Your biggest financial blunder?

Mine was riding a whole bunch of AOL stock WAY down, sure my Golden Goose would once again give me golden eggs. I made some good money on it but if I had sold when they merged with Time Warner, man O man, the street outside would be named Easy!

Not buying Starbuck's initial stock offering.

Fuel Cell Energy.  Purchased at $80, it split and now you look it up. I get sick if I do.

Still hoping it will come around.

Going away from my own plan several years ago and loading up on preferred banking stocks.  Everything in moderation, but when searching for yields, you can become a pig.  I did...

Today, entering banking preferreds in the mid teens is a good thing.  Doing so in the low twenties two years ago.  Not so good.

Mar52 - You know the fuel cell was really supposed to take off.  I looked into it myself.  I invested in Satellite (Orbital Systems) back in the 80's and, too sounded great.  But, I was too early.  Today, the stock has recovered nicely.  Where would we be without satellite?  My broker and I were just far too early.

Hey, maybe the same thing will happen to fuel cell manufacturers.    

Pretty much my entire adult life.   :~(

Baah Ben


Mar52 - You know the fuel cell was really supposed to take off.  I looked into it myself.  I invested in Satellite (Orbital Systems) back in the 80's and, too sounded great.  But, I was too early.  Today, the stock has recovered nicely.  Where would we be without sastellite?  My broker and I were just far too early.

Hey, maybe the same thing will happen to fuel cell manufacturers.    

I saw where the federal government is halving the fuel cell technology budget because they say the technology is ten years away.  That's certainly not going to help the stocks of the fuel cell tech companies.

Spending like I was still working 2 jobs, now I am in moderate CC debt...

Not mine, my father's. In the 1940s, when offered an opportunity for an investment, he turned it down saying nobody would by a camera just so they could see their pictures right away. I understand Dr. Land managed to get enough money, anyway.

My biggest (most costly) financial blunder was the timing of my termination of my first marriage. I was saddled with very large Child Support Payments for several years following that action that really caused me some major hardship.  Now that those days are in the past, I can look back in hindsight and see where I made poor decisions...but at the time It seemed like the best path to follow.
  Frankly, after 24 years of very unhappy life in that marriage, The "blunder" has turned out to be a painful, but wise, course of action.

We are in the 15th year of this "Second Chance" and find that many of those difficult experiences from the past have faded in both scope and importance. The Kids have survived quite well. We enjoy our contact with the 'Herd' of Grandchildren. AND our contact with my former spouse is limited to annual family get-togethers where she is present So while those days were "costly", What's Done Is Done!

I bought a smoked meat business using SBA money (1st Mistake) back in the mid 80's from an old gentleman who wanted to retire. 
"Pitts Home-made Country Smoked Meats"  Best Darn Ham, Sausage & Bacon you ever tasted. Was State approved but not USDA approved so could only sell it in-state. His operation had been Grandfathered in on numerous State regulations, so as a new owner, I had to do NUMEROUS upgrades to meet current regs, some of which were rediculous. That put a big dent in my SBA money. (Mistake#2- Did not do enough Due Diligence). The business was highly seasonal and did 80% of its volume between Thanksgiving & Christmas. Went in undercapitalized, (BIGGEST Mistake of all) and the operational expenses drained the remaining SBA money, creating a negative cash flow from Jan to Nov. Bottom line-Cashflow dried up and had to close the business. Had to file Bankruptcy & lost my house and the business.
 
The lessons to all of you would be "Entrepreneurs" is:

1. Do extensive research, planning and due diligence BEFORE you do anything.
2. Figure out how much cash reserve you will need to survive the first 2 years---Then double or triple it!
3. Don't buy or start a business you know little about unless you have the financial reserves to get you thru the learning curve.
4. Always remember, CASH FLOW IS KING! IT"S THE DIFFERENCE BETWEEN SUCCESS & FAILURE!
5. Always remember, CASH FLOW IS KING! IT"S THE DIFFERENCE BETWEEN SUCCESS & FAILURE!
6. Don't be in a hurry to expand your business. Use the same steps outlined in points 1 to 5. Treat it as if it was the 1st start-up, not an expansion. Do you have enough cash reserve to support it for 2 years?

Michael Hoffman


Not mine, my father's. In the 1940s, when offered an opportunity for an investment, he turned it down saying nobody would by a camera just so they could see their pictures right away. I understand Dr. Land managed to get enough money, anyway.

