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What Are the Dumbest Financial Decisions You Have Ever Made?

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Deleted78083

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By far and away the worst financial decision I ever made was relying on eBay as a selling platform. When I sold my auto repair and restoration business in 2004 I started selling vintage used car parts on eBay full time.

This was basically like printing money as everything I listed (it was auctions only in those days) got sold, usually on multiple bids, for top dollar. Keep in mind I had been in the vintage car business for 20 years at this point and was well versed on the value and target market for these items.

Fast forward a couple years and everything is going great, making excellent sales and very very profitable.
I decided I needed more inventory and I was able to buy a HUGE inventory (like a 30 year collection). This was a very expensive purchase and I borrowed the money for this.

I also had purchased over 100 vintage parts cars (on borrowed money) and had a small salvage yard to pull parts from.

I also added 2 people to the staff, including a person dedicated to making ebay listings and a dedicated packaging and shipping guy.

I was relying on eBay almost exclusively and this was a REALLY bad move. Only a couple months after I get this inventory eBay sales pretty much died. Also at pretty much the same time eBay made us take our phone number out of our listings and this greatly affected our sales. We went from the phone sales being 10 - 20 items per day to basically nothing.

I found out through the sellers forums and other blogs that eBay had changed their algorithm to basically hide small sellers favoring the big boys (Diamond Sellers). The combination of these 2 thing spelled disaster and I was forced to let everyone go and do everything myself as there just was not enough sales to have staff.

I am STILL paying for the huge loan I took out and figure this "adventure" cost me well in excess of 1.5M, including my lost time as I worked for basically free for years to just pay this loan.

I am just now starting to get back on my feet with another business but that eBay adventure was an absolute disaster financially.

The lesson is NEVER EVER give up control of your sales process (the commandment of control) to a 3rd party or you are just basically their employee and they can shut you down (fire you) on a whim.

I am now back to the business of restoring and repairing vintage musclecars and am SO GLAD to be done with eBay.
What a story, this could have been an entire thread by itself!!

I must say I am very "happy" with this thread and all that I am learning.

I thought it was the end of the world when I lost in the stock market, but then when we put things in perspective.....
 
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Deleted78083

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In doing research for a service provider to handle this project, I researched several firms -- the first one a joined I spent $1,400 on only to learn that it did not fit my needs at all -- it was more suitable for a local restaurant who wanted to message customer's about free drinks or discounted pizzas.

Luckily I was able to get a refund on it once I learned it would have cost me $65,000 a year to do what I wanted to do.
Who the hell would pay 65 000 a year to message people about free drinks and discounted pizza lmao
 

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By far and away the worst financial decision I ever made was relying on eBay as a selling platform. When I sold my auto repair and restoration business in 2004 I started selling vintage used car parts on eBay full time.

This was basically like printing money as everything I listed (it was auctions only in those days) got sold, usually on multiple bids, for top dollar. Keep in mind I had been in the vintage car business for 20 years at this point and was well versed on the value and target market for these items.

Fast forward a couple years and everything is going great, making excellent sales and very very profitable.
I decided I needed more inventory and I was able to buy a HUGE inventory (like a 30 year collection). This was a very expensive purchase and I borrowed the money for this.

I also had purchased over 100 vintage parts cars (on borrowed money) and had a small salvage yard to pull parts from.

I also added 2 people to the staff, including a person dedicated to making ebay listings and a dedicated packaging and shipping guy.

I was relying on eBay almost exclusively and this was a REALLY bad move. Only a couple months after I get this inventory eBay sales pretty much died. Also at pretty much the same time eBay made us take our phone number out of our listings and this greatly affected our sales. We went from the phone sales being 10 - 20 items per day to basically nothing.

I found out through the sellers forums and other blogs that eBay had changed their algorithm to basically hide small sellers favoring the big boys (Diamond Sellers). The combination of these 2 thing spelled disaster and I was forced to let everyone go and do everything myself as there just was not enough sales to have staff.

I am STILL paying for the huge loan I took out and figure this "adventure" cost me well in excess of 1.5M, including my lost time as I worked for basically free for years to just pay this loan.

I am just now starting to get back on my feet with another business but that eBay adventure was an absolute disaster financially.

The lesson is NEVER EVER give up control of your sales process (the commandment of control) to a 3rd party or you are just basically their employee and they can shut you down (fire you) on a whim.

I am now back to the business of restoring and repairing vintage musclecars and am SO GLAD to be done with eBay.
This would make another great thread like @monfii said.

I think the other important lesson here is something akin to "don't test the depth of a river with both feet."

The business was going phenomenally well, but maybe the huge 1.5M move was just a bit too much. If it is possible to do something like this in chunks, one step at a time, that's better.
 

