Seriously I’ve made more than my fair share of stupid money mistakes. Some people even read my articles and see me as a financial expert. Truth be told, my expertise stems from the fact that I learnt the hard way from my mistakes. My mistakes have been opportunities for learning and progress, with something good eventually coming out of it.Mistakes are opportunities for learning and progress, with something good coming out at the end. Click To Tweet
Do not be afraid of making mistakes. I have compiled ten of my stupid money mistakes here with the hope that you could learn something from them. Here they are:
Giving loans from my savings
The first stupid mistake I made with my money is giving people loans from my savings. From time to time friends and loved ones request to borrow money. In order to help them I took out of my savings, which they promised to repay promptly. Most times they defaulted, with a few paying the money in bits over a longer period. This is not what savings are meant for. My savings should be put to use working to produce more money and not as a loan to others. That’s why I have stopped giving loans, preferring to give people cash gifts if I can afford it instead.
Blowing my christmas bonus
Stupid Mistake Number two usually took place at the end of every year during the Yuletide season. This was the time my employer would pay me a thirteenth month bonus, one additional month’s salary. For many years this bonus was “Christmas Spending Money” and I went all out to blow it away by the New Year. Stop blowing your bonus. Invest your bonus rather to generate profit.Stop blowing your bonus. Invest your bonus rather to generate profit.. Click To Tweet
Delegating my money making efforts to others
Now taking my hard earned money and entrusting it into the hands of a stockbroker to invest it for me also qualifies as a stupid mistake. I didn’t take time to learn about money and investing so I entrusted my savings to my stockbroker to invest for me. He was just an employee in a firm and didn’t invest any money of his own. How can a man who isn’t rich make money for others? According to Warren Buffett, “Wall Street is the only place that people drive to in a Rolls Royce to take advice from people who ride the subway.” Eventually I lost money due to bad investment advice. I thus took up the gauntlet to take charge of my financial life and slowly started to master money and investing.
Dating a gold digger
You might find the fourth stupid money mistake I’ve made quite amusing. This involved dating someone who only saw me as a source of income to assuage her needs and wants. I was once in a relationship where I kept giving and giving, while getting next to nothing. Relationships should be give and take. I thus had no choice but to end the relationship with my account considerably lighter. There are many gold diggers in society today. You would do well to open your eyes before getting into any relationships. Avoid anyone who keeps demanding money from you.Relationships should be give and take, not one party giving and giving. Click To Tweet
Taking a loan for the wrong reasons
My fifth money mistake involved taking a loan to finance purchases such as a personal car or home appliances. I took a loan with the associated interest and fees to purchase something I wanted but did not need. I ended up paying far higher even though the payment was spread out. The main point is that none of these purchases were assets. Assets bring in money. A brand new car for my personal use cannot bring in any additional income. I would have been better off saving to purchase a used car instead of a brand new one. Take loans to procure assets.
Investing in what I didn’t know or understand
I’ve also had experience investing in businesses I did not know much about. I remember investing thousands to learn Online forex trading and losing it all. The opportunity simply did not materialise as promised by the Service Provider. There are many scams posing as business opportunities for the innocent, naive and gullible to fall prey. Ensure you do your proper and due diligence before you put your hard earned money into any venture. If the returns sound too good to be true they probably are.There are many scams posing as business opportunities for the innocent, naive and gullible to fall prey. Click To Tweet
Seduced by lotteries & promotions
What about the lottery, promotions and the like? I’ve fallen victim on occasion, seduced by advertising messages telling you to give little and get much in return. It usually involves buying products or patronising services. In return you could be the lucky winner of a cash prize worth far more than your initial outlay. The bad news is millions of other people are thinking the same way so the chances of winning are remote. I have even had to over patronise the product in hope, yet still winning nothing. Going down this route is unrealistic and stupid.
Spending my savings on expensive foreign holidays
Another stupid money mistake is embarking on expensive foreign holidays and spending all my savings. I took money meant for investment to blow away on a holiday. After all life is short? I’m not saying holidays aren’t necessary but why not holiday nearby or within the African continent? There are many excellent holiday destinations close to home that cost far less. A holiday is a holiday, as far as I reckon.There are many excellent holiday destinations closer to home that cost far less.. Click To Tweet
Renting a house with more space than required.
Ninth, several years ago I rented a house, larger than what I needed for my growing family. A duplex in an exclusive neighborhood was my desire and I would not rest until I achieved it. When I calculated the amount spent afterwards it could have built me a house in a less exclusive neighborhood. This was most definitely an unwise move. There’s nothing wrong in starting small and seeking to build your own house as soon as possible.
Improper use of a credit card
Finally using a credit card without an understanding of payment terms was my tenth stupid money mistake. Failing to pay back more than the minimum monthly limit caused the interest to pile up. Thus interest paid became higher than the value of what I had bought. I learned that the best way to use a credit card is to pay off the outstanding before it’s due. This would lead to paying a much smaller interest.The best way to use a credit card is to pay off the outstanding before it's due. Click To Tweet
Stupid money mistakes: good/bad?
I have become more savvy about money as a result, because I made mistakes. These mistakes and the consequences of losing everything financially has driven me to acquire an expertise on money affairs. I don’t know where I would have been without them, probably financially illiterate and living in lack and poverty.
Mistakes are not necessarily a bad thing, it is not learning from them that is bad. Learning by making mistakes is the best way to learn because the learning curve comes with experience and knowledge. Experience is one of the best teachers one could ever have or hope for. Have you made mistakes like the ones above or perhaps others? Congratulations in advance because you have a better chance at achieving wealth provided you learn from them.Mistakes are not bad, it is not learning from them that is bad.. Click To Tweet