your largest financial mistake to date?

[2017ish]

... If we do we'll lock in the loss. If we decide not to and stay here for 10 more years it will probably be moot. But DW has a terribly hard time with the thought of taking the loss. I'm more, eh, it is what it is. It won't break us, but it certainly was bad timing.

Not telling you anything you don't already know, but bite the bullet. In our situation, it hurt--but luckily (?) we had moved and needed to sell. Slashed the asking price a couple of times and it was gone. Have occasionally looked up prices in our old neighborhood since then--including last month. We never would have gotten our heads above water on that property, and are quite happy to have moved on.

On the other hand, we bought three rentals and our FL home cheap in 2009 - 2012 for a total of less than $1M. If we were to sell those houses the combined gains would be just about the half million we'll probably lose on the Beach house. So que sera ,sera.

This is great solace, which should comfort your spouse. I've got my fingers crossed that whenever our present house/land is sold, we will end up even for life on residential real estate. Would take a hefty gain though! In any event, we've been blessed to live in a couple of very nice locations/houses; the monetary losses don't erase those memories. Sounds like you are in the same situation.

 

[Music Lover]

I married the wrong person which led to being pressured to buy a larger more expensive house and an unnecessary new car. She also did far too much frivolous spending on bling and other useless things.

Luckily I realized my mistake early and managed to extract myself before too much financial damage was done.

 

[FiveDriver]

After watching JDS Uniphase, the Fiber Cable company, skyrocket to higher highs in the late 90's.....I finally bought it at the precise moment of it's all-time high. I mean THE MOMENT as in 3PM March 22, 2000. That was about a $12K mistake at a time when $12K was a substantial sum of money.

After being bludgeoned by that event, I stood on the sidelines while CMGI, the Internet Incubator stock, would double and split several times within the year. My procrastination paid off as this high flyer also burst into flames without incinerating any of my money. I avoided around $15K worth of kindling on that one, so I consider the whole thing a lesson in Stock Market Mania.

Experience is the best Teacher.....but the lessons can be very expensive.

 

[eytonxav]

Being too conservative early in my investment life.

 

[easysurfer]

FIRE'd in Jan 2008. Market was already starting to go south before the big meltdown. Looking back, should have reallocated some of my 401K to safer investments before retiring. Jan 2008 was a flurry with a lot going on at that time (post holiday, was battling a fever that wouldn't go away, got outsourced, and decided to FIRE). On the bright side, this didn't happen later in 2008 during the market freefall .

 

[Danmar]

Holding out to the very end with some employee stock options in 2011. I should have cashed them in June of 2011 vs January 2012 when they expired. This cost me well into 7 figures after tax. Too greedy.

 

[Ronstar]

We sold our office building in 2004, more than doubling our money. Not wanting to pay tax on the gain, we 1031'd the proceeds into 3 Florida condos. Sold all condos at a loss. Would have been better to pay the tax in 2004 and invest the remainder in cd's.

 

[jjquantz]

My largest financial mistake was to leave BigOil and go into teaching. I left tons of money on the table. However, I also got to spend a LOT more time with DW and the kids. A second error, the ones my kids always point out, is that we had a propensity to relocate every 5 years or so and we insisted on buying houses instead of renting. As 2017ish said, we're just hoping that we come out even on real estate over our lifetime.

 

[MBAustin]

Bought condos early in my working life when interest rates were 10+ percent. Sold the first one for a job transfer and basically broke even, but 2nd one went significantly under water. Rented it out for less than the mortgage payment for too many years before the value recovered enough to sell it. Probably lost $15-20K total. Have encouraged our kids to be patient to buy their first home.

 

[travelover]

Being too conservative early in my investment life.

+1 - I was eligible for a 401(k) at the very beginning in early 80's and put my money into interest bearing accounts instead of a stock index fund that was available. Also wished I'd contributed to pension plan for the entire career - but company looked rocky when I was hired and it seemed like a bad gamble.

It all worked out in the end and I have more than "enough".

 

[Rosie]

When my Fine Former Employer went public, I purchased some stock at the IPO price through a deal available to employees. This was in late 1999, during the tech bubble. We had a six-month blackout during which we could not sell that stock.

