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  • #61
    Cashed out a 401k from a job I had before med school - would be worth close to 100K

    Racked up 20K credit card debt before I started derm residency

    Didn't save a dime while at said job with 401k and I was making 6 figures. Sigh.

    p.s. I have met a billionaire. Whole other level of money.

    Comment


    • #62
      Not starting ANY retirement savings while in residency. To be fair, I threw extra money at student loans which were at 6.8% but I'll never get that Roth space back.

      Not immediately setting up automatic payments- I was late on I think 2 payments for one of my student loans which landed on my credit report. Had the money, just forgot to log on and set up the payment.

      I have "too much" cash at the moment but will be buying a new vehicle in the next few months so I'm keeping it as cash for now.

      Near miss: almost got signed up with an FA with AUM fees. Kept forgetting to send in the paperwork and had the nagging sense that the fees were too high. Never sent it in. Then discovered WCI :-)

      Comment


      • #63




        Due to my overly conservative nature, I have been fortunate not to make any catastrophic financial blunders.  Ranking them from least serious to most serious I never paid an FA, never trusted my “friend” on a hot deal he found that’s “just for me”, never invested in a Ponzi scheme, and never bought a whole life policy  :P

        Probably my biggest blunders are:

        1. carrying too much cash (~10% of assets excluding home) despite having a high paying job and being under 40, and

        2. buying a 3D printing stock five years ago that I lost 75% of my investment on.


        I continually try to carry less cash.  The current level of 10% is down from 20% a couple years ago, and not just from asset value appreciation and more savings!

        On the 3D printing stock, I was at least able to accumulate some tax losses that I still have! I also learned as someone else did in a recent thread not to try my hand at stock picking.

        When I bought my house I got a 7 year ARM.  I guess time will tell whether that was a blunder or not.  I say no, but I know you guys hate mortgages and ARMs.  I saved about 150bps in interest expense when the loan was the largest, so I think it was a good trade, but I haven’t run the math for a while.

        So what blunders have you guys made and what did you learn from them?

         
        Click to expand...


        The amount of cash carried or lack of leverage is a major opportunity cost. Figuring out the optimal amount of leverage is a big factor.

        I made some mistakes including:

        - losing 50k in the 1999 internet bubble (I was young)

        - losing 50k at the end of the cycle in 2008 (didn't learn sufficient lessons from 1999)

        - losing 700k shorting S&P futures in 2014 (I was going through some relationship difficulties at the time)

        - bailing on a house for 1.35M and having to  buy a comparably worse property in a similar location 3 years later for double that (I was being stingy and that cost me)

        However, I was able to recover from these due to having other positions and investments that worked out.

        The fact that I carried 1.5M in debt (or roughly 2-3x my income in that period) when I was 32-43 resulted in investments where the 1.5M debt became offset by a much larger gain on the investments.

        Leverage can kill but used judiciously it can amplify returns. If I had used no leverage, my net worth would be 6M instead of the current 12M. If I had been in cash my whole life and not made a risky investment, my net worth would be 3M

         

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        • #64







          Due to my overly conservative nature, I have been fortunate not to make any catastrophic financial blunders.  Ranking them from least serious to most serious I never paid an FA, never trusted my “friend” on a hot deal he found that’s “just for me”, never invested in a Ponzi scheme, and never bought a whole life policy ????

          Probably my biggest blunders are:

          1. carrying too much cash (~10% of assets excluding home) despite having a high paying job and being under 40, and

          2. buying a 3D printing stock five years ago that I lost 75% of my investment on.


          I continually try to carry less cash.  The current level of 10% is down from 20% a couple years ago, and not just from asset value appreciation and more savings!

          On the 3D printing stock, I was at least able to accumulate some tax losses that I still have! I also learned as someone else did in a recent thread not to try my hand at stock picking.

          When I bought my house I got a 7 year ARM.  I guess time will tell whether that was a blunder or not.  I say no, but I know you guys hate mortgages and ARMs.  I saved about 150bps in interest expense when the loan was the largest, so I think it was a good trade, but I haven’t run the math for a while.

          So what blunders have you guys made and what did you learn from them?

           
          Click to expand…


          The amount of cash carried or lack of leverage is a major opportunity cost. Figuring out the optimal amount of leverage is a big factor.

          I made some mistakes including:

          – losing 50k in the 1999 internet bubble (I was young)

          – losing 50k at the end of the cycle in 2008 (didn’t learn sufficient lessons from 1999)

          – losing 700k shorting S&P futures in 2014 (I was going through some relationship difficulties at the time)

          – bailing on a house for 1.35M and having to  buy a comparably worse property in a similar location 3 years later for double that (I was being stingy and that cost me)

          However, I was able to recover from these due to having other positions and investments that worked out.

