Scary financial mistakes

scared eye Scary financial mistakesOK, so I haven’t always been fearless about money. At times I was careless, clueless, or spineless. It cost me big.

Without beating up on myself too badly, I hereby present the list of my worst financial mistakes for inclusion in the Reverse Carnival of Financial Boneheadedness.

  • Ate out for lunch, almost every day, for a decade. Approximate cost based on an average price of $7.50, 4 times a week, 50 weeks a year, with a missed investment return of 10% = $22,871
  • Bought a new car when I was making less than $10/hour. I already had a reliable older car. Total foolish loss, approximately $8000.
  • Bought a $700 dog when I was making less than $20,000 a year. It was a big dog, too, which means big food bills. I love dogs, but a pound-dog would have been just as loving. Total loss: $600, not counting food.
  • 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.
  • Was addicted to gadgets. I used to spend several thousand dollars a year on what I now realize were throwaway gadgets, like bleeding edge PDAs which were outmoded or abandoned in a year.
  • Cashed in my 401K to meet a short-term cash-flow problem. Loss, approx $42,000 present-day value including tax penalties.
  • Paid much of the expenses for a semi-ex-girlfriend to fly to Bali with me, because I was afraid to go by myself. Going by myself would have been more fun, and by the end of the trip the girlfriend and I were thoroughly through with each other. Loss, $1,500 + one relationship.
  • “Rode the horse until it dropped” at a startup company, weathering a forced pay-cut of 30%, convincing myself that it would all pay off. Instead the investors/owners disrespected my sacrifice, assuming I couldn’t find a better job. Company died anyway. Total loss, approx $40,000.
  • Left “golden handcuffs” in the form of 75,000 $20 stock options at Dell to work for the startup, rationalizing that the options were “under water” and unlikely to recover. Total profit, had I remained and exercised those options today: $487,500.
  • Sold my last house for $100,000 less than the next buyer flipped it for. Ouch. I thought I was so lucky that I listed, sold and closed in 10 days. Nope. My $50,000 profit paled in comparison to the new buyer’s windfall.

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6 comments to Scary financial mistakes

  • hehe…those are great! Don’t feel too bad, most of us have made similar mistakes as well. It’s what you learn from those mistakes that ultimately counts in the end.

  • Oh wow, until I read this I had totally forgotten how much money I was spending on PDA gadgetry for a while… I sold a lot of the stuff on Ebay but I’m still sure I wasted a lot of money just to play with new toys. I’m pretty much over it now, but I’m sure one of these days there will be something new I want! And for what it’s worth, I do get a ton of use out of the PDA I have now.

    Your lost $487k from Dell is a doozy!

  • Madame X, Yup, that was a big number. I’d actually avoided calculating it for quite a while.

    You notice that I also didn’t total the numbers on the list. That would be too depressing, even if a ball-park is easy to put together, the specific number would be much more weighty.

    That said, I actually spend very little time regretting choices. I’m very much a “don’t cry over spilled milk” kind of guy, this was just for fun and to join the fun of the reverse carnival.

  • Holy huge mistake Batman! That’s some list you have there. Well, it’s all in the past now. You seem to have made some nice strides since then. Keep up the good work!

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