Financial Blunders on the Road to FI

Michael QuanBeliefs, Education, Misc, Real Estate, Saving Money, Taxes8 Comments

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Financial Blunders

The road to FI (financial independence) is littered with financial blunders.

But, don’t let that stop you. I didn’t… yet somehow I was able to F.I.R.E. at 36.

Today, I’ll share with you a few of those silly mistakes I’ve made… some far worse than others!

Financial Blunder 1

Stole $40 from My Dad’s Wallet

financial blundersSo when I was just 8 years old, I really wanted to get my hands on some cold hard cash!  My juvenile desire was so great that I stole two $20 bills from my Dad’s wallet and denied ever seeing them when he came asking us kids if we’d seen it.  A month or two passed and I had to launder it.

So, I took one of the $20 bills with me one day when we were shopping in a bookstore.  In an empty aisle I dropped the $20 bill, then walked around a minute before returning.  When my sister and Mom were in view, I did my best acting, “Oh my gosh!!  I just found $20!”  After a couple of high fives, I pocketed it and returned it home into my piggy bank.

To be honest, I don’t know what I did with the other twenty, but my Dad never officially called me out even if he had his suspicions.  Instead, he taught me the value of money over the years by example.  Thanks, Dad!

Financial Blunder 2

Destroyed a Rare Baseball Card

baseball-cardIn elementary school, I coerced my friend into trading me a pretty expensive baseball card (worth ~$2000 today) for several other cards that were essentially worthless… yes, I know… that wasn’t very nice!!

To make matters worse, I carried the rare mint-condition baseball card out during recess in my pocket.  After playing 20 minutes of dodgeball, the baseball card had two new creases right down the middle of it.  This essentially cut the value of the card by 95%… ouch!

Perhaps it was a bit of poetic justice since I wasn’t too nice to begin with.

Financial Blunder 3

Bought a Rental Home That Couldn’t Be Rented

RH2After the last housing downturn in 2008, I finally pulled the trigger and purchased my very first rental home.  I was elated because the numbers looked great in my pro forma (estimated projections).  I was super proud of myself for waiting until the market corrected itself in 2010.

There was only one problem.  I couldn’t rent it out!  Turns out there was a long-term (99 year) rental restriction on the property.  I was s&$! out of luck.  If you’d like to read more about how it all worked out, check out my post – My First Rental Property Was a FAT Failure.

Make sure you read EVERYTHING before you sign your contract.

If I had to do things over again today, I would have considered working with a turn-key provider like RoofStock first.  They help new investors vet the entire property for you and provide a lot of hand-holding along the way.

Financial Blunder 4

Worked One Day for a Year

financial blundersI had been looking for a job during the summer leading into my senior year of high school.  Nothing really caught my attention until my cousin gave me a referral to work the concessions stand at the Hollywood Bowl.  I excitedly jumped on the opportunity and drove over later that week for a quick interview.  They said okay and I scheduled my first evening.

The following week I worked one evening for 5 hours and got paid $4/hour.  I made a whopping $20!  I never returned after that one night because I started back to school the week after.  Additionally, it also took me over an hour to commute to the location, so I also wasted gas and time getting there and back.

Here’s what else was lame.  I was set up as a W2 employee so I had taxes withheld on $20.  I wasn’t about to file a tax return on $20 of income that year, so I blindly gave Uncle Sam my money for free.  Ahhh, to be young and ignorant.

Hmm… I wonder what I did with that 20 bucks!?

Financial Blunder 5

Wasted $300 on a Horse Betting System

horse-racingAs a kid, I was always fascinated by gambling.  Trips to Las Vegas gave me googly eyes and my ears focused in the clanging of falling quarters.

My cousin and I realized that we could legally gamble when we turned 18… at least at the race track.

As soon as I turned 18, my best friend and I made a trip to the local horse racing track.  We were super psyched to go because we had just purchased a brand new $150 horse betting system that was a sure thing!

It turned out the systems didn’t work at all and we lost another couple hundred dollars in bets that day.

A couple of years later in a college statistics class, I finally studied the expected odds of gambling.  I was crushed to find out that the odds were rigged against me from the beginning.  Gambling completely lost its prior allure and it’s one of my least favorite past times today (win!).