WJK

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By far and away the worst financial decision I ever made was relying on eBay as a selling platform. When I sold my auto repair and restoration business in 2004 I started selling vintage used car parts on eBay full time.

This was basically like printing money as everything I listed (it was auctions only in those days) got sold, usually on multiple bids, for top dollar. Keep in mind I had been in the vintage car business for 20 years at this point and was well versed on the value and target market for these items.

Fast forward a couple years and everything is going great, making excellent sales and very very profitable.
I decided I needed more inventory and I was able to buy a HUGE inventory (like a 30 year collection). This was a very expensive purchase and I borrowed the money for this.

I also had purchased over 100 vintage parts cars (on borrowed money) and had a small salvage yard to pull parts from.

I also added 2 people to the staff, including a person dedicated to making ebay listings and a dedicated packaging and shipping guy.

I was relying on eBay almost exclusively and this was a REALLY bad move. Only a couple months after I get this inventory eBay sales pretty much died. Also at pretty much the same time eBay made us take our phone number out of our listings and this greatly affected our sales. We went from the phone sales being 10 - 20 items per day to basically nothing.

I found out through the sellers forums and other blogs that eBay had changed their algorithm to basically hide small sellers favoring the big boys (Diamond Sellers). The combination of these 2 thing spelled disaster and I was forced to let everyone go and do everything myself as there just was not enough sales to have staff.

I am STILL paying for the huge loan I took out and figure this "adventure" cost me well in excess of 1.5M, including my lost time as I worked for basically free for years to just pay this loan.

I am just now starting to get back on my feet with another business but that eBay adventure was an absolute disaster financially.

The lesson is NEVER EVER give up control of your sales process (the commandment of control) to a 3rd party or you are just basically their employee and they can shut you down (fire you) on a whim.

I am now back to the business of restoring and repairing vintage musclecars and am SO GLAD to be done with eBay.
I had a similar experience on a smaller scale -- I had a side gig where I made jewelry for etsy and my little office area with the espresso bar. When they went public, that whole source of sales on etsy died instantly. I sold off the materials this last year at a dead loss, and I quit doing any jewelry. I didn't need the side business, but it was fun for a hot minute. Again, it was a control issue.
(Oh, and the virus shut down the espresso business, so now I have a very comfortable office that has a nice, big espresso machine.)
 

steve schweitzer

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This would make another great thread like @monfii said.

I think the other important lesson here is something akin to "don't test the depth of a river with both feet."

The business was going phenomenally well, but maybe the huge 1.5M move was just a bit too much. If it is possible to do something like this in chunks, one step at a time, that's better.
Hello and thank you for the reply.

Just to clairfy, I did not take out a 1.5M loan. The loans for everything totaled a little over 500K and at that point I had been in business close to 3 years with great sales and over 60% margins so I was not just "testing the water".

The 1M additional I referred to was my lost time for close to 10 years of this disaster.

I could not just "walk away" from this as a stupidly pledged my home, property, tools and most other assets as collateral for this loan.

When I tried to get the bank to work with me they said pay the loan or loose your property. I pretty much had no choice except to just work constantly selling parts anywhere I could for whatever I could get out of them. I was also doing repairs on vintage cars to help out, although not devoting full time to this yet.

I finally was able to build up enough business in my classic musclecars restoration shop to completely stop with the parts business and devote full time to the shop.

Now I am restoring HIGH END musclecars and have a year long waiting list.
 

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Who the hell would pay 65 000 a year to message people about free drinks and discounted pizza lmao

The service is quite affordable if you have 1000 customers who are messaged a few times per month...

Not for 50,000 customers who might get messages 4X a week.
 

Ing

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I don’t like to admit that.
But in 2011 my 10 year old son was exited by a new thing called Bitcoin. I refused to see that legit, but as a father / son project I bought 5000 Bitcoins at ONE €.
In 2012 I sold them at a profit of 500%.

I d like to cry....
 

MrTrash757

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Well I avoided a pretty big mistake here in launching this service...


In doing research for a service provider to handle this project, I researched several firms -- the first one a joined I spent $1,400 on only to learn that it did not fit my needs at all -- it was more suitable for a local restaurant who wanted to message customer's about free drinks or discounted pizzas.

Luckily I was able to get a refund on it once I learned it would have cost me $65,000 a year to do what I wanted to do.

:jawdrop:
big oof on this one. You did dodge a bullet...
 

MJ DeMarco

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garyfritz

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When I was a baby engineer, 7 years out of college, I had racked up $100k in company stock. The market kept going higher and higher. This was the mid 80's, and the market had traded in a range for my entire adult life. The only way to make any money was to sell when it got too high, and buy in again when it dropped. So in 1986 I sold the whole thing and put the money into other ""investments,"" which pretty much all tanked. I was still scared to put the money back into the market because it was "too high." So I missed the entire 1400-to-10,000 runup in the DJIA, the biggest bull market in history. Finally I said "This is crazy, I'm missing out on all this profit," so I dumped all my money back into the market. In January of 2000. Just before the dot-com bubble popped.