During that 6-month window, the share price went from about $10 to over $100. Then the stock plummeted, as did all tech stocks, so that at the end of the 6 months it was closer to $30. Still, not too shabby!

Also right near the end of that 6-month employee blackout, our CFO sent an all-company email stating that anyone considering selling their stock at the end of the blackout window obviously had no faith in the future of the company and *did not deserve to work there*. I kid you not. This was in mid-2000, before Enron.

Timid little worker bee that I was, my mistake was to not sell my stock when I could have. It soon went below the IPO price, where it stayed for about a decade, until the company folded.

My other mistake was to not save that email from the jackazz CFO.

I still made out OK in the end with my employee stock options. But I'm kind of annoyed at myself for not following my instincts and selling the stock I had purchased outright when I could have. So it goes.

 

[nash031]

Buying property in Charleston back in 2005. I ended up getting out in 2007 before the market totally tanked, but probably would've saved myself $30,000 had I just rented instead of buying. I had turned a 30% profit on another property in a different area prior to that, so that $30K loss ate away about half of the gains from that purchase. Net wasn't a loss, but I definitely lost money on the second purchase and should've more closely analyzed the market instead of just believing that real estate was always a winner.

Next was buying a new Jeep when I owned a 4-year-old paid-off Toyota Celica with about 40,000 miles on it, then turning around and replacing said Jeep three years later with my current car which is over 100K miles. Learned the lesson, but wasted about $25,000 in the process in my mid-20s.

Other than that, not having any cash to invest in Apple when I first heard about the iPod back around 2003.

There are a few $1000 mistakes in there that would've helped, but avoiding the two mistakes mentioned in my 20s would've put me in a better position today.

 

[frayne]

Interesting thread and it seems most of us have made a mistake or two along the way. Guess the main lesson is learning from your mistakes or misfortune, unfortunately many don't.

 

[2017ish]

My largest financial mistake was to leave BigOil and go into teaching. I left tons of money on the table. However, I also got to spend a LOT more time with DW and the kids. ...

Having done something quite similar (BigLaw to SAHD/half-time teacher), I wouldn't say this was a mistake. A costly, but in my/DW experience, sound decision on balance. Sounds same for you!

 

[Dash man]

For years I've been pressuring DW to diversify because she had so much in company stock and stock options, but apparently not enough. Fortunately, I've been successful enough that we're okay, but last Friday alone our net worth dropped just over $1 million...and it was because a competitor announced poor results, not even her company. Her company announces this week...we'll see what move the roller coaster takes.

 

[GalaxyBoy]

My first investment in a single stock for an amount of $10,000. Not as big a mistake as others have made, but at the time it was a lot of money for me. The stock was Media Vision, and I bought it based on the fact that I had one of their video cards, was very pleased with it, and Money Magazine wrote an article about the company. Can't lose.

Well, maybe it could. From the Wikipedia page on the company:

Media Vision could not sustain its meteoric rise. On May 17, 1994, CEO Paul Jain resigned as Media Vision quickly became the subject of the longest-running securities fraud case in Silicon Valley history. The investigation and trial lasted nearly a decade, resulting in criminal charges filed against Jain in 1998 and ultimately his indictment on 27 counts of financial fraud (Wired) and the incarceration of Jain and CFO Steve Allen ([1]).

I think I sold my stock for $0.01. Not per share, the whole lot.

 

[bradaz2488]

The 3 mistakes that stand out for me:




1) Portfolio not properly diversified during dot.com crash. Too much % in company stock and options. Net worth drop big time....
2) Day trading. Easy money before dot.com crash, but took a bath on some small tech stocks.


3) Hired financial advisor to manage ~30% of investment assets. Would have made $100K more by simply investing in a low cost balanced fund. Fired him right after I retired .....



Retired at 49 so I guess I made more right choses than wrong

 

[Cassius King]

After watching JDS Uniphase, the Fiber Cable company, skyrocket to higher highs in the late 90's.....I finally bought it at the precise moment of it's all-time high. I mean THE MOMENT as in 3PM March 22, 2000. That was about a $12K mistake at a time when $12K was a substantial sum of money.

