What's your biggest financial mistake ?

[danel]

Care to elaborate?

Ist disaster, signed a 10 year lease on a kiosk below Myers in Pitt st mall, central plaza, centre wasn't opened, it was off the plan, turned out that the foot traffic from qvb to Pitt st mall aw
Led behind our kiosk, we were doombed from day one, terrible job keeping it afloat then sold it, thank g d!!!

2nd disaster, small shop built in Lee st train station, near broadway, huge foot traffic, most people walked straight past our shop, couldn't stop the flow from the train to people going to uni, work etc.had to sit it out for 3 years!!!!

 

[MsAli]

1. Losing 2k on an OTP property (but best lesson ever) in year 2009 - The 24k OTP grant was too impressive for a FHB!!
2. Handing over $500 to a private car seller but never saw that money again
3. 3k on an online subscription service that didn't give many results. Should have more calculative about the decision.
4. Buying 24 shares for an investment bank for $58 a piece on my first income at 22 after university in year 2008 and watching those shares go down during the GFC to never recover and hovering around $31 a piece! It was my first and last share purchase!
5. Not learning about various affordable asset classes before I could buy a property during the first year of my employment 2008 (some have quadrupled in value!). But glad I have taken action NOW.
6. Buying a car on finance with sis...that too in the first year out of university. The car ended up costing $20k+ instead of $16k
7. Listening to incompetent brokers outside who were trying to sell OTP apartments; applied for multiple loans to multiple banks, which caused multiple hits on the credit file. Eventually I did go to the bank directly and the lender asked to "please explain"! Obviously I didn't know the repercussions and the brokers didn't tell me!
8. Spending 20k between me and sis end of first year of work in year 2008 to go overseas in peak to attend wedding....could have invested much sooner!
9. Earning tax free money during 2nd year of uni at 19 years of age, on a scholarship. Saving 14k of the 28k earned, and then blowing it on a new laptop
10. Fixing my first home loan at 7.29% last year in August and then started the interest rate cuts!

Jeez, I guess I learned soon enough still. Each of the one above were great lessons although pricey....The key is learning from mistakes and I believe I'm getting better. I am heaps better at managing my money now.

I think there needs to be a thread about the best financial decisions people have made too....So we can all learn rather than just dwell on regrets!

 

[handyandy]

Outsourcing my financial plans to a well known Financial Planner to many on this forum.

Cost me 10 years of hard savings ... approx. $700K

MASSIVE, MASSIVE lessons learnt from the process. Main one been - DO NOT TRUST ANYONE ELSE TO MANAGE YOUR FINANCES !!!!

Lost to the same 'advice' but for different reason.

They never advised me and I pulled out all my earnings in the time in the fund. Certainly didn't indulge in the trees or olives or any other harebrained schemes to keep money in the fund.

None the less, lost all my earnings I received from the fund (by now taxed) via the GFC, this was over $3mil in the fund and another $1mil in straight shares.

Also lost assorted $100k's on other shares such as Great Southern, Rams and a few others.

Worse thing is that the capital losses are isolated from my property gains. So virtually all these losses are worse than useless for any capital gain offsets.

Cheers

 

[redwing]

Lost to the same 'advice' but for different reason.

They never advised me and I pulled out all my earnings in the time in the fund. Certainly didn't indulge in the trees or olives or any other harebrained schemes to keep money in the fund.

None the less, lost all my earnings I received from the fund (by now taxed) via the GFC, this was over $3mil in the fund and another $1mil in straight shares.

Also lost assorted $100k's on other shares such as Great Southern, Rams and a few others.

Worse thing is that the capital losses are isolated from my property gains.. So virtually all these losses are worse than useless for any capital gain offsets

Cheers

Why's that Handyandy

 

[joeExpat]

4. Buying 24 shares for an investment bank for $58 a piece on my first income at 22 after university in year 2008 and watching those shares go down during the GFC to never recover and hovering around $31 a piece! It was my first and last share purchase!

Well I made some related losses with larger numbers and declines (e.g UBS 60->10 CHF) but I wouldn't allow the experience to put you off shares forever. I think they are an integral part of an investment plan. These days my gross share investments exceed the property investment values, which I'm kind of moving away from with all the hassle, expenses and concentrated risk.

Lots of interesting responses in this thread, many related to bad share purchases or missed property opportunities. But i wonder if the next decade could be the reverse ?

