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
nss20
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by nss20 »

Too many mistakes to list. However, one theme runs through all my investment mistakes. It was investing in businesses that I didn't understand. The people I invested in were high integrity and pretty smart, but that wasn't enough. On occasion, I invested even when my questions weren't answered adequately. You need to separate your personal feelings from making hard-headed investment decisions.
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birdog
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by birdog »

Trading energy/metal futures contracts.
Wricha
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Wricha »

I guess this is a financial mistake and it is big. Business partners (including myself) sold a piece of commercial real estate which we each got around 7 figures they all dumped their money in Tesla I was the only one who did not. I told them the “enough” story. They now have turned that 7 figure into 8 figures and not a week goes by that one of them repeats the “enough” story! You know, I do think about it but I don’t feel all that bad about my decision I guess age or enough is truly enough has settled in.
MAandMEMom
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by MAandMEMom »

Normchad wrote: Fri Dec 18, 2020 1:31 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.
@normchad Same for me, 1992, and I was offered four jobs. The one I didn’t take was for a company that would eventually be bought by IBM. I would have got to travel the world.
Cruise
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Cruise »

Would you believe that my worst financial decisions were to tell Jeff Bezos about an idea for selling books and Howard Schultz my idea for selling espresso? :)
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JiggsJazzCar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JiggsJazzCar »

Wricha wrote: Sun Dec 20, 2020 6:31 pm I told them the “enough” story.
What is that? Just that you have to recognize when enough is enough? I have been struggling with trying not to worry so much about where every single penny is going. It’s driving me and my wife crazy.
bltn
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by bltn »

random_walker_77 wrote: Fri Dec 18, 2020 2:57 pm
Godot wrote: Fri Dec 18, 2020 1:51 pm
JiggsJazzCar wrote: Fri Dec 18, 2020 1:41 pm
Godot wrote: Fri Dec 18, 2020 1:29 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.
Without reading any further, I think this can be declared the worst mistake of this thread!!
bltn
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by bltn »

tibbitts wrote: Sat Dec 19, 2020 8:03 pm
Halicar wrote: Sat Dec 19, 2020 5:52 pm
tibbitts wrote: Sat Dec 19, 2020 4:21 pm
Halicar wrote: Sat Dec 19, 2020 12:54 pm
tibbitts wrote: Fri Dec 18, 2020 7:45 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.
This is very insightful. Possibly one of the most useful pieces of advice in the forum lately. I discussed this same topic with my son on a holiday visit home this past week.
moneyzone
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by moneyzone »

Bought 40k worth new car as my first car in 2010 with 19k down and 0% interest 3y loan. stupid youngster with new job. At that time 1b condo were for sell with 19k down as 10% down payment. if I had bought that condo it would be good 500k now. missed the lifetime opportunity to buy during historic downturn in housing market.
Starfish
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Starfish »

h82goslw wrote: Sat Dec 19, 2020 6:50 am
Starfish wrote: Sat Dec 19, 2020 2:44 am I see the divorce stories and couldn't help thinking: how is the divorce the mistake? Isn't the marriage? Financially speaking, marrying somebody with 0 or much lower income is the major mistake. Ideally partners should be as equal as possible in marriage, financially, intellectually, same page with goals, preferably hobbies too.
That's the lesson here.
This is an interesting point. It’s a good thing my spouse didn’t take this viewpoint. When we married I was just starting my career and in my first two years earned $13k combined. Now I gross almost 3 times what spouse earns.

To OP, by far my biggest financial mistakes were just draining the bank on cars.....leasing new vehicles every 2 years, sports cars, motorcycles etc. Now I buy and hold my cars.
Of course, I was thinking about potential.
Just to clarify, I think in a divorce the financial part is (or should be) a very small part of the damage, at least for regular people. But being a financial financial forum/topic, this is the way to minimize this portion.
Wricha
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Wricha »

JiggsJazzCar wrote: Sun Dec 20, 2020 11:15 pm
Wricha wrote: Sun Dec 20, 2020 6:31 pm I told them the “enough” story.
What is that? Just that you have to recognize when enough is enough? I have been struggling with trying not to worry so much about where every single penny is going. It’s driving me and my wife crazy.
Jack Bogle wrote a book “Enough”. The founding premise of this book was an actual conversation that occurred many years ago. Two famous authors, Kurt Vonnegut and Joseph Heller are talking at a party hosted by a billionaire hedge fund manager. Kurt says to Joseph, “You know, this billionaire makes more money in one day than you made in your whole lifetime from your novel Catch-22“. Joe responds, “Yes, but I have something he will never have… enough.”

