My Dumbest Purchase Ever And Lessons Learned
Last week DebtKid, shared his dumbest purchase and offered his Nintendo DS Lite as a contest prize to one lucky winner. Everyone who shares their story has a chance to win the Nintendo DS Lite. Well, I am going to join in for the opportunity to win this little gadget. But more importantly, it’s a story I’ve been thinking about sharing anyway.
I briefly touched on this story when I shared my best and worst financial decisions, but I didn’t share the details. I am going to do that in this post, but more importantly, the valuable lessons I have learned from that experience.
Free Seminar and Limited Time Opportunity
When I graduated from college, I didn’t get into medical school as I had hoped, and I felt lost. To make it worse, I didn’t have a real job to keep me busy. I was officially in a career limbo. As a result, I was on the prowl for opportunities, and found myself at a free business seminar one night. The presenters were from a company called Silent Sales Force. The presenters weaved together a very convincing 2-hour show and at the end offered all attendees a one time only opportunity to purchase their bulk candy vending machines at a deep discount. In my haste, I jumped right at the chance and bought 2 dozen units.
The Anatomy Of A Bad Decision
Let’s do a play by play look at this bad decision:
- No business plan — I am sure you’ve heard it before: “He who fails to plan, plans to fail.” I went into the seminar cold. I didn’t know anything about bulk candy vending machines, or the business model that makes it work. Everything I knew about the business and these machines were what they told me that night.
- No due diligence — I didn’t use my enthusiasm to do additional research on my on term. Is this a sound business model? Do I want to work with this company, or is there a better alternative? Are these machines the ones I need? Who are my competitors? Are local businesses willing to place my machine on their premises?
- Impulse buy — No business plan, no due diligence, and I fell for one of the oldest sales gimmicks. I rushed into buying because the presentation made it sounds like a sure thing, and I was afraid of losing the opportunity to buy at a great discount. I let my emotion made the decision for me.
- No self awareness — I was blinded by the promise of easy money. I didn’t consider my personality, or passion to be in this type of business. Do I really want to go around and ask other people if I can use the store space for bulk candy vending machine? Do I want to go around collecting money quarters, refill machines, and repair them?
- No follow through — By the time I got these machines, the excitement wore off and I got a full-time job to fill the void. I let them sit in my house instead of doing something with them. I wasn’t motivated to follow through at that point.
- No exit strategy or recovery plan — I was so sure this was going to work that I didn’t consider what to do if it didn’t. Since I bought these machines on “special promotion,” the company won’t take them back. I could have sold individual unit and get them out of my house (I did sell a few at a loss). Unfortunately, most of them sat in storage for nearly a decade before finding their way to the dumpster.
Overall, this experience taught me a few things:
- When it’s important, start with a plan
- Do your due diligence and seek independent source of information
- Don’t rely on your emotion, or gut instinct
- Be aware of your capability and respect your passion
- Every endeavor requires discipline, commitment, and persistence
- Always have an exit strategy and a recovery plan
In retrospective, I am glad I made this mistake early on. The experience taught me many things that helped me quite a bit over the past few years, and they will continue to benefit me for the rest of my life. I hope you enjoyed this story, the analysis, and the retrospection.
If you like reading about bloggers admitting their dumbest purchases, here are a few: