What was your worst financial misstep?

Never give money based on good dick. I gave a guy $10k from a cash advance on my American Express Optimum card. Surprise, surprise, he disappeared and never paid me back. It took some time and refinancing of my condo but I was able to pay if off without an adverse affect on my credit score. I no longer "lend" money.

When my brother was deeply in debt and almost lost his apartment, I paid off his rent and brought all his bills current. Then I showed him how to live on a budget.

Graduate School

But recently I realized that I probably threw my engagement ring out in the trash. It's only like $3000 or $4000 but it's making me nuts.

Penny stocks, day trading, mid-2000s. Never again.

I believe the word is "craw" not crawl, but Spellcheck is a fickle friend.

The first time I did a 1031 exchange, I failed to educate myself enough to realize that it was being done incorrectly, and it cost me many thousands of dollars in unnecessary tax, and messed-up my property tax basis.

College and that first credit card.

Gonna second graduate school. Biggest Ponzi scheme going.

Excessive credit card debt....twice!

Thus far, it's been racking up unnecessary debt on credit cards and taking out general loans, which ruined my finances in my 20s; I was broke and paying off this stupid stuff for years while peers were buying homes, traveling and buying nice, "normal" things. Also law school.

R8 - but was all of that irresponsible spending or just life's expenses that didn't keep up with your salary? I think a good amount of US consumer credit card debt is basically from not being able to make ends meet. If a car needs repair, many people in the nation don't have a spare few thousand without using a credit card.

For me, I wish I had put more into my 401k when I was younger. I justified it by saying that, with my lower income in my 20's, I need all of my paycheck to support myself. Truth is, I spent too much money going out and I really wouldn't have felt it much to have some pre-tax dollars taken out - particularly if it was matched by my employer.

Definitely credit card debt in early 20s and having to enroll in consumer credit counseling, to "renegotiate" repayment - such a debilitating experience, which I never had to go thru again (knock on wood)

A four unit apartment building I bought for $300,000 with an inheritance from my father. I sold it a few years later for $600,000 .It recently sold for $1.2 million. I also stupidly ended up paying huge capital gains taxes ,then lost $200,000 in '08' wich left me with my initial investment,minus about $80,000 . If I ever get my hands on that kind of money again, I will definitely go to professionals for advice.

Co-signing a car loan for a co-worker.

Someone I worked with and considered a friend got a new job, but needed a more reliable car. I knew him well and he was a good employee. He'd even dog-sat for me and I trusted him. I stupidly ignored the fact that he couldn't qualify for the loan on his own. The last words I said to him as we left the dealership were "If you can't make a payment, LET ME KNOW and I'll take care of it and we can work it out."

Of course the little shit defaulted on the car loan, the car was repossessed and a year later I got a call from a collection agency demanding $10,000. I negotiated that down to $7500 and paid them the money. I got in contact with Mr. Bad Debt and he apologized profusely and promised to send me $100 a month until it was paid off, saying he was too embarrassed to tell me he'd been unable to make the payments. Of course, I never received a dime.

I was willing to let it all go, just wanting to put it behind me, when I got a letter from the IRS. Apparently, that $2500 I 'saved' when I settled the debt is considered income and I had to pay federal and state tax on it, plus of course a penalty.

That's when I stopped being Mr. Nice Guy. I paid the tax but on my next year's return I wrote off the $7500 as an uncollectable debt, and, when required to provide details, I gave the IRS the name and the address of person whose debt I wrote off. They accepted my return, (it's been over a decade ago) and I have no idea if they went after him for the unreported 'income' or not.

Naturally it took me years to build my credit score back up, but now I Have a FICO score of 840 and have learned my lesson.

R13 - in cases like that, did you get the car? I mean, it sounds like you paid for the entire car, right? If not, that really sucks.

The worst was not taking a small inheritance I received when my father died and putting the money on apt in NYC in 1990. There were apts available at that time for very little. I just blew it on dumb shit. I was 22 and not very stable in every sense of the word. I finally grew up but my life would have been much easier if I had had some advice from a nice relative.

[quote] Co-signing a car loan for a co-worker.

Without reading any further, it's obvious the DL maxim "This will end in tears!" a likely outcome.