I would say you and your wife should sit down and discuss what enough is. And how more is simple more you will be much more content with your life situation after you reach an agreement. Every time I hit a financial milestone another one appeared. Very silly mind game we play. The book is also worth a read. Good luck.
ClassOf2021
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by ClassOf2021 »

I’ve made lots of little financial mistakes but learned from them.

Always have been pretty financially conservative and my biggest mistakes have been, in retrospect, were passing by opportunities where I should have known better. For example, missing out on back door and mega back door Roths when they first started being used. I expect if I could have been watching bogleheads back then, I would have not missed that one.

But even so, on the verge of retirement, I am in great shape. I’ve always been a boglehead even if I did not know that bogleheads existed.

I started reading this site a couple of years ago and it has helped me be comfortable with the decision to retire. 8-)
Wings5
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Wings5 »

Here are a few:

-Signed a lease for a nice car right out of college. $3,000 down and $225/month, with about 12,000 miles a year. Went way over, had to buy it. A used Honda Civic would have been a much better choice.

-Graduated college with minimum student debt relative to my salary. Got talked into buying more credentials, took out (more) student loans for poor training that taught me zero actual skills. $8,000 for nothing.

Both of those combined to push us towards Dave Ramsey, then Bogleheads.
“Ronald James Read was an American philanthropist, investor, janitor, and gas station attendant.”
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racy
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by racy »

1. Bought a Triumph sportscar right after college, without the income to really afford it.
2. Broke my 1 share, of a 1980 Berkshire Hathaway purchase, into baby Berkys; then bought shares of individual companies, including WorldCom...
3. Borrowed against my 401k in my 20s.

Mostly youthful mistakes; not looking forward to senility...
iamblessed
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by iamblessed »

Abe wrote: Fri Dec 18, 2020 4:19 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. :(
It was not the best move but at least you stayed in the black. Most of us were in the red.
Independent George
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Independent George »

Jumping at buying a condo as soon as I had the money for a deposit because I was afraid of getting priced out of the market... in June 2007.
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JiggsJazzCar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JiggsJazzCar »

Wricha wrote: Mon Dec 21, 2020 5:15 am I would say you and your wife should sit down and discuss what enough is. And how more is simple more you will be much more content with your life situation after you reach an agreement. Every time I hit a financial milestone another one appeared. Very silly mind game we play. The book is also worth a read. Good luck.
I think my wife is already at the enough stage, it is I who is having the issues. I stay awake some nights worrying about the smallest details of our financial situation even though I know we are perfectly fine. I was raised in a very "thrifty" home and in which my parents never spent money on themselves. Now any time I feel like I am wasting money I feel my anxiety rising. My wife an I both have full time jobs that will have pensions, we have zero debt and we have very healthy brokerage and retirements funds but I can't seem to turn off those old feelings of being overly thrifty or terrified to spend money.

I seem to obsess over all the little mistakes that I make and can't seem to give my self credit for the successes or at least give myself the benefit of the doubt that past choices I made were actually fine given the information I had at the time.

My wife has suggested that it might be time to talk to a counselor or something, and I think she might be right.
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JiggsJazzCar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JiggsJazzCar »

Wricha wrote: Mon Dec 21, 2020 5:15 am Jack Bogle wrote a book “Enough”. The founding premise of this book was an actual conversation that occurred many years ago. Two famous authors, Kurt Vonnegut and Joseph Heller are talking at a party hosted by a billionaire hedge fund manager. Kurt says to Joseph, “You know, this billionaire makes more money in one day than you made in your whole lifetime from your novel Catch-22“. Joe responds, “Yes, but I have something he will never have… enough.”
It seems the the entire book is free on Youtube as an audiobook if anyone else is interested. Thank you for the recommendation.
ad2007
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by ad2007 »

Cashed out a handful of stocks to pay cash for our home about 10 years ago. Think NTFLX, HD, DIS and WMT.
If we took out a mortgage and kept those stocks until today, I think we'd be sitting on .... actually, I've resisted the temptation to calculate. Would be quite painful to see the number.
JBEB
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JBEB »

tibbitts wrote: Fri Dec 18, 2020 7:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Can you explain this one please?

