My boneheaded financial mistakes

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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catdude
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My boneheaded financial mistakes

Post by catdude » Wed Sep 27, 2017 1:01 am

Here on Bogleheads, discussing the stupidities of celebrities, star athletes, politicians, etc. etc., is a no-no. But happily (or perhaps not so happily) we ARE allowed to talk about our own stupid mistakes. I've made my share. In fact, I think I've made just about every dumb move there is to make. But as an old boss of mine once told me, "Everybody makes mistakes. That's why they put erasers on pencils and spittoons in bars."

When I think back on my financial mistakes, here are a few that come to mind --

1. In my 20's and early 30's, I worked in a dead-end, low-paying job. As a result, I got a late start in building home equity and investable assets.

2. During that time, in spite of my low income, I had opportunities to invest but -- with few exceptions -- passed them up. For example, there was a period of about four years where I lived rent-free.

3. There were a couple times when I did invest in IRA's, but ultimately tapped them for income. Big tax bill!

4. I didn't get serious about investing and saving for retirement till I was about 40. When I did, I signed up for the 457 plan at work, and chose funds that were red-hot, e.g., Janus funds. (This was during the 90's tech stock boom). As soon as I invested in them, they tanked.

5. I once invested in a mutual fund solely because they advertised on a radio show I frequently listened to.

6. I only bought new cars, and I always financed them. In retrospect, I wish I had paid cash for used cars.

That's my list. These, at least, are the things that come to mind. There are probably other mistakes that I've forgotten. But I bring this up to let the newbies here know that we all makes mistakes, but if you learn from them things can still ultimately turn out fine.

Anybody else care to 'fess up to the mistakes they've made?
catdude | | "You playing tonight?" Dwight Evans, speaking to Cal Ripken, circa 1989.

rosylenm
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Re: My boneheaded financial mistakes

Post by rosylenm » Wed Sep 27, 2017 1:09 am

Too many to count, but included cashing out 401(k)s and a SEP IRA or three before 35.

Forty seems to be a magic number for a lot of folks, myself included. It took turning 40 for me to buckle down, settle some debts and get serious about saving for the future. Being a DINK makes it a lot much easier.

grettman
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Re: My boneheaded financial mistakes

Post by grettman » Wed Sep 27, 2017 3:59 am

Borrowed from 401K when I was younger. Took the full 15 years to pay off....

Didn't invest up to my employer's match when I was younger even though I had the money to do it...

I am a terrible negotiator (paid more for houses and cars)....

With all that said, I am blessed that I am on a path to be FI by 57 (I am 46 now).

mancich
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Re: My boneheaded financial mistakes

Post by mancich » Wed Sep 27, 2017 4:04 am

Tried to time the market more than once. hint: it doesn't work :beer

bovineplane
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Re: My boneheaded financial mistakes

Post by bovineplane » Wed Sep 27, 2017 4:24 am

Bought metricom and worldcom because I couldnt get enough companies that ended in com. Luckily it wasnt much money and I was young.

Bought a house in Late 2006. Even talked with the wife that we were not comfortable with the market, new construction seemed like junk for the prices being charged. Financed it with an 80/20 zero down loan. Carried it as a rental for far too long losing money because we liked our renters. Finally sold last year.

Kept repeating the cell phone contract nonsense for years until Sprint raised my plan one too many times in 2010.

Certainly not perfect but also not quite 40 yet. Have 300k saved for retirement, an emergency fund, Max the TSP and add some to Roth while my wife also contributes 6-8% to her TSP and purchased a reasonably priced home for our income and have a pension coming when I retire from the military so we turned out fine.

Silverado
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Re: My boneheaded financial mistakes

Post by Silverado » Wed Sep 27, 2017 4:51 am

Past: Snowmobile. Fortunately I was in my early 20s and was investing in IRA and some after tax. But that was about a $8000 loss in three years.

Ongoing: We pay too much for Directv. Sort of small potatoes, but it adds up over the years of course. We pay too much for one line on Verizon.