When I left active duty military several years ago, my retirement plan contributions were refunded. It was about $20,000, and I should’ve rolled it into the 401K I started with my civilian employee. Instead, I spent the money on trips, a down payment for a car, and a bunch of shit I didn’t need. And since the money was from a retirement account and I was well below retirement age, I ended up owing thousands of dollars in taxes. Had I invested the money, it would probably be worth double.

[quote] in cases like that, did you get the car? I mean, it sounds like you paid for the entire car, right? If not, that really sucks.

No, the car had been repossessed for non-payment. I was stupid in not getting a copy of the paperwork at the time of signing (attempts to contact the dealership were futile), but apparently they can repossess the car, sell it at auction, and still go after you for what is called a 'deficiency balance'. I didn't want a car (I live and work in the city and parking alone would be a huge expense) so I was actually relieved not to have to deal with the hassle of having and then selling a car.

If I did not pay immediately, the collection agency could've gone to court and gotten a judgment against me and garnished my wages. Since I'd moved on and had started a new job myself, I certainly didn't want that to happen, not to mention what that would've done to further damage my credit, so I felt it was in my best interest to dig into my savings and make it all go away as soon as possible.

No tears, R16, just anger and a sense of betrayal.

Beanie Babies

I bought a condo at the peak of the 2008 bubble for $171K. It then quickly lost value to where they were going for $45K. I let it go and ruined my credit for seven years.

R18 - that sucks. I still would have tried to have possession of the car - you can sell them quickly if you're willing to go low. Some money back is better than none. What a scam. So they were able to sell the car twice. That should be illegal.

The house next door sold for $14,900 in 2011. It just sold for $130,00 and the developer will probably flip it for $200,000+ after the rehab. Yeah, it need some work- but it was a roof.

I casually mentioned it to my family members at the time. It would have been pocket change for someone (or all) to help me out, but no one offered.

I won't forget.

[quote] Co-signing a car loan for a co-worker.

My mother worked in a bank and made me promise multiple times to NEVER EVER NEVER EVER EVER co-sign anyone's loan. She'd obviously seen what it can do for you when things go wrong. She told how her client, an elderly woman, had co-signed her nephew's loan and the stupid asshole obviously defaulted on the loan. To make the matters worse the little cunt went on living like nothing had happened, living in the house his aunt kept on paying from her meager pension. My mom told me the lady was practically starving since all her money went to pay the loan. The story, completely true, was so powerful that the couple times I've been asked to co-sign a loan by a buddy I haven't felt a twinge of guilt for declining immediately.

Not seriously contributing to my 401k until my 30s

We bought a townhome in 2006 in OC, not at the height of the bubble but close to it, which was overpriced to the tune of at least $150K. Very nice gated community with lakes and ducks. Both of us were making good money so they wouldn't refinance us. Had to short sale it and my name was first on the mortgage so I took the majority of the hit for that short sale, and non-payment for the time it took to sell it. (8 mos).

2nd biggest financial mistake was taking a year of Walden University to the tune of some 8K.

[quote] So they were able to sell the car twice. That should be illegal.

I know there are laws governing this sort of thing, but let's try this oversimplified example:

Price of car $25,000

Payments (1,000)

Proceeds from auction sale (14,000)

Deficiency balance $10,000

They're not really selling the car twice. They're just trying to get they money they were contractually owed in the first place.

Theoretically, if the had sold it at auction for more than the original sales price, my deadbeat friend would've received a check for the difference.

I'm sure all this is public record, but I didn't have the energy or desire to research it.

I wish I had known your mother R23

R13, I'm R1. I can empathize with your issue. My brother missed 3 months on his rent and didn't ask for my help at the first missed payment. Instead it cost me over $3k to payoff his back rent and the cost to file the eviction notice. I also had to pay his utilities (apartment paid most so it wasn't much) and his cell phone bill since that was his only phone.

My brother was always bad with money. He got over $20k in severance when he was downsized from Hewlett-Packard back in the 80's. Against everyone's advice, he banked NONE of it and just below it on stupid shit. When he died, he had not a penny to his name.

I can say that one positive came out of all this. I now make sure I have at least $20k in savings in case another family member needed help.

