OK, 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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