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What do you consider your greatest financial mistakes?

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AUTHOR: Jonathan Clements on 4/04/2021
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Charles Schafer
4 months ago

Equity crowdfunding.
I was listening to a lot of popular VC’s at the time and thought I should try investing in startups too. My only goal at the time was “get rich.”
I have 1 company that is doing really well, a few that held my money for years only to return my original investment when the company was acquired (0% return!), and the rest have either failed completely or are chugging along with few prospects for growth or acquisition.
I don’t think I realized at the time how painful having money tied up somewhere you can’t access it would be. Since then, I’ve realized other goals and expenses I would have rather saved the money for instead, with much less risk.
Learned the lesson though, and now try to keep my investing simple, goal-oriented, and liquid.

Klaatu
5 months ago

Buying WorldCom after falling for the hype and thinking I was smarter than everyone else. Learned from the experience though and it now keeps me away from bitcoin and trading in general.

Ken Begley
5 months ago

Switching in and out of the stock market over the past 40 years convinced it was on the verge of collapse.

Laurie Phillips
9 months ago
  1. Taking an overconfident broker’s advice and buying a lot of Lucent at $75/share. It went to 55 cents when the company started missing its earning estimates.
  2. Hiring financial advisors who had a few portfolios to funnel clients into, none of which matched my needs.
  3. Not keeping real estate. I calculated what I’d be worth if I had kept all the property I’ve owned and it was a classic story of “If only”.
MHG
1 year ago

Several years before the summer Olympics in Beijing I was buying stainless steel for a factory. The owner of a supplier, just back from Japan, made a sales call. The Japanese stainless steel mill execs were all worried because China was busy building multiple stainless steel mills. The were afraid steel prices would fall. I knew there is limited nickel available (one of the metals that makes steel stainless) and the mills would have to bid the price up. That night I found a publicly traded nickel mining company in Canada trading on the NYSE, my wife and I figured out how much we could afford to loose, and we bought stock the next day. The price of nickel, and the stock, rose. When the stock price doubled I sold half, the price kept rising, then the company got bought out at a premium. We made a nice amount of money but I thought I was so smart. Then I lost too much of my gains buying losing stocks before I switched to broad ETF’s and mutual funds.

JAY SCATTERGOOD
4 months ago
Reply to  MHG

my thought also when an investment goes up 100% sell original investment than you all to gain and nothing to lose

Captain FI
1 year ago

Dragging my heels on getting my first aviation job, and ending up spending over $300,000 AUD on flight training and aircraft rentals. If I had of pushed myself out of my comfort zone and gotten a job earlier, I could have avoided a lot of this expense which could have been invested.

Oh and, buying farm pride shares (egg farmer in Australia). Lost 50% of my nest ‘egg’ haha

Seigo Tsujimoto
1 year ago
  1. Being a follower.
  2. Unable to control emotions.
  3. Watching/reading financial news as if they are all true
Cheryl Moore
2 years ago

2 regrets

  1. Not maxing out my 401k in my younger years 20’s through 40’s. I would have had more money because of the magic of compound interest. I started maxing out my 401k in my late 40’s.
  2. Saving instead of investing. I saved a lot of money in my saving accounts instead of investing it in the stock market. I was fearful of loosing money, so I put money in a savings account. Now that I understand how the market works, I could have put most of it in an index fund with better returns. It did not take me long to learn this lesson, but just wish I knew it all along.
Bob Smith
4 months ago
Reply to  Cheryl Moore

Don’t be so sure investing was the correct way opposed to savings. You may have strayed off course from what now is monday morning quarter backing. Bet you slept well?

baldscreen
2 years ago

We didn’t know anything about finances for quite a few years, so didn’t save enough for retirement in our 20s and 30s. Thankfully we are naturally frugal so we will be ok, but have had to save a greater percentage in our later working years.

Debbie Clay
2 years ago
  1. Buying a timeshare in the Bahamas. Was on vacation, having great time, let sales talk me into purchasing. Years of increasing maintenance fees and we never even went back to stay there. Could not even give the timeshare away, ended up having to pay them more $$ just to get out of the agreement.
  2. Buying 3 acres of land an undeveloped community. Didn’t read the HOA covenants that were super restrictive on building and other lot restrictions. Of the 100 lots that were sold in one day, 15 years later only 8 lots were developed into houses.After trying to sell the property through many real estate firms over the years, just sold this year for far less than appraised value and only received 10% on my original investment.
corrupt
2 years ago

Before I learned about diversification I had too much of one company’s stock, and paid the price when it took a 50% cut.

Scrooge_McDuck88
2 years ago

Not understanding the value of tax advantaged accounts like a Roth at a young age.

Jeff
2 years ago

I didn’t start earlier and I didn’t put at least enough in my 401k to get the full match.

Carl Book
3 years ago

I moved my retirement money out of a stock index fund and into a money market fund several years ago. I thought the market was high and I would jump back in when it was bottoming out. I waited way too long to get back in. Trying to time the market is not a great idea. I’ve also been known to chase yield only to have dividends cut because of poor earnings. The stock then drops because of the poor earnings/dividend. Lesson is not to chase yield without looking at earnings. And the best investment advice is to start investing at an early age and on a regular basis. You can’t win if you aren’t in the ball game.

Andrew F.
3 years ago

When I was young I invested too much of what discretionary income I had in rent houses, and not enough in the stock market. I missed out on some very valuable compounding.

Anika Hedstrom
3 years ago

When I was young and just starting out with investing, I took way too much advice from friends and family who were chasing the next best thing. I ended up purchasing a few MLPs (master limited partnerships) which I knew nothing about at the time. I lost money and had to wait considerably longer to file my taxes due to the K-1s that come from these types of investments.

Mike Zaccardi
3 years ago

I had a few financial hiccups – like buying a little sports car when I was in my early 20s in 2008. It was used, so it wasn’t too expensive, but had I kept my old Camry and just invested the extra money in a stock portfolio, that would be a tidy sum today. Other than that, nothing really comes to mind. I’ve found, however, that whenever I’ve tried to get too cute with my portfolio (i.e. holding more cash or investing in Lending Club notes), it just generally lost out to a diversified and simple mix of index funds. Keep it simple and stick to your plan.

Bob Smith
4 months ago
Reply to  Mike Zaccardi

I was in my early 60’s in ’08. That said lucky you, ur reading Humble Dollar.

kristinehayes2014
3 years ago

My top two:
1) Spending too much (and consequently not saving enough) when I was in my thirties. I was all about ‘stuff’ back then. I thought having the most up-to-date furnishings, cool electronic ‘toys’ and new cars would make me happy. It didn’t (see mistake number 2). If I would have saved a fraction of the money I spent, my retirement portfolio would likely be significantly larger today.

2) Not fighting to retain my pension when I got divorced. My ex-husband fought for the right to take 1/2 of my state pension when we divorced. I didn’t fight back because I just wanted out of an incredibly unhappy marriage. I realize now I should have tried harder to retain my entire pension, especially since I didn’t receive any portion of his retirement benefits.

Sanjib Saha
3 years ago

I made three big financial mistakes (there are more smaller ones). The biggest blunder was staying out of stock market for first 12+ years of my career. I did save regularly. Unfortunately, my investment knowledge was so limited during that period that I knew nothing outside Bank Savings and CDs. I stayed on the sideline because I mistook it to be the playing ground.

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