 
My father bought Polaroid very early on and Marriott on the IPO, although he was a Physician, and they are not known for their fiscal acumen, the man was a Market wiz.

Food  - Not a good story.  Hey, thanks for sharing.  It's a story that would be good for students in their MBA program.  A good bad story...This is a help to others...Nice of you to do this.... 

Yes, I agree that you need enough "staying power" cash.  But, like you say research is the key.  Putting in the time to make sure the situation is right.  Covering all the possibilites and possible problem situations.

Sometimes, if a place is for sale, you don't have adequate time.  Don't be so hard on yourself.  Maybe you didn't have months to check it out properly.  Yeah, you paid a heavy price....No question.

Another really important lesson to learn is being able to walk away from a deal, if you love it but something just doesn't seem right.  Not falling in love with anything so much that you can no longer keep the emotions out of it.

Your list is excellent.  You obviously have learned plenty from the experience.  Enjoy your life and be thankful for your health.  Don't beat yourself up over the past.

Did you see that Wayman Tisdale died at 44....If you are a sports fan, you know who he is.  Just goes to show you, none of us are here with any gurantees.  Be happy and move forward.

Baah Ben


Food - Not a good story.  Hey, thanks for sharing.  It's a story that would be good for students in their MBA program.  A good bad story...This is a help to others...Nice of you to do this.... 

Yes, I agree that you need enough "staying power" cash.  But, like you say research is the key.  Putting in the time to make sure the situation is right.  Covering all the possibilities and possible problem situations.

Sometimes, if a place is for sale, you don't have adequate time.  Don't be so hard on yourself.  Maybe you didn't have months to check it out properly.  Yea, you paid a heavy price....No question.

Another really important lesson to learn is being able to walk away from a deal, if you love it but something just doesn't seem right.  Not falling in love with anything so much that you can no longer keep the emotions out of it.

Your list is excellent.  You obviously have learned plenty from the experience.  Enjoy your life and be thankful for your health.  Don't beat yourself up over the past.

Did you see that Wayman Tisdale died at 44....If you are a sports fan, you know who he is.  Just goes to show you, none of us are here with any guarantees.  Be happy and move forward.

 
BB- Thanx for the kind words!
That being said, Yes, I have moved on from this experience and several others. That's another story.
I was excited by the quality of the product and the unique tastes it had. The Ol' Boy, who owned the business had spent many years developing the unique process. He had a 7th grade education, maybe. It was, and still is, the best I've ever eaten.
Lesson to be learned--Don't fall in love with the product if it doesn't have a positive CASH FLOW!
 
After closing the meat business, I walked into a Management Recruiters Int'l office in Pensacola, FL looking for a job and wound up working there for 16 years! We were independent contractors working on 100% commission, and were responsible for paying our own taxes. I was totally broke with a kid going into College and so I didn't pay my taxes, based on the assumption that I would earn enough money in the 1st Qtr
of next year to pay them--WRONG! Business slowed down and I couldn't pay my taxes.
LESSON # whatever-- NO MATTER WHAT, PAY YOUR FREAKIN' TAXES.
Wound up dealing with the IRS for several years to get a settlement and pay those Bas-ards off! I keep battling the world out there, but I am happy with my life in Semi=Retirement, Making enough money to pay my bills and content to know I tried and survived. Take a lesson you youngsters!
 
Did not live here when Tisdale played here but based on the Jock Talk Shows today, he was highly regarded

Not enough room or time here to list or explain them all.

I dunno. I'm doing OK. I've made loads of "mistakes", and financial mistakes, but were they really mistakes? It's the living fallacy of Candide; if I hadn't quit that summer job doing drywall to go see the Rolling Stones in Cleveland back in '74, if I hadn't been thrown in jail for being stinking drunk, if instead I'd been responsible and finished college and invested wisely, then I probably wouldn't be here in this nice comfortable house with this loving family, typing on the internet, today.

No regrets. I never had a crystal ball, just my wits competing against my urges. My wits have won just often enough to get me by, and for that I am thankful.

The only mistake is not learning from your mistakes. 

Hey, the Wizzard of Omaha has made many, many mistakes these past two or three years.  Berkshire Hathaway stock had taken a big hit and he is supposed to be one of the world's smartest guys.

Food - A friend of mine owed the State of NY sales taxes on a company that he folded.  He got a really good lawyer and worked out a real good settlement..Years ago. 

"Can't get blood from a stone"  They will negotiate. 