I am also a terrible negotiator and sell for way less than I should, houses , cars, anything. We have averaged a move every three years over the last 24 including two international ones, so there were often cars to be sold and a couple houses. Because of this (either the moves or my lack of skills) I never consider any property as part of net worth. I assume I will mostly give it away at some point.

carolinaman
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Re: My boneheaded financial mistakes

Post by carolinaman » Wed Sep 27, 2017 6:35 am

I have made many mistakes over the years. One that stands out was when I left a govt job in NC in my 30s. I was vested in their retirement system, but had no plans to return so I withdrew my contributions of $10k. Five years later I returned to replace my former boss and stayed 22 years until retirement. I was allowed to re-purchase my years in the system after 10 years, at a cost of $63k. Ouch! I did that. It was worthwhile despite the cost. Oh, and one more thing. A NC supreme court case ruled that govt workers pensions were not subject to taxes for those vested in the system prior to 1989. Had I kept my money in the system, my pension would not be subject to NC income tax, but since I took it out, my pension is taxable. I keep on paying for that mistake!

DavidRoseMountain
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Re: My boneheaded financial mistakes

Post by DavidRoseMountain » Wed Sep 27, 2017 7:52 am

Around 1991 I inherited 30,000 from my grandmother after she passed away, my parents invested that money. They put some in Mutual Series mutual fund, some in Mesa Petroleum - T. Boone Pickens. The Mesa Petroleum promptly went bankrupt.

Then with what was left I let a broker invest the money, and he wheeled and dealed buying/selling different stocks. After about 2 years I left the broker, and he increased the money about 5% but I'm sure I probably vastly underperformed the market.

Eventually I used that money to buy a house in 1994

In the late 90's not having learned the previous lesson, I started investing in an actively managed mutual fund, Oakmark. But one of the companies they were invested in had some terrible politics. I sent a letter to the fund manager complaining about that company. I got a response back, basically telling me that they only invest with respect to improving the shareholder's value. It wasn't a bad response, but the internet provided me with an opportunity to do more research. That's when I discovered that index investing was considered a better option so I moved my portfolio over to an S&P 500 index.

Nonetheless, I continued to invest some in other actively managed funds like I think Janus and an IPO fund. I even tried a little bit of stock picking.
The actively managed funds tanked after the dot com bust. Lesson learned. Everything after that was put into index funds.

beebog
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Re: My boneheaded financial mistakes

Post by beebog » Wed Sep 27, 2017 8:27 am

I bought GM prior to the crash. When it went down I bought more because I thought it was 'too big to fail' and if GM failed, I'd have bigger things to worry about. That, at least, was true.

Fire2030
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Re: My boneheaded financial mistakes

Post by Fire2030 » Wed Sep 27, 2017 8:30 am

mancich wrote:
Wed Sep 27, 2017 4:04 am
Tried to time the market more than once. hint: it doesn't work :beer
+1 :oops:

bigred77
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Re: My boneheaded financial mistakes

Post by bigred77 » Wed Sep 27, 2017 8:44 am

beebog wrote:
Wed Sep 27, 2017 8:27 am
I bought GM prior to the crash. When it went down I bought more because I thought it was 'too big to fail' and if GM failed, I'd have bigger things to worry about. That, at least, was true.
Me too!!

That was my catalyst to actually sell everything I owned and put a boglehead portfolio into practice. I had found this site, believed in the strategy, but was dragging my feet on actually implementing the plan. I still had the originally chosen active funds in my 401k. I was still trading individual stocks in my Roth IRA. Then I put everything I had in my Roth IRA into GM stock because they were too big to fail. There stock was trading just above 2-3 dollars I believe and they were going to announce big changes after negotiating with the union. Well they came out and said no deal could be reached and they were going to claim bankruptcy. I watched it happen in real time. I think I was able to sell my shares for about 80 cents a share as the stock bounced from all the short sellers buying to close out their position.

Luckily I only lost a few thousand dollars because I had only been working and investing for a year or 2. Probably the best thing that could have happened to me as I implemented a boglehead plan immediately and haven't looked back. Better to lose 60% of $5k when your in your early 20s than learn that lesson the harder way when your in your late 40s.

neilpilot
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Re: My boneheaded financial mistakes

Post by neilpilot » Wed Sep 27, 2017 8:56 am

About 15 years before I retired, even though I had sufficient knowledge and experience to manage my investments I thought I was too busy at work and it would take too much time. So I handed most of my account to an Merrill Lynch adviser.