I max out my roth every year, but wondering if maxing my tax deferred is better than just getting over with it now in a taxable. (also, I am dumb when it comes to taxes)
NerdicSkier
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by NerdicSkier »

Worst financial decision was to get married and have a family. Best lifestyle decision was to get married and have a family.
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Quercus Palustris
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Quercus Palustris »

Out of college, barely contributed to 401k. Like, not even to the full match %, leaving free money on the table. The reason? College & credit card debt, how could I be putting that money away without first getting out of debt? Of course all the while spending $ on going out, travel, etc. and not getting out of debt. Penny foolish and pound foolish, I guess.

This would have been around 2007, so prime time to be investing at rock-bottom. But as others have said, that sort of timing is a regret only in hindsight, not a mistake.
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

JBEB wrote: Mon Dec 21, 2020 10:13 am
tibbitts wrote: Fri Dec 18, 2020 7:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Can you explain this one please?

I max out my roth every year, but wondering if maxing my tax deferred is better than just getting over with it now in a taxable. (also, I am dumb when it comes to taxes)
I'm not sure but I'm assuming you're dividing accounts into:

1. taxable
2. Roth (contributions are taxed, earnings are exempt from taxes, at least for now.)
3. traditional (IRA, 401k, 403b, 457, etc. when not specified as Roth - taxes on contributions and earnings are deferred.)

I'm not saying that no deferred accounts are desirable, just that it's possible to over-emphasize contributions to deferred to the point where your marginal tax rate in retirement will be higher - possibly much higher - than while you are accumulating. I just don't see this situation discussed very often; the emphasis always seems to be on taking every opportunity to defer taxes, and that doesn't always end well.
JBEB
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JBEB »

tibbitts wrote: Mon Dec 21, 2020 11:10 am
JBEB wrote: Mon Dec 21, 2020 10:13 am
tibbitts wrote: Fri Dec 18, 2020 7:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Can you explain this one please?

I max out my roth every year, but wondering if maxing my tax deferred is better than just getting over with it now in a taxable. (also, I am dumb when it comes to taxes)
I'm not sure but I'm assuming you're dividing accounts into:

1. taxable
2. Roth (contributions are taxed, earnings are exempt from taxes, at least for now.)
3. traditional (IRA, 401k, 403b, 457, etc. when not specified as Roth - taxes on contributions and earnings are deferred.)

I'm not saying that no deferred accounts are desirable, just that it's possible to over-emphasize contributions to deferred to the point where your marginal tax rate in retirement will be higher - possibly much higher - than while you are accumulating. I just don't see this situation discussed very often; the emphasis always seems to be on taking every opportunity to defer taxes, and that doesn't always end well.
THanks for the clarification.

I always looked for formulas to help decide if I should max but never really seemed to find any-just blanket advice.
justcruisin
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by justcruisin »

Lots of mistakes in my 20's. In general, always worked hard (and received OT) to just barely pay for expenses in a given month. Thought I deserved more than I could afford, and basically inflated my lifestyle. Lucky to have dug myself out of this hole and now in my mid/late 30's, met the right person, made the right RE moves and finally in a position at current company where I increased my income. Now I stress more about spending money and fund discretionary expenses with the previous years savings so that whatever is not used, can be re-invested. Budget so that we always hit a minimum level of savings per year and max out all tax advantaged accounts...thanks to Bogleheads.

-Worked to play = travel, bars, clubs, alcohol, CC debt for 8 years, no retirement savings until 30.
-Cars = still a bad habit, but leasing BMW's every 2 years starting at 25 don't help your financial situation.
-Dad was financially savvy, and tried to help, but we had a bad relationship and I never listened.
-Health = working 80-100 hours a week for OT is bad for you physically. Doesn't work in your early 30's and stress related issues are no joke.
tibbitts
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

JBEB wrote: Mon Dec 21, 2020 11:20 am
tibbitts wrote: Mon Dec 21, 2020 11:10 am
JBEB wrote: Mon Dec 21, 2020 10:13 am
tibbitts wrote: Fri Dec 18, 2020 7:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Can you explain this one please?

I max out my roth every year, but wondering if maxing my tax deferred is better than just getting over with it now in a taxable. (also, I am dumb when it comes to taxes)
I'm not sure but I'm assuming you're dividing accounts into:

1. taxable
2. Roth (contributions are taxed, earnings are exempt from taxes, at least for now.)
3. traditional (IRA, 401k, 403b, 457, etc. when not specified as Roth - taxes on contributions and earnings are deferred.)

I'm not saying that no deferred accounts are desirable, just that it's possible to over-emphasize contributions to deferred to the point where your marginal tax rate in retirement will be higher - possibly much higher - than while you are accumulating. I just don't see this situation discussed very often; the emphasis always seems to be on taking every opportunity to defer taxes, and that doesn't always end well.
THanks for the clarification.

