Reverse Carnival of Money Mistakes

Wow, I am really impressed with the great quality and variety of submissions for this Reverse Carnival of Money Mistakes. Everything from everyday expenses to complete lifestyle overhauls is covered, and I’m sure everyone reading it can relate to at least some of the money bloopers listed below. This is truly an entertaining way to learn from others. I love reading about personal experiences. A hearty Thanks to everyone who contributed! Also thanks to those who have spread the word about this Carnival, and thanks in advance for those that will.

I’ve shared some excerpts, but be sure to check out the links for the entire story. To celebrate the end of Valentine’s Day (Let’s just say I may need to buy another saute pan after ‘reducing’ my soy ginger sauce to… charcoal), I’ve chosen a pink motif:

Source (Blog or Person) Notable Money Blunder
SMB’s Financial Coups “Right after college I got caught up in a ?business enterprise?… *I* owed more than $40,000 … Eventually, at 25, I declared bankruptcy.”
John’s Jottings Missed out on a great trade opportunity – “The $1,800 I never spent would now be worth $80,000 if I had held on all this way…”
Blueprint for Financial Prosperity “I should’ve been more demanding after the home inspection to get the seller to get some things fixed. I should’ve asked because you never know.”
Fearless Money “Got married too young, largely to get residency to finish college in Minnesota. The eventual and inevitable divorce cost me big. Saved approx. $8,000, divorce cost me approx. $40,000.”
Anonymous “did not purchase the I Bonds when the fixed rate was 2.5%! did not fund my 401(k) for the first 2 years and only partially for the 3rd year and paid taxes!”
Financial Ladder
(no specific post)
I was lucky enough to start investing in stocks, and open a ROTH IRA when I was only 20 years old. Unfortunately, the mistake I made was holding onto stocks that dove, and became stagnant after the tech boom/bust. For years after that I didn’t always contribute the max amount into the ROTH every year. I was also with a company that matches 401k contributions, but didn’t open one up until 4 years later! If I would’ve realized how important these things are, if I would’ve cared, I could’ve been in better shape than I am now. The mistake of financial apathy……..
Young Professionals Financial Blog “Basically, the mistake is that I didn’t take my finances seriously enough earlier in my life… I am really not sure what happened to all that money that I should have been investing. I even lived at home for a year after college to save some money, but have nothing to show for it.”
Investing Intelligently “In 1999, my grandma, her husband, some of her friends, and I started an investment club. The club was doomed from the start… 360 Networks and Global Crossing both filed for bankruptcy if I remember correctly and their stock became worthless.
Board Game Madness “I lost $4450 or so by trusting the wrong people, not understanding an investment, locking money into a contract that was too long for the overall market cycle, mis-judging the risk of lost principal, and diversifying in the wrong direction.”
Consumerism Commentary “The mistake I’m focusing on is the lack of understanding of my worth and the worth of my time… The whole time I was working there, I ignored my personal finance situation. I was making a sacrifice for the mission”
Circle Management “never break the old egg before you eat the new egg, even if the new egg is just in front of you”
Make Love, Not Debt “He took out a payday loan at like 200% interest…then locked his keys in his car in the parking lot and had to call her collect to come rescue him. Yes kids, it’s true: She got a collect call from Check Into Cash… She bought $500 Manolo Blahnik shoes because Sarah Jessica Parker said they were cool on Sex and the City.”
SingleMom & Money “forego paying bills during the month of December so I could buy BabyGirl LOTS of Christmas gifts (many were broken or forgotten by February but I suffered the consequences through March)”
Clutter2Cash “Though I have been saving at least some money for retirement since the mid-90′s other than that we have been living AT or slightly ABOVE our means…usually carrying balances on credit cards. I did this my entire adult life up until last year. Every time we would feel like we were about to get ahead financially something would happen to keep us in the hole.”
In Acton “…I went to another dealership approximately 2 weeks later and promptly purchased a fully hooked up V6 SE Camry. After a dizzying array of taxes and fees and add-ons that I can’t even recall being told about, I drove off the lot with the biggest grin on my face and a debt that would’ve sent me to a private school for a whole year!”
My Open Wallet “Blew Ivy League educational opportunities: if I had taken a few different classes, or stayed awake in the ones I did take, or even just made better use of the career center, I could have gotten any of a million jobs where I could have made more money, at any of the many companies that recruited at my college.”
Everybody Loves Your Money “Learned all about compound interest and the rule of 72 when I was 18 and then proceeded not to do a damn thing about it for 10 years. Knowing something, and actually acting on it, are two entirely different things. (Yeah. Duh)”
MyMoneyBlog (me) I had the “analysis paralysis”. I was so scared of losing all my money, I just put all my retirement money in cash.
Dan OK, here’s my worst. I almost didn’t put my name on this post :P

It’s 1999. I just started my first real job in my career. I don’t know crap about money or investing, but friends are making bookoo $$ in the “different this time” stock market, and I finally have some dough saved up so I want in. “Just get some mutual funds,” they say. “It’s easy.”

