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.
Best Financial Decisions
1. I bought a house in 1998
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.
2. I bought a smaller house with $185,000 mortgage instead of the bigger one with $245,000 mortgage
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 didn’t have to worry about not having enough money because I spent it all on mortgage
- I gave me the flexibility to invest more in my 401k and IRA
3. Took advantage of tuition reimbursement from work to get a Master Degree
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.
Worst Financial Decisions
1. Went to expensive college instead of taking the full scholarship to a very good state school
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).
2. Didn’t having well-defined financial goals sooner
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.
3. Spent money on gets rich quick schemes and unrealistic businesses
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.
From around the web:
- My Financial Decisions: The Good and the Bad at Single Guy Money
- 6 Financial Decisions – Don’t Learn The Hard Way at Gather Little By Little
- My Best and Worst Financial Decisions: They Might Surprise You at Being Frugal
- Best and Worst Financial Decisions: From the Trenches at I’ve Paid For The Twice Already…
- My Best and Worst Financial Decisions at ChristianPF
- My Best and Worst Financial Decisions at The Dough Roller
- Bad decisions I’ve made in investing at MyInvestingBlog.com
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.