I did OK but so did he :D

I retired 2 years ago, took charge of my accounts and reduced my overall management fees (including ER) from about 1.8% to the current 0.35%. I figure I've reduced my overall investment fees by $25k/yr or more.

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Top99%
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Re: My boneheaded financial mistakes

Post by Top99% » Wed Sep 27, 2017 9:04 am

My list is also long and I will take the time to post it to hopefully help others from making the same mistakes:
1) Trading in my perfectly usable used car for a new car that cost ~33% of my gross income 2 months after I landed my 1st job. The loan was at 15.75% (1985).
2) Spending enough that we carried a revolving balance on our credit cards for the first 5 years after we started work.
3) Buying our first house with 5% down. We had no business buying a house at that time.
4) Buying a Mercedes after a big raise and then buying another during the tech bubble. I think cars are a leading cause of financial suicide and we certainly extended the time to becoming FI by 5 years by overspending on cars.
5) A financial and life lesson: My wife and I spent too much time working in our 20s and 30s and spent too much on material stuff Vs experiences.
6) During the tech bubble allowing our net worth to become >75% tied to my employer's stock. Ultimately that was the lesson that stung the most and also helped motivate me to learn about investing and "your money or your life" type tradeoffs.

So, if I could do it again:
1) Become a Boglehead earlier
2) Spend *a lot* less on material stuff, especially cars
3) Redirect some of the money from 2) to travel and experiences and the rest to savings.
Adapt or perish

remomnyc
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Re: My boneheaded financial mistakes

Post by remomnyc » Wed Sep 27, 2017 10:11 am

1. During college, I charged everything and only made minimum payments on my credit cards. Now, I still charge everything but only if I can pay it off every month.
2. After college, I invested my IRAs in penny stocks, some which did spectacularly well and others that went bankrupt. I cashed in my IRAs when I started grad school to pay tuition and paid taxes and penalties.
3. After the crash in 2009, I sold all the active funds in my 401k, but instead of immediately buying index funds, I DCA’d my way back in over two years, thinking there would be another reset. I left a lot of money on the table by being partially out of the market during the early part of the run-up.

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alpine_boglehead
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Re: My boneheaded financial mistakes

Post by alpine_boglehead » Wed Sep 27, 2017 10:33 am

1) Not having looked around the internet and thus not having found bogleheads/diehards earlier
2) See 1 :)
3) Trusting a financial advisor
4) Investing a nice chunk in a "safe" fund (see 3) ) in 2007 which turned out to be a Madoff feeder fund
5) Buying a "safe" investment from a local bank which in the fineprint turns out to be a bond issued by this bank - it's a "junk bond" (I hope the next banking crisis doesn't hit before it matures). This is a common problem in Europe it seems.
6) Accepting jobs that paid too little
7) Not investing in stocks much earlier (only savings accounts)
8) Not investing index funds earlier (but 2%+fee mutual funds)

Texanbybirth
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Re: My boneheaded financial mistakes

Post by Texanbybirth » Wed Sep 27, 2017 10:36 am

Bought a used 2014 Honda Odyssey even after test-driving it and having some reservations about it's condition. I took it to my mechanic (after purchasing it) and he kindly informed me that I had made a mistake. We traded it in for a new minivan, to the tune of a $4k loss. We don't talk about that one too much in my house. :oops:

Cashed out an old 401k to make a down payment and some improvements on our first house. I got overwhelmed by the size of the mortgage (at the time 2x my annual salary [OT comment removed by moderator prudent]) and we sold the house a year later. We made back all our money, and we are very happy in our current home, but I'm too scared to see what the value of that old 401k would be now if I had left it alone. :oops: :oops:

Also, didn't start saving 15% of income until 29 years old. That'll probably add a few years onto my working life. Oh well. :beer

TravelforFun
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Re: My boneheaded financial mistakes

Post by TravelforFun » Wed Sep 27, 2017 10:37 am

grettman wrote:
Wed Sep 27, 2017 3:59 am
Borrowed from 401K when I was younger. Took the full 15 years to pay off....
I don't consider borrowing from 401K a mistake but how did you get a 15-year 401K loan?

harvestbook
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Re: My boneheaded financial mistakes

Post by harvestbook » Wed Sep 27, 2017 11:44 am

Invested in sports cards and comic books in the 1990s instead of the stock market (to be fair, I didn't even know "ordinary people" could buy stocks-- I thought you had to wear a suit and tie.)

