Biggest Financial Blunders

[jfoxcpacfp]

q-school wrote:

dear 20 year old q-school.  you are about to receive a letter offering you a fantastic job with a company called apple.  you should accept this offer.

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True?

[q-school]

underbilling?  disability insurance which i've never used?  overinsuring life insurance?  buying too big house to keep wife happy?   rolex?  mercedes?  got busy at work and couldn't get all my money out of flex spend account one year.  changing jobs--super expensive from lost revenue?  not forcing my wife to keep working in a job she hated until the buyout came?  not buying more real estate when market was hot?  not converting more into roth ira 2008?  not buying more google on day 1?  letting my wife plan vacations?  all the exercise equipment purchased ever?  adoption of second child?

who can keep track of all the blunders?
i like to forgive and forget, otherwise i wouldn't be able to function.

 

[Hatton]

jfoxcpacfp wrote:

hatton1 wrote:

I think it is good for folks to post about mistakes because we have all made them.  Being too heavy in cash and paralyzed is another mistake that comes up on this board.

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Totally agree, especially because there are so many forum readers who are intimidated by the regular participants because we make it sound like we’ve always had our stuff together. We’re all on the journey, just at different stages.

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I think admitting to past blunders by some of us who are older and well off might be useful to the younger wci reader or even someone who 50 plus and just starting to think about retirement.  I suspect some people are intimidated by the numbers thrown around on this forum.

[ReFinDoc]

Picking the wrong partner(s) and the subsequent legal fees.

Failing to diversify income.

Failing to recognize own self-worth.

Staying in private practice too long.

 

 

 

[VagabondMD]

jz wrote:

Funny.   I’ve made every dopey financial decision you can envision:  short term home ownership, overly speculative angel investing, performance chasing in dot.com  bubble, market timing, home ownership in declining market, universal life insurance, paying overpriced  college tuitions.  Yet,  we’ve made  more wise decisions than dopey decisions, so we’re retiring  wealthy.

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I have done almost all of the above (add private schools and timeshares) and will also be retiring early with no money worries. I think the key is to make the mistakes early, learn quickly, and move on.

[ENT Doc]

In no particular order of idiocy:

1. Not diversifying my earliest investments (investing in stocks)
2. Buying a universal life policy that I later got out of, wasting thousands of dollars in present value dollars (lord knows what this translates to in terms of years of retirement)
3. From a financial point of view, (probably) doing military scholarships to pay for undergrad and med school
4. Not investing regularly/waiting/holding too much in cash after I did start "getting it"
5. Being duped (by the same advisor selling the UL policy) to put my 403 money from residency and my Roth money (which I had been putting away for years) into annuities - later got out of these but had to sacrifice thousands of dollars to pull out and assuredly lost thousands more in opportunity cost of investments.

Luckily these things are in my rear view.  The best thing I can do moving forward is to make sure my children are well educated financially.

[TotallyBroke]

Accepted to a DO school in Texas.  Due to marriage situation, I would pay out of state tuition the first year $20K (actually $17 after the scholarship they offered me), then $10K per year.  That's right, total tuition cost would have been $50K.

Instead, I accepted my invitation off the waitlist at Penn State where tuition was roughly $50K per year in a much higher COL area.  That's right, total tuition cost about $200K.  I'm sure I got 4 times the education at an MD school than that DO school, right?  

Including living expenses with a family in Med school, interest accrued during residency and fellowship, student loan burden maxed out at $452,367.52 before it started to get paid down.

 

Oh, BTW, as a Sports Medicine doc, it would have been REALLY nice to learn a little manipulation to use on patients........

#FeelLikeAnIdiot

#WishICouldGoBackAndWarnMyself

[uptoolate]

Given the way the housing market has gone in my neck of the woods, my most costly 'error' was not buying an expensive enough house 20 years ago.  Second place is maybe marrying wonderful DW who is incredibly frugal and has been known to earn a pretty good buck, but the lady I didn't marry went on to become the CEO of a major corp - just as well though, I don't think I could have taken all of the schmoozing. And of course at the end of the day, there are things that are much more important than finances.

