This is our first group writing project from members of the M-Network. I this writing project we share with our readers our best financial decisions and worst financial mistakes. Why make your own mistakes when you can learn from ours? After you finish reading this post, please visit other M-Network blogs to read about their best and worst financial decisions.
I think this was the only time that good timing worked for me. Normally, I have the tendency to buy investments at the worst possible time. As Lady Luck would have it, I bought my house at the end of 1998 — right before one of the biggest housing price boom ever.
The chart above represents NYC housing prices that very closely resemble the value of my house. My house essentially tripled in value between 1998 and now. If I’d waited much longer, I wouldn’t have been able to afford the house.
When we were shopping for a house in 1998, my dad and I really wanted a bigger house. Luckily, my mom insisted (overruled actually) that we buy the smaller one. With the bigger house, my monthly mortgage payment would be $1,508 instead of $1,139. Not having to pay that bigger mortgage turned out to be a good thing because:
I think this was another great financial move. After I failed to get into medical school, I could have gone back for my graduate degree right away. Instead, I decided to join the work force to earn some money and gain life experience. This allowed me to pay of the student loans and mature a little more. A few years later, I was ready to go back to school by taking advantage of the tuition reimbursement program offered by my company. In the end, I saved $36,400.
I made a several mistakes with respect to college as I per my post “7 Mistakes I Made When I Went to College.” As mentioned in the post if I went to the less expensive school I would have saved my parents about $20,000 a year. If we took that money and invested in the stock market, it might be worth about $265,000 today (at a modest 8% CAGR).
Since I started this blog, I developed better financial goals such as building $1 million investment portfolio by 2017 and saving $250,000 for our son’s college by 2024. Without good financial goals, I was prone to make mistakes as I have written in my guest post “12 Investing Mistakes I’ve Made (and How You Can Learn From Them)” at Get Rich Slowly.
In my quest to become richer, I bought several get rich quick packages like the one that tells you how to sell the get rich quick book to other suckers like me, or the one that tells you how to flip foreclosures with no money down. Although flipping foreclosures could be practical business for people who are industry insiders, it wasn’t realistic for a 21 years old guy with student loans.
I also made a rash decision and bought some candy vending machines. I went to the seminar, got all pumped up, and left my common sense at home.
I hope you enjoyed this post.