I always looked for formulas to help decide if I should max but never really seemed to find any-just blanket advice.
There can't be any blanket advice, because the optimal outcome depends on multiple assumptions. But the downsides of overdoing deferred income don't seem to be mentioned very often, maybe because in a somewhat higher percentage of cases - especially for people who aren't the most diligent about saving - it works out.
Cruise
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Cruise »

tibbitts wrote: Mon Dec 21, 2020 11:10 am
JBEB wrote: Mon Dec 21, 2020 10:13 am
tibbitts wrote: Fri Dec 18, 2020 7:45 pm Investing too much over my career in deferred accounts vs. Roth or taxable.
Can you explain this one please?

I max out my roth every year, but wondering if maxing my tax deferred is better than just getting over with it now in a taxable. (also, I am dumb when it comes to taxes)
I'm not sure but I'm assuming you're dividing accounts into:

1. taxable
2. Roth (contributions are taxed, earnings are exempt from taxes, at least for now.)
3. traditional (IRA, 401k, 403b, 457, etc. when not specified as Roth - taxes on contributions and earnings are deferred.)

I'm not saying that no deferred accounts are desirable, just that it's possible to over-emphasize contributions to deferred to the point where your marginal tax rate in retirement will be higher - possibly much higher - than while you are accumulating. I just don't see this situation discussed very often; the emphasis always seems to be on taking every opportunity to defer taxes, and that doesn't always end well.
Another factor to consider: What do you do with those tax savings: Spend or invest in post-tax vehicles?
michaeljc70
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by michaeljc70 »

The most I lost on a single security was when I was sure interest rates were going to go up after the financial crisis and bought a leveraged ETF (20+ Year Treasury Bear 3x) :oops:
Last edited by michaeljc70 on Mon Dec 21, 2020 1:11 pm, edited 1 time in total.
mchop
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by mchop »

I trusted a family friend to be my financial advisor.
carmonkie
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by carmonkie »

After i left my first job in 2002 I had about 17K in my 401(k). I rolled over to Vanguard, I put it in some Vanguard funds (without a clue) that would equate to a 3 fund portfolio, I cashed that rollover and used it pay credit card debt. It would be worth a cool 80K today without touching it.

Also I used to get ESPP stock @ 15% discount and I blew it all up. The root of the problem i married someone that did not have the same financial goals as I did and ended-up wit the triple crown. Divorced, Chapter-11, and almost had the house foreclosed.

This led to the best decision ever, divorcing this person and started all over financially and now my wife and I are stashing close to 40% of our salaries and live debt free..
cb990z
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by cb990z »

anon_investor wrote: Sun Dec 20, 2020 12:29 am 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...
Things start to get really grim if you measure every past purchase in terms of a future compounded return. Imagine how much worse that'll look in 30 years! :)

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

Post by Luckywon »

cb990z wrote: Mon Dec 21, 2020 1:52 pm
anon_investor wrote: Sun Dec 20, 2020 12:29 am 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...
Things start to get really grim if you measure every past purchase in terms of a future compounded return. Imagine how much worse that'll look in 30 years! :)

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.
At one point in my investing career I observed the reverse phenomenon. In March 2009 the value of my retirement accounts was less my cumulative contributions over more than a decade, not even accounting for inflation. I joked that the best thing I ever did with my money was spend it. :sharebeer
cb990z
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by cb990z »

Luckywon wrote: Mon Dec 21, 2020 2:00 pm
cb990z wrote: Mon Dec 21, 2020 1:52 pmThings start to get really grim if you measure every past purchase in terms of a future compounded return. Imagine how much worse that'll look in 30 years! :)

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.
At one point in my investing career I observed the reverse phenomenon. In March 2009 the value of my retirement accounts was less my cumulative contributions over more than a decade, not even accounting for inflation. I joked that the best thing I ever did with my money was spend it. :sharebeer
I had a mini version of that this March... I always front load my 401k contributions in January. So then come March's market dip, 2020's contributions are completely washed out, plus far more. It's disheartening.