After being bludgeoned by that event, I stood on the sidelines while CMGI, the Internet Incubator stock, would double and split several times within the year. My procrastination paid off as this high flyer also burst into flames without incinerating any of my money. I avoided around $15K worth of kindling on that one, so I consider the whole thing a lesson in Stock Market Mania.

Experience is the best Teacher.....but the lessons can be very expensive.

My stock of choice in those days was Wordcruncher Technologies (WCTI). Lost every penny I had in that SOB. Was a valuable, very expensive lesson to learn. But am extremely fortunate to learn it in my early 20's with less of a stash than later in life. Recovered just fine, but that was a lot of compounding that was lost.

 

[jabbahop]

Biggest mistakes were all more opportunity cost issues.
- for 20 years used a financial planner that had us in expensive front 5% front load funds. Did ok but could have don't much better.
- wife and I had 8 years of options and employee stock in the 90's working for Apple. I wanted to be more diversified so sold them as soon as we could instead of now after many splits. Probably > $1M.
- 17 years of options and employee stock which sold when vested to diversify. I retired and was happy to exercise the balance @ around $60. 18 months later it is over $100.

My market timing skills were always the worst but I remember the stories of people that had millions in tech stock before the crash and then had nothing.

 

[Beldar]

Largest Financial Mistake to Date?

In retrospect, for me, it was not being more loose with the cash on hand during the crash in 2008 - 2009.

I purchased 100K shares of SiriusXM for 11 cents/share. Today it's hovering around $4. I could have purchased 5 times that amount.

Also, passing up on bargains at the time like GE, Ford, Kmart. I guess I was like a lot of folks and went into deep conservative mode. The "experts" I worked with at the time cashed out their 401ks at or near the bottom, and laughed at me for not doing the same; I continued the max contribution.

They're still working.

_B

 

[RunningBum]

A couple years ago I was thinking about where I'd be had I made a few decisions that I had considered but missed on, like not exercising all of my company stock options at the high and diversifying at that point. I did take some out literally the day before the high, and really did consider selling the rest that next day, but decided not to. I'm not going to list all of the other decisions but they are all things I definitely considered, and some I even did but only in a small way. Of course it's all very unlikely but it's not like any of these were things putting all my money in Apple when it was rock bottom, that weren't at all on my radar. It also assumes I would've made those decisions and not others I am probably forgetting that I am far better off not having made.


I put it in a spreadsheet and figure I could've had about 6x more than I have now, after taxes, and taking into account retiring 10 years earlier and even doubling my spending. It certainly would've been nice to have ER'd 10 years earlier. The extra money would be nice to be able to travel in my comfort and have a few more toys, less stress about health care costs. I could also do more for family, especially my son and DIL, though it's not clear that would be better for them, as their lives might be better having to be more responsible with limited help from me. Mostly, though, I don't see it making a big difference in my life anymore.


I just thought it was interesting, because when I first started the exercise, I thought maybe if I'd have made those 5-6 decisions I might have a net worth approaching $100M, but it turns out I'd be far from it.

 

[Walt34]

Getting married in 1978 to what turned out to be the wrong girl. Essentially it cost me my net worth at the time (which wasn't all that much but still...) plus all I made for the next five years. When the house sold we each came out of it with a bit over $7k. I put it in the bank, she took a trip to Europe.

Later on, investing far too conservatively for my age at the time.

 

[W2R]

Definitely marrying. After 23 years I ended up with less then $1,000, plus debt and a junk car. Oh, and also the rent was due, I was over 50, and all I had was a soft money research job. What a disaster! I could not even afford a bed so I slept on the floor for months.

I don't think anybody profits from divorce, or at least neither of us did. He got the house but I heard that after selling it he came out about even.

Luckily Frank has heard enough horror stories about the financial implications of divorce, that he doesn't mind that I don't want to marry.

 

[kcowan]

DW convinced me to turn down on offer on our 5000 sq.ft. estate for $1,050,000 as I had wanted move 10 miles away and buy on a lake, putting $500k in our pocket.

7 years later we unloaded the house for $530k.

 

[Meadbh]

My only foray into angel investing was $20,000 that I put into a biotech startup led by a relative. The business plan was actually pretty sound, and I fully realized that this was high risk investing, to be done only with money that I could afford to lose. Things were going very well until 2008. The company became a casualty of the Great Recession. Oh well.