Baah Ben

Food - A friend of mine owed the State of NY sales taxes on a company that he folded.  He got a really good lawyer and worked out a real good settlement..Years ago. 

"Can't get blood from a stone"  They will negotiate. 

I was able to negoiate a settlement- about 20 cents on the dollar.

Woops!

Letting my wife run the family books, ('we can afford that'...)...(oh and myself beniegnly ignoring potential problems...'it'll work out').

Making emotional fiscal decisions..

chewingthefat


Mine was riding a whole bunch of AOL stock WAY down, sure my Golden Goose would once again give me golden eggs. I made some good money on it but if I had sold when they merged with Time Warner, man O man, the street outside would be named Easy!

Mine was just the opposite. Back in 1992 when AOL went public I had an opportunity to get in on the IPO since I was contracted with them to run the Mac Graphics Forum. I had $1,000 to spare at the time. My stock broker brother said to wait because IPOs always went down. So I took his advice. The $10 per share IPO went immediately to $28 the first day and did not drop for 8 years. That $1,000 would have topped $800,000 had I got in and then I would have had your opportunity to ride it back down.

Back when i was a totally gonzo hippie living in the Sierra Nevad Mtns i made a few bucks on a venture we wont go into--anyway--i had a few grand in my pocket and stopped by to visit my grandmother in Chico Ca---she saw the cash and made me an offer--she would sell me her house for 20 grand and take 3 of the 5ooo i had as a down payment and finance the rest AND she would rent the hopuse from me for the same as my payments woukd be. Me being the brilliant idiot that all 22 yr olds are said"what the heck do i want to buy a house in Chico for?--no thanks gram---well--20 yrs later i moved to chico---that house was selling for 72000---17 yrs later when i left Chco it had just sold again for 212000---smart move huh!!!

Ahh Davydd - Ever hear of a company called Lucent?  Back in the day, I had almost 1000 shares and was proudly in their Dividend Reinvestment Program!!

I rode my dividends and continued to add to my position eventually ending up with 1000 shares.  I was so proud of myself!  Up from the 30's to the 50's to the 60's and even into the 70's.  When it started to dip, I always felt it was coming back.  So, when I ran into a woman I never met before in Pembroke Pines..  I'm coming out of the pool store and see this attractive blond with a Lucent sweatshirt on.  I said to her, "Hey are we going to be ok?"  She said "Yes!  My husband works for them and he said it's going to be fine."  OK!  Thank you!

I sold most around $2 and used it as a tax write off for 5 years. 

 
Many years ago, I bought stock in the Rochester Telephone Company, a small regional phone company in upstate NY that produced steady--albeit somewhat anemic--returns.  A few years later, they reinvented themselves as Frontier Communications, went nationwide with long-distance service, and began producing really great returns.
 
Because of Frontier's success, they were bought out by/merged into Global Crossing Inc., and I received shares in the new company.   The very grandiose plans for Global Crossing sounded really good on paper, and intially the returns were very good.  In fact, the returns were so good that the CEO of GC began construction on the largest private home in the US.  
 
Yup, you guessed it.  I failed to get out before their financial house of cards collapsed, and I wound up losing something on the order of $8k on that investment.  At least I was able to claim a capital loss over the period of a couple of years, in order to recoup my losses.
 
The moral of the story?  Don't believe everything that is printed on the glossy paper of those annual reports.  In the case of Global Crossing, it was mostly smoke and mirrors and outright lies.
 

Baah Ben


Ahh Davydd - Ever hear of a company called Lucent?  Back in the day, I had almost 1000 shares and was proudly in their Dividend Reinvestment Program!!

I rode my dividends and continued to add to my position eventually ending up with 1000 shares.  I was so proud of myself!  Up from the 30's to the 50's to the 60's and even into the 70's.  When it started to dip, I always felt it was coming back.  So, when I ran into a woman I never met before in Pembroke Pines..  I'm coming out of the pool store and see this attractive blond with a Lucent sweatshirt on.  I said to her, "Hey are we going to be ok?"  She said "Yes!  My husband works for them and he said it's going to be fine."  OK!  Thank you!

I sold most around $2 and used it as a tax write off for 5 years. 

I have to say out loud what I'm sure you know; that Lucent used to be Bell Labs, one of the finest engineering brain trusts that the planet has ever known, and Western Electric, one of the greatest manufacturers this country has ever seen. You had no way to see that AT&T would suck from them of their assets and talent and toss away the husks.

