folktales of financial faux pas
I think it’s important to admit that everyone makes mistakes, even the mighty current president of the USA (no way!?) and even Mr Money Mustache. There is no avoidance of this fact so the best thing is to admit it when you make one, use it as a learning experience and move on with your life without regret (perhaps easier said than done depending on the consequences, I’m not sure how I would have handled inventing the atom bomb for example but there we go).
As this is supposedly a personal finance blog today we’re talking about financial faux pas. I’m going to write down some of my worst monetary sins for you to laugh at, and feel free to use this as a forum to admit your own.
There is no judging allowed on this page, think of it as free group therapy courtesy of your old pal TFS.
So cleanse your souls my FI brethren and join me…
cash machine cock ups
We’re starting small here, but sometimes I can be very absent minded and walk away from cash machines with my card but without the money. One time way back it was around £50 I think and so I rang the bank and got them to reimburse me, which they kindly did! But more recently in the last year I would say I’ve done this 3 times now with values of £10, £20 and then £10 again. The thing with all of those times is that it was in a very busy square in London and so there is no chance the money would have gone back in – I believe there is a time limit of about 30 seconds then the money goes back in and you can get reimbursed or are automatically reimbursed – so I *shock* couldn’t even be bothered to ring the bank to see if I could get it back.
This is shockingly lazy to not even try I know, but part of me thought I needed to be punished financially for being such a dufus (clearly this did not work) so I thought I’d just leave it.
The final £10 was actually even more ridiculous as I was at the same cash machine as where it happened before and I thought to myself “Oh… better not leave the money in the machine this time” and then the next thing I knew I was 50 metres away and there was no cash in my wallet.
Do my ears deceive me or is that my self fulfilling prophecy klaxon going off?
It would seem my subconcious only heard the last few words of that thought… “leave the money in the cash machine” 1. It was like a hole in the space time continuum had opened up in my brain and I honestly can’t remember what happened for those 30 seconds between my last thought and checking my wallet. Gadzooks!
Anyway so that is £40 in a year of cash machine confusion!
Total cost over the last 5 years: £90
clothing catastrophes
I’m really good at losing clothes, especially coats. I cannot tell you how many coats I’ve left in places over the years. Let’s crank up the admission time another notch here: Yes I am mainly drunk when this happens.
I don’t know what it is with alcohol that makes me want to part ways with my clothes (snigger) but it happens with an astonishing frequency.
I guess the only upside is that I tend to buy cheap coats so each time I’m only looking at a £20-£30 replacement cost, but let’s face it this is still a ridiculously daft thing to be doing.
Total cost is probably 1 coat per year so we’re looking at around £150 over the last 5 years…!
gambling gaffes
I’ve made many stupid bets over the years which I won’t bore you with 2 but this gaffe refers to the fact that I decided to try to pay off my credit card balance by gambling. I will repeat that in case you we’re floored by the stupidity of this plan the first time and couldn’t absorb it properly:
I decided to pay off my credit card balance by gambling
I was fresh out of University and in all fairness it was a 0% deal which was valid for 6 months after you finished Uni, so running up the balance in the first place wasn’t that bad. Obviously it was still money I didn’t have and had to pay back pretty sharpish though! I also didn’t have a decent job so paying it back quickly was looking like a tough task working on office temp pay.
So my plan was hatched to win some big bets and pay it off. The balance was around £1,500 if I recall correctly.
There are clearly a thousand holes in this otherwise “watertight” plan but the main one I found was that whenever I won a bit I tended to think I was doing well and so spent the money rather than paying it off (oops) and then inevitably ended up losing a few bets after that and the balance would either revert to what it was before or even go up slightly. Not good!