When I left my employer and started my own business, I invested via Edward Jones, rolling my 401(k) into an IRA there. Again, a sin of ignorance. I didn't even know I could open my own account and do it all online. I thought you had to give your money to somebody with an office who wore a tie. Luckily, it only took me a couple of years to get past that.

But ignorance also saved me.I never knew the value of my 401(k) at work--I literally did not know how to check it and had no idea what it was invested in. I invested the max for the company match and continued even after they abolished the match as a cost-cutting move. Therefore 2008-09 didn't bother me a bit and I just kept dumping in.

Now the danger is I am not as ignorant, but sometimes I think I "know stuff" and that tempts me toward trouble.
I'm not smart enough to know, and I can't afford to guess.

Iliketoridemybike
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Re: My boneheaded financial mistakes

Post by Iliketoridemybike » Wed Sep 27, 2017 11:49 am

Not understanding tax loss harvesting well enough so that I bought and sold in the same month. Wash sale. No tax benefit for me. :oops:

HenrysCreek
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Re: My boneheaded financial mistakes

Post by HenrysCreek » Wed Sep 27, 2017 12:00 pm

MANY....

1. Overpaying for a couple of businesses I've bought.
2. Selling a business too cheap.
3. Keeping too much cash on the sideline over the past 5 years. :shock:

Nearly A Moose
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Re: My boneheaded financial mistakes

Post by Nearly A Moose » Wed Sep 27, 2017 12:28 pm

I'm still young(ish), so plenty of time to build on this list :o

1. Spending too much on our wedding. It was a great time and our guests enjoyed themselves, but we really could have spent $15-20k less and pocketed the money.
2. Blindly trusting my financial advisor, who told me not to fund my 401k (he gave me the bit about how I should own the money, not the government, and how he could make more for me) and instead just invest in taxable. Took me 4 years to figure that one out.
3. Buying a whole life policy from said financial advisor, when all I really needed was a good term policy (and even then not until a few years later)
4. Letting my financial advisor put me into a sector rotation model
5. Buying a nice looking house that had been flipped. I just don't trust that things were done correctly, and I overpaid.
6. Not traveling more before kids (we certainly traveled, but I'd prioritise it higher if I could)
7. Not understanding the value of a Roth IRA when I was earning real but relatively low income before I started my "real lawyer" job.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

CoAndy
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Re: My boneheaded financial mistakes

Post by CoAndy » Wed Sep 27, 2017 12:51 pm

Panicking and selling and missing out on some great gains following the last recession.

Marrying a complete disaster of a woman.

Spending too much on frivolous purchases.

Luckily, the ship has been righted. 8-)

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FrugalProfessor
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Re: My boneheaded financial mistakes

Post by FrugalProfessor » Wed Sep 27, 2017 1:36 pm

1.) Blindly following advice of HR woman during intern onboarding at MegaCorp in which she advised opting out of 401k. I pissed away a 6% company match. Total cost < $1k.
2.) Blindly following advice of HR woman during onboarding at phd student onboarding. I learned after the fact that I was eligible for a 14% employer match. Total cost $20k.
3.) Prioritized Roth IRA contributions over 401k contributions while I had moderate income + multiple kids, failing to hack the EITC. Total cost $10k.

Overall, my mistakes have been relatively small. In each situation I failed to do the math myself and blindly relied on the wisdom of others. Takeaway for me: Do the math. It's not rocket science.
Last edited by FrugalProfessor on Wed Sep 27, 2017 2:46 pm, edited 1 time in total.
I blog. My effective (not to be confused with statutory) MTR is 45% (fed + state, excluding payroll). I save $30k/year in taxes by maxing out deferrals. Taxes are the lowest hanging source of alpha.