 

[pinkboy]

1. Losing 2k on an OTP property (but best lesson ever) in year 2009 - The 24k OTP grant was too impressive for a FHB!!
2. Handing over $500 to a private car seller but never saw that money again
3. 3k on an online subscription service that didn't give many results. Should have more calculative about the decision.
4. Buying 24 shares for an investment bank for $58 a piece on my first income at 22 after university in year 2008 and watching those shares go down during the GFC to never recover and hovering around $31 a piece! It was my first and last share purchase!
5. Not learning about various affordable asset classes before I could buy a property during the first year of my employment 2008 (some have quadrupled in value!). But glad I have taken action NOW.
6. Buying a car on finance with sis...that too in the first year out of university. The car ended up costing $20k+ instead of $16k
7. Listening to incompetent brokers outside who were trying to sell OTP apartments; applied for multiple loans to multiple banks, which caused multiple hits on the credit file. Eventually I did go to the bank directly and the lender asked to "please explain"! Obviously I didn't know the repercussions and the brokers didn't tell me!
8. Spending 20k between me and sis end of first year of work in year 2008 to go overseas in peak to attend wedding....could have invested much sooner!
9. Earning tax free money during 2nd year of uni at 19 years of age, on a scholarship. Saving 14k of the 28k earned, and then blowing it on a new laptop
10. Fixing my first home loan at 7.29% last year in August and then started the interest rate cuts!

Jeez, I guess I learned soon enough still. Each of the one above were great lessons although pricey....The key is learning from mistakes and I believe I'm getting better. I am heaps better at managing my money now.

I think there needs to be a thread about the best financial decisions people have made too....So we can all learn rather than just dwell on regrets!

Honestly I think you are being a bit hard on yourself. Really, reading through those 10 points, how worse off are you really? In actual fact, turn it into a positive and how much more educated from those experiences are you now and what you know you need to change to make the desicions you make the right ones? We are all young, 'want' and not necessarily 'need' new cars and the like, are a little naive when looking at first investment 'opportunities' in shares, property etc.

Ask and old chestnut, we all make mistakes that provide lessons in all walks of life. Those who learn from their mistakes better themselves.

pinkboy

 

[Ace in the Hole]

Honestly I think you are being a bit hard on yourself. Really, reading through those 10 points, how worse off are you really? In actual fact, turn it into a positive and how much more educated from those experiences are you now and what you know you need to change to make the desicions you make the right ones? We are all young, 'want' and not necessarily 'need' new cars and the like, are a little naive when looking at first investment 'opportunities' in shares, property etc.

Ask and old chestnut, we all make mistakes that provide lessons in all walks of life. Those who learn from their mistakes better themselves.

pinkboy

I agree here.
MsAli, you can't win em all.
You're gonna get losses in between the wins.
Your losses don't seem to be crippling, and one small win will wipe them all out easy.
Experience costs money, everybody has to pay.

 

[MichaelW]

Hi Guys,

I've had a few, but the biggest mistake so far has been engaging my builder for my Mona Vale development. Never ever let perceived friendship cloud your commercial judgement. That builder has cost me in the order of $200K so far and I'll have to fight them through the tribunal now to recover what I can. Can you believe they've been "building" now for two years and still haven't completed.

Other ones include some GFC share losses, circa $150K. Also about the same in GSP wine grapes, yet to be finalised.

But life goes on. We're almost at the point where our certifier will give us an Occupation Certificate and we can get tenants into our Mona Vale development. That will turn cash flow around and get things moving forward again.

2012 has been a crap year. Bring on 2013.

Cheers,
Michael

 

[Ideo]

Honestly I think you are being a bit hard on yourself. Really, reading through those 10 points, how worse off are you really? In actual fact, turn it into a positive and how much more educated from those experiences are you now and what you know you need to change to make the desicions you make the right ones? We are all young, 'want' and not necessarily 'need' new cars and the like, are a little naive when looking at first investment 'opportunities' in shares, property etc.

Ask and old chestnut, we all make mistakes that provide lessons in all walks of life. Those who learn from their mistakes better themselves.

pinkboy

I agree.

Travelling overseas for a wedding? Hardly a bad mistake. More of something that is worth doing.

There is more to life than the size of your asset portfolio.

 

[virgo]

Biggest Financial Mistake

Hiya

My biggest financial mistake is having THREE children instead of TWO!

Well, you did say "FINANCIAL" mistake, didn't you?


From: an ex-ACCOUNTANT

 

[devank]

MsAli... I'm sure you gained something out of everything you mentioned.

4. Buying 24 shares for an investment bank for $58 a piece on my first income at 22 after university in year 2008 and watching those shares go down during the GFC to never recover and hovering around $31 a piece! It was my first and last share purchase!

This is not really your fault.

6. Buying a car on finance with sis...that too in the first year out of university. The car ended up costing $20k+ instead of $16k

Car loan is bad.. but still you may have used that 16K for some other purpose.

8. Spending 20k between me and sis end of first year of work in year 2008 to go overseas in peak to attend wedding....could have invested much sooner!

Any overseas trip would cost about that much. Think about the memories and fun you had.
We always try our best to go to overseas weddings. It is great fun! Especially when you have friends coming from Aus!

9. Earning tax free money during 2nd year of uni at 19 years of age, on a scholarship. Saving 14k of the 28k earned, and then blowing it on a new laptop

I'm sure you would have make use it!

Hiya
My biggest financial mistake is having THREE children instead of TWO!
Well, you did say "FINANCIAL" mistake, didn't you?

Thanks for making feel bad Virgo. Knowingly we made that 'financial mistake'.

 

[DJBarnstar]

Experience costs money, everybody has to pay.