In a huge stroke of luck, the credit card company changed their rules and started charging cash transaction charges on bookmaker deposits. It turned out even the young and financially loose TFS was not stupid enough to pay these charges – they were extortionate – and so my plan was “foiled” and I decided to just pay it off the old fashioned way by getting a proper job and making monthly payments instead. I think I cleared it within 3 months in the end which was a lot less stressful than relying on my original plan 🙂
The lesson here, that should have been obvious by watching any Guy Ritchie Brit gangster flick, is don’t bet with other peoples money!!!
I’m not sure how much this cost me in monetary terms (perhaps nothing) but it certainly was stupid and caused far more stress than it was worth.
hotel howlers
We once decided to spend £500 on a night in a hotel. Yep,
500 big ones
500 sovs
500 GBP
Half a bag of sand
I think we’re all up to speed with the amount now so let’s move on.
A bit of context, we were are the end of travelling around South America in 2008 and wanted a treat, to be pampered after enduring countless 12+ hour uncomfortable (but in some ways still very fun) bus journeys, and staying in hostels for 3 months.
So we pretty much looked up the most expensive hotel in Rio we could find: The Copacabana Palace.
It was £500 for the night and this didn’t even include dinner which was another £100 on top of that.
Needless to say none of this seemed “worth it” at all after the event but at least we had a story to tell about it. At the end of the day it was just a pretty nice hotel room and a slightly above average dinner, while being made to feel a bit uncomfortable as we didn’t belong there, clearly not being uber rich!
Anyway I just realised I already told this story before here so if you want any more details have another read of that post, but I thought it might be fun to work out what that money would be worth now if I’d invested it instead.
As luck would have had it, this was in the depths of the financial crash: November 2008, the FTSE was at the dizzying heights of 4377 according to the Yahoo Finance chart. This now sits at 7343 at the time of writing so our £600 would have turned into a cool grand. However this doesn’t take reinvested dividends into account and surely we’d have diversified over a global basket of funds as well.
Seeing as the Vanguard LS100 fund has increase by over 100% since it’s inception in June 2011 when the FTSE 100 was around the 6000 mark, I think it’s fair to say that our £600 would have at least tripled to £1800 if we’d have invested it at the depths on the 2008 crash in something similar? Does that sound right?
I can’t find any decent graphs for indices with dividends reinvested so if anyone out there knows of any that would be cool!
How about you? What are worst financial faux pas? Repent your sins here and all will be forgiven!
🙂
Notes:
- I’ve read that subconciouses can get things wrong like this on occasion, especially with golf: “Don’t hit the ball in the water, don’t hit the ball in the water” – I think you get the point by now 🙂 ↩
- actually some are hilarious and are worth hearing, but I will save that for a separate post one day I think ↩
Hi TFS,
Leaving money in the cash machine?!?! Wow! I have to say I use cash points rarely (most spending is on reward credit cards, paid off in full) – but when I do I tend to take out a block of either £50 or £100 – so there is no way I will forget that amount!
£500 for one night in a hotel?! Wow – I though I had stayed in some expensive places, but that beats me 🙂
In terms of my faux pas? I’ve had some corkers. When I first moved to London and had the (what at the time seemed large) pay cheque land – we took a habit of buying Champagne at the weekend. I am not talking about a bottle or two here. We are talking about Jeroboam (4.5 litres) and Methuselah (6 litre) bottles. I even have a picture of me swigging it from the bottle – those suckers are heavy! It was great fun but fortunately I stopped that after a couple of months. I dont want to think what that would be worth today!
I think otherwise I have been fairly sensible (or boring!) – but I have blown a LOT of money on holidays – however I dont regret any of it. I would guess in my 20’s and early 30’s I was blowing around 50% of my take home pay over the year on them. I dont regret a thing – great comfortable flights around the world, skiing all over the shop touring the far east, south america, central america, middle east, africa you name it.
One that would probably get most of the FI communities blood pumping…. as you know, I am a fan of the booze. I got into a habit of enjoying some rather nice Whisky. I got to try one once that really was nice, so without asking the price. Well, as you can imagine a 35 year old single malt doesn’t come cheap. It was over £200 for the bottle. It wasn’t really noticeable given the other bottles I also bought were over £100, but that right now would be worth several thousan pounds in my ISA. I did however thoroughly enjoy them 🙂
Cheers,
FiL
Haha I know right, what a numpty!?