Nearly A Moose
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Re: My boneheaded financial mistakes

Post by Nearly A Moose » Wed Sep 27, 2017 2:24 pm

FrugalProfessor wrote:
Wed Sep 27, 2017 1:36 pm
1.) I blindly following advice of HR woman during intern onboarding at MegaCorp in which she advised opting out of 401k. I pissed away a 6% company match. Total cost < $1k.
2.) I blindly following advice of HR woman during onboarding at phd student onboarding. I learned after the fact that I was eligible for a 14% employer match. Total cost $20k.
Why in the world was the company HR person saying not to use the 401k plan? I get (from experience) why an advisor might try to push you toward putting assets under his management, but I can't for the life of me figure out what skin the company HR person has in the game...
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

zuzimb
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Re: My boneheaded financial mistakes

Post by zuzimb » Wed Sep 27, 2017 2:42 pm

Nearly A Moose wrote:
Wed Sep 27, 2017 2:24 pm
FrugalProfessor wrote:
Wed Sep 27, 2017 1:36 pm
1.) I blindly following advice of HR woman during intern onboarding at MegaCorp in which she advised opting out of 401k. I pissed away a 6% company match. Total cost < $1k.
2.) I blindly following advice of HR woman during onboarding at phd student onboarding. I learned after the fact that I was eligible for a 14% employer match. Total cost $20k.
Why in the world was the company HR person saying not to use the 401k plan? I get (from experience) why an advisor might try to push you toward putting assets under his management, but I can't for the life of me figure out what skin the company HR person has in the game...
Maybe to save the company on 401k matching expense?

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Elsebet
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Re: My boneheaded financial mistakes

Post by Elsebet » Wed Sep 27, 2017 2:48 pm

FrugalProfessor wrote:
Wed Sep 27, 2017 1:36 pm
1.) Blindly following advice of HR woman during intern onboarding at MegaCorp in which she advised opting out of 401k. I pissed away a 6% company match. Total cost < $1k.
2.) Blindly following advice of HR woman during onboarding at phd student onboarding. I learned after the fact that I was eligible for a 14% employer match. Total cost $20k.
That advice borders on the criminal side.

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FrugalProfessor
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Re: My boneheaded financial mistakes

Post by FrugalProfessor » Wed Sep 27, 2017 2:53 pm

Nearly A Moose wrote:
Wed Sep 27, 2017 2:24 pm
FrugalProfessor wrote:
Wed Sep 27, 2017 1:36 pm
1.) Blindly following advice of HR woman during intern onboarding at MegaCorp in which she advised opting out of 401k. I pissed away a 6% company match. Total cost < $1k.
2.) Blindly following advice of HR woman during onboarding at phd student onboarding. I learned after the fact that I was eligible for a 14% employer match. Total cost $20k.
Why in the world was the company HR person saying not to use the 401k plan? I get (from experience) why an advisor might try to push you toward putting assets under his management, but I can't for the life of me figure out what skin the company HR person has in the game...
In circumstance #1, we were all interns so the HR woman assumed that the 401k would be more of a hassle than it was worth for a few months of employment. We were all poor undergrads + many of us didn't want the hassle of rolling over a 401k with a few hundred dollars in it. I'm okay with this assumption generally, but in hindsight it was a mistake.

In circumstance #2, the phd students were given a stipend of $25-30k to live on. I think the assumption here was we were too poor to care about savings. I had around $150k in assets in the time and could have easily depleted savings to cover any shortfalls. It was such a rushed onboarding process and we certainly weren't very well informed.

With that said, I'm a grown adult and take full ownership of screwing up Scenario #2, particularly after getting burned in Scenario #1. These two experiences combined etched in my soul a deep distrust in the competency HR departments and the need to do due diligence myself.

Scenario #3 prompted me to become obsessed with knowing the in's and out's of the tax code and modelling it in Excel.
I blog. My effective (not to be confused with statutory) MTR is 45% (fed + state, excluding payroll). I save $30k/year in taxes by maxing out deferrals. Taxes are the lowest hanging source of alpha.

wandering_aimlessly
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Re: My boneheaded financial mistakes

Post by wandering_aimlessly » Wed Sep 27, 2017 3:08 pm

None deadly but we all have our sins:

1) Spending the money my parents saved for college on a new car when I received an ROTC scholarship (back in the 80s) - had to have a new car for flight school.
2) Not understanding options for saving while I was in the military - certainly don't make a lot but the opportunity is there to save substantially
3) Using a retention bonus I received after an acquisition to buy a motorcycle (in 2002)...still have this one and paying property tax every year and have a grand total of about 4k miles on it
4) buying wife new cars - they aren't extraordinary but haven't completely converted her over - maybe next one....

