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GOLD! What Are the Dumbest Financial Decisions You Have Ever Made?

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monfii

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I will start.

1. I sank 80% of my net worth into stocks in May 2019, and sold when they bottomed in March 2020, 2 or 3 days before the Fed rolled out QE. Then I bought options with the remaining money I had left, and lost everything.
Lesson: read about the financial products you are buying, about the psychology of investing, and learn how the economy works, the relationship between central banks, governments, stock markets, and the value of currencies. Don't get financial advice from Reddit.
Ultimately, losing all of that money taught me a bunch. I was happy to make the mistake at 24 as I will not make it again.

2. I bought a bunch of stocks and other assets (BTC, Tesla, Fiverr, Xiaomi...) between 2017-2019 when they were cheap and sold them after 2-3 months every time because "tHeY wErE gOiNg NoWhErE".
Lesson: same as above + be patient and don't invest rent money + contrarian investing works (if people talk about it, it's already too late. Look for what no one speaks about).

3. I didn't work during the first 3 years of my bachelor's because I had to learn a foreign language and go drop resumes, which I was both too scared and lazy to do. I did get a job eventually, as a waiter, and was fired after two weeks. I didn't pursue further.
Lesson: you only get out of something as much as you are willing to invest + not earning money kills self-esteem.

4. I bought around a dozen of plane tickets without checking the dates properly and had to pay to change them/cancel and buy new ones.
Lesson: check better and focus.

5. I negotiated my salary...down. I felt the rate I was earning was too high and put too much pressure on me to deliver quality I wasn't sure I could deliver. I negotiated my salary from 11 euros/hour to 9 euros/hour. I was 17.
Not to brag, but as it turned out, I ended up being the best student the manager ever had in 20 years and remains the only one he ever gave a bonus to (20 euros).
Lesson: you grow when you are under pressure and required to get out of your comfort zone and do something you have never done. Making mistakes is ok even when you get paid. Don't solicit salary based on your assurance, but based on what the market is willing to pay you and the size of the problem you solve.

6. I bought a bunch of stuff under an emotional state (Gary Halbert, I think, talks about not making decisions when you are angry, hungry, lonely, or sad) that I ultimately regretted buying. One of them was a ski-trip for 500 euros that I managed to resell to someone else eventually, but what a hassle has it been.
Lesson: don't buy a bunch of stuff in an emotional state, and make your financial decisions in the morning, not at 1AM.

7. @Bekit's story made me think that I also did the same with bikes. I bought random bikes thinking I'd flip them, while I had no bike repair training lol. I ended up selling them after 2 years or so, for the same price I had bought them at.
Lesson: learn how flipping works before doing it.


I certainly made more. I'll add them as I go.
 

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Kasimir

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Oh wow, so I don't have that many stories. But I also did some stupid investing around March/April 2020. I could cover all my loses with my Bitcoin gains but still I was just stupid and naive. And traded with too many emotions.
Lesion: Emotions are bad! :D Okay maybe not :), but just do enough research before doing something that you're missing experience in.
 

Bekit

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I was at a yard sale back in 2015 and they happened to have a car for sale. It was a really clean Toyota Camry for $3,000. I forget the exact year and mileage, but it was something like a 1999 with under 100,000 miles. I was like "OH WOW! That's an AMAZING DEAL! I'm going to flip this car and sell it for $4,500!"

I didn't have a clue about how to flip cars.
I didn't have a mechanic look at it.
I don't personally have ANY knowledge about how to evaluate a car.
I didn't even do any online research on vehicles of a similar make, model, year, and mileage to see what the "going rate" was.
All I did was drive the car around the block.

I went to the bank and withdrew $3,000 and handed it to the people and they signed the title over to me. Woo hoo! This was going to be amazing!

The next day, I took some beautiful photos of the car and posted the ad on craigslist.

The day after that, the driver's side window rolled down and wouldn't roll back up. Fortunately, I had a garage where I could keep the car when it rained. Fixing the window cost like $150.

There was also a problem where the car made a sort of thumping sound at higher speeds. Someone told me that the tires had flat spots on them from where the car was sitting so long. Hmmmm....