[DMFA]

7/1 ARM FHA loan at 4% plus PMI as a resident. Fortunately that turned out okay.

Also spending way too much on rent (like half our income) as in intern while my wife was still a student on loans.

Fortunately, not much else...yet. We'll see what ends up being ridiculous in retrospect...

[jfoxcpacfp]

uptoolate wrote:

Second place is maybe marrying wonderful DW who is incredibly frugal and has been known to earn a pretty good buck, but the lady I didn’t marry went on to become the CEO of a major corp – just as well though

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Ummm - your DW doesn't read WCI, right ops: ?

[MPMD]

small potatoes but in hindsight we went w/ 30 year mortgage over 15 on a home w/ purchase price ~1.2X our annual income because we were "worried about cash flow."

made so much sense at the time but now def seems irrational.

[djohnflatfeecfp]

Two come to mind for me.

 

1. Put a small amount of money in a buddy's startup. I think it was around $500 and it was over 20 years ago, but at a time when I did not have a lot of fun money. The company never did anything and the fact he spent all day at the gym probably didn't help.

2. When I first started as an advisor I worked at a wirehouse. I had a good chunk of money to invest and fell hook, line and sinker for a wholesaler's UIT product. I had to invest through a senior advisor who never even made sure I understood the product (I think I was two weeks into my training).  He was just happy to pocket the big commission.

 

I've learned I'm not comfortable mixing personal and business investing and to never invest in anything I don't understand.

[Antares]

I've made a lot of them over the years, but I see those as the price I paid to stop making them.

The most costly were working successively with two FAs, AUM. One pushed the stock of distressed companies, and I had few winners but lost thousands on several that went bankrupt. The second was a college friend who I was so relieved to see at a reunion, because I was paralyzed by knowing I had to leave the first one, and wasn't yet emotionally ready to do it myself. He was professionally invested in the belief that index funds are a bad idea. His advice was reassuring, but the cost of that reassurance was high, and thankfully the time came when I no longer needed to pay it. On a smaller level, I lost money on individual stocks during the dot.com bust, sold Apple many doublings ago, held too much cash after getting freaked out by market moves.

Another big mistake was worrying too much about my investments. I'd be way ahead if I'd just dumped everything in two or three index funds from early in my career, made regular contributions, and paid no more attention.

On the other hand, I maxed out my retirement contributions from age 25, always knew the importance of saving, didn't live excessively large, married another physician who shares that philosophy, and eventually came to embrace a diy Boglehead-style investment approach. And as 60 looms, I look forward to a comfortable retirement and my earlier anxieties about money have largely gone away. For me it was a little like poker: you have to pay to learn. Sites like this one may reduce that price!

[cgossage]

My biggest blunder came in college. I was ready to propose at the end of my senior year but had no money. So I decided I would open up a credit card to fund the engagement ring and would use my signing bonus I was getting in a few months to pay it off. Being a bargain shopper I thought I would apply to 7 credit cards at the same time to see which one would give me the best deal.

The 1st one came in with a $3,500 credit limit, the next with $1,500, the next with $500 and the last 4 were all declined. All of those credit inquiries messed up my credit so badly I had to use my wife's credit to get my first mobile phone plan.

Fortunately I was able to buy the ring and she said yes, so I guess it was worth it in the end.

[beagler]

Not continuing to add to index funds during 2008.

Not maximizing my income potential as a new, single attending (could have worked 2nd job etc.)

Following stock tip from friendly, well-intentioned patient - Immunogen. Following Motley Fool and buying Invensense. Fortunately both sub $10k purchases and less than 1% of portfolio. I'm now all indexed again.

Too mcuh cash drag.

Not switching to concierge practice model now. ( I'm not doing it although I probably should --less work for same or more money.)