Investing $100k in a friend’s business and watching it go belly up largely due to him. Time has largely healed this wound but I’m more careful about everything now

R27 - I can sympathize, I have a financially irresponsible brother. His list of mistakes are too long to list. He just doesn't care about money or bills and just thinks that nothing bad will happen.

Of course several family members have bailed him out time and again, including myself.

He'll never be financially responsible and I shudder to think what he's going to blow his money on once he gets some inheritance. He's been banking on that inheritance his whole life and an excuse to not have saved or do anything responsible.

When Bitcoin mining started, I signed up for a service that would use my computer to mine them in the background. I had a good amount but then changed computers and forgot about it. Now I can’t even figure out where my account was or how to get my coins, they would be worth a fortune now.

R29, my case blows that whole "the eldest does the best and sets the example while the youngest is a disappointment." My brother was the eldest; I'm the youngest and most responsible. Only one of 4 kids to own a home.

R31 - yeah, the oldest siblings are usually the most entitled. The youngest may have been 'babied' or favored, which is the usual words elder siblings call us. But in reality, parents knew how to parent better with the youngest child and they were usually more forgiving and less stressed about everything because they were older and had been through it all before. Not our fault. But the youngest siblings are usually not the most entitled - not from what I've seen.

1) Buying stocks like Global Crossing in 1999 only to see it go bankrupt a short while later.

2) Not buying a coop on 23rd St in Chelsea in 1992 because it was $250K and I thought that was so overpriced. I stayed in my rental. That apartment is now worth more about $2 million.

3) Not putting money into a retirement account until I was 40. Lost many years of contributions and interest.

There are, oh, probably another dozen but these are the first that come to my unhappy, broke mind.

I was an authorized signer on my dad’s credit card and they came after me for $23,000 when he died. The trust wouldn’t pay it and I refused to pay it. I embarked on a full-time job of drinking and it interfered with fighting the matter. It dropped from my credit report last year. No, I don’t drink any more.

I spoiled that old guy with the card and we had fun.

50k on different rentboys

r22 if you as an adult couldn't come up with $14k (cash or loan) then yeah I see why your family refuses to take you advice on anything.

r23 who are these friends that make such a request. That's really weird and beyond friendship. The only loans I would consider co-sighing are that of my future spouse, after marriage, boyfriends don't count. My parents co-signed for my student loans and I'll do the same for my future children but beyond that everyone else can fuck right off.

I've loaned way too much money to my ex-partner, who has struggled to keep his business afloat. I know I'll never get the money back, but that doesn't keep him from always having a new car, and his mortgage for his sprawling house on a hill brings tears to my eyes.

R38 - then that's not a loan. Ask him for the money. Tell him it wasn't a gift to subsidize his lifestyle. I'm mad for you.

[quote]A four unit apartment building I bought for $300,000 with an inheritance from my father. I sold it a few years later for $600,000 .It recently sold for $1.2 million.

Ouch; that's got to hurt. Another vote for credit card debt. I also don't get people who are continually buying new cards. I'm driving my current car until the wheels fall off

Whenever someone asks to borrow a lot of money, I always say, "Sure, as long as you give me ALL of your other money and let me decide how you can spend it." I got completely fed up with lending money to people (which ended up to be GIVING money to people) and having them live higher on the hog than I do. Most people have trouble with money because they can't separate the "must haves" from the "nice to haves." No one MUST have tattoos, recreational drugs, the most expensive cell phone or shoes, cigarettes, recreational drugs, etc. If you're going to spend money on those things, it won't be mine.

R27 Cosmo, you're a sweetie. After what you went through with your brother, you're willing to plan ahead in case another relative gets in a jam.

Thanks, R42. My brother and one of my sisters (both deceased) were terrible with money. Both were constantly hitting up the "Bank of Mom" for money. My brother never made much money and lived within his means, for the most part. The financial trouble he got into was due to his non-working son. He was always giving him and his wife and their kids money - money he didn't have.

My sister, on the other hand, made lots of money but used retail therapy as a way to combat whatever was wrong with her. She bought a new car in October of 2015, knowing she wasn't feeling well (she was later diagnosed with stomach cancer). She lost her job shortly after that and had to use the money Mom left us to live on. Then she got sick and passed away in 2017.

