"Non-optimum" financial actions we take for emotional reasons, convenience, etc.

[WhoDaresWins]

I don't know where to begin in my case. Suffice it to say, I am no longer doing the stupid things I did due to ignorance and pressure from family and piranha salespeople. I am marking time with an (aargh) annuity and (eeek)front load funds until I can get out with the least amount of damage possible.

 

[clifp]

Credit card late fees. I don't why it is so hard to never pay a CC late, they are all on-line and only require a few mouse clicks to pay. But for some reason I always have one and sometimes two credit late fees and the attended finance charges a year. Dumb I know.

 

[Gumby]

When you get right down to it, retiring is almost always financially suboptimal. Or, in my case, voluntarily taking a 75% pay cut to do work that I thought I might enjoy more (two years after that decision, I am still happy I did it). In both cases, there is the life enjoyment factor, which is typically not financially quantifiable.

The same factor influences most of what we might describe as financially suboptimal behavior -- how much of our time and mental energy do we really want to give to squeezing every last cent out of life? Could I get a 1/4% better rate on my checking account if I switched banks? Yes, but the hassle factor exceeds the potential earnings, so I don't.

 

[ziggy29]

Credit card late fees. I don't why it is so hard to never pay a CC late, they are all on-line and only require a few mouse clicks to pay. But for some reason I always have one and sometimes two credit late fees and the attended finance charges a year. Dumb I know.

It can happen. Maybe you just forgot to set the automatic payment. Maybe you got the reminder on a calendar, clicked "OK" to get rid of it and forgot to follow through. Maybe a processing glitch occurred. These could be a few of the several "non-optimal" reasons why some people don't want to even play the rewards/cash back game. One late payment can eat a few months of cash rewards in some cases. And I haven't even touched the hassles of cleaning up identity theft.

Having said that I do play those games for the 2% cash back, but I understand the risks and I've decided it's worth it as long as I stay on top of things and keep an eye on discretionary spending. For me. The risks are within my comfort zone given the typical reward.

 

[easysurfer]

Although I read and hear that once retired, it's a good idea to use a CD ladder, I decided to just money from my cash portion in a money market fund.

Since I'm pretty much a total index investor (total bond, total us stock, total international stock) I figure money market rates will fluctuate so I treat that as my "cash index".

 

[freebird5825]

...To redeem myself, I did send an email to VG asking them what it would take to consolidate everything under 1 roof. I still hesitate to put all my funds into one fund family...
I hate doing transfer paperw*rk, hence the procrastination.

The plot thickens...I heard back from VG today. One of their reps laid out the process in excruciating detail, so now I have no excuses to not do this. Except the d*mn hated paperw*rk...

I set a calendar reminder for next week to print out the forms, fill them out, get my signature guarantees done to accomplish the paperw*rk part. Then good ol' VG gets to do the transfers from TDA while I sit here and grin.
I made a decision... I'm going to retain my stakes in the existing non-VG funds until end of 2009, but they will be "housed" in my existing VG brokerage account. All under 1 roof, no more multiple accounts floating around.

This is a great thread BTW. Openly admitting my procrastination, in black and white, is truly motivating me. There is hope.

 

[audreyh1]

Credit card late fees. I don't why it is so hard to never pay a CC late, they are all on-line and only require a few mouse clicks to pay. But for some reason I always have one and sometimes two credit late fees and the attended finance charges a year. Dumb I know.

I avoid this by using online billpay, automatically having an ebill sent to my bank which sends me an email. And then I can go on-line to schedule it, with plenty of advance notice (plus email reminders anyway). For one of the cards which tends to have a lower recurring monthly amount, I just autopay it via bank online billpay.

Audrey

 

[samclem]

Ditto for me. She has her 2 funds both in USAA S&P 500 (.25 ER) but would be better in VG TSM (.18 ER) IMHO.

When I first started investing I put a large % of our money in the USAA Cornerstone fund (which has stocks, bonds, real estate, and which used to have a gold component). I held on to it for about 5 years after I knew I should sell and put it in VG funds. It wasn't a bad fund for a beginner, just more expensive than I needed or wanted to pay.

 

[kumquat]

Every month, I look ar my CC bill online. Then I round it up to the next $ and pay it. Since I seldom use it, I usually have a [-]small miniscule[/-] less than $0.99 credit. I could be earning 0.4% interest on that money. Silly me.

