This week’s Friday Financial Foul Up will feature a post from Sarah of Paranoid Asteroid. She is a great person that I’m thrilled I’ve gotten to know since February’s Blogger Happy Hour. I hope you enjoy her good spirited post and her final remark may be the best thing I have read all month. Enjoy.
I am the sort of person who learns best by doing, messing up, and doing differently. My first car purchase taught me not to accept dealer financing. My first apartment taught me not to fall in love with a place so much that you ignore all of the drawbacks (I lived there for 4 years, and even by the end couldn’t remember that running the toaster and the dryer at the same time would blow the fuses). My first time making Chicken & Stars taught me that you’re supposed to add water to soups marked “condensed.”
So when Brian asked me to write a Friday Financial Foul Up, I answered honestly, “I don’t make mistakes.” I just learn.
Most of my lessons come with minimal consequences. I probably paid a few hundred dollars extra in interest on the car loan before I wised up and refinanced through my credit union. I loved my apartment, and since my now-husband moved in shortly after I did, the only additional costs were a few extra calls to the landlord or running to the garage to reset the fuses. Adding water to the soup after the fact worked just as well as adding it in the beginning.
There is one mistake, however, that still bothers me, mostly because I’ve never gotten around to correcting it.
I opened my IRA in 2007 under pressure from my father, from every financial website I read, and from my boss. The only problem was that I had no idea how to invest. Target retirement funds weren’t widely available, and Robert Kiyosaki had written an article about how mutual fund fees would eat up all of your returns.
Where I Fouled Up
Luckily, I had a subscription to Money Magazine! And they had an article on The Best Stocks To Buy NOW! Inexplicably, I decided to pick one company from this list and buy a few shares of their stock. To this day, I’m not sure why I thought that was a good idea. The company was General Electric, and if I’m not sure why I only picked one company, I’m 63857 times less sure why I chose GE. I’ve harbored a dislike of GE ever since they didn’t offer me a job in 2005.
I bought 50 shares at $36.89, for a total of $1844.50, on February 28, 2007. Today they are worth $18.30 per share, for a total of $915. That means I’ve lost $920.50, at least on paper. That’s over 50%! What’s worse is that I’m still holding onto those shares for all the stupid emotional reasons people always hold onto losing stocks. This mistake could even end up costing me more, and yet I feel powerless to extricate myself from the situation.
What I Learned
It sounds so simple now, but even the finance “experts” can’t predict the future. Blindly accepting recommendations from anyone without doing your own research will probably leave you shaking your fist in impotent rage at Money Magazine every time you check your account balance.
At the very least, I can satisfy myself knowing that GE is still down from their 2005 value, while my current company is up by $10 in the same period. People might argue that hiring one person couldn’t affect stock prices that much, but I know better.
Do you like this series? Check Out The Previous Foul Ups:
Foul Up #26 – Brian (My Next Buck) – Final Four Weekend
Foul Up #25 – Peter (Bible Money Matters) – Being Ignorant of Your Finances Means Money Lost
Foul Up #24 – Daniel (Sweating the Big Stuff) – Paying for Value
Foul Up #23 – Kristin (Instigationology) – Giant Elves and the $86 Movie I Never Finished
Foul Up #22 – Kyle (Suburban Dollar) – Being Down on High Interest Checking Accounts
Foul Up #21 – Brian (My Next Buck) – Pale Dude’s Shouldn’t Go Tanning
Foul Up #20 – Shawanda (You Have More Than You Think) – How Financial Knowledge Can Hurt
Foul Up #19 – Christine (Money Funk) – Love Can Hurt Your Financial Situation
Foul Up #18 – Clayton (Just Good Financial Advice) – Trying to Get Rich Quick
Foul Up #17 – Craig (Budget Pulse) – Black Friday Purchase Becomes a Dust Collector
Foul Up #16 – Jesse (PF Firewall) – The Fine Print of Rental Properties
Foul Up #15 – Paul (Fiscal Geek) – Unsuccessfully Restoring American Muscle
Foul Up #14 – Mrs. Micah (Finance For a Freelance Life) – How Getting Married Wrecked My Finances
Foul Up #13 – Evan (My Journey To Millions) – Speeding Up Payments on Loan Interest, Not Principal
Foul Up #12 – Elle (Couple Money) – Stretching Yourself to have a Comparable Car to Your Friends
Foul Up #11 – Revanche (A Gai Shan Life) – Sibling Bailouts Cost More than Just Money
Foul Up #10 – Brad (Enemy Of Debt) – There’s Nothing Interesting About Interest-Only Loans
Foul Up #9 – Jason (Redeeming Riches) – Buying a Car with a Balloon Payment at the End
Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money