Our 6 Financial Mistakes and 15 Lessons Learned
Hello readers, today, we are going to talk about financial mistakes we have made throughout our lives and the lessons we learned from them.
We will start with the financial mistakes made by Ms99to1percent, those made by Mr99to1percent, and then those made together since we started dating.
Ms99to1percent’s financial mistakes
Mistake 1: Not paying off my credit card or at least paying the minimum required amount
Back when I was in college, broke, and barely surviving, some bank made a mistake and gave me a credit card J. I quickly maxed it out buying food and books and couldn’t find money to pay it off.
But not only did I not pay it off, I didn’t bother paying the small minimum monthly payments, because I was too lazy to go to the bank to pay such a small amount. I told myself I was too busy for that.
I also told myself, the bank should not have any problem with it, since they were charging me interests and making money off me. The bank must love me.
And of course later on I found out, I had ruined my credit because of that, but I was able to fix my credit and bring it into the 700’s within a year of finding a full-time job before even graduating.
1) If the banks love you, you are probably doing something wrong.
2) Set up online banking/payments, it will save you time
3) Maxing out your credit cards and not paying at least your minimum monthly payments, will ruin your credit
4) Pay off your credit card every month
Mistake 2: Buying some $7,000 stock market forecasting tool
Another fellow college student and I went to some business presentation for some stock market forecasting tool at a fancy hotel so that we could get some free lunch. (I told you we were broke and had to be resourceful 🙂 ).
But we ended up falling for their tool or should I say scam (won’t name the company), and we borrowed money to buy the tool for $5,000, plus other add-ons and monthly subscriptions and the total came to about $7,000 with my half of the costs being $3,500.
We tried the tool for months, trying to learn how it works, but we never made any money, instead it actually made us lose money but fortunately, for us, we were in the test-mode, since we didn’t have much money to trade live anyway or day trade.
5) There’s no such thing as a free lunch
6) No tool can really predict the stock market. If someone tries to sell you one, they are scamming you.
7) It’s best to put your money in an index fund. Invest in single stocks only with money you can afford to lose.
Mistake 3: Buying a brand new car
After getting frustrated with my first car that somehow always managed to break down every week around payday 🙂 , and also after getting tired of my crooked mechanic; I decided I would aggressively save for a brand new car.
I did a lot of overtime, and finally bought a $30,000 brand new car and of course lost 20% of its value the minute I drove off the lot.
I also made a mistake and continued to go to the dealership to have the car maintained.
Until one day, someone hit my car, and he took it to a decent, smaller, cheaper place to have it fixed for a 1/10 of the dealership quote.
8) Never buy a brand new car.
9) Find a mechanic/shop that you trust. Don’t go to an expensive dealership to have your car maintained or fixed especially if you plan to keep it for a long time.
If you sell the car after 10, 12, 15,…years of driving it, no one is going to care that you took it to a fancy, expensive dealership for maintenance.
Mr99to1percent’s financial mistakes
Mistake 4: Attempt at party promoting
Back when I was in high school, I came up with my first business idea: Party promoting.
I took all my savings, rented a place, printed & distributed flyers, and even bought a radio ad… and a whopping 20 people showed up. Ha! It was a total flop.
The hardest thing was to tell my parents that all my savings were gone. However, to my surprise, I didn’t get in trouble.
They told me it’s ok to try and fail, but it’s no ok to fail to try.
10) it’s ok to try and fail, but it’s no ok to fail to try
11) Take time to research and execute your business plan.
Mistake 5: Using my credit line to buy a luxury car
I bought a used, luxury car for $30,000 and put it on a credit line.
And, on top of that I didn’t try to pay it off fast, instead I spent the next 3 years, making only the $200 monthly interest payment.
After 3 years of only covering interests, the balance had actually increased instead of decreasing due to the credit line insurance premiums that were being added.
Fortunately, after getting married to Ms99to1percent, she convinced me to cancel the credit line insurance and to pay off the balance and to never carry the insurance on the credit line since I should not be using the credit line; and if I was to ever use it again, I should pay off the balance by end of the month.
All in all, the car cost me an additional $10K in interest and credit line insurance premiums, for a total of $40K+.
12) Always buy a car cash
13) Don’t use a credit line for anything, unless it’s for an emergency, and you don’t have an emergency fund.
By the way, you should really have at least 6 months’ worth of expenses in an emergency fund.
14) Don’t carry a credit line insurance
Our financial mistake as a couple
Mistake 6: Suspended/Delayed lifelong dream
We have a lifelong dream of setting up school(s) for kids, especially underprivileged kids.
We tried to start the project this past spring, but we realized how expensive and time consuming it was, especially dealing with government bylaws and bureaucracies.
We ended up wasting thousands of dollars for nothing, and thus, the project has been suspended until we FIRE and have enough money and time to manage the project.
15) Research, research and do some more research before starting an expensive project
How about you guys? What are the financial mistakes have you made and what lessons have you learned from them? Please share with us. Sharing is caring 🙂 .
On that note, here are a few other personal finance bloggers who have shared their financial mistakes:
- Chronicles of a Father with Cents – My Financial Mistakes
- A Journey to FI – My Financial Mistakes,
- ThinkSaveRetire – Don’t brag about success; tell me your failures
- OthalaFehu – Budget Bungles, Money Muddles, and Fiscal Flubs
- Turning Point Money – My Financial Mistakes
- Femme Cents – 7 lessons I learned from my biggest financial mistake
- Mr. Jumpstart – Recent Financial Blunder
- The Frugal Gene – Top 5 Sorry Ass Financial Mistakes Of My Early 20s
- Gen Y Money – My Tell All: Investing Mistakes in my 20’s
- 99to1percent – Our 6 Financial Mistakes and 15 Lessons Learned
- Winning Personal Finance – My 7 most regrettable financial decisions
- Chief Mom Officer – Overdrawn checking account!
- Foreign Born MD – Biggest mistake: Over a million dollars worth
- Kiwi And Keweenaw – Is An Emergency Fund Necessary with a High Savings Rate
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Do you want to learn more about us? If so, you can also read these other posts:
- About us
- How We Increased Our Annual Income From $0 to $160K to $400K+
- How we live on 15% of our income
- Joining the Million Dollar Club/Challenge and So Can You
- How To Pay Off A Mortgage In 5 Years
- Our Biggest Money Fight and 9 Lessons Learned
- Our 6 Financial Mistakes and 15 Lessons Learned