What I should have done instead... is predicted a future serious pandemic in December (in time for the January pay period deferral adjustment cut off) and delayed my contributions to time the market. That's what Bogleheads preach right? :P
jerrysmith
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by jerrysmith »

Really too many to count but the 3 that are at the top of my mind (one of which I'm still paying)

1. Too many student loans, I'm no where near what some folks have but I borrowed too much and really did a 2nd MA Degree that I really didn't need.
2. Cars, I've not spent huge amounts but I generally get another used car every couple years. Again not a huge amount but it adds up.
3. Credit Cards in my youth.
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JiggsJazzCar
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by JiggsJazzCar »

mchop wrote: Mon Dec 21, 2020 1:06 pm I trusted a family friend to be my financial advisor.
Did you lose money or just fees?
Wricha
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Wricha »

JiggsJazzCar wrote: Mon Dec 21, 2020 9:26 am
Wricha wrote: Mon Dec 21, 2020 5:15 am I would say you and your wife should sit down and discuss what enough is. And how more is simple more you will be much more content with your life situation after you reach an agreement. Every time I hit a financial milestone another one appeared. Very silly mind game we play. The book is also worth a read. Good luck.
I think my wife is already at the enough stage, it is I who is having the issues. I stay awake some nights worrying about the smallest details of our financial situation even though I know we are perfectly fine. I was raised in a very "thrifty" home and in which my parents never spent money on themselves. Now any time I feel like I am wasting money I feel my anxiety rising. My wife an I both have full time jobs that will have pensions, we have zero debt and we have very healthy brokerage and retirements funds but I can't seem to turn off those old feelings of being overly thrifty or terrified to spend money.

I seem to obsess over all the little mistakes that I make and can't seem to give my self credit for the successes or at least give myself the benefit of the doubt that past choices I made were actually fine given the information I had at the time.

My wife has suggested that it might be time to talk to a counselor or something, and I think she might be right.
I think a better book for you might be “A new earth” by Tolle
marielake
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by marielake »

Can't decide if it was buying a time share or buying a lot of land that I thought I would one day build on.
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dumbbunny
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by dumbbunny »

In 2006 I had one hold-out stock that was 5.5% position in my stock-side of my portfolio. It has been my darling stock since 1988. The balance of my portfolio was Vanguard funds. At the conclusion of a portfolio check-up with Vanguard, the rep said I had too much AAPL stock and recommended I convert some or all of it. Since the stock has given me mediocre returns in recent months and I wanted to be a card-carrying Boglehead with a Three-Fund portfolio, I decide to convert all of it to Vanguard. That decision cost me, yeah, I still track it, $2.2M. I had no idea AAPL was about to market the iPhone. I had the opportunity to buy AAPL each and every day since then but didn't - another "worst financial decision/mistake," but I resisted...and I had to listen to my friends brag about how much money they have made even after jumping on the AAPL train as late as 2011. Even having AAPL make up 3-4% of my VTSAX holding didn't bring solace knowing what could have been.

Attempting to bring solace and to uphold "things happen for a reason," I have convinced myself that a higher power has saved me as I imagine that I might have taken profits on my good fortune and bought a Titanic cruise en route to the Old Course at St. Andrews.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"
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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 »

cb990z wrote: Mon Dec 21, 2020 1:52 pm
anon_investor wrote: Sun Dec 20, 2020 12:29 am 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...
Things start to get really grim if you measure every past purchase in terms of a future compounded return. Imagine how much worse that'll look in 30 years! :)

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.
It is a tangible reminder of what not to do, and I did learn my lesson, so relatively speaking not a costly mistake. But... not the smartest thing to do either considering I had 6 figure student loan debt at the time...
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wander
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by wander »

Worst financial Decision was I didn't buy Microsoft or Apple stocks in the 90s.
stocknoob4111
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by stocknoob4111 »

worst was staying out of the market for a few years during the best bull market in recent times. second worst, wasting a lot of money in my 20s buying/leasing expensive cars I could not afford to impress people (keeping up with the Joneses) instead of channeling that money into investments, third worst - procrastinating and not buying a home in 2012 when homes were dirt cheap and I had the downpayment ready to go :oops: I saw a nice townhome in SoCal for $353,000 in mid 2012 and I remember not being decisive, good grief, now that same house is $810,000 :shock:

Thankfully, I learned from my mistakes and i've been 100% invested since late 2017 :beer
Dontridetheindexdown
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Dontridetheindexdown »

My failure to buy as much Exxon as I possibly could right after the Valdez incident.
tibbitts
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by tibbitts »

I don't agree with many of the replies in this thread. Since this is Bogleheads, buying individual equities should be considered a behavioral mistake, no matter the outcome. It's not a mistake to engage in the correct behavior and have it not prove optimal. Mistakes are errors where there was a somewhat obviously correct path that wasn't taken.
Equitius
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Equitius »

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Last edited by Equitius on Sun Jan 24, 2021 5:21 pm, edited 4 times in total.
ChrisC
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by ChrisC »

Group mistakes.

