Bishoy: My biggest money mistake was when I decided to invest with a live account too early on.

custom built computer
Simon’s custom built computer

Amy: What’s a live account? Can you explain a little?

Bishoy: When you start investing, you can do practice investments with a practice account, where you’re not trading real money, you’re trading paper money, which is not hard currency. I was one month into trading and I was trading with a live account, and I ended up losing maybe $15,000. There was no reason for me to trade with real money, and I just didn’t have the experience. People say that you become a good investor after 10 years of trading, and I had already jumped into live trading.Simon: Yeah, my worst money mistake is also investment related. This was back in college, and I had invested in a company that I thought was going to do really well, but then all of a sudden it just tanked and went bankrupt.

Amy: How much money did you end up losing?

Simon: About $700?

Amy: That’s not too bad. And I feel like your money mistake is more just what happens when you invest — there are some highs and lows and unexpected consequences.

Claire: My worst money mistake was not setting up a retirement account when I was in my twenties. All I did was have fun, go out, buy drinks. When I was reading Ramit Sethi’s “I Will Teach You How to Be Rich” and I saw the chart about compounding interest, it hurt me to see how much money I could have saved away if I had set one up.

Amy: I didn’t make any major money mistake that had huge consequences. I mean, I’ve shopped and gotten things that I regret, but I either donate the items or sell them. Though I did purchase a pair of expensive shoes that I didn’t wear much and when I sold them, I didn’t sell them at a good time and they ended up going for way less than I know they could’ve gone for if I had sold them at some other time. That was my bad, and I still occasionally think about it!

To change it up a little, what was the most worthwhile purchase you ever made?

Claire: It was definitely my car for me. It’s a 2005 Prius, and I got it off Craigslist. I did all the homework, I looked up the Carfax, I compared prices. When I went to pay, I paid with a credit card check, and I paid it off in about eight to nine months.

Simon: My most worthwhile purchase was definitely the computer I built. It’s got custom parts and I spent about $2,000 on it, but it was worth every penny. All the parts are high quality and you won’t be able to find it for that price in the market.

Amy: I was going to say my college education, but that’s a cop-out and my parents paid for most of that anyway. I got a super expensive bag a couple of years ago and it’s definitely — definitely! — the most expensive thing I’ve ever paid money for at this point in my life. But even though it was expensive, I’ve gotten so much use out of it and probably will for another few years, so it nets out to being a good investment.

Bishoy: Mine was definitely getting Lasik surgery. I wore glasses for years, and being able to see everything crystal clearly was amazing. It cost me about $2,500 but this is a procedure I would get again and again if I needed touch-ups in the future.

Amy: That’s a cosmetic procedure, right? So insurance wouldn’t cover it?

Bishoy: Yeah, it’s not covered by insurance, but you can haggle on that, for sure. The doctor first gave me a price of $3,800 and I wasn’t going to do it, but then they lowered it down to $2,500.

– – – – – – –

MyBankTracker readers, what was the worst money mistake you ever made? Your best investment? Let us know in the comments section!

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  • Alan

    My wife and I have made several wise financial decisions. We accepted teaching positions in Peru after graduation with our Masters degrees and substantial college debt. We paid off our loans in full at the end of year 1 and then continued for 3 more years, saving as much as possible. We bought our first home in Rhode Island during the summer after year 3 in Peru and rented it out. After our 4th year in Peru, we accepted positions in Belgrade, (then Yugoslavia…now Serbia) for 2 more years. When we came home, we had reasonable equity in our R.I. home, (we accelerated payments) sold it and moved into a bigger home.

    Our MOST beneficial decision was to find a GOOD financial planner to start managing our investments (mainly retirement assets) at about age 32. Finding a good planner was not easy. We walked out of 3 “initial interviews” with planners that just did not support our goal of no debt and saving for retirement instead of riskier levels of investing and taking out a bigger mortgage on our home. Our 4th planner interview was a match and we have been with him now for about 25 years with excellent results. Much to our great pleasure, he was recently named one of the 10 leading financial planners in the nation.

    Our third decision that has worked out well was when we returned to the U.S. from our overseas postings, when we landed good jobs (took a couple of years) we began putting money into Roth IRA’s, 457 plans or 403b accounts. One thing I learned is that teachers think that their pension will take care of them when they retire. I made it a personal mission to explain to every new teacher that came into my school TO GET INVOLVED with a 457 plan and/or Roth, because there is a good chance you won’t be in the field for 30+ years and even if you do collect the full pension benefit, it isn’t enough for a “comfortable” retirement. Several teachers jumped on board…more did not.

    I encouraged the teacher’s union to bring in a private disability policy as none was offered by the school system. This took some convincing but we did finally get a plan in the building. Out of over 100 teachers, 9 signed up. I was one of those who did and I am so glad. I was diagnosed with a genetic Kidney disease in year 24 of my employment with the school and a transplant was necessary. I had my transplant and it was (is) successful but my doctors thought I should retire (age 54) because of increased risk of complications due to exposure to illnesses. I did retire, and was eligible for only 42% of the state pension. I thought the disablity insurance policy on which I had paid premiums (after tax dollars) would step in but we pretty much had to sue them and spend considerable $ on legal assistance before they would honor the policy. Long story…but I am VERY determined and we won after months of “fighting”. I am still collecting the benefit until I am 65..

    I have been retired for 6 years now and my wife, a library director, loves her job and doesn’t want to retire. We take cruises, travel, and live nicely but carefully using non savings. Our planner assures us that between our investment retirement accounts and our pensions, we will be comfortable in our “senior years”. We have no debt and hope to never be in debt again.

    Our bad decision….well, I think we did OK and no major financial errors were made. I wish we had started retirement savings a few years earlier but all in all, I think we did OK for a couple of kids just out of college and now in our early 60s.
    Alan Massachusetts