Not saving more money during my peak earning years. For a decade straight I made shit-ton. Could easily have saved 300-400k. But I lived. Traveled. Ate well. Blah, blah. Cuz, you know, I never thought it would end.

Until it did.

I'm fine--I just could be a lot finer.

Investing $50K in a commercial land deal 16 years ago. Only have seen $5K of my money. ‘Loaning” a friend $16K and never seeing a dime. We are no longer in contact.

Marriage.

Gio, my Italian giggolo.

Misstep: Investing in individual stocks, recommended by a financial planner.

Only mutual funds & bonds now.

I would never cosign a loan for a friend. It's risky enough to co-sign a house loan with a spouse. I don't think I would even do that.

A long time ago, I lent a friend money so that she could put a deposit on a new apartment (rental). She was in a bad situation with her roommate and needed to move. She set the time (deadline) for when she'd pay me back. She didn't meet that deadline, but did pay me back later. When she did pay me back, she acted like she had done me a favor by actually repaying the loan. (I didn't charge interest.) That was enough to turn me off being a lender to friends.

[quote] The house next door sold for $14,900 in 2011. It just sold for $130,00 and the developer will probably flip it for $200,000+ after the rehab. Yeah, it need some work- but it was a roof. I casually mentioned it to my family members at the time. It would have been pocket change for someone (or all) to help me out, but no one offered. I won't forget.

Won't forget missing out on an opportunity? Or won't forget that family members wouldn't offer to lend you money when you "casually mentioned" the house being for sale?

[quote] I was an authorized signer on my dad’s credit card and they came after me for $23,000 when he died. The trust wouldn’t pay it and I refused to pay it. I embarked on a full-time job of drinking and it interfered with fighting the matter. It dropped from my credit report last year. No, I don’t drink any more. I spoiled that old guy with the card and we had fun.

R34, what was the misstep? Running up the $23,000? Not fighting the matter? Depending on where that $23K went, the trustee might have had a reason to balk at paying the CC bill.

Taking out student loans to go to college in the mid 90's and consolidating them with Sallie Mae at 9% interest for 20 years. I spent my 30's paying $400 monthly only to have 18 years pass and my balance was pretty much the same as when I took out the loan. I had to do the forbearance a few times when I wasn't making much money and so each time it added up in interest. I believed that I would get a high paying job out of college and that never happened. Finally, I once my car was paid off, I sold it at CarMax for $15 grand, took a loan from my 401k, and bought a new car at 2% interest (I had great credit) and no money down. My car payments were less than what I had been paying for my older car AND my student loans combined and my student loans were then paid off. My car was just paid off last year and now I'm debt free at 51. BUT in meantime, my peers were buying houses/condos or traveling while I was working full time and taking extra work on the side to make ends meet. I really didn't have much choice if I wanted to go to college since I had been on my own since my parents kicked me out at 18. I don't regret going to college and now make decent money but in retrospect, I should NEVER had consolidated those loans. Because I did it made me ineligible for the 3% refinancing that they started offering later. Student loans are a scam but I also know that college education cannot be achieved for some people without them.

I gambled. For many years. I make a good salary and only support myself, but even though I stopped last year (for good - COVID closing the casinos saved me) I’ve been having trouble performing the demands of my job now in my 50s. The workload, stress, etc. has more than doubled and I’ve had to reduce my time which means less income. I never dreamed I’d be worrying about money, but I am.

I threw away SO much money. Thinking about it makes me sick. Gambling is a horrible addiction.

I suppose the upside is I’ve managed to finish paying off all of my gambling debt since I quit.

R53, gambling is probably the worst addiction. Glad you paid off your debts. I hope you can stay out of gambling.

[quote] [R23] who are these friends that make such a request

No true friends have asked that, it was a work colleague, or actually his pregnant wife since the colleague was too chicken shit to ask himself. Another one was a guy I sometimes hung out with.

The reality if you co-sign a loan for anyone, be it your parent, sibling or an offspring, be prepared to be the one having to pay it back. If you're well off and the risk for you isn't monumental it's not necessarily that terrible, but if you don't have much you can easily ruin the rest of your life.

Giving money to Joe Dallas and Exodus to free me from homosexuality.

Still a massive whore for the cock.