Not selling World Com, Lucent Technology, and Nortel Networks when the stocks had run up considerably over a decade in the 1990’s and riding them to worthlessness.

Selling MSFT in the early 2000’s after holding onto to it for 2 decades; navigating too soon out of actively managed mutual funds with stellar performance records like Fidelity Magellan and New Horizons (TRowe Price) in favor of index funds.
todaysBob
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by todaysBob »

1. Buying an under construction investment property in my home country 2 years after moving to US(2010). I was 26, had no idea of what stock market meant and back home stocks were looked down upon as gambling. So this felt a safe option. That apartment is still being built(like a few days/every year :( ) and stuck in court cases. There goes $100k I will probably never see again.

2. Playing with Options in 2013 when I had no idea what exactly they are. Lost 100%($35k) of my capital. Didn't learn from it and lost $15k more in 2015.

3. Getting into Private Equity, out of my 6 investments on EquityZen 1(MapR) has already bankrupted, other just had a successful exit(Credit Karma bought by Intuit). Sitting with minus 8% over last 3 years and all illiquid investment while S&P 500 is up more than 25% in that period. Invested ~$70k here.

4. I also have the honor of contributing to and getting burned by Crypto craze! This was actually off to a great start, my initial $7k invested in Ethereum quick turned into $42k. Here I was thinking I have finally found a winning formula :D. Then came crash of Jan 2018! I kept putting more money and finally sold at a loss of $27k!

So yeah I have done every possible investing mistake there is before finally finding Bogleheads in late 2019. Even that started off in the worst way possible. After scavenging the site for couple of months and finally gathering enough strength to put all of my money($600k) into the market, guess the day I went all in? Yeah you got it. Feb 19th 2020 :mrgreen:

I sometimes solace myself by saying maybe it was good that I had gone through all those losses early in life. That has made me kind of battle tested and somewhat tolerable to large drop in markets.

Other saving grace is that having tried out all these alternates, I am now able to easily accept I have no special knowledge of the market and happy with whatever market will return.
mkc
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by mkc »

Closing on a construction loan December of the same year as we sold ESPP shares to finance the downpayment on the build without understanding our deductions would be limited due to the cap gains on the stock sales, when our bank and builder gave us the option to close after the beginning of the next year. :oops: That was back in '98, long before we really knew anything about capital gains.

Followed closely behind by purchasing the first horse (and shortly behind that, the second horse).
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9-5 Suited
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by 9-5 Suited »

bltn wrote: Mon Dec 21, 2020 2:05 am
random_walker_77 wrote: Fri Dec 18, 2020 2:57 pm
Godot wrote: Fri Dec 18, 2020 1:51 pm
JiggsJazzCar wrote: Fri Dec 18, 2020 1:41 pm
Godot wrote: Fri Dec 18, 2020 1:29 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.
Without reading any further, I think this can be declared the worst mistake of this thread!!
Technically any Boglehead who was alive in the 90s with $10,000 to their name made this mistake. In a highly liquid market, there’s no difference between selling at $10 and choosing not to buy at $10 in terms of future opportunity cost.
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by Golfalot »

There are lots of good replies to this thread. It's been fun to read.

I've had a couple bad mistakes, both real estate related....

1) Back in early/mid 2000's, at the encouragement of my DW, we bought a wooded lot on a golf course for $90k that we thought we would eventually build a summer cottage/second home on. Felt good with the purchase since it was listed at $105k. Paid $2k/year carrying costs on that puppy for about 10 years. We never ended up building on it and eventually sold it for $75k. Took forever to sell.

2) Rather than build, in 2014ish, we looked at little cottages to buy in another "getaway" area within our state. At the time, we couldn't financially justify pulling the trigger on a $175 - $200k cottage that we would only use a few times a year. Now, those same cottages are $350k+, and with COVID and our kids doing online school, we would give anything (well maybe not $350k..:-)) for one of them. Oh well.
youngpleb
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Re: What is the Worst Financial Decision/Mistake You Have Made?

Post by youngpleb »

Probably my costliest mistake was going to college for 7 years instead of just 4. I did end up with some good degrees and a good job, but those missed years of full time work (nearly 4) really stack up. I should have put more thought in high school into what I wanted to major in.

Then early in my career came Bitcoin mania, and I lost a few thousand dollars in that. Tough lesson, but good to get it out of the way early. I’d like to have that money back now!
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