Most of my other mistakes I can mostly blame on my ex-wife. Like buying a Mexican timeshare (couldn't talk her out of it) and "investing" in other hot ideas like oil leases &etc.
 

TSM

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Enjoying this post a lot. My worst was not buying back into property in 2009/10 after selling around the first top in 2007. I made a lot during the GFC but then didn't switch my view in 2009 when things turned around. I had been so excited by what I thought was a great ability to time the market, that I held on to my doom and gloom view, not realising that the economy had become almost irrelevant as we were now living in QE times.

BUT I made it much worse by then trying to get my money back by .... day trading.

My question is, how have you got past losses? It seems to me that if you don't process the experience you keep repeating it.

I got stuck in regret and getting angry at myself. A friend of mine lost 38Mill in the GFC and then went on rebuild almost straight away and now financially free again.
 

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Just a few.

Like joining an MLM scam to recover from a previous MLM scam :D (Telexfree and Unetenet). Fortunately (I guess) I didn't make anyone join because it smelled bad just after joining.

Or take a 6k credit to fund me as a freelance instead of trying to sell my services before leaving my job. Add to that another 5k of credit card debt to pay the bills. (And that debt burden has mine my confidence for a long time)

Those are the worst ones by far, but there are more. It seems like I'm used to making the same mistake twice, but at least I learn the lesson after the second time :D
 
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Deleted78083

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My question is, how have you got past losses? It seems to me that if you don't process the experience you keep repeating it.

For me, I saw the money I lost as the price i would have paid to get the knowledge that I got.

I also thought that had i gambled my money the same way 10 years later than I did, i could have add one or two zeros to the losses
 

ElleMg

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Oh no, care to tell? No worries if it is too painful.
It's not painful but I don't think there's much value in the story

Referencing the fastlane distinctions from the "you deserve!" chapter, this is the type of guy I was dating:
Hitchhikers assign control over their financial plans to others effectively introducing probabilities to victimhood. The Law of Victims: You can't be a victim if you don't relinquish power to someone capable of making you a victim. Responsibility owns your choices. Taking responsibility is the first step to taking the driver's seat of your life. Accountability is the final.

At some point when you love and invest in someone like this there's almost a reversal, to quote Robert Greene, "You can die from someone else’s misery—emotional states are as infectious as diseases. You may feel you are helping the drowning man but you are only precipitating your own disaster. The unfortunate sometimes draw misfortune on themselves; they will also draw it on you."

I'm glad I managed to take full responsibility and make the right decision for myself, and learn from it. It's not uncommon to hear of entrepreneurs being taken for a ride by greedy partners, I'm grateful I learnt the lesson now instead of when there's 10x or 100x the money at stake :happy:
 

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A good percentage of the "bad decisions" in this thread involve selling instead of holding...

Good lesson for all the younger investors out there -- the key to building wealth is time.

Buy assets and wait.

NOT buy assets and sell them.
Mine happened on the buy side....

I paid ~$24k for a "book of business" a couple years ago.
Ended up with just a couple thousand in revenue - a lot of the clients just ghosted during the transition.

This doesn't sound like a lot, until you consider that my gross revenue the year before the acquisition was only $150k.

I learned that you don't buy single-employee/owner businesses unless you're very experienced at transitioning them. Most of these are tied directly to the owner, and clients are used to dealing with that one person. Switching is painful for them, so it gives them an excuse to shop around or do the work themselves.
 

JunkBoxJoey_JBJ

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Mine happened on the buy side....

I paid ~$24k for a "book of business" a couple years ago.
Ended up with just a couple thousand in revenue - a lot of the clients just ghosted during the transition.

I learned that you don't buy single-employee/owner businesses unless you're very experienced at transitioning them. Most of these are tied directly to the owner, and clients are used to dealing with that one person. Switching is painful for them, so it gives them an excuse to shop around or do the work themselves.
@CareCPA this is crazy... Was on the phone TONIGHT with a Baby-Boomer who is willing to sell his blue collar "One Man Band", then you had to go and post this! But this potential deal would involve a truck and equipment (two Mechanics said it's worth the price just for the truck and equipment without the book and website).
 

CareCPA

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@CareCPA this is crazy... Was on the phone TONIGHT with a Baby-Boomer who is willing to sell his blue collar "One Man Band", then you had to go and post this! But this potential deal would involve a truck and equipment (two Mechanics said it's worth the price just for the truck and equipment without the book and website).
Ha, don't let me talk you out of the deal.