 

[traineeinvestor]

Until about 2003 when I started to get our financial house in order (having children was the catalyst) there was a long list including (but not limited to):

1. rent from an overseas investment property was piling up in a cheque account yielding about 2% when I could have made early payments on a floating rate mortgage costing about 9% - the mortgage is now gone and the rent gets swept up each month into a money market account pending investment

2. late fees on rates because I was perpetually sending in the cheques on the last day which meant they would always arrive a few days past the due date - I now have as many bills as possible on autopay and process the remaining ones once a fortnight in a batch even if it means paying a bit early

3. not stopping the payments on a whole of life policy (which my father took out in my name when I was 18), even though I know it is a lousy investment and I would be better off buying bonds or equities - by the time I ran the numbers in 2003/4 the policy had been running for long enough to be worth continuing

4. waiting until last week to close out my high MER funds even though a comparable range of low cost ETFs has been available for a while now (HK's low tax rates are partially offset by an absence of low cost no load funds, only recently remedied). No more front end load or actively managed funds for me anymore - even so I still envy those who have access to really low cost funds like Vanguard etc

5. buying expensive wine - and drinking it. I have no remorse over this one and I will be putting a padlock on the wine fridge once my children get older. Of course, at some stage I may need help remembering the combination.....

 

[Ronstar]

1. I stopped tracking investments during the crash. They went on cruise control for over a year. Now I'm just starting to take a peak.

2. My bank changed its routing no and sent me a letter several months ago with a list of automated payees that need to be notified by the end of the year. I've done nothing with this.

3. I've yet to look into setting up the $5000 catch up contribution on my 401k

 

[heyduke]

My biggest emotional bust was when my DW came down with breast cancer... watching her go thru the treatments and caring for her made me neglect what was a very active stock trading account I had open... end result was we lost 50K in 4 months...

 

[Lusitan]

My biggest emotional bust was when my DW came down with breast cancer... watching her go thru the treatments and caring for her made me neglect what was a very active stock trading account I had open... end result was we lost 50K in 4 months...

Man, sorry to hear about your wife. I hope she is recovering. 50K isn't really all that important when we view it with the right perspective.

 

[Nords]

From Nords "We have no compelling reason to dart around in front of the steam roller picking up nickels."
So THAT's what you do all day when you are retired

Apparently I have a hard time turning it off.

I could start a franchise business called "Should I pay off my mortgage?"

This is a great thread BTW. Openly admitting my procrastination, in black and white, is truly motivating me. There is hope.

Someday you'll get around to dealing with your serial procrastination?

This board is great for announcing commitments and then feeling obligated to hold to them.

 

[kyounge1956]

Well, there's the Traditional IRA I started when I got my first job as a teenager. It only has a few hundred dollars in it, and the annual fee generally eats up most of the interest it earns. I don't meet the income limits to make tax deductible contributions to it, and I've been meaning for years to pay the taxes and roll it over into my Roth IRA. I've had the form sitting around for months, but no action. If that isn't sub-optimal I don't know what is.

 

[freebird5825]

Someday you'll get around to dealing with your serial procrastination?

This board is great for announcing commitments and then feeling obligated to hold to them.

Nah, the days of grinding my nose to the stone are toast. It took me over 2 years to learn how to relax (uh huh ) and not be so schedule driven (oh boy ).
Now I've swung to the other extreme, saying obscene things like "I don't think anymore" and "Tomorrow maybe". I think my psyche has whiplash.

 

[kyounge1956]

And speaking of suboptimal, here's an article I just came across about financial bubbles. I wonder what the behavioral economists say about this. Is there any way to end the boom/bust cycle? It's going to be a very rough ride if future bubbles are spaced at intervals of several years instead of several decades as in the past.

 

[heyduke]

Man, sorry to hear about your wife. I hope she is recovering. 50K isn't really all that important when we view it with the right perspective.

she is fours years a breast cancer survivor and all is well thanks for asking... yep given the circumstances it was just a bad loss... just added some Mondays to my retirement date...

 

[Moemg]

she is fours years a breast cancer survivor and all is well thanks for asking... ..

That is a lot more important than any amount of money !

 

[Finance Dave]

I leave money on the table by opting for simplicity and protecting my credit score. I do this by turning down the "20% off on this purchase if you open an in-store credit card today" offers continuously.

I first say "no thank you", but then when the clerk pushes and pushes, I go into a long-winded diatribe about how it actually COSTS you money to open one because your credit score is based partially on how many credit inquiries you have and how much available credit and that if your FICO score slips below about 720 and then you try to get a car loan or house loan the rates are worse and then you have to buy a smaller house or a cheaper car and then because it's a cheaper car it doesn't have side curtain airbags and then because your wife drives it she gets in a wreck and is seriously injured and then since you're visiting her in the hospital you have to hire someone to cut your grass and then he accidently cuts his foot off in the mower and you get sued so you have to hire an attorney to protect you and .......


Ok, so I don't really say all of that...but you get the point.

 

[bkatran]

Novaman,

Are we related? the same thing happens with my BIL ... But I know none of my siblings are ready for retirement except for me. Citibank was $1 a share before, now at leat it above $4. I don't think it ever come back to 60 in my lifetime... We'll see.

 

[charlie]

DW and I leave a lot of money on the table eating out.

Cheers,

charlie