Mosca - Yeah..Bell Labs was once a wonderful company.  I had all the Telcos for so many years..Sold them all in 2001.....Should have sold them in 1999!

Pac Tel, Bell South, SW Bell, US West, Ameritech, Bell Atlantic and the one they kicked around AT&T.  Today, they are all reunited as AT&T!! Absolutely crazy!

Slavishly holding onto Coca Cola stock too long, just because my great aunt did (I inherited it from her).

If I had sold even half of my shares when it hit $88 and change back in 1998, I'd have a nice little nest egg now.

We'll never see it that high again, I'm sure.

Live and learn...

November 2007

my brother told me to come up with $8000.oo in the early 80's for to buy some stock in m&t bank .i just said no thanks .as its split and gone up in value over the years he sold that stock in 2005 for over a million dollars.me on the other hand bought stock in empire bank after i saw how he did and lost around $1,ooo after it merged in the mid eighties.

For years, individual investors were told to buy and hold...

Baah Ben


For years, individual investors were told to buy and hold...

Yeah--that was supposed to be sound advice.

But it just doesn't make sense these days; not sure it ever did. 

Take my Dad for example:  He has his pension, his Social Security, a paid off house in a good neighborhood. And at the height of the stock mrket rally by the late '90s held a portfolio of stocks that had a value of something like $400,000. Obviously, he did not need those stocks for income, but held on to them because that's what everyone in the family always did.

Now, of course thay are worth a fraction of their peak and at his age, he will never recoup the losses. If he had switched even half ot CDs, he'd be a lot better off.

But, he's one of the lucky ones--he enjoys a simple life in retirement, but for others who bought and held andneeded hat income, the situation is not so good for thier standard of living.

I used to invest a little in an on-line brokerage firm called BuyandHold.com but dropped them when they started charging a montthly fee.  I think they're still around.

Yeah..Who knows if buy and hold was ever the right formula.  Obviously it is not today. 

The one thing that does seem to always work is saving as much as you can each year.

 Quitting my last job because I did not want to move. I'll never see that kind of pay again.

drpep


 Quitting my last job because I did not want to move. I'll never see that kind of pay again.

Life is all about choices. We make choices every day based on what we know, how we think, what's important at the time etc. I've made choices, some were great choices for me and my family and some were disasters for me and my family The important thing I've learned is to live with those decision's and move on to the next great decision or disaster. If you wallow in the bad decisions, you're dead. Don't stop making decisions based on what you think is best at that time. To second guess and linger in the past will more that likely result in a bad decision.  Be positive, forget the past and move on to the next good or bad decision!

Food - Perfectly put....

Baah Ben


Food - Perfectly put....

Thank You!
With age comes wisdom---And the ability to live with who you are. I didn't understand that 10-20 years ago.

Financially, it was not a blunder, but rather one of my best investments, when I bought some Pizza Hut stock many years ago at $16/ share.  I had never been to a Pizza Hut (at the time, there were only two in NJ where I was living at that time).  The stock doubled in about six months when I finally ate in one while vacationing in FL.

It was by far the worst pizza I'd ever eaten.  I promptly sold my holdings after which it sank back to about $16 over the next 6 months when Pepsi bought it up.  

I've only been back to a Pizza Hut twice since - both being as bad an event as the first.  Eating there more than one was one of my worst blunders.

When I first got married in the early 70's we bought a house in what is called the "Old Town District" for $10,000! It was a brick 2 bedroom with a large kitchen, dining room, LR with fireplace, finished attic (extra bedroom) and one bath with a unfinished basement. Our payments were $100 a month with a 10 year loan. Well after a few years there nothing would do that I wanted a new house. So started building a house, sold the old house for $24,000.

This area is now very expensive and the "in" place to live. If I could I would kick my self everyday for selling this house. It would have been paid off over 23 years ago. Now I have another 15 years of paying a mortgate.

Dumb, dumb, dumb me!

SassyGritsAL


When I first got married in the early 70's we bought a house in what is called the "Old Town District" for $10,000! It was a brick 2 bedroom with a large kitchen, dining room, IR with fireplace, finished attic (extra bedroom) and one bath with a unfinished basement. Our payments were $100 a month with a 10 year loan. Well after a few years there nothing would do that I wanted a new house. So started building a house, sold the old house for $24,000.

This area is now very expensive and the "in" place to live. If I could I would kick my self everyday for selling this house. It would have been paid off over 23 years ago. Now I have another 15 years of paying a mortgage.

Dumb, dumb, dumb me!

