What was your dumbest financial decision?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Miguelito
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Re: What is the worst financial decision that you've made?

Post by Miguelito » Wed Feb 18, 2015 2:26 pm

Buying our first home. We grossly underestimated the renovation costs, and bought the house near the housing peak. Lost A LOT on that house. We sold it to buy a home that has since recovered 50-75 of that loss, but it was still a net loss. Young and stupid. A bit of peer and wife pressure too, because she did not want to rent. I decided we should get a house big enough so that we would never have to move. We made it our own but in addition to underestimating the cost of the work, made the house too nice (because "we'd be there forever"). Ironically, our increasing income made things worse.

Luckily we were able to afford the loss and we are happy in our new home, but I am still haunted by how much we lost.

MindBogler
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Re: What is the worst financial decision that you've made?

Post by MindBogler » Wed Feb 18, 2015 2:33 pm

Listening to a financial adviser. I was 100% in an actively managed tech mutual fund through the tech crash. I lost 80% of my retirement savings. The only saving grace is that I was only a few years into the process. I guess that experience brought me to indexing and self-direction, so perhaps it wasn't so bad after all.

The only other major mistake I can think of is taking a cash-out refinance during the housing boom so I could continue to live beyond my means. :oops: :oops: :oops: :oops:
To anyone even thinking about it: just say no.

Both problems have since been corrected.

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gasdoc
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Re: What is the worst financial decision that you've made?

Post by gasdoc » Wed Feb 18, 2015 3:12 pm

Miguelito wrote:Buying our first home.
MindBogler wrote:Listening to a financial adviser. I was 100% in an actively managed tech mutual fund through the tech crash. I lost 80% of my retirement savings. The only saving grace is that I was only a few years into the process. I guess that experience brought me to indexing and self-direction, so perhaps it wasn't so bad after all.
I hope the young Bogleheads are reading these comments. This is a great thread!

epitomist
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Re: What is the worst financial decision that you've made?

Post by epitomist » Wed Feb 18, 2015 3:46 pm

Removed because of the thread merge that erroneously assumed "worst" and "dumbest" were synonyms
Last edited by epitomist on Mon Feb 23, 2015 9:54 am, edited 1 time in total.

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LadyGeek
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Re: What was your dumbest financial decision?

Post by LadyGeek » Wed Feb 18, 2015 4:54 pm

I merged duffman12's thread into here.
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duffman12
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Re: What is the worst financial decision that you've made?

Post by duffman12 » Wed Feb 18, 2015 7:59 pm

beardsworth wrote:
duffman12 wrote:Did a quick forum search and didn't see anyone ask this question before.
Not sure what terms you were using in your search, but I recalled a previous thread about "worst mistake," and the search found this:

viewtopic.php?t=69004
Toons wrote:
duffman12 wrote:Did a quick forum search and didn't see anyone ask this question before.
So feel free to vent out your bad financial decisions so others can learn from them! :sharebeer
Prior Thread :happy

http://www.bogleheads.org/forum/viewtop ... 2&t=134130
sschullo wrote:
ny_rn wrote:What was your dumbest financial decision?

Discussion here: http://www.bogleheads.org/forum/viewtop ... &p=1986148
also here: http://www.bogleheads.org/forum/viewtop ... 10&t=86277

and here: http://www.bogleheads.org/forum/viewtop ... 3&start=50

Larry Swedroe has a book about mistakes: http://www.bogleheads.org/forum/viewtop ... =2&t=86263
OK my bad, sorry
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duffman12
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Re: What was your dumbest financial decision?

Post by duffman12 » Wed Feb 18, 2015 8:03 pm

henry A wrote:Smart: Starting a decent paying job the day after college graduation.
Dumb: Quitting that job 5 months later to travel the world

.. Although I don't regret it at all, my retirement account would be a lot larger had I not gone. Not only did I spend much of my saved income, I missed out on the opportunity cost! Looking back though it was a great trip with awesome experiences. I think I found what I was looking for while traveling and settled down into a more rewarding job after returning. So in essence: bad financial decision; good life choice.
If you don't regret it I wouldn't call it a dumb decision :)
I'm 18 so I'm trying to find a balance between setting myself up for the future but at the same time getting out and seeing more of the world :)
"Greed may not be good, but it’s not so bad, either. People think greed is just for money and power. But everyone wants something they don’t have." | ChasingGains.org

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pennstater2005
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Re: What is the worst financial decision that you've made?