I showed the car to a few people and they all brought a mechanic with them to check it out. (I started thinking, Oh. It seems like people always do this when they buy cars. Maybe I should've. )

People would ask me hard questions like "How long have you owned it" and "Why are you selling it" and I ended up looking super sketchy because I didn't want to admit that I had bought it solely to flip it. But I had obviously owned it for less than a month because it still had temporary tags on it.

Then, a few people reported the craigslist ad as a scam and my ad got taken down. I didn't understand why this had happened, but now I didn't have any more leads to look at the car.

I ended up selling the car to the last guy who looked at it. He offered me $2800 and I took it. By that time, it was a relief to just have it gone.

So that was a failure. I chalked it up to a $350 lesson in why you should at least do a little bit of research and know what you're doing before you go and try to do something like flip a car. And as a girl who is mechanically clueless, I concluded, "Why bother? I'll just focus on making money in areas that I understand." LOL
 

thechosen1

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Probably when I ordered 200 units of a product I had a "hunch" would sell well.
I've sold about 20 of them, but it's been 2 years. The rest are in my parents' garage ...
 

Ocean Man

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Probably not cashing out on GME before the restriction of buying it. Could've sold for around $120k from initial investment of $20k. Back in Feb or Jan I believe? The first largest jump around $3XX.
 

thechosen1

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Probably not cashing out on GME before the restriction of buying it. Could've sold for around $120k from initial investment of $20k. Back in Feb or Jan I believe? The first largest jump around $3XX.
This is so sad but I encouraged my dad to buy GME like 2 years ago, it absolutely took a nosedive and stayed there for 2 years, then I taught him about covered calls, he sold one on it, got assigned, and it literally mooned the next week lolol

I have stopped giving investment advice. Only do my own. Truth be told, the CC was a good move and he got out of a bad stock for a good price. Nobody knows the future (or what Reddit will do next)
 

MJ DeMarco

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Oh boy, I have a good story -- one that happened quite recently.

I'm still in the middle of verifying it was, in fact, a dumb decision.

Will share next week...
 

James Klymus

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1. Buying 3 bitcoin in 2015ish for around $3-400 a piece. I would have had an extra $180,000 in the bank today. Then selling at a loss a few months later, because i needed a downpayment for a car. Which brings me to...

2. Buying a new car while working at a restaurant and living with my parents. Terrible purchase that set me back years financially. I was more excited to buy the used toyota that replaced it, than I was to buy the new car itself.
 

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Matt Sun

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I bought btc in 2017 with my parents money, Like $6300 that went to $8600 and then evaporated to like 1800$... I didn't sell tought and now that same crypto is worth like $15500 . I havent sold yet but definately don't want to be the one holding the bag again.

mm also, studying literature in college lol.
 

Private Witt

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When I first heard of this magical coin that would make it easier to deposit to play poker in 2011. Remember buying my first BTC when under 5 bucks and started to poker on Seals with Clubs. Quite a few $200 to $500 dollar pots were played, never would imagine those 100 coin pots would be worth north of 5 million, but never thought twice it was an investment those early days, just an easy way to play some poker.
 

WJK

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I will start.

1. I sank 80% of my net worth into stocks in May 2019, and sold when they bottomed in March 2020, 2 or 3 days before the Fed rolled out QE. Then I bought options with the remaining money I had left, and lost everything.
Lesson: read about the financial products you are buying, about the psychology of investing, and learn how the economy works, the relationship between central banks, governments, stock markets, and the value of currencies. Don't get financial advice from Reddit.
Ultimately, losing all of that money taught me a bunch. I was happy to make the mistake at 24 as I will not make it again.

2. I bought a bunch of stocks and other assets (BTC, Tesla, Fiverr, Xiaomi...) between 2017-2019 when they were cheap and sold them after 2-3 months every time because "tHeY wErE gOiNg NoWhErE".
Lesson: same as above + be patient and don't invest rent money + contrarian investing works (if people talk about it, it's already too late. Look for what no one speaks about).