Hopefully by publicly shaming myself I will be more alert next time I’m getting cash out. I also very rarely use cash nowadays but you need it for the odd taxi or foot from a street vendor etc… so that’s why when I do it’s normally a small amount. I won’t ask you what you are getting a oner out for FiL don’t worry 😉
I know it’s ridiculous isn’t it? God knows how much it would be to stay there now! I don’t even wanna look!
Sounds like you’ve had some great trips and are very well travelled, if you can afford all that and still be on your way to FI you’ve done something right. I agree that no regrets spending money on holidays etc… much rather that than “Stuff”.
Haha I can hear the blood boiling already! If you get value out of that purchase then I wouldn’t really call it a faux pas… unlike the hotel stay for me which most definitely was not “value” in my book
Hi TFS,
Haha I really struggle with the leaving money behind 🙂 I still tend to chop and change between cash and credit card. I like the reward points on the credit card, but cash is a lot harder to spend due to the emotional stress of handing over the blue, brown or purple drinking tokens….
Actually, would you believe if you took 2 nights in November it would “only” be £653 for the room… bargain! Well you could always splash out for an Ocean View room… only £1,093 for the same two nights 😉
I am not sure if its doing something right or luck, but yes I’ve done some great travels – one to chat about over a pint (or 3) and as you say much better to take the holiday than stuff!
Haha yes it seems most in the FI community aren’t big drinkers (it is expensive after all), but the whisky is defnitely worth it for me 🙂
Cheers!
In all fairness that is a right bargain compared to what we paid then taking inflation into account… haha thanks for checking for me.
I’ll bend your ear about the travels on the next FI London meetup that we both attend I think 🙂
Haha exactly – so the lesson is spend as much as possible on your hotel rooms as they will only get more expensive. Wait… maybe not 😉
A pleasure, I think we stayed somewhere a little cheaper – I would have to look back and check somehow!
Definitely – hopefully another one soon!
FiL
Lol! Thanks for the fun post TFS.
I once placed a five figure purchase order for some shares, but managed to transpose the stock ticker characters), resulting in the purchase of many shares in a company I had never before heard of.
I only clocked my stuff up when I was doing my month end accounts (some several weeks later), and promptly exited the position. Luckily, like many a gormless lackwit “investor” before me, I was saved from my own stupidity by a rising market.
A great escape indeed!
Haha, that is indeed a great escape, especially considering you didn’t notice it straight away!
I’ve done a similar thing with a bet before, probably on more than one occasion (most of which probably lost) but one sticks out vividly because instead of a 10/1 loser I backed a 66/1 winner… You don’t get luck like that very often though of course!
@Slow Dad – just been over to your site. Lots and lots of good content but man, the design is bad! So bad as to make it almost unreadable. I think you are selling yourself short there – the content deserves better!
call yourself cantankerous.life and not slow dad as well.. less confusion as to whats what and whos who.
@Rhino – thanks for the kind words, and the free design consultation.
@TFS – Reddit called, it seems one of their trolls has escaped. Last seen in your neighbourhood apparently. If you spot it they ask you not to feed it, and to call Steve Huffman so he can return it unharmed to its natural habitat. 🙂
Haha, I’m staying well out of this one although I’m sure Rhino’s comments were made with constructive criticism in mind… 🙂
for sure, maybe its as simple as trying out a few alternative ‘themes’ if its a wordpress or equivalent type thing. I think you could reap large rewards if getting more traffic is your goal?
It’s all good Rhino, I was just having some fun with you!
You’re probably right about the design. I just started with one of the default Blogger themes, then turned off almost all the clutter/noise/widgets (like sidebars and blogrolls and email sign up forms and so on).