Post by pennstater2005 » Wed Feb 18, 2015 9:10 pm

duffman12 wrote:
beardsworth wrote:
duffman12 wrote:Did a quick forum search and didn't see anyone ask this question before.
Not sure what terms you were using in your search, but I recalled a previous thread about "worst mistake," and the search found this:

viewtopic.php?t=69004
Toons wrote:
duffman12 wrote:Did a quick forum search and didn't see anyone ask this question before.
So feel free to vent out your bad financial decisions so others can learn from them! :sharebeer
Prior Thread :happy

http://www.bogleheads.org/forum/viewtop ... 2&t=134130
sschullo wrote:
ny_rn wrote:What was your dumbest financial decision?

Discussion here: http://www.bogleheads.org/forum/viewtop ... &p=1986148
also here: http://www.bogleheads.org/forum/viewtop ... 10&t=86277

and here: http://www.bogleheads.org/forum/viewtop ... 3&start=50

Larry Swedroe has a book about mistakes: http://www.bogleheads.org/forum/viewtop ... =2&t=86263
OK my bad, sorry
Don't worry about it. You post a topic that's been covered before, you get lambasted. You bring up the old thread so you don't post a new topic that's been covered, you get lambasted :twisted:
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LadyGeek
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Re: What was your dumbest financial decision?

Post by LadyGeek » Wed Feb 18, 2015 9:26 pm

And then the moderator steps in... :wink:
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epitomist
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Re: What was your dumbest financial decision?

Post by epitomist » Wed Feb 18, 2015 9:59 pm

I respectfully offer my opinion that resurrecting year-old threads (or older) is a terrible way to revisit a topic. Dumbest financial decision is a topic that is completely time dependent. For example, in the 2015 thread there were a ton of "buying a house" responses. How many of those do you think there would've been in 2007? How many people lost money buying oil before late 2014? Should people have to wade through years-old irrelevant responses to get to present-day relevant responses?

Not to mention I can't count how many times I've read a full page of responses on a resurrected old thread to read something that is anachronistic that didn't make sense only to realize I was reading irrelevant 2 year old comments.

Caduceus
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Re: What was your dumbest financial decision?

Post by Caduceus » Thu Feb 19, 2015 9:04 pm

I think many financial topics are iterative, so repeating similar topics or questions is inevitable, and even desirable.

There are only so many broad categories of questions about indexing one can write about. Ever notice how repetitive Jonathan Clements' columns are? (Even though he is very, very good)

squirm
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Re: What was your dumbest financial decision?

Post by squirm » Thu Feb 19, 2015 10:42 pm

Altephor wrote:Keeping upwards of 30k in a normal savings account for the past 3 years. Could have made an additional 15k if I had just stuck it in a total market or S&P fund.
But that's backwards looking. Nobody has a crystal ball. I keep money in a CD as a cash cushion. Could have made more in the stock market and way more in TSLA or AAPL or some biotech, but it's not earmarked for that.

I wouldn't call your decision a mistake.

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Re: What was your dumbest financial decision?

Post by Carefreeap » Thu Feb 19, 2015 10:59 pm

Right now it's looking like taking a big pile of cash and paying off the mortgage in 2010 instead of investing in a S&P index fund. Could have just about doubled the mortgage amount. :wink:
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gd
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Re: What was your dumbest financial decision?

Post by gd » Fri Feb 20, 2015 7:42 am

I responded to the "worst" financial decision, not the "dumbest". There is a difference, at least for me, and it is an important one. Something can be a bad/worst financial decision, but still a reasonable decision for non-financial reasons. That's not dumb. These were two different threads.

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JDCarpenter
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Re: What was your dumbest financial decision?

Post by JDCarpenter » Fri Feb 20, 2015 9:23 am

gd wrote:I responded to the "worst" financial decision, not the "dumbest". There is a difference, at least for me, and it is an important one. Something can be a bad/worst financial decision, but still a reasonable decision for non-financial reasons. That's not dumb. These were two different threads.
Agree, and the thread merge affected my answer in the same way. I would never have said it was my "dumbest" financial decision to stay home with kids; we were fully informed and it worked out within the realm of "as planned." OTOH, it may well have been the "worst" purely financial decision we've made--although we'd make it again if given the choice.
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Clever_Username
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Re: What is the worst financial decision that you've made?

Post by Clever_Username » Sat Feb 21, 2015 11:25 am

Miguelito wrote:Ironically, our increasing income made things worse.
How did this make it worse?
epitomist wrote:They really just wanted to scare me with a big number like $3 million so that I would settle for relatively small amount (~ $30,000) that would enable them to keep the house. Instead I paid $35,000 to the best real estate attorney in the county. Probably overkill but I don't mess around with these things. Now there is an 18 months long public-record case docket that I can send to any future people that want to sue me that will show them that I am not an easy target.