Financial Blunder 6

Paid a Fake Border Crossing Fee

stopI don’t know about you, but sometimes when you’re traveling in a foreign country (especially a 3rd world country), it can get a bit stressful trying to comply with pertinent laws, taxes, and fees.

My wife and I were traveling in Central America with some friends and decided to take a quick side tour into Guatemala from Belize.  When we got to the border there were signs clearly marked NO FEE to exit or enter Guatemala.

When we entered, we were greeted by uniformed officials asking us to pay an entrance tax.  We were a bit suspicious of this tax, but with limited Spanish, we ultimately complied.  It came out to $20 for the 4 of us.  It wasn’t a lot of money, but when you’re under stress you don’t think as well.  We gave them the money and moved on.

I hate getting scammed!!

Final Thoughts

Sometimes the most thoughtless financial blunders ultimately end up being the most valuable lessons.

You can see when I was young, I made some poor judgment calls because I thought I wanted money.

When I was finally older, I still made mistakes, but it was at least with the right intentions.

I also didn’t quit.  Reaching FI is all about finding the proper strategy and then course correcting until you reach your destination.

Readers, what are some of your financial blunders you’ve made?  What did you learn from them?

 

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8 Comments on “Financial Blunders on the Road to FI”

  1. Michael, I also had that Johnny Bench RC. I’m picturing it in my mind, and he (as a rookie) had to share the card with some no-name (sorry, no-name, but I can’t remember your name). I got it right out of the wax, from Robert’s Liquor Store at Palms Blvd. and Centinela Blvd. in West L.A. I was in second grade in 1968, and the boys from our neighborhood would ride down on Tuesdays because that was the day they put out the new cards in boxes, 5 cents for a pack of 5 cards. Also got Nolan Ryan/Jerry Koosman RC the same way. We would trade, just like you did. As I look back, I think the hobby was great for children because it taught us memory skills, pattern-recognition, and negotiation skills. Fun days.

    My cards got beat up, too, carrying them around in a rubber band in my back pocket. 15 years ago, I sold 1,710 cards for $800. They were all pretty low grade. Anyway, not too many people have come across that card, let alone owned it!

    Also, in 1988 I was on a group school trip touring Central Banks in S. America, and had the chance to enter Paraguay. To get on the bus, we were asked to ‘donate’ $5 to uniformed soldiers holding long guns. It didn’t feel right, and I was the only one not to do it. One of the soldiers gave me a creepy fake-grin as they left, and long story short the students who went to Paraguay got pretty much cleaned out of their cash. All ‘voluntary’, of course, but they had to say that, didn’t they. I feel violated just thinking about that grin!

    1. No way! Can’t believe you had the same Johnny Bench. And yes, it was a shared card with some unknown player (Rod maybe?). That’s so cool that you got it out of the wax pack.

      And wow, your trip to Paraguay sounds like quite the adventure. You were pretty brave NOT to “donate”… haha.

  2. In high school I had a job I interviewed for at lake Lanier islands. I remember selecting island cleanup because it paid $2 more per hour. It was a janitorial job which was fine but it was ultra boring and isolated. Seeing as the commute was about 1 hr for me it didn’t last past a few weeks.

    1. Thanks for sharing! It’s interesting the types of jobs we’ll take when we’re younger (especially in hindsight). And, it’s always amazing to see what they teach us about what we like and don’t like.

  3. That’s hilarious. I have many similar stories.

    I was really into baseball cards when I was young – what was the card you traded for?

    Super into gambling too – when I turned 18 my friends and I drove nearly 2 hours to the Chumash Indian Casino pretty regularly haha.

    Then when I was 19 I have a pretty similar story of not working. After my first year in college I was living at home and my parents said I needed to get a summer job. So I interviewed at Jamba Juice and was offered the job. I figured that satisfied the requirement and I didn’t ever follow up to schedule getting started ….

    1. Brian, the card that got smashed was a Topps 1968 Johnny Bench Rookie card.

      That’s so funny you have so many of the same stories. What was your game of choice at the Indian casino?

  4. These are some great stories Michael. On the last one, if a uniformed officer is asking for $20, it’s kind of hard to say no. I’d categorize that as more in the “getting robbed” category than making a bad final decision.

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