Luckily the upside of good moves (most of which I would classify as investing in myself or being too lazy to move my money once I had done something smart with it) - has more than paid off and leaves us with a mid-seven figure retirement pool (and a beer money retirement from the military) :sharebeer

Tutty59
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Re: My boneheaded financial mistakes

Post by Tutty59 » Wed Sep 27, 2017 3:13 pm

As a young BH I really enjoy reading these kinds of threads. Seemingly regardless of what poor decisions everyone has made along the way, it's encouraging to know that you've rebounded from them and have found the right path. Thanks for posting OP!

(and better luck in your future endeavors :D )

Hockey10
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Re: My boneheaded financial mistakes

Post by Hockey10 » Wed Sep 27, 2017 3:20 pm

1. Bought a vacant piece of land in NC. Sold it 12 years later at a loss of about $2500. (Lesson learned - never buy land unless you plan on using it soon). :oops:

2. Bought stock in Palm (remember the Palm Pilot) at $35 per share during the dot com bubble. Sold it at $3 per share. :(

neilpilot
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Re: My boneheaded financial mistakes

Post by neilpilot » Wed Sep 27, 2017 3:35 pm

I'm actually surprised that someone hasn't said they made a mistake buying a timeshare week. I've bought 2 at vastly discounted prices, put them to good use, and have no regrets.

However the vast number of Bogleheads here think timeshares are very much a financial mistake.

spoco79
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Re: My boneheaded financial mistakes

Post by spoco79 » Wed Sep 27, 2017 3:41 pm

Too many to count, but here are the highlights!

1. When I was 24, I left a job with a $14,000 in an IRA. I cashed it out and blew it, then got hit with a big tax bill.
2. I invested in a friend's business venture. The friend disappeared as quick as my money did.
3. I bought a home at the peak of the market in 2004, was too proud to sell it an break even in 2007. In 2009, I gladly sold it with a $30,000 loss after going through 4 renters in two years.
4. I quit a job about 10 months before I was vested. Probably cost me $50,000
5. Had 1000 shares of Apple stock at around $20. Sold it when it hit $25 and bought Circuit City.

theplayer11
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Re: My boneheaded financial mistakes

Post by theplayer11 » Wed Sep 27, 2017 4:25 pm

2000 tech stock bubble, hit the jackpot on a few penny stocks that went through the roof, but was too young, naive and stupid to sell and take the profits. Pissed away well over $400K... :oops:

theplayer11
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Re: My boneheaded financial mistakes

Post by theplayer11 » Wed Sep 27, 2017 4:29 pm

neilpilot wrote:
Wed Sep 27, 2017 3:35 pm
I'm actually surprised that someone hasn't said they made a mistake buying a timeshare week. I've bought 2 at vastly discounted prices, put them to good use, and have no regrets.

However the vast number of Bogleheads here think timeshares are very much a financial mistake.
bought a flex week in Aruba on our honeymoon. Basically, with the fees per year, it was a scam. We ended up going back 2 years in a row for 2 weeks each time and basically broke even.

Mr.BB
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Re: My boneheaded financial mistakes

Post by Mr.BB » Wed Sep 27, 2017 4:41 pm

So many screw ups, so little time. Here are just a few.
In high school I took earned about $5,000 my junior year. Knew nothing about investing (This back in the 70's). Wish I someone had taught me and had invested in just a basic blue chip fund back then.
My mom had gotten me an IRA and in my early 30's I cashed it out because I need some extra money. (Would of been smarter to have gotten an extra job).
Had a couple of stocks which did very good but I never took profit. Of course they came crashing back to earth and I loss money.
I remember when Ebay came out on the market. I remember thinking "I would never buy that stock! Who is going to want other people's crap?" Boy did I get that one wrong!
Not saving when I was younger.
Not leaning about finances (compounding growth /Expense ratios..etc) when I was younger
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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SquawkIdent
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Re: My boneheaded financial mistakes

Post by SquawkIdent » Wed Sep 27, 2017 4:56 pm

Two come to mind...