Compulsory Nonsuit information:
http://www.pacode.com/secure/data/231/c ... 230.1.html
I just want to applaud your action here.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

ybc
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Re: What was your dumbest financial decision?

Post by ybc » Sun Feb 22, 2015 6:03 pm

dumb: not starting Roth IRA at 18 vs 24
lending money to a friend. 7k still trying to recoup it. NEVER AGAIN
not looking into other investing vehicles (401k / SEP) until now.

crit
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Re: What was your dumbest financial decision?

Post by crit » Sun Feb 22, 2015 6:42 pm

I am part of Generation X. Like many of my cohort, my dumbest decision by a long shot was bending to my Boomer parents' pressure to buy real estate. They wanted to see me 'settle down' and gosh darn it, their generation did so well from the mid 70s to the mid 2000s!

So yeah, I bought in 2004. Lived in it until 2007 when a job at an Ivy called. Long-distance landlorded for 7 years, and finally sold, breaking even, 10 years after I bought it. And that -- being able to rent it, being able to hang on until RE came back up enough -- was the best-case scenario.

zachguy
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Re: What was your dumbest financial decision?

Post by zachguy » Mon Feb 23, 2015 5:41 pm

Buying an F150 King Ranch...brand new. It's cool but certainly wasn't worth the 40k+. I won't ever buy another brand new car again or spend more than about 25k.

aj44
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Re: What was your dumbest financial decision?

Post by aj44 » Tue Feb 24, 2015 1:15 am

Buying the house I live in today 13 years ago, it is still worth 40k less than I paid for it. I remember talking to my dad then about the housing bubble and I had plenty of time to sell but was too lazy.

pennywise
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Re: What was your dumbest financial decision?

Post by pennywise » Tue Feb 24, 2015 7:49 am

I'm probably in the middle of it right now and it falls into the procrastination category. Inherited a brokerage account, held in Oppenheimer funds, over a year ago and haven't yet moved it into Vanguard. Although now that I just got tax paperwork including the $2000+ the account mgr charged for 2014 my motivation has suddenly increased to quit paying him and start paying myself :oops:

minesweeper
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Re: What was your dumbest financial decision?

Post by minesweeper » Tue Feb 24, 2015 8:24 am

Investing in front-loaded funds in my traditional IRA account for the first few years. :annoyed

equivestor
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Re: What was your dumbest financial decision?

Post by equivestor » Tue Feb 24, 2015 9:10 am

Buying the Vanguard Energy Fund (VGELX) in my 457B in 2012. I've painfully watched it drop 35% since July 2014. However, I have no intention to sell since that would be an even dumber financial decision.

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geerhardusvos
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Re: What was your dumbest financial decision?

Post by geerhardusvos » Tue Jun 30, 2020 9:27 am

Skizbo wrote:
Sat Mar 01, 2014 5:00 pm
Hello Bogleheads. In order to make me feel better about some bonehead financial decisions I have made, I'd like to hear what your dumbest financial decision was. Mine was a $33k investment many years ago in pay telephones. Yes, you read that right, pay telephones. In the entire universe of possible investments, I chose pay telephones.

I had just lost my job in a merger so was looking to turn some of my severance into some financial independence. The company making the pitch would place our phones in "high-volume" locations and all we needed to do was collect the $300-$500 per month from each location and put it in our bank account. The whole plan seemed to be endorsed by a very well known company in the industry so what could possibly go wrong? Plenty. After the phones sat in our high-volume location (i.e. our basement) for 6 months, I joined a class action lawsuit and recovered $15K and was able to ship the phones back free of charge. I felt fortunate to recoup some of the investment, but to this day I wonder what was I thinking?

Skizbo
:oops:
I think my worst financial decision was not investing early and aggressively, I had no idea about low cost index funds or financial independence and I could’ve been investing 30% or more of my income in my early 20s, but we were barely investing 10%. We were, however, amassing large amounts of cash to purchase a house, and I think the house was a big financial mistake as well. The opportunity cost in trade off versus investing in the market, and all the time we spent on that house fixing it up, we could’ve been investing and taking vacations... If we had just continued renting and putting our savings into investments and maxing out our retirement accounts, we would be already financially independent at age 30. Thankfully no super dumb decisions, at least not big ones, but for anyone in their 20s, just keep plowing the money into the market, you won’t regret it
VTSAX and chill

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