          The fact that I carried 1.5M in debt (or roughly 2-3x my income in that period) when I was 32-43 resulted in investments where the 1.5M debt became offset by a much larger gain on the investments.

          Leverage can kill but used judiciously it can amplify returns. If I had used no leverage, my net worth would be 6M instead of the current 12M. If I had been in cash my whole life and not made a risky investment, my net worth would be 3M

           
          Click to expand...


          wow, those are impressive numbers both ways.  guaranteed to give many on here ulcers.  

          may i ask (if you are comfortable sharing) if at 12M, you have any desire to stop playing the game so aggressively?   i think most posters here would go very conservative at 10M and call it a day.  we would be more worried about the extreme swings and park 10 million conservatively, and continue to swing for the fences with 2 million maybe.

          thanks for your thoughts.

          congrats on achieving an astonishing net worth.

           

          Comment


          • #65
            I live with no leverage at all.  Hopefully @dont know mind will elaborate more.  FWIW I lost much more than 50K in 2000 and 2008.  I believe you do what you are comfortable with and understand fully.

            Comment


            • #66
              Hard to pick. Most are minor for me. Most would be not buying a great stock that I thought about buying but I am sure I forget about all the bad ones I also did not buy so I will call that a wash. For 20+ years I invested most of my money in an S&P 500 index fund. Some I put into a managed fund with what I would now say had high expenses. I wish I had not done that but at least I wasn't spending it.

              Comment


              • #67




                I live with no leverage at all. Hopefully @dont know mind will elaborate more.
                Click to expand...


                I think his leverage means OPM, aka Other People's Money made famous by Danny Devito in a movie, the name of which escapes me. In stocks it means using the brokerage to lend against your stocks to make risky buys or shorting the stocks to make ungodly gains.

                I play a more conservative leveraged game by using the bank's 70% financing of commercial properties to buy investments with 30 % down ( along with other investors). There is a risk that we can enter a downmarket and the income might not be able to cover the mortgage payments and daily expenses but by buying and building judiciously this has not happened so far, touch wood.

                Comment


                • #68
                  I have made plenty of blunders including investing 90K in a land with a house builder along with others to buy a 750K land, and the builder will then build the houses. Unfortunately there was a housing downturn and we were forced to sell it at a loss and I got $30K back. I have also invested in two start ups that has yet to produce any income and might either do well or be bankrupt.

                  But I don't regret taking risks once I had my retirement savings in stocks covered. As dont_know_ mind says, unless you take risks and leverage you cannot win big. What I learned is to go with investors who are experts in their field, have achieved success and have some good game plans for growth.

                  Comment


                  • #69
                    Paying 8.5% Front Load on a Fidelity Destiny II fund in the early 90s. Basically, I gave up about $1K on my initial investment in mere minutes.

                    Paying a whole semester of my sister's college tuition.  She managed to drop out before the 2 week deadline and had the university cut her a check for the full amount despite the fact I paid for it with my credit card!  She never went to college and I never got my $2,800 back

                    "Loaning" my father $4,800 for taxes.  Never saw a penny of it back...

                    Waiting a year to jump into a Roth IRA when it first became available because I didn't understand it.

                    Lost an opportunity to contribute to a 457b for 2 straight years because I allowed the "Benefits" department to act like a "Financial Advisor" as opposed to educating myself.

                    Took out a HELOC to buy a home about 16 years ago.  Repeated the same mistake 2 years later in purchasing a brand new BMW.  All paid off now, but the "opportunity cost" can never be recovered

                    Potential current blunders in the making-

                    a) Maximizing a 403b Roth while I am in my prime earning years; the numbers suggest that I probably should be contributing pre-tax. My disdain for dealing with the IRS in the future is probably clouding my logic. I always tell residents, fellows and junior faculty members to NOT do what I am doing when they get in their prime earning years, but rather choose a 403b strategy that is appropriate for their incomes.

                    b) I'm switching to a Health Savings Account despite having a chronic health condition that will definitely force me to maximize my individual deductible of $2,700.  With a family deductible of $5,400, this may turn out to be a loss in the long run. I have 12 years of compounding $6,900/year, but I'm at high risk of losing this strategy. We'll see...

                    These are just the highlights. I've made many more.  I will reach Financial Independence in 5-6 years, but I'll be 59 years old. Thus, I will not fit the category of "Retire Early" in the "FIRE" acronym.

