What's your biggest financial mistake ?

[nhg]

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.

1st was a loan to a 'friend' who I had known my entire life but wasn't close to.

2nd was a business deal.

I have no hold-ups doing business with a friend. I am aware every investment has a risk, and therefore don't take it personally. It's when I lend money (not as an investment) or the person trys to do the dogey, that's when I come down hard.

I must admit I am significantly more cautious, though I have a handful of friends (not my best friends who I would have to think hard about lending money too as they struggle to understand it), but my mates who have gone on their own investment journey, understand the risks, and have great work ethic.

Amusingly as I was writing this response, my 2nd dot point regarding the granny flat, just got a call from the owner of the buyers agent to sort out the issue

 

[HomePage]

Back in 1990, I sold my LX V8 Torana (those were the days ) for about $5K and deposited my winnings into a term deposit with the Pyramid Building Society at at whopping 18% interest rate .... only to see on the news the very next night that Pyramid had gone under .

Fortunately, I took the Vic government money back eventually guarantee and managed to get it all back, minus interest, over a couple of years. Those who chose to wait for the Receiver to divvy up the residual spoils ended up with only cents in the dollar.

 

[ozmale42]

Back in 1990, I sold my LX V8 Torana (those were the days ) for about $5K and deposited my winnings into a term deposit with the Pyramid Building Society at at whopping 18% interest rate .... only to see on the news the very next night that Pyramid had gone under .

Fortunately, I took the Vic government money back eventually guarantee and managed to get it all back, minus interest, over a couple of years. Those who chose to wait for the Receiver to divvy up the residual spoils ended up with only cents in the dollar.

Actually your biggest mistake was selling the V8 Torana...Nowadays in good Nick and original that would be worth in the 10's of thousands, more if an SL/R or A9X.

I did the same though, sold an XB GT coupe in 1986 for 5 grand....now worth around $60k in top nick, oh well

 

[HomePage]

Actually your biggest mistake was selling the V8 Torana...Nowadays in good Nick and original that would be worth in the 10's of thousands, more if an SL/R or A9X.

I did the same though, sold an XB GT coupe in 1986 for 5 grand....now worth around $60k in top nick, oh well

It was an SLR but only a 4.2 auto with a rusty boot , so nothing special. And I reckon I saved 10s of thousands in fuel by getting rid of it. But yeah, some of those old hoon cars have become collector items and are worth a mint.

 

[jim1964]

Reminds me of my Monaro & Sandman collection.At my height when i had a big shed there was the HX Sandman ute(My favourite),HQ,HJ & a HZ Monaro.Wanted to do full time weddings with them.A Sandman van would have been a good one for this All gone now...........

 

[tvadera]

1> Buying IP at height of the boom, hasnt gone up a cent, has gone backwards though
2> Buying managed funds, 3rd year running havent gone up in value, price has gone backwards
3> Missed out on buying an investment prop with my uncle , stuck with analysis paralysis, he bought it and doubled his money after 4 years, i was still stuck with analysis paralysis
4> Most of the shares bought has gone back in value, some companies have stopped trading

 

[china]

Money and friends/family do not mix. Mixing them means losing both.

 

[Deltaberry]

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.

If you decide to lend money to your family, don't expect it to be repaid.

Let's see:

- We lent $3k to my niece so she can eat out more often (probably be repaid one day when she sells her houses);
- Lent $100k to my uncle (in fact he stole the money and when confronted said he was just borrowing it, haven't been repaid for over 10 years);
- Lent $50k to another uncle (never heard a word about it for 10 years);
- Gave/lent (fine line) $50-60k to another niece to study. Her parents (my cousins) used to call up and thank us profusely before we agreed to do this and after we paid the money, we never heard from them (now been 4 years)
- Had $20k "stolen" (was told it was put in a term deposit by the person who I entrusted the money with) and when confronted after the term deposit had supposedly expired and she "rolled over" the term deposit without asking me, she said it's now stuck in a Chongqing development and because of Bo Xilai's fall she doesn't know when we'll see it again

That said, I'd like to think if I ever needed to borrow a bucket load of money from someone, I'll have enough integrity/honour to repay it. If it meant selling everything I have to repay someone I'd probably do it. Maybe it just comes down to the individual.

 

[ugotadollar4me]

My worst thing was being assett rich and cash poor for to long, nothing was going right and it nearly broke me,
Got ripped on a business sale
Got screwed by several tenants
Nearly got screwed on a business deal with a mate ended up loosing several thousand instead of several million so thats alrite.
having to many properties with one bank and then they tried to squeeze the rock which gave me sleepless nights until I deleted them.
Over all the worst year of my life was 2012, things have now turned and I see a bright 2013.

