2:14 pm
sschoe2 wrote: Sat Dec 19, 2020 1:36 pmI am satisfied enough with my job running a lab in the food industry though I detest living in Illinois.
Running a lab sounds great.

The contact thing is annoying, but contract-to-permanent is pretty common.
Not really common. My previous job I worked for 3 years contract no benefits for a big soft drink, OJ, snack, and oatmeal company that starts with a P and the only way I was made permanent was by leaving them. Awful experience, I never fully recovered my passion from science after spending 3 years detesting coming to work every morning and reading the propaganda emails stating what an ethical company they are and all the fake awards they got for it while hanging signs all over stating we're having a nice social event for "EMPLOYEES ONLY" nor spending my 30th birthday burning my diplomas in the backyard grill for a morale boost. For an added bonus the slimy contract agency declared me 1099 so I SS-8'ed them to the IRS who naturally ruled in my favor but I was gone by then.

Anyways according to the WE Upjohn Institute for Employment Research only 27% of contract/temp to hire job really become permanent and 18% of contract jobs overall.
Many years ago, I was at a similar stage of life as you. I had a Chemistry Degree, Masters in Microbiology and was a supervisor in a hospital lab. I asked myself, what would I be doing in 5 years and my conclusion was basically the same thing for maybe a bit more money. I also concluded that if I wanted a different outcome, I would have to make a career change.

Working in a lab requires attention to detail, precision and good analytical skills. For me, computer programing was a natural fit and I started taking Computer classes at night. It took a few years but I ended up transferring over to the computer department at the same hospital for a significant bump in pay.

It was hard to work full time and take classes at night. It was also hard to get that first job in a new career. But looking back, I have never regretted my decision. The medical knowledge learned in my first career combined with computer skills ended up being very marketable and satisfying second career.
Aged Maduro
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Aged Maduro »

F150HD wrote: Sun Dec 20, 2020 10:08 am
Aged Maduro wrote: Sat Dec 19, 2020 1:06 pm The worst financial decision i ever made was to become a real estate agent after college....
per your longer post above, I think this would make a great thread in itself. Pros/Cons of becoming a Real Estate agent and folks related stories (folks in the field)

Seems may on here (self included) have had bad experiences w/ realtors that have left us salty. In todays tech world some (many?) no longer see a need for RSAs & its wasted $$ (from reading other threads)

Movie 'American Beauty' comes to mind :happy
Good idea..i will post one soon.
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