1. the four letters I hate the most...CMGI

2. Ex wife

:oops:

SeaToTheBay
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Re: My boneheaded financial mistakes

Post by SeaToTheBay » Wed Sep 27, 2017 5:11 pm

I'm 33. Have generally been pretty good, but did make some pretty dumb mistakes along the way.

1. Had to sell - on margin - a pharma stock that I had been up 60% on when it crashed. Also rode another nat gas MLP nearly into bankruptcy (got out just before, but took a big loss). Ironically, I re-bought the same pharma stock 3 years later (this time AFTER it had its first product approved by the FDA) and more than made my $ back despite it being a far smaller chunk of my portfolio.

2. Didn't fully understand 401k matching until about a year into it.

3. Didn't fully understand 401k tax consequences when I could have been maxing it.

4. Didn't fully understand all the various tax deductions I'd lose by making too much $ (I've learned a lot about taxes in the past couple of years post-MBA).

5. Moved to the Bay Area in 2014 and decided to wait until the housing market cooled off to buy, and to a lesser extent to have more $ saved and marry the person I moved for. Got priced out of one city that summer, and another city the following summer, then finally buckled down and bought late-2016. We are pretty happy with it, but cringe at what could have been (in the sense of both price appreciation and commute) and worry that this could end up being our next mistake if/when the economy sours. So far so good but we'll see.

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catdude
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Location: Central Oregon

Re: My boneheaded financial mistakes

Post by catdude » Wed Sep 27, 2017 5:37 pm

Tutty59 wrote:
Wed Sep 27, 2017 3:13 pm
As a young BH I really enjoy reading these kinds of threads. Seemingly regardless of what poor decisions everyone has made along the way, it's encouraging to know that you've rebounded from them and have found the right path. Thanks for posting OP!

(and better luck in your future endeavors :D )
You're welcome, Tutty! Nowadays I seem to be making better decisions, fortunately. Although there is the matter of my four senior cats. They can be a financial drain sometimes, but -- given that I am the catdude -- I don't see adopting them as a financial mistake. I'm happy to have them around.
catdude | | "You playing tonight?" Dwight Evans, speaking to Cal Ripken, circa 1989.

basspond
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Re: My boneheaded financial mistakes

Post by basspond » Wed Sep 27, 2017 5:46 pm

Sold some stock in 401k account and withdrew the gains
Listened to penny stock broker
Bought new sports car, but the kicker was that the insurance premiums were more then the payments
Financed furniture

mbasherp
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Re: My boneheaded financial mistakes

Post by mbasherp » Wed Sep 27, 2017 5:57 pm

My first investing experience was a penny stock recommended by my roommate. I put in $500 hard earned dollars during the same time I was wrestling with CC debt in my 20's. I thought "this will pay off huge and I can get out of debt!" It didn't just tank, it was delisted and went to absolute zero. It was what I'll call a multifaceted learning experience :oops:

investor997
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Re: My boneheaded financial mistakes

Post by investor997 » Wed Sep 27, 2017 6:58 pm

1) Back in the dot-com era, bought 1000 shares of one particular tech company stock for about $6/share. Rode it down to $1/share, panicked and sold for a loss. The stock then subsequently rode the dot-com wave up to $80+/share before eventually tanking like everything else. That was one of the first stocks I ever bought. Shoulda learned my lesson, but no..

2) Bought $4K worth of stock in another company in my Roth IRA. Watched the stock double to $8K in a matter of months, but rather than at least pull my initial outlay off the table, I got greedy and held. The company subsequently went bankrupt. Lost it all.

3) Worked for a pre-IPO startup in the early-00s. Accepted an offer at another company and left, but decided to gamble $13K on exercising my ISOs as I walked out the door. Sometimes you really can't ever tell when these things hit it big and I didn't want it to be the one that got away. The company was eventually acquired for significantly less than the sum of all prior investment rounds. All common stock shareholders such as myself were completely zero'd out.