                    Comment


                    • #70




                      Paying 8.5% Front Load on a Fidelity Destiny II fund in the early 90s. Basically, I gave up about $1K on my initial investment in mere minutes.

                      Paying a whole semester of my sister’s college tuition.  She managed to drop out before the 2 week deadline and had the university cut her a check for the full amount despite the fact I paid for it with my credit card!  She never went to college and I never got my $2,800 back ????

                      “Loaning” my father $4,800 for taxes.  Never saw a penny of it back…

                      Waiting a year to jump into a Roth IRA when it first became available because I didn’t understand it.

                      Lost an opportunity to contribute to a 457b for 2 straight years because I allowed the “Benefits” department to act like a “Financial Advisor” as opposed to educating myself.

                      Took out a HELOC to buy a home about 16 years ago.  Repeated the same mistake 2 years later in purchasing a brand new BMW.  All paid off now, but the “opportunity cost” can never be recovered

                      Potential current blunders in the making-

                      a) Maximizing a 403b Roth while I am in my prime earning years; the numbers suggest that I probably should be contributing pre-tax. My disdain for dealing with the IRS in the future is probably clouding my logic. I always tell residents, fellows and junior faculty members to NOT do what I am doing when they get in their prime earning years, but rather choose a 403b strategy that is appropriate for their incomes.

                      b) I’m switching to a Health Savings Account despite having a chronic health condition that will definitely force me to maximize my individual deductible of $2,700.  With a family deductible of $5,400, this may turn out to be a loss in the long run. I have 12 years of compounding $6,900/year, but I’m at high risk of losing this strategy. We’ll see…

                      These are just the highlights. I’ve made many more.  I will reach Financial Independence in 5-6 years, but I’ll be 59 years old. Thus, I will not fit the category of “Retire Early” in the “FIRE” acronym.
                      Click to expand...


                      @mitochondria If you don't mind sharing, I'd be interested in your insight about dealing with the family situation. I am from a working class family with no formal education and many of my immediate and extended family members are in financial ruins. I am very guilible and I am a softie, but I am also extremely frugal. How do you suggest one deals with family members with their hands out? There are a subset of people I plan to help once I have my own financial house in order (parents, nieces) , but there are plenty of others who may target me.

                      Comment


                      • #71


                        . I am very guilible and I am a softie, but I am also extremely frugal. How do you suggest one deals with family members with their hands out?
                        Click to expand...


                        One option would be create a budget, am investment plan and maximize all investments. If you have invested in Roth, 401K, other retirement plans, have a set emergency fund and have a idea of the expenses, you know much much is left after those are taken care of. Invest most of the remainder in a index no load mutual fund. That way, you can honestly say you have very little money or no money since everything is invested and you will not sell it and pay capital gains in order to hand them money.

                        Comment


                        • #72







                          Paying 8.5% Front Load on a Fidelity Destiny II fund in the early 90s. Basically, I gave up about $1K on my initial investment in mere minutes.

                          Paying a whole semester of my sister’s college tuition.  She managed to drop out before the 2 week deadline and had the university cut her a check for the full amount despite the fact I paid for it with my credit card!  She never went to college and I never got my $2,800 back ????

                          “Loaning” my father $4,800 for taxes.  Never saw a penny of it back…

                          Waiting a year to jump into a Roth IRA when it first became available because I didn’t understand it.

                          Lost an opportunity to contribute to a 457b for 2 straight years because I allowed the “Benefits” department to act like a “Financial Advisor” as opposed to educating myself.

                          Took out a HELOC to buy a home about 16 years ago.  Repeated the same mistake 2 years later in purchasing a brand new BMW.  All paid off now, but the “opportunity cost” can never be recovered

                          Potential current blunders in the making-

                          a) Maximizing a 403b Roth while I am in my prime earning years; the numbers suggest that I probably should be contributing pre-tax. My disdain for dealing with the IRS in the future is probably clouding my logic. I always tell residents, fellows and junior faculty members to NOT do what I am doing when they get in their prime earning years, but rather choose a 403b strategy that is appropriate for their incomes.

                          b) I’m switching to a Health Savings Account despite having a chronic health condition that will definitely force me to maximize my individual deductible of $2,700.  With a family deductible of $5,400, this may turn out to be a loss in the long run. I have 12 years of compounding $6,900/year, but I’m at high risk of losing this strategy. We’ll see…

                          These are just the highlights. I’ve made many more.  I will reach Financial Independence in 5-6 years, but I’ll be 59 years old. Thus, I will not fit the category of “Retire Early” in the “FIRE” acronym.
                          Click to expand…


                          @mitochondria If you don’t mind sharing, I’d be interested in your insight about dealing with the family situation. I am from a working class family with no formal education and many of my immediate and extended family members are in financial ruins. I am very guilible and I am a softie, but I am also extremely frugal. How do you suggest one deals with family members with their hands out? There are a subset of people I plan to help once I have my own financial house in order (parents, nieces) , but there are plenty of others who may target me.
                          Click to expand...