I'm going to write a book, "Stay Where You Are And Become Rich!" Most Middle Class Americans, Incomes between $30 and $90K, are always chasing that next promotion, climbing the Corporate Ladders, etc. Some make it-----most don't. I moved 17 times in 40+ years doing just that. I was successful climbing the ladder----to a point!. However, now that I reflect back on it from a financial standpoint, it was not that smart to buy and sell houses and move that often. Your post triggered me to think about it and I've not had time to crunch the numbers, but I'm certain that if I had stopped along the way and settled into a job and home, I would have been further ahead in the financial game. Granted, in today's world there are no job guarantees. But by staying stationary, the home would have been paid for, the monthly mortgage payment would have been invested in other areas and I'd be in a much better financial situation. The moral of the story is to find a comfort level in a place you like to live and settle down there and prosper, even if you need to work for a lower salary! Think about it, most of our parents didn't move all that often, they paid off their mortgages and put us thru College. Granted, a different time, but some of the basic principles still apply.

One of the most underrated jobs is that of a teacher.  In most large cities, their pay is what other parts of the country would consider terrific.  But, living in these cities quickly eats up those $60,000 plus salaries.  Many have to supplement their incomes with work during the summers, etc.

However, if you can stick with it, after twenty years or so, you get a really good pension.  If you've started teaching early enough in life, you can retire in your early 50's.  

Many a person from my generation initally looked the other way but today, those who chose teaching as a profession are retired and doing ok.  Especially in this financial climate.

 I've been buying and selling domains for a few years and certainly regret some of the ones I've bought and the prices I got for some of the ones I sold.  I'm getting better at it but I still have more to learn.

Andrea

Baah Ben


One of the most underrated jobs is that of a teacher.  In most large cities, their pay is what other parts of the country would consider terrific.  But, living in these cities quickly eats up those $60,000 plus salaries.  Many have to supplement their incomes with work during the summers, etc.

However, if you can stick with it, after twenty years or so, you get a really good pension.  If you've started teaching early enough in life, you can retire in your early 50's.  

Many a person from my generation initally looked the other way but today, those who chose teaching as a profession are retired and doing ok.  Especially in this financial climate.

I have to second this observation
 
My wife and I have completed thirty years of service to the University System of Georgia and, thus, have qualified for our Teachers' Retirement pensions.  It's one of the last of the old-time good pensions--a defined benefit plan that has cost of living adustments.
 
My wife retired a couple of years ago and is now working part-time, making more than when she worked full-time.
 
I will retire next month and hope to do the same.
 
We may not have gotten rich on teachers/librarian salaries, but we in our mid-50s have our pensions that will provide a stable standard of living. If we ever get Social Security we'll be in great shape.
 
So, it really  may not be easy--we had share of poor years early on and te job had its challemges,  but it does pay to stick it out and if you do it's a good reward.
 
 

tfrilin - Yup!  When you were young, you did have a tougher time than those who chose other vocations.  Today, you're the envy of many.  Congrats..Enjoy your senior years!

Having kids.  I could've just burned my paychecks and come out better.
 
Brad

I, too, am a retired schoolteacher. The pension is good, and I was able to retire early enough to start a second career in the financial business.
I have a year and 6 weeks until I retire again, and this time I mean it!

Teaching was for me great.. in the beginning. I would have paid them to let me do it. The last five years were a nightmare (7th grade inner city)

I am awfully glad I stuck with it.

SassyGritsAL


When I first got married in the early 70's we bought a house in what is called the "Old Town District" for $10,000! It was a brick 2 bedroom with a large kitchen, dining room, LR with fireplace, finished attic (extra bedroom) and one bath with a unfinished basement. Our payments were $100 a month with a 10 year loan. Well after a few years there nothing would do that I wanted a new house. So started building a house, sold the old house for $24,000.

This area is now very expensive and the "in" place to live. If I could I would kick my self everyday for selling this house. It would have been paid off over 23 years ago. Now I have another 15 years of paying a mortgate.

Dumb, dumb, dumb me!

I bought our first house using my GI Bill of Rights for zero down payment for a $24,000 mortgage and sold it 11 years later with 300% plus appreciation (hot 70s) and then took that profit and designed and self-built my second home starting in 1982. Our house topped $500,000 in value before the recent downturn. That was one of my stellar investments of 0 to $500,000 plus with pure leverage. Not included in that is my secret financial weapon. My property is legally subdividable with another potential $200,000 half acre lot. Only I won't do that while still living there.