3. I didn't work during the first 3 years of my bachelor's because I had to learn a foreign language and go drop resumes, which I was both too scared and lazy to do. I did get a job eventually, as a waiter, and was fired after two weeks. I didn't pursue further.
Lesson: you only get out of something as much as you are willing to invest + not earning money kills self-esteem.

4. I bought around a dozen of plane tickets without checking the dates properly and had to pay to change them/cancel and buy new ones.
Lesson: check better and focus.

5. I negotiated my salary...down. I felt the rate I was earning was too high and put too much pressure on me to deliver quality I wasn't sure I could deliver. I negotiated my salary from 11 euros/hour to 9 euros/hour. I was 17.
Not to brag, but as it turned out, I ended up being the best student the manager ever had in 20 years and remains the only one he ever gave a bonus to (20 euros).
Lesson: you grow when you are under pressure and required to get out of your comfort zone and do something you have never done. Making mistakes is ok even when you get paid. Don't solicit salary based on your assurance, but based on what the market is willing to pay you and the size of the problem you solve.

6. I bought a bunch of stuff under an emotional state (Gary Halbert, I think, talks about not making decisions when you are angry, hungry, lonely, or sad) that I ultimately regretted buying. One of them was a ski-trip for 500 euros that I managed to resell to someone else eventually, but what a hassle has it been.
Lesson: don't buy a bunch of stuff in an emotional state, and make your financial decisions in the morning, not at 1AM.

7. @Bekit story made me think I also did the same with bikes. I bought random bikes thinking I'd flip them, while I had no bike repair training lol. I ended up selling them after 2 years or so, for the same price I had bought them at.
Lesson: learn how flipping works before doing it.


I certainly made more. I'll add them as I go.
I've tried a lot of things that have flat failed. I've learned from every one of them. I make sure that the losses are a small percentage of my investments. I only use money that I can afford to write off. And they must have huge upside potential in order to even give them a try.

I've also done a lot of things on a whim. When I was in my early 40's, I got a wild hair and I went to law school at night and on the weekends. We were in the middle of a horrible recession that had started around 1990. I was working at my career all day and going to school all night. By the end of the first year, I figured out that I did NOT want to be an attorney. But, I was there and holding my own. So I finished and got my J.D. By the end of law school, I had morphed my RE career (appraiser, broker and investor) into being an expert witness and doing litigation support. Yes, going to law school was expensive. But, I ended up making more per hour than my attorneys that hired me.

I guess I'm telling you that even bad decisions can be made right sometimes. If nothing else, you learn from them.
 

Kelvin Fernandez

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When I first heard of this magical coin that would make it easier to deposit to play poker in 2011. Remember buying my first BTC when under 5 bucks and started to poker on Seals with Clubs. Quite a few $200 to $500 dollar pots were played, never would imagine those 100 coin pots would be worth north of 5 million, but never thought twice it was an investment those early days, just an easy way to play some poker.
I did the same. In 2009 I had just moved to Texas and was too depressed to go to school. I remember surfing the web all day looking for ways to make money online. In one of those blogs there was mining bitcoin on the list. So I downloaded the entire bitcoin blockchain on my cheap walmart laptop and started mining it on my laptop. I was making 1 bitcoin a week mining. But I had to keep the laptop on all day and night.

I remember getting annoyed with it because they weren't worth much so I deleted the wallet from my computer. Those few bitcoins that I mined in '09 would've been worth $100k today. I don't regret it because you just didn't know at the time what exactly Bitcoin was and the potential it had. Just like the guy that spent 2000 bitcoins on a large pizza.
 
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MrTrash757

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Worst? Lettimg an ex have free reign with credit cards and bank accounts, to the point where I had to file Chapter 7. I regret it.

One recently that had been a good leason and surprisingly turned out ok - over paying for a Shopify store.

Will being patient with my next biz acquisition be the next mistake? I sure hope not.
 

monfii

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Martin.G

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Probably buy a car. It is money that I could use in my business. But also, at that time, I didn't have one.
 