BUT - do make sure you do thorough due diligence, and have a plan for transitioning customers over.
 

garyfritz

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A good percentage of the "bad decisions" in this thread involve selling instead of holding...
Good lesson for all the younger investors out there -- the key to building wealth is time.
Buy assets and wait.
NOT buy assets and sell them.
This.

I am no financial dummy -- I ran a very successful commodity fund with $10M in client money back in 2000. And yet my return in my stock accounts is NEGATIVE. I can't seem to buy something and leave it alone -- I've always been more of the "trader" mentality, and that doesn't always work out so great.

Thank God for real estate, which is TOO HARD to sell, so I hang onto it for decades. That's where all my net worth came from.
 
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Deleted78083

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This.

I am no financial dummy -- I ran a very successful commodity fund with $10M in client money back in 2000. And yet my return in my stock accounts is NEGATIVE. I can't seem to buy something and leave it alone -- I've always been more of the "trader" mentality, and that doesn't always work out so great.

Thank God for real estate, which is TOO HARD to sell, so I hang onto it for decades. That's where all my net worth came from.
What I am about to say may be very stupid so please, correct me if I am wrong.
Isn't the purpose of a commodity fund to sell for profit?

Doesn't investing in stocks and investing in commodities suddenly become two opposite activities, where you want to hold the stocks as long as possible, while you want to sell the commodity...as fast as possible?
 

garyfritz

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There are long-term and short-term strategies in both stocks and commodities.

The fund I ran used strategies I developed that generally held positions on the order of 1-2 days. And actually it's misleading to call it a "commodity" fund, even though that was the official term. I traded *futures*, but mostly not *commodity* futures. It was mostly stock index futures (S&P500, ND100), bond futures, etc.

Most people make money in stocks by holding for a long time. But I have friends who make over 100% per year with short-term trading in stocks and options.
 

James_17

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Mine, I bought a stock at the same time index funds with my mom's money when I was a fresh graduate out of college. Hold it for the long term and not taking any single peso of it. The stock went up to 30% and this year -40%. I still hold them waiting to rebound.

Lesson learned: Put yourself in the driver's seat, liquidity is greater than paper gains.

I was sold by the fake gurus conducting seminars who have no definite applications about what they are teaching and at the end of the presentation, they are promoting a system that costs 50,000 bucks. Attended board games to get rich and then after the game, "what to do next?"

Lesson Learned: Invest in learning to those teachers who eat their own recipe, teachers who are walking the talk.

Now, I started investing in my own efforts, set myself as a lifetime student of the game of being rich, maximizing my time grit, and the grind as a realtor for the rich people and businesses looking for expansions here in the Philippines and not relying on any financial institutions and the government.
 
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wouldntitbenice

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A thread like this means so much more to me than the inspiration or pretty hollow example threads. I don't take comfort in anyone's failings, but it helps to be reminded it happens to smart people.

For me, my dumbest financial decision has been keeping my savings in cash for the day that big opportunity comes, instead of investing it in index funds while I wait. My formal education was in finance, and I've always been a sensible investor, and had I invested one a larger and consistent, but still safe, scale compared to what I did intermittently over the years, I would have hundreds of thousands more in savings. I always feared the right opportunity would come while the market was on a downward swing, and I'd miss it...so instead I missed large parts of the longest stock market gain in history.
 

Kelly592

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In 2017 from about October to December, invested in cryptocurrency coins now referred to as “shitcoins.” My wallet grew from an initial investment of about 20k to over 120k. Was waiting for just the right moment to cash out but that moment never came.

In 2018 the bubble popped and that 120k wallet dwindled to about 15k. Cashed out 10k and left 5 worth of coins still there. Now I cant even get access to the wallet.

Lesson learned: Don't get greedy. Control emotions and always have a profit-taking plan when it comes to trading.
 

sambreaker20

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During the amazon fba craze about 4 years ago I opened up 4 credit cards with a limit of about 20k total and a pay pal working credit of about 10k. When on a crazy fba shopping spree, lots of prices tanked and was stuck with about 18k in credit card debt. Set my flipping back about 3 years and killed my credit. Total idiot will never do that again.
 

Leona Ta

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:) Hi ! The most dumbest decision I've made so far is buying an 20 ml eye cream with 80 USD. The problem is I didn't use it after that and I bought it because I thought I might use it somehow. In Vietnam and for a woman, 80 USD is a paycheck for 2 working days, I could have done a lot of useful thing with my 2 days time, now I can't take it back. :(
 

MJ DeMarco

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Here's one that someone posted here recently...



Ignorance of wash sales washes guy out...
7b28664e-368e-4f9c-84cf-c9be73a22d80.jpg
 

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