                          you didn't ask me, but i've given out hundreds of thousands to family over the years.

                          it has created some strife with my wife over the years, so we compromised by handing over tens of thousands to her family over the years.  They are in a better situation than my family.  it is one reason my emergency fund is probably among the highest of posters on the board (to relate to your other question).

                          the first part i think is to establish boundaries.  second is never ever to mention money around them  they know you have it, don't make it easy for them to introduce the subject.  don't talk about spending or how expensive anything is or vacations.

                          once you decide they need it for somewhat legitimate purchases, make sure you have come to terms with it being a gift.  even if you choose to draw up papers (we never did), know it is basically never coming back to you.  maybe there are some tax ways to write off a bad loan to a family member, but we never pursued any of these things.

                          my sister's car was crushed by a tree while she was at church during a thunderstorm.  it was my parents old car.  i decided to buy her a used but reliable car instead of having her search for an ancient junker that she could afford.   being a softie (as i am also), when it came time for her to buy her first house, i was totally opposed.  my parents basically ordered me to send her a check for the down payment for a place she couldn't afford.  however, grace of god, the place appreciated enormously, and then later she sold it when she got married.  she offered to pay me back, but i told her not to worry.  she never needed any money again.

                          my parents roof caved in partially when the neighbors tree branch cracked off and landed on their roof.  it was the midwest and december.  i sent them some money and they basically handed it to some nice guy looking for work outside of home depot who never showed up.  i then paid it directly to a licensed contractor and told him under no circumstances is he to let my parents talk him into letting nice people who are standing out of home depot have any money (parents are nicest people in the world but financial disasters).  stuff happens, and i was in a position to help.  parents had covered the holes with a plastic tarp and were living with space heaters and blankets under this.  crazy.

                          i only tell you this so you know you are not alone, and not all gifts are given only because you are a softie and gullible.   it's good that you have self awareness.  it's easy to think you are being taken advantage of, it's easy to worry about enabling.  sometimes i think we forget how fortunate we are when we worry about how to optimize investment returns and expense ratios etc.   i know you are not in a place to help yet, but just to let you know you are on a trajectory where saying no to family members may not be the best option for karma, sleeping well at night, etc.  however, got to get to that place first. 

                          ymmv

                          happy thanksgiving.

                          Comment


                          • #73


                            I think his leverage means OPM, aka Other People’s Money made famous by Danny Devito in a movie, the name of which escapes me.
                            Click to expand...


                            Haha, I think the title is literally Other People's Money.


                            @mitochondria If you don’t mind sharing, I’d be interested in your insight about dealing with the family situation. I am from a working class family with no formal education and many of my immediate and extended family members are in financial ruins. I am very guilible and I am a softie, but I am also extremely frugal. How do you suggest one deals with family members with their hands out? There are a subset of people I plan to help once I have my own financial house in order (parents, nieces) , but there are plenty of others who may target me.
                            Click to expand...


                            My view is that the only way to deal with this is gift the money to your relatives if you are inclined to do so.  Do not expect it to be paid back and don't do it if you are going to resent feeling taken advantage of.  I think you should help your family if they are in need, but this doesn't mean funding a lavish or irresponsible lifestyle, especially if you have a negative net worth.

                            Comment


                            • #74


                              Haha, I think the title is literally Other People’s Money.
                              Click to expand...


                              Duh. Memory is going downhill faster than I expected and the stubbornness of not googling has caught up with me.   :|

                              Comment


                              • #75


                                @mitochondria If you don’t mind sharing, I’d be interested in your insight about dealing with the family situation. I am from a working class family with no formal education and many of my immediate and extended family members are in financial ruins. I am very guilible and I am a softie, but I am also extremely frugal. How do you suggest one deals with family members with their hands out? There are a subset of people I plan to help once I have my own financial house in order (parents, nieces) , but there are plenty of others who may target me. November 23, 2017 at 9:32 am MST #76673  (1) REPLY | QUO
                                Click to expand...


                                I have loaned money to my brother so he could buy a house after his second divorce.  He did repay me in about 5 years.  One of my nieces husband wanted me to "help" with a down payment for a better house.  I declined this one.  Never tell your relatives like this about your net worth or income.  They already think you are a rich doctor but you do not have to rub it in.

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