Mike Stoian

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Does being broke count? I didn't even have any money to lose most of my life xD
 

monfii

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Does being broke count? I didn't even have any money to lose most of my life xD
I don't know if I am allowed to laugh, but it is kinda funny, no harm intended : )

I counted one of the mistakes as not having a job when I should have gotten one, so...you may explain why you were broke, and the mistake you made by not doing something, which let you remain broke : )
 

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Brrr

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Two business ones:

1. I was buying a custom gelato cart for 5k euros to operate as a pop-up at this high-end venue. I didn't think it was worth spending 60euros to fly out and check it at any point during the build. When it arrived I quickly realised they had used terrible components that made it barely functional but drastically reduced the quality of the product. It also arrived 6 weeks late. Embarrassing for me and the brand although it looked the part at least.

Managed to barely recoup the money in the last couple of months in the season, but it's going to need replacing or improving already. Lots of lessons learnt on that one:
  • Know what you are buying
  • If you do not know, check with people that do know
  • Do not trust people if it is the first time you are working with them
  • Factor in some money wastage as "insurance" on your investment

2. Registering my business for VAT (sales tax) when starting the business when I wasn't actually legally required to. Basically I have been paying 20% of my revenue to the government for no reason for almost 3 years.

This was a big mistake, done for the right reasons. I didn't have enough money to start my business and was reliant on claiming back some of the costs of the machinery in order to do so, which I could only do by registering.

Lessons:
  • Have a good accountant
  • Have contingency money for things going over so you aren't making desperate decisions

Lots of other stupid small personal financial decisions involving buying stuff you don't need, spaffing money on nights out and losing and breaking things. I'm much better in that regard now.
 
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JScott

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Not dumb, because it was the right decision at the time, but...

In 2006, my friend and I both got job offers at Facebook. I would have basically been his boss.

He took the job. I took a different job.

Six years later, he retired with a little over $50M.

I didn't make $50M at the job I took... :rofl:
 
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JunkBoxJoey_JBJ

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Going back a ways but it sticks out as totally DUMB. Was going to try and do credit card processing sales at one time... bought a $500 watch to "look great and feel great" from a jewelry store I wanted to '"close" as their payment processor. "How could they not use me after this purchase". Riiiggghhhttt.

Sold the watch for $200 and never closed the deal. Had zero clue about a lot of things then... Erhh still? Hahahaha... this is awesome.
 

Kelvin Fernandez

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Not dumb, because it was the right decision at the time, but...

In 2006, my friend and I both got job offers at Facebook. I would have basically been his boss.

He took the job. I took a different job.

Six years later, he retired with a little over $50M.

I didn't make $50M at the job I took... :rofl:
He got $50M working for facebook? Did they give him stocks?
 

plutownium

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The worst financial mistake I made was deciding to become a music producer at 22. It was a waste of 6 years of my life.

It might have been okay if I hadn't used university & working on music as an excuse to not have a full time job.
 

biophase

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Hmmm... this thread forced me to try to remember a lot of stuff that I’ve forgotten.

Invested $5k in a mall franchise that sold fake celebrity jewelry, wish I could remember it’s name.

Invested $20k in what ended up to be a real estate ponzi scheme. I got lucky because I withdrew my money 2 months before it imploded. Google Radical Bunny.

Invested money into 2 residential lots in St. George Utah. Eventually sold them but lost around $30k.

Bought new construction home for $340k, when it was completed it was worth $450k but builder had a no sale clause for one year and I also didn’t want to pay the taxes so I hoped to keep it 2 years. Ended up getting foreclosed on.
 

Timmy C

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Hmmm.

My most significant loss would have to be about four years ago.

I put down $40,000 on a block of land that I gave to a developer. I didn't know it at the time, but you could give them as little as $3000, and they would secure the land for you.

About six months later, when I went through a relationship break up, I lost it all as I couldn't afford to build a home on one income alone.

The developer didn't refund anything as it was written in the contract that they didn't have to.

Other than that, I haven't had any big losses.

Touch wood.
 

JScott

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He got $50M working for facebook? Did they give him stocks?

Yes, employees receive stock options. Because he started relatively early at the company (long before they went public), he got a lot of options at a very low strike price. When they went public, his options were worth a lot of money.
 

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