What terrible financial decisions have you witnessed your family, friends, or coworkers make?

[VandVsmama]

I don't really see anything wrong with that. We're on a forum where we like to brag about our vacations and any number of other things that we don't always get to talk about much in real life for fear of offending people. Here, we get to give our opinions about what we think is best. We do a lot of judging on almost any topic! IMO there is nothing wrong with talking about finances and how you think your way is best on an anonymous forum. It's the perfect place to do it.

Exactly. Especially since we've all criticized each other, some quite strongly, over crimes and misdemeanors like stroller use in WDW and the #1 biggest problem in all of humanity: not putting the grocery cart back in the corral.

 

[StitchesGr8Fan]

Everyone I know who buys in to MLM’s or Network Marketing scams. They are pyramid schemes, just with tangible products. 97% of people lose money on them but I know so many people who think that an MLM is going to get them out of debt.

 

[nicolita3]

Start a hypothetical "My Ex-Step Mother Stole My Inheritance" thread and let's see what the wisdom of the crowd says. IRL though, what does your friend say about her own situation? Is she mad at herself for her decisions?
ETA: I just realized you weren't the PP who brought this example into the thread.

Yes she is mad about the situation and is upset because she has nothing saved now that she is in her 60s fighting cancer and can't retire. It's a sad situation and there's other drama as well that would take up anther thread.

 

[Mackenzie Click-Mickelson]

The biggest mistake Ive seen is getting sucked into those title/payday loan places that you can never pay off at 200% interest.

Originally I had the same opinion you do and to an extent I still do but after watching John Oliver years ago about it I changed my viewpoint a tad and shifted the blame for the bad cycle on the payday loan industry itself. People still need to pay back a loan (any loan they get), but the payday loan industry is awful.

 

[MillauFr]

Buying DVC when you can't afford it.

 

[MillauFr]

Most of the people I know don’t put a lot into their 401k. Big big mistake

Even worse is the 401k administrators who only offer the employees some high cost funds when instead they can offer some S&P Index Fund that charges them 0.01% in fees.

 

[Pea-n-Me]

Exorbitant school loans.

 

[VandVsmama]

My sister has a friend who is putting all the money she & her husband WOULD have invested in retirement and put it in their son's college fund instead. When he was born, they decided that he would go to Harvard so he could get a good job and make tons of money to support mom & dad.

They have a rude wake up call headed their way some day down the road.

 

[RamblingMad]

Buying DVC when you can't afford it.

If you need a loan for it, you can’t afford it.

 

[dvcgirl67]

Our estimated value is currently up about 40% from when we bought it 5 years ago. We have been planning to add a garage at some point, which will require a refinance, and it was suggested we take advantage of all the extra equity in the home. I argued against it. Between the sky high construction costs right now and the inevitable crash that will happen at some point I am NOT interested in risking being underwater on our home.

The housing market is getting, "frothy" according some reports from economists. Many of us don't need economists to tell us that things have gotten crazy. It does appear that a frenzy has taken hold though, and that never ends well. The fundamentals don't point to a crash like we saw in the housing market during the Great Recession. That market was a house of cards. This time there are some real fundamentals like short supply and low interest rates fueling it, and thankfully underwriting for mortgages is much stronger now than the non-existence of such measures pre-Great Recession. However, there's a bit of a "fever" in this market with bidding wars taking place on many houses essentially all over the country. Maybe we won't see a crash, but there will be a reversion towards the mean for sure.

The stock market is frothy too, it's been overvalued for some time now. I was listening to a podcast....I think it was Dave Ramsey, who did a "Everyday Millionaire Theme Hour". All of the callers were baby millionaires....all in the 1.2, 1.1, 1.4 range...etc. Essentially, they all just became millionaires as well...due to these frothy markets. Having lived through the tech bubble burst/recession, the "assets of all kind bust"/Great Recession....a lot of those newly minted millionaires may not be in that category for long. They're all on the right track for sure....it's just the ups and downs that come with investing.

 

[John VN]

Most of the people I know don’t put a lot into their 401k. Big big mistake

Years ago when employed I always asked my supervisor during my "yearly review" if he could redirect the pay raise I was to receive to a needy co-worker. I did not need the 25 to 50 cents/hour increase and there were many others who could benefit. His reply was always "It is not allowed." To my surprise during a monthly Factory Employee Meeting it was revealed that I was voted the company's first "Employee of the Year" and along with the title came a $100.00 award. Upon standing and thanking my co-workers I told the boss to split the award 50/50 and give it to 2 very diligent and disserving lower paid workers. The boss stood up looking quite shocked and said the company would match the amount. Sadly these employees and others were in the group that simply could not afford to put money into a retirement account.

 

[ronandannette]

Years ago when employed I always asked my supervisor during my "yearly review" if he could redirect the pay raise I was to receive to a needy co-worker. I did not need the 25 to 50 cents/hour increase and there were many others who could benefit. His reply was always "It is not allowed." To my surprise during a monthly Factory Employee Meeting it was revealed that I was voted the company's first "Employee of the Year" and along with the title came a $100.00 award. Upon standing and thanking my co-workers I told the boss to split the award 50/50 and give it to 2 very diligent and disserving lower paid workers. The boss stood up looking quite shocked and said the company would match the amount. Sadly these employees and others were in the group that simply could not afford to put money into a retirement account.

This must have been quite a few years ago if $0.25/hour would have been a blip on anybody’s radar screen. My staff is all salaried now and even a few hundred a month doesn’t impress them.

 

[TippyThomas]

Exactly. Especially since we've all criticized each other, some quite strongly, over crimes and misdemeanors like stroller use in WDW and the #1 biggest problem in all of humanity: not putting the grocery cart back in the corral.