Not knowing squat about mutual funds, for further advice I go to (dunce cap velcroed on for this one) my bank.

Arrgh!

Wachovia Securities is more than happy to bend me – er – help me get started in my investing career. It so happens that their “advisor” sells a lot of funds to folks my age from the Evergreen “family” of funds. All with friendly 2%+ ER’s, 1% 12b-1 fees, and 5% back end load. And $50 automatic investment were set up from my savings each month (which I would later find out made calculating my cost basis even more fun!)

I remember the rep’s pitch that “I even have one client who’s told me she’s chosing to finance her car longer just so she can keep more money in these funds, because it’s worth it!”

At least it’s some consolation that I didn’t sell during the lowest part of the bursted bubble.

After giving myself a very needed crash-course in investing just last year, I finally sold these funds after the very day after the six-year anniversary to avoid the load (which really accomplish much in retrospect because of the 12b-1 negated the 1% decrease in load each year).

At least I’ll have a loss to deduct for a couple of years…

OH THE SHAME!

Canadian Capitalist “I once had tons of in-the-money options in a technology company, which at one point was 70% of my net worth. Let?s just say it ended very badly.”

Comments

  1. Oh behalf of the younger, I would like to thank everyone for sharing their mistakes. I hope we can all learn from eachother and be enriched in wealth and in happiness.

  2. Great job, and great stories!

  3. jon, borders on the table and a valign=top on the left column might be helpful.

  4. Great website! I wanted to ask do you see any advantage to holding a non-interest checking account? I’m thinking of just using two savings accounts to hold my money that allow me the flexibility to withdraw and deposit anytime. What do you think?

  5. Great post! Mistakes are great if you can learn from them.

  6. Thanks for doing such a great job wrangling our bloopers!

  7. Thanks for putting this together! It’s a great read.

  8. Wonderful post! It helps to see other smart people making the same mistakes I did, but still pulling it together. I’m linking your post to my site to encourage my readers! Joy

  9. Thanks for hosting this roundup! I’ll have to add stuff here. What to choose? I’ve made so many bad decisions over my life it’s not even funny. It’s actually kind of pathetic! But there is redemption in compounding interest…

    I did not save up a 3-6 month cash cushion when I first finished college. I lived beyond my means and when I lost my job in the dot-com bust, I cashed out my 401K plan to tide me over till I found a new job.

    On the flipside, I early exercised my stock options to take a dividend payout and got the company match into my 401k at my old company. It doesn’t balance out what I lost, but hopefully I’ve learned something in the past 5 years between these two occurrences!

  10. I’ve got a great one:

    When I was ten years old, I started shoveling snow around town to earn some money. When I was twelve, I got my first paper route.

    By the time I graduated high school in 1973, I had saved up more than $4,000 (roughly $25K in current dollars).

    Then I blew it all on college, and ultimately took two student loans. I graduated with a liberal arts degree and a minor in comp sci in the middle of a recession in a depressed Rust Belt economy. The PC quickly rendered my mainframe skills obsolete, and I took a minimum wage job to pay the bills. (By graduating, I stopped being a student and lost my on-campus janitor job.)

    Today I earn my state minimum wage and am paying $100 per month on my student loans with several more years of payments.

Trackbacks

  1. [...] Rule of 72 How Long Till You Double Your Money? Is the Rule Of 72 Good Enough? My Money Mistakes Reverse Carnival of Money Mistakes Dumbest Debt Decisions Ever: #3 of 5 del.icio.us Digg Furl Reddit Socializer Help  |   [...]

  2. [...] to the 10th edition of the Carnival of Investing. Whew, with hosting my Reverse Carnival last week and then putting this one together, I forgot how much time it takes. Thanks to all the [...]

Speak Your Mind

*