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  • Mistakes

    Another thread got me thinking. I learn really well from my own mistakes but also hearing from others...

    What are some mistakes you made?

    I'll go first. I invested 5k as resident in crypto essentially at the peak in 2017 time frame lost 80% played the hodl/long game then sold in 2019 just before it took off beyond my original investment...

  • #2
    In my twenties I invested my life savings ($5k or so ) with a financial advisory firm. Though nominally a fiduciary oriented towards military savers, they put the whole amount into loaded mutual funds that underperformed to boot. Cheap lesson in the greater scheme of things. I’ve been a DIY investor in low cost index funds ever since.

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    • #3
      Not buying enough TSLA earlier or knowing about options during the first run up.

      Not buying Bitcoin or Ethereum early because I didn’t like the idea of the fees on exchanges.

      Overextending my margin use and getting a margin call because I didn’t understand how buying power was calculated or changed in some situations.

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      • #4
        • Paying cash for a house.
        That wasn’t the mistake. Getting the cash on margin from the taxable account.
        • Paying capital gains early as part of a long term tax plan.
        That wasn’t the mistake. The dot com crash leveraged the damage.
        Don’t let the tax tail wag the dog and over confidence. I had the financial muscle to survive, but losses are painful even if you have the tolerance and capacity.
        “Rule number 1: Never lose money. Rule number 2: Don't forget rule number 1.”
        I like those rules. Consider risk before you consider returns.
        Various mistakes in over concentration added to taxes and over concentration and over confidence.

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        • #5
          Day trading ~80% of all my money my first 6 months out of residency. Who knew I wouldn't have time to trade the market all work day.

          Missing out on a Roth IRA for ~5 years because I didn't know about it while I had part time income.

          Obligatory didn't buy enough Tesla, Apple, Bitcoin, Amazon, Microsoft, etc...
          $1 saved = >$1 earned. ✓

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          • #6
            Buying stock in a pharma company based on the very promising results of a phase 2 trial. The drug and company stock then crashed and burned in phase 3.

            But it taught me some valuable insight into both investing and the importance of forming medical opinions only after rigorous and established scientific trials have been completed and fully reported.

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            • #7
              took some money "off the table" during a period of what i perceived to be political issues that simply could not help but affect the market.
              market continued to rise.

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              • #8
                Lots of mistakes. Loaded mutual funds, non-fiduciary "financial advisor', Not investing in Amazon near the IPO, Angel investing. No whole life or variable annuities or time shares. Remember if you correct your mistakes and invested the money rather than spending it you do ok.

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                • #9

                  1. Joining a poorly managed hospital owned practice out of residency

                  2. Selling 10,000 shares of AIG for $1 and doubling my money, now it is worth $55/share , this is when I learned researching stocks between patients and being a trader is not a good second career option. I have been a Jack Bogle fan ever since.

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                  • #10
                    1. Picked the wrong school.
                    Got accepted to 3 medical schools. Should have gone to the least expensive (state school) but got advice to go to the slightly higher ranked private school which cost way more. Got advice to: "go to the highest ranked school".
                    The advice came from people who were not paying the tuition. Worked out OK, but I always tell people to go to the less expensive state school.

                    2. Bought a big old house in 2006 when I had a bunch of student loan debt. House was a money pit. Job was not stable. Peak of housing market. Decided to do another fellowship and could not sell the home (housing bubble burst) then made the mistake of becoming a long distance land lord.
                    Bought house for 292k Sold it 10 years later for 115k...........you can lose money in realestate......houses don't always increase in value.

                    3. Long distance landlord (mentioned in 2, but it needs it's own little bullet point). Be pretty careful with this. Best to look in on tenants occasionally and make sure one one is changing motorcycle oil in the living room. No management company cares as much as you do.
                    Old houses can be time bombs.

                    4. Early in investing career I sold in taxable to "rebalance" not realizing I would not have to pay capital gains taxes.........should have rebalanced with new purchases or in IRAs.......got really lucky and was able to TLH the gains away and owed zero LTCG taxes but the whole deal was a rookie move. Did help me learn about TLH and LTCG.

                    5. As an intern I invested with an insurance company (they were an advisor for our residency class). The guy was not too bad (did not buy any whole life crap) but I did have a Roth IRA invested with these people and they were charging me fees for active management etc. I rolled it into VG in 2010 and it all turned out ok.

                    6. Opened a SEP IRA instead of a Self Employed = Solo 401k. Was not able to do backdoor Roths due to this and some money I had in a rollover IRA. Moved money out of both the SEP and the rollover IRA, and opened a Solo 401k. Now can do BDR........until.......


                    Two lucky breaks:

                    1. In 2006 I heard Dave Ramsey on the radio......bought his book....life changing. Began to attack debt and to understand how dangerous debt was. (Compound interest, etc.).

                    2.. In 2009 I was on the cusp of investing a bunch of money in actively managed funds. A friend saved me, and told me I should read this book by Bogle. He gave me the book title and a 5 min pep talk about Vanguard and index funds.

                    Life changing.
                    Last edited by Tangler; 12-22-2021, 05:37 AM.

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                    • #11
                      Not doing Roth while in training.

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                      • #12
                        Originally posted by MPMD View Post
                        took some money "off the table" during a period of what i perceived to be political issues that simply could not help but affect the market.
                        market continued to rise.
                        Was it Trump? You love that guy right? JK

                        I know a republican who took money out after Biden got elected. Market is up over 20% for 2021.

                        Mr. Market is a tough dude to predict.
                        Last edited by Tangler; 12-22-2021, 07:00 AM.

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                        • #13
                          Liking academics?

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                          • #14
                            Invested money meant for a honeymoon that was just over a year away. Was up 60% within 8 months but I didn’t sell as I didn’t want to pay short term capital gains. By the time a year passed it was down 20% from when I bought so I waited for it to come back. It didn’t come back and I lost everything. I think the investment was $2500. No biggie as I was working at the time and got enough money for the honeymoon

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                            • #15
                              Bought a “Best of America” variable annuity during their 1990s heyday. I did get out of this expensive ER policy by 1035 exchanging into a lower cost Fidelity VA. Would have gotten out completely but didn’t want to pay taxes as cash value was higher than basis. I still have it in an SP500 fund, functionally a slightly higher ER account with income tax rather than CG tax eventually due on gains. DAF can’t accept it unless surrendered first so will probably pass to my kids through my estate.

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