LOVE THIS! Can I use it?

haha

 

[MichaelW]

LOVE THIS! Can I use it?

haha

I've got something similar in my sig!

 

[nhg]

Biggest mistakes:

1. Lent $15k of my own cash to a ‘friend’, who tried to sneak away, received the money back with interest 2 months after due date, but the emotional stress and wedge it put between my family and I were beyond any monetary gains I’ll ever make.

Lesson Learnt: Everybody thinks this guy is a bit of a superstar. Still have friends asking if I can introduce him to them. Looks can be deceiving; can now catch a con artist out no troubles.

2. Purchased a property from a well known buyer’s agent who I thought was giving legitimate advice. Drainage and easement issues means granny flat will cost +$30k min more than budgeted.
Lesson Learnt: Always ALWAYS do your own DD even if your advisor seems trustworthy. I am incredibly anal about this now, and it has saved me LOTS of money since.

3. Hired a friend to build a granny flat for me at above property. Did a horrible job, had to fire him, realised loss was $8k. Opportunity loss. Don’t even want to think about it.
Lesson Learnt: Don’t hire friends. Although I am really good at separating relationships from business, this guy is a still a good friend, just a really crappy builder.

Have lost money in shares, though overall probably even. Never made huge amounts, though enough to pay for a few around the world trips. Will get back into it shortly. Money lost on smaller business ideas never made me flinch, business is business, there are always risks. It’s the money I lost when I trusted someone that hurt.

 

[Ace in the Hole]

Biggest mistakes:

1. Lent $15k of my own cash to a ‘friend’, who tried to sneak away, received the money back with interest 2 months after due date, but the emotional stress and wedge it put between my family and I were beyond any monetary gains I’ll ever make.

Lesson Learnt: Everybody thinks this guy is a bit of a superstar. Still have friends asking if I can introduce him to them. Looks can be deceiving; can now catch a con artist out no troubles.

2. Purchased a property from a well known buyer’s agent who I thought was giving legitimate advice. Drainage and easement issues means granny flat will cost +$30k min more than budgeted.
Lesson Learnt: Always ALWAYS do your own DD even if your advisor seems trustworthy. I am incredibly anal about this now, and it has saved me LOTS of money since.

3. Hired a friend to build a granny flat for me at above property. Did a horrible job, had to fire him, realised loss was $8k. Opportunity loss. Don’t even want to think about it.
Lesson Learnt: Don’t hire friends. Although I am really good at separating relationships from business, this guy is a still a good friend, just a really crappy builder.

Have lost money in shares, though overall probably even. Never made huge amounts, though enough to pay for a few around the world trips. Will get back into it shortly. Money lost on smaller business ideas never made me flinch, business is business, there are always risks. It’s the money I lost when I trusted someone that hurt.

Was number 3 after number 1, as dealing with "Friends" seems to be a recurring problem.
Same with Michaels development by a "friend" at the time.

Yet again confirms that Friends/Family just does not mix with Business/Investments/Finance....

It's just not worth it.

 

[lizzie]

Personally - rather than financially - this was also mine.

Lent $10k to stepdaughter - interest free - she paid back half then stopped paying or communicating (asides from asking for more money).

I was friendly and open in trying to get her to repay - then blew my top with some home truths - balance owing appeared in the bank account 2 days later so she did have it. Haven't spoken or seen her since.

Doesn't worry me to much as she was a prickly so 'n so anyhow - but I feel sorry for hubby as it's made his relationship more difficult. Not looking forward to the Christmas get together.

1. Lent $15k of my own cash to a ‘friend’, who tried to sneak away, received the money back with interest 2 months after due date, but the emotional stress and wedge it put between my family and I were beyond any monetary gains I’ll ever make.

 

[devank]

Yet again confirms that Friends/Family just does not mix with Business/Investments/Finance....

It's just not worth it.

To be honest it worked out well for in this sort of dealing. I helped few of my friends when they were desperate. I simply asked them to look at ANZ's interest rate at the end of month. They paid the interest on a monthly basis and also slowly paid off the initial loan.
What is the point in being a friend if we can't help each other?

 

[sanj]

To be honest it worked out well for in this sort of dealing. I helped few of my friends when they were desperate. I simply asked them to look at ANZ's interest rate at the end of month. I they the interest on a monthly basis and also slowly paid off the initial loan.
What is the point in being a friend if we can't help each other?

Absolutely. In the past I've borrowed from and lent to friends and family and currently do business with both groups. As long as ground rules are set and everyone is on the same wavelength I think it canm work very well

 

[Peter 14.7]

Have lost money in shares, though overall probably even. Never made huge amounts, though enough to pay for a few around the world trips. Will get back into it shortly. Money lost on smaller business ideas never made me flinch, business is business, there are always risks. It’s the money I lost when I trusted someone that hurt.

Yes, it does hurt being taken advantage by friends.

Twice been burnt but using friends for work and then getting screwed.

Also if you have business, dont trust staff to stay good.

Peter

 

[ozmale42]

Getting married and the subsequent divorce