That said I don’t much care about traffic and SEO and subscribers and all that bollocks. If I wanted to get rich I’d write one of those “Get Rich Quick” books! For me a post is just my way of working through a particular issue or problem I’ve stumbled over in real life. If other folks want to read along then that is nice I guess, but is just a bonus.
ah – I assumed that the ‘semi-professional’ volume of content you are cranking out implied you were intent on monetising things. If not then, as you say, who cares..
Credit card and gambling – ouch! I shudder to think what would have happened if I had contemplated that!
I once logged onto my online bank account to see that £1000 had been unexpectedly transferred out of the account. In a panic, I immediately called the bank to investigate. They confirmed that I had apparently actioned the transfer myself. I blurted out ‘No way! Absolutely not!’ They then confirmed that I had apparently logged onto the website at 1.30am on Saturday and authorised a transfer into a savings account with another bank account. That Saturday, I’d been out on the razz and upon my return home in a drunken stupor, thought it was a good idea to move funds between my accounts! I think I had meant to transfer £100, not £1000 but quite why I chose to do it at that time remains a hazy mystery! As with lots of things, including matched betting, avoid bank transactions when you’ve had a few haha!
I know some people that have gotten into really bad debt with credit cards and gambling but that was with poker sites. I can imagine casinos can be equally dangerous! You can just play and play and play 24/7, until you max out the cards of course! Thankfully none of that ever appealed to me and I stuck to the sports betting which I’ve historically done alright at.
That is hilarious about the drunken bank transfer! 🙂
Who knows what is going on in your mind when you’re in that state… haha.
Well recently I bought the same album twice. iTunes’ janky software made it look like my purchase didn’t go through, and then it waited an hour to download the music, while I was busy purchasing it on Amazon. Surprise, surprise, charged for both!
And like your coats, I leave sunglasses everywhere. You can count on it, I probably get less than 20 days of use before I leave them somewhere. I also never remember to bring them with me in the first place. So now I’ve got six pairs of $3 sunglasses scattered around (home, car, office, jackets..) so I always have one, and if I lose it, it’s only $3.
Hehe good to know I’m not the only one out there of an absent mind!
I only own one pair of sunglasses and miraculously I’ve had them for about 7 years. They are prescription ones so maybe that is why I take better care of them (I’ve totally jinxed that now… haven’t I!?)
Mine is losing my reading glasses – twice. The first time was in the throes of a migraine, when I just desperately needed to get home from work. I’m pretty sure I put them on the top of the car, then drove off. The second time, I left the case at work. I carefully placed them on the front of my shirt for safekeeping, telling myself that I wouldn’t lose them. I remember having them on the train with me, but between getting off the train, to the carpark and home, I have absolutely no idea what happened to them. Total cost over 7 years: nearly $1,000!
Wow driving with a migraine, that is impressive in itself! I’ve only had a few in my life but can barely see when I do get them haha.
It’s so weird when you think of something then you just go on autopilot and boom, minutes have passed and you have no idea what happened. A strange phenomenon indeed!
Buying individual shares at the height of the dotcom boom! My worst purchase was THUS (the trendy rename of Scottish Telecom) on the advice of my brother in law who was consulting there and thought they were a great bet. Oh, the plans they had. I paid over £8 a share, and subsequently watched the price dive until I’d lost about 5 grand. It pains me still to think about it.
I’m kinda glad I was too young to get involved into investing around the dotcom boom era, although even just hearing about it put me off for years after that, which is also a shame in itself as I could have started the snowball much earlier if I’d found some decent investment literature back then.
£5K is a big hit, no wonder you still think of it from time to time! We tend to remember the big losses or mistakes in our lives far easier than the wins and successes don’t we?