There were plenty other bonehead moves but these are the more noteworthy ones. One of my more successful stories from the dot-com era involved Broadcom. I road BRCM up bigly, then cashed out a bunch and bought a BMW for cash. The stock subsequently tanked in the dot-com bomb. At least I got a new BMW out of it.

Cieren
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Re: My boneheaded financial mistakes

Post by Cieren » Thu Sep 28, 2017 11:23 am

I can't explain how helpful this thread is (and how reassuring) - I'm not quite 40 yet and I often feel like I'm still scrambling to figure out where I/we should be, financially. Add to that that I've made a ton of financial mistakes (soooo many), and have the sinking feeling I'll probably make a couple more before I'm done. :wink:

So I guess my biggest:
1. Co-signing on a high-interest auto loan for my then-fiancé when I was 19.
2. Not attending to all of the debt/credit issues from said ex-fiancé until my mid-20's.
3. Cashing out 401(k)s - more than once! Sweet lord.
4. Marrying my husband. I love him dearly, but financially it wasn't the best choice, for numerous reasons. In my case, the best (personal) decision wasn't the best one financially, but I'm at peace with it. 8-)

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abuss368
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Re: My boneheaded financial mistakes

Post by abuss368 » Thu Sep 28, 2017 11:38 am

Bogleheads -

Our worst financial mistake was thinking we knew more than the market and thus could beat it!

Our best financial decision ever was to return to Vanguard.

Thank you Jack Bogle.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

seity
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Re: My boneheaded financial mistakes

Post by seity » Thu Sep 28, 2017 11:53 am

Got conned by a phone magazine salesman when I was fresh out of college.
Trading in the new truck I bought my husband 1 year after buying it for the next year newer model.

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peterinjapan
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Location: Japan!

Re: My boneheaded financial mistakes

Post by peterinjapan » Thu Sep 28, 2017 12:46 pm

I happened to praise Paypal to an employee at a convention, and a few days later I got a call with an offer to invest in their IPO with the "friends and family" system they had set up. I declined, stupidly, as I'd just been burned on another investment. When some opportunity presents itself, now my policy is "throw $10k at it so you don't kick yourself later for not investing something."

Example 2: I was at another convention, an anime convention, and I asked the young people I was talking to, who was going to buy the upcoming Nintendo Wii. 99% of the hands shot up into the air with so much speed you can feel the wind on your face. That was probably a "I should buy some Nintendo stock" moment, but of course I didn't. Stupid, stupid...

p0nyboy
Posts: 102
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Re: My boneheaded financial mistakes

Post by p0nyboy » Thu Sep 28, 2017 1:04 pm

Penny stock...lost $700.

That was really my only financial screw up as of now. I got off pretty easy.

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catdude
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Location: Central Oregon

Re: My boneheaded financial mistakes

Post by catdude » Thu Sep 28, 2017 2:27 pm

Hi, OP here. Can't believe I forgot this, but when I was much younger, on a couple occasions I loaned money to people who turned out to be deadbeats. :oops: Really dumb. But I learned a valuable lesson for a relatively small amount of money.
catdude | | "You playing tonight?" Dwight Evans, speaking to Cal Ripken, circa 1989.

genedios966
Posts: 5
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Re: My boneheaded financial mistakes

Post by genedios966 » Thu Sep 28, 2017 2:50 pm

My biggest mistake was taking a break from contributing to TSP because I was actively looking for house and wanted cash for down payment/cushion. Offers fell thru 2x and ended up delaying purchase, which is what I should have done in the first place.

N10sive
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Re: My boneheaded financial mistakes

Post by N10sive » Thu Sep 28, 2017 2:54 pm

my biggest bonehead mistake was taking out a student loan while I was in college and buying two motorcycles with it. I had school basically paid for so access to that cash was for whatever.

Just finished paying off that student loan 6 years after graduation. Ended up costing double the motorcycles in interest. I did have a lot of fun on those things but not sure if it was worth that much.

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El Greco
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Re: My boneheaded financial mistakes

Post by El Greco » Thu Sep 28, 2017 3:11 pm

About ten years ago I used to listen to and follow the recommendations of Jim Cramer :shock: 'nuff said.

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