I notice you bring that up a lot. I guess it must have had quite the impact on you.

 

[RangerPooh]

A friends soon to be ex-husband fell for a IRS scam to the tune of $35k that he took from their savings, credit cards, and money that she'd been saving for two years to return home (another country) to visit her family. The soon-to-be ex ignored her concerns about withdrawing money, she'd received notifications from the bank and credit card companies. Then proceeded to blame falling for/paying the scammers on her.

Sadly he's fallen for other scams a few times in the past.

 

[RamblingMad]

The housing market is getting, "frothy" according some reports from economists. Many of us don't need economists to tell us that things have gotten crazy. It does appear that a frenzy has taken hold though, and that never ends well. The fundamentals don't point to a crash like we saw in the housing market during the Great Recession. That market was a house of cards. This time there are some real fundamentals like short supply and low interest rates fueling it, and thankfully underwriting for mortgages is much stronger now than the non-existence of such measures pre-Great Recession. However, there's a bit of a "fever" in this market with bidding wars taking place on many houses essentially all over the country. Maybe we won't see a crash, but there will be a reversion towards the mean for sure.

The stock market is frothy too, it's been overvalued for some time now. I was listening to a podcast....I think it was Dave Ramsey, who did a "Everyday Millionaire Theme Hour". All of the callers were baby millionaires....all in the 1.2, 1.1, 1.4 range...etc. Essentially, they all just became millionaires as well...due to these frothy markets. Having lived through the tech bubble burst/recession, the "assets of all kind bust"/Great Recession....a lot of those newly minted millionaires may not be in that category for long. They're all on the right track for sure....it's just the ups and downs that come with investing.

It’s math. Low rates push up asset prices. That’s always been the math. Now, when rates go back up, then asset prices should go down. Eventually new builds will catch up to this demand. It’s going to take a couple of years to unwind. My home is up $150k since last year. That’s nuts.

Now, the underwriting is better now. But it’s the better credit customers that are most likely to file for bankruptcy. This will happen over time.

I should start to see my neighbors do cash out refinance to tap the ridiculous home prices changes over the last couple of years. This is how folks start to put on more debt than they can afford.

 

[Turn the Page]

The housing market is getting, "frothy" according some reports from economists. Many of us don't need economists to tell us that things have gotten crazy. It does appear that a frenzy has taken hold though, and that never ends well. The fundamentals don't point to a crash like we saw in the housing market during the Great Recession. That market was a house of cards. This time there are some real fundamentals like short supply and low interest rates fueling it, and thankfully underwriting for mortgages is much stronger now than the non-existence of such measures pre-Great Recession. However, there's a bit of a "fever" in this market with bidding wars taking place on many houses essentially all over the country. Maybe we won't see a crash, but there will be a reversion towards the mean for sure.

The stock market is frothy too, it's been overvalued for some time now. I was listening to a podcast....I think it was Dave Ramsey, who did a "Everyday Millionaire Theme Hour". All of the callers were baby millionaires....all in the 1.2, 1.1, 1.4 range...etc. Essentially, they all just became millionaires as well...due to these frothy markets. Having lived through the tech bubble burst/recession, the "assets of all kind bust"/Great Recession....a lot of those newly minted millionaires may not be in that category for long. They're all on the right track for sure....it's just the ups and downs that come with investing.

For sure. Our financial guy called a couple of months ago. He had been reviewing our portfolio and one of the funds our IRA was in was making about 30% returns and he recommended we sell because he felt that was artificially high. So we did.

 

[RamblingMad]

For sure. Our financial guy called a couple of months ago. He had been reviewing our portfolio and one of the funds our IRA was in was making about 30% returns and he recommended we sell because he felt that was artificially high. So we did.

Wait. What? I don’t get the rationale. It’s doing really good, so you sell it? Your advisor must be some timing genius. I have no clue what the top is for my investments.

 

[Turn the Page]

Wait. What? I don’t get the rationale. It’s doing really good, so you sell it? Your advisor must be some timing genius. I have no clue what the top is for my investments.

Sure, before the stock price crashes. I have no idea what it is doing now but a few months ago he felt the stock price was artificially inflated and would drop to a more normal level soon.

 

[DLgal]

For sure. Our financial guy called a couple of months ago. He had been reviewing our portfolio and one of the funds our IRA was in was making about 30% returns and he recommended we sell because he felt that was artificially high. So we did.

What? Fire him.

 

[Starport Seven-Five]

The worst I've ever heard was an hourly employee who was turning down overtime because "if you make too much money, you get bumped to the next tax bracket actually take home less." It is amazing how many people don't understand how tax brackets or withholdings work.

It is amazing that so many do this. Just financing a car in general is USUALLY a bad idea.

"Usually" is correct because it depends on rate. Our latest purchase offered a 0% rate or $500 cash back. Less than a 1% return if we took the cash back so we'll let that loan ride.

I find a lot of people are debt adverse without really considering that there is math involved.

That's what happened to me and DH. When we retire again, we will still be in a much higher tax bracket than we were when we first invested in our 401 and 457 so we really lost out on that tax situation.

Keep in mind that you are writing off taxes at your top tax bracket while you'll pay the effective tax rate on your withdrawals. Pretty much any income in the 22% or above tax brackets ends up ahead assuming there isn't a massive change in tax rates.

Sure, before the stock price crashes. I have no idea what it is doing now but a few months ago he felt the stock price was artificially inflated and would drop to a more normal level soon.

Is he a fee only advisor or does he get commission? What did he move it from/to?

I dunno, I'm always skeptical of "advisors" because of all of the behind the scene games. Tons of horror stories regarding high fee funds that advisors get kickbacks from. Have to monitor them closely.

Plus, if these "advisors" were any good at picking tops/bottoms, they would already be on a beach somewhere.