Oh, i got a good one. The most expensive lesson on psychology of gaming. The myth of infallible luch and the tunnel vision. So, i was winning 3 times in the row on some casino deals, making more than 100 with a £20 bonus. Next day, i react catastrophically, in a way i would not expect it. It was a suite of 4-5 mistakes, all easily to avoid. It started with a bet of 40+20 bonus, that somehow did not processed. So i lost 300 something on exchange. Then, clever me, i tried to recover the loss with some sure bets of 2.0 odds, thinking that i will win back the money. And i lost 3 times in the row. Total loss: £1555. Now i got a new rule. Every time when i messed up, i will not do any bet or casino play that day. I will wait for a night and i will start again with a clear head next day.
Crikey Georgr, that is compounding the original error somewhat!
Again no judgement here, I’ve got some howlers of terrible bets I’ve lost in the past but that is probably a whole other post in itself. I’ll have to write it up some day as they’re quite amusing – well they are to me and probably other gamblers at least, or anyone who loves a bit of schadenfreude! 🙂
I’ve never forgotten to collect cash from the cash machine (unless I’ve been so oblivious I’ve not even noticed) but I do find once I’ve withdrawn cash, I’m less careful with it than I am with card purchases as I’ve already “written off” that money.
I’d say my main stupid haemorrhaging is not claiming work expenses. I’m sure I’ve left hundreds, maybe thousands on the table that way over the years.
Yea know what you mean about being looser with cash, I am also the same. I also hate change and end up just buying crap to get rid of it.
Not claiming expenses!?!?! OMG! I don’t think I’ve ever let that one slip. When it comes down to something my employer owes me I will go out of my way to get it damn straight haha. Saying that, I have not really ever had many expenses to claim so maybe that is why, do you get expense claiming fatigue maybe? Is that a thing?
Saw that the blog is not up any more… shame! Will it be coming back at all? Either way hope things are all good in FS world mate!
Expense fatigue is definitely a thing. If it’s a couple of pounds for a bus ticket you have to keep for the next five years in case of audit, I confess to letting it slide (small each time, but it adds up).
All good though, thanks, in “FS world”. The decision to axe the blog was a privacy thing, so unlikely to be resurrected tbh, but FI plans are still coming along nicely. Hope to make it to one of the London meetups again soon.
5 years!!!?! I’ve never heard of that one, no wonder you didn’t bother haha.
Ah that’s all good then. I don’t blame you re: the privacy thing and hopefully catch up soon 🙂
I’ve never done the cash machine before, although I have seen money go back in before when passing one, hope it wasn’t you!
Maybe a few small gambling ones when trying out matched betting but it was free money I had lost anyway.
My biggest was after I’d came back from a trip around the world and about £20k in debt, I bought a car. On finance. For £9k! I still had the loan for my old car I had sold to get spends for travelling! Seems like distant past now but I can’t believe I did that!
That is a bit of a big faux pas The Doffer but no judgement from me.
I just hope the trip was worth it! 🙂
I see from your blog you are well on your way to financial nirvana now, I’ll pop over and check it out properly soon, looks good!
Good luck with avoiding the financial mistakes and your FI quest+blog!
We all make money mistakes. Thx for sharing, so we can learn…
On ATM, I usually take the cas and leave my card. The bank close to where we live, knows this and calls me… handy
My biggest cash drain at the moment are speeding tickets.
I have spend a lot of money on new hobbies, to find out it is not for me. Like a sumo wrestling robot, or the time I wanted to build my own led lights…
Long long time ago, I have spend a lot of money on 2 city trips to Brazil…
Hi Amber tree,
“On ATM, I usually take the cash and leave my card.” – That is weird because over here that would be impossible, as the card always comes out first and the cash will not be dispensed before you remove the card. Presumably because if you lose a tenner or so it’s not the end of the world but if you leave your card for someone else to pick up they can go to town, especially with contactless and what not!
I presume it’s the other way round over there, i.e. cash comes out first?!
Brazil is cool, that is for sure. Not worth spending tonnes on as you can do it frugally but definitely worth a visit, I would love to go back!