 

[trinity168]

Mistakes:
1. We all wish we could have started earlier in the investment path, whether stocks and/or IPs.
2. Had been burned in a pyramid scheme. Lost a few hundred, circa 2000.
3. Put in 10K USD to a company that does forex, had it giving back 200/month, for about 2-3 years before the Director bolted. He is listed as wanted on the interpol. What hurts more is, I had my brother invest in it and, he lost his 10KUSD too. ( YR 2002-2005 ).
4. Bought small plot of land overseas ( around 2002 ), guaranteed to double in price.
5. Bought some stocks just pre-GFC. Lost about 7-10K.
6. Bad experience lending to an ex-BF, and an ex-colleague ( who did a sad story and I felt bad so I lent him some money ). Both took forever to repay.


Here's to all the lessons learned, and here's to 2013 to usher in blessings for all of us!

 

[jingo]

If you decide to lend money to your family, don't expect it to be repaid.

That said, I'd like to think if I ever needed to borrow a bucket load of money from someone, I'll have enough integrity/honour to repay it. If it meant selling everything I have to repay someone I'd probably do it. Maybe it just comes down to the individual.

Wow, Deltaberry,

You and your immediate family are obviously very generous. Do you still see these relatives who owe you money? I wonder how they can keep facing you under these circumstances? I'm like you, I'd pay it back as fast as I could.

Regards Jason.

 

[attrill]

Got divorced. Cost me a bundle, but so glad it's behind me. Bought an OTP unit in Perth at the height of the boomin 2008. If I sold now I would need to put in $80k to pay off the bank, so at the moment I am topping up the rent with $400 a month to keep it going.

Two other properties in Perth were bought in 99 and 03 so the whole thing is slightly positively geared.

Live and learn, live and learn

 

[Deltaberry]

Wow, Deltaberry,

You and your immediate family are obviously very generous. Do you still see these relatives who owe you money? I wonder how they can keep facing you under these circumstances? I'm like you, I'd pay it back as fast as I could.

Regards Jason.

Yea every time they need something they show up. Sometimes they talk about coming back to some of our businesses whenever their own ventures don't work out. As I oppose it vehemently, my father never lets it happen.

The one whose school fees we're paying for still lives in one of our places in the CBD, rent free of course. Asked her to help out on some tasks a few weeks back - she seemed pretty hesitant but did it any way.

 

[Hickson]

Yea every time they need something they show up.

The one whose school fees we're paying for still lives in one of our places in the CBD, rent free of course. Asked her to help out on some tasks a few weeks back - she seemed pretty hesitant but did it any way.

It doesn't take long to realise what such a good wicket you had, until its gone.

 

[sheriff]

My biggest mistake is gambling hardcore by playing the pokies in my early 20's. It all started by a workmate asking me to go to the local rsl and having a beer and a flutter and the addiction kicked in real hard and dropping all my pay with barely enough to pay the bills and mortgage. All this occured from 2005-2011 then i decided that i needed to turn my life around and drop all my gambling friends from my circle. I think all up in those 6 years i would of drop in excess of 100k.

 

[lizzie]

Yea every time they need something they show up.

Actually - in terms of "life" - the biggest financial mistake was lending hubby's daughter $10k to buy a car ... the issues involved in trying to get her to be responsible and pay the money back (at the terms she set) cost us any close relationship.

 

[Peter 14.7]

Actually - in terms of "life" - the biggest financial mistake was lending hubby's daughter $10k to buy a car ... the issues involved in trying to get her to be responsible and pay the money back (at the terms she set) cost us any close relationship.

Ditto for $10k to sister. In the end we had to use power of attorney to get this and $7k back for mother. She simply didnt care to pay.

Note: 7 year old daughter did the same when wife foolishly bought her an item with "her money" on credit. DD then stopped doing chores and wife was stuck

Peter 14.&

 

[8fold]

Hmm great topic, I have nothing on some of the previous posts, but went into business with family in a niche mining operation in SA. Huge upside but also huge downside (which we managed to realise). Went in with multiple properties, cars etc, came out with clothes but managed to norrowly avoid going bankrupt (had to borrow an old car off my parents).

I guess we also came out with lifelong friends from SA we still keep in contact with and bucketloads of great memories. What probably hurt the most was our small children did without for a few years...

 

[redwing]

Update re: Great Southern

Funds Fallout News Clip

And

After the wipeout, Great Southern investors stand to lose homes

THOUSANDS of people who put $1.8 billion into in a failed blue gum, grape vine and olive tree scheme and who face being paid a paltry $16 at best for every $10,000 they invested are also threatened with the double jeopardy of bankruptcy as banks are given the green light to foreclose on the estimated $398 million in outstanding loans used to finance plantations.

 

[tcocaro]

Too many to list but if I had to just say one it would be not planning out a strategy to the very end.

To give you some context most of my larger investments have been in property developments over extended time horizons.

My single greatest mistake was deciding early on to split the planning process in two using site acquisition and subsequent approval of plans as the mid point major mile-stone.

I would layout plans inintimate detail to this point with the belief at this stage I would flesh out the second part of the equation i.e. build and sell.

This has proven to be an immensely costly and ill fated concept and strategy.

I would say 90% of the issues I faced stem from this simply decision to divide the planning process in two.

Never, ever again will I do this.

If anyone can heed my warning make sure all plans have a start middle and end enshrined in reality and each part as detailed no matter how long the time-horizon.

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.