What's your biggest financial mistake ?

[joeExpat]

Sometimes it's cheaper to learn from others mistakes instead of your own.

What's your biggest financial mistake (property/stocks/whatever) & how did you deal with it ?

Mine was being overweight in European bank shares (mostly British and Swiss) from 2000 - 2008, for the "safe dividends" . Most of them dropped 80% or went bankrupt, the only relative survivors were HSBC(UK) & Santander(Spain). Anyway I only hold a couple now (HSBC, CS), generally avoid bank stocks, and am more active hedging any financial position these days.

 

[BayView]

Gave $30k of stock to a "friend" who was starting up his own Proshop business at a Golf Club.

Had no credit and couldn't get supply from golf companies to fill the showroom.

He was going to pay it off in installments of $1k per month....

Did a runner owning $15k to me and declared bankruptcy soon after. Never saw a cent of the $15k.

Second one; our very first IP was a brand new townhouse for $405k, and was supposed to get $450 per week rent.

Bought when we had lots of equity but not a lot of income.

Couldn't get a renter for almost 3 months and ended up having to rent it for $350 per week.

Neg cashflow was too hard and sold it 18 months later for $455k.

Combo of neg cashflow and all associated buying and selling costs resulted in even money experience.

 

[jrc77]

Not finding this website ten years ago . Probably has cost me 5 years of financial freedom!

Also not knowing the tax differences between offset and redraw when paying down my first PPOR. A few years later completely paid off and then wanted to upgrade to a new PPOR and keep original as IP. Whoops. Cost quite a bit to fix up.

Regards,

Jason

 

[danel]

1.Selling a 3 bed unit in Bondi Junction, would have been $400000 more, about 11 years ago.

2.Renting a shop and being stuck in a lease

3.please see number 2

 

[lizzie]

Buying $30k worth of shares in 2008 ... now worth less than $5k

Getting caught up in the buying frenzy of 2004 for CG and ignoring cashflow - doing a knockdown/rebuild at the top of the market - market crashed - having to sell rebuild for $200k less than costs - sold all IP's in a panic to liquidate (even the positive cashflow ones) ... actually that was 3 mistakes all rolled up into one short period.

Listening to, and following, others' "path to wealth" instead of creating my own.

 

[powderfingers]

Running a music festival which needed 2000 attending to break even,
770 attended, lost over $70 000 in one day.

Then bought shares which are down 50%

Now back to real estate where I should've stayed and was doing well at.

 

[pieman]

1. Selling a house in Albert park to buy several flats in st kilda. Worked out ok but much prefer the growth I'd triple a house.
2. Spending 50k on renos of a ppor that I purchased as a development site and was always going to be a multi unit site

 

[geoffw]

My biggest financial mistakes were getting married and having children.

My biggest rewards in life were gettin married and having children.

 

[mumbai]

Where's the like button!!!

 

[oracle]

Buying $30k worth of shares in 2008 ... now worth less than $5k

+1

Invested $20K before the GFC. Invested another $10K after the GFC when the market recovered significantly. So total $30K invested worth only about $15K now. Just waiting for it to go above $20K and I will just pull out, this is all in a managed fund.

The experience taught me it might not be a good idea to completely rely on professionals. So I started taking things into my own hands and started investing directly into the sharemarket. The returns are so much better once I took matters into my own hands.

Cheers,
Oracle.

 

[The Y-man]

Where's the like button!!!

Use the picture of the balance/scale at the top right hand othe post you like.

The Y-man

 

[BMW]

Buying a new car when the old one was perfectly fine.

 

[wobbycarly]

1. Buying on margin, writing covered calls, and then doing an ostrich in 2007/2008 - "It'll come back, I'm not going to sell into this short term panic".

Managed to turn the original $35k stake into $120k, and that then into about $12k.

2. Buying a business without proper due diligence - not on the business, on the distributor I was buying from! Still paying that one off, with the garage still half-full of semi-useless stock.

3. Not starting earlier.

 

[devank]

1. Similar to Geoff. Having children is the biggest financial mistakes and the biggest rewards in life!

2. Spent too long at the uni.

Funny thing is I'm repeating both mistakes knowingly

 

[The Y-man]

Biggest financial mistake? - probably the 2 cars I spent a lot of money on driving them at rally cross and circuit days.

But then, nothing like coming up to turn 1 full pelt down the main straight at Phillip Island, feathering the throttle, clipping the apex and into that huge off camber Southern Loop....

The Y-man

 

[flyingace]

Macquarie Fusion Fund

 

[Sunfish]

I can think of two: Not trying harder to get one house financed and not thinking harder about another.

 

[HotRod]

Not the biggest but the one that hurts the most.

Inherited $2000 from my grandfather in 1984 (when I was 17 going on 18) and had it invested in Geneva Finance. Knew nothing about risk v reward and it was "earning" 18%.

Was due to mature in two months time, when I saw on the news that the company had gone belly up. Was quite upset.

Ended up selling the debt to a company for a pittance and I bought a whisky decanter that I have owned ever since. Brings nothing but good memories of my grandfather.

Funny that.

 

[DEC]

Missing out on this
No actually money lost but the future earning potential would be great

REDUCED TO $515,000
Residential Land
Under Contract

LOT 100 ZEUS ST
Mortgagee exercising power of sale. Approx 11.37ha's (28 acres), current approvals for a 9 lot subdivision (STCA) forming just a portion of the total area. North facing aspect views of the ocean, islands & Farnborough Beach, Corio, Byfield and beyond...
Balance area of some approx 20 plus acres, provides the chance to build a dream home in this extremely private position. Or, maybe you would prefer to land bank the balance with a view to future subdivision, STCA.
http://www.realestate.com.au/property-residential+land-qld-barlows+hill-200316031

 

[Blacky]

Wow - great thread.
Here I was thinking that I was the only one who screwed up and lost money on varies attempts of wealth creation. Its good to know Im not alone.

For me
1) not buying a property I looked at for $205k cos it was the asking price and they wouldn't budge. Now worth about $600k.
2) instead I bought a vacant block with the view to develop for $190k, now worth about $150k and not generating any income.
3) Ignoring income and focusing purely on CG.
4) Investing with a friend without putting enough effort into managing the project.
5) Macquarie fusion fund...
6) Moving from investor to developer too soon.

Hopefully thats all...

Cheers