I almost totally abandoned my blog last year. Instead of posting regularly, I had very few posts in the entire 2019. Not much thought and effort were directing to this space and it looked sad.
I had no energy for anything else. I was physically and emotionally drained day after day after my slavery, low paying contract job (got that half way through 2019). Why am I going for a job like that? It’s kind of complicated (more on that later), but one of the main reasons is that I want to teach myself a lesson, to teach myself the value of money.
It’s fair to say that my intelligence in money management is really low. I have a Master’s degree in Finance and looked after big company’s finance department but my personal finance has always been neglected. It’s with regret to admit, I never treated money with care.
In the light of a new year and new decade, I thought it’s time to lay out some of my biggest money mistakes in years and try to learn something from them.
Leaving a rental property vacant for months before selling it a the lowest point.
I used to have a house and rented it out. Without shopping around for a good real estate agent, I just used the first one available. Of course they charged the highest commission. But I was too sloppy to care about that. The tenant was very demanding and a little too nasty for my liking so I decided to sell the house. It was around 2011 when the Sydney housing market was slow and depressing. Nobody was buying at the time. And my tenant made sure the house was a mess whenever there was an open inspection. It took forever before the tenant finally moved out. Instead of finding a new tenant and change to a better real estate agent, I just let the property vacant for more than 6 months. The house was eventually sold at a very low price after being on the market for nearly a year.
Then magic happened. Sydney experienced the strongest housing boom in history. From 2012 onwards, you could hardly catch up with the rapid growing pace of Sydney housing price. Years later, I found out the person who bought my house sold it a few month after buying it from me and made nearly $300k profit straight away.
Lesson learned? Too many. The key one is never to be too emotional. A bad tenant certainly shouldn’t be the reason to sell your rental property.
Trading Foreign Currency with huge leverage without knowing how to trade properly.
I can be timid and have low self esteem but occasionally over confident. Take trading Forex currency for example.
I heard someone traded Forex for a living and never needed to go to the office everyday. At the time I hated my job in corporate (that was 10 years ago). It was a well paid job but being an emotional person I couldn’t handle the pressure that well.
So I quit my day job, wishing to carve out a career trading foreign currency and live happily ever after. My investment in Forex was $125k. My vision (day dreaming) was to double that money in a year. I did study Forex very hard, learning all the candle stick formation, support resistant level, different patterns and fibonacci etc etc. After all, I had a finance degree and did well, trading FX would be a piece of cake right? Wrong. I lost the entire $125k. Luckily I was too lazy to transfer money to my forex account on time so I didn’t end up loosing my entire savings account.
Thinking back, I was over leveraged and once again too emotional. I acted like a gambler, risking too much in hope of getting my money back.
One day I was walking past a food market, someone handed me some promotional material. It was a pack of chewing gum in a blue case. Turning it over, it reads: Gambling problem? Call this number: xxxxxx. It was totally spooky. How didn’t they know? Do I have “Gambler” written all over my face?
Withdrawing cash from ATM without taking the cash.
Did I say that I’m very careless with money? Yes. Did I also say that I day dream too much to a stupid degree? Let me tell you a personal story.
A few years ago, I was looking to buy a unit in Sydney. There was one that was almost reasonably priced but requires major renovation. After inspection, I walked away pondering the possibilities then the agent rang.
“Good news, the owner agreed to sell at this much xxx, but there’s another buyer that’s really interested. He’s coming to pay deposit this afternoon. If you come now and pay $1000 deposit and it’s yours.”
“But I want to think about it a little bit more.” I replied.
“No need, it’ll be gone if you don’t take it today. It’s a real bargain. I just want to let you to get it first because I really like you.” The agent assured me.
So I proceeded to the ATM to take $1000 out. While pushing the buttons to withdraw cash from the machine, my mind went wild, imagining ways to renovate, thinking over and over if it’s a really good fit. My daydream was cut off by the sound of ATM shutting down the withdrawing slot.
Wait! Did I take the cash or not? I looked frantically everywhere in my wallet, bag and pockets. No $1000. But I did withdraw the cash!!! I have the receipt from ATM. But where’s the money? Did someone else take it while I was day dreaming? Oh God.
So I went to the bank teller telling my story. Nobody believed me. ” Surely you took the money, our record shows you withdrew the cash.”
“But I didn’t take the cash!” Everyone just looked at me like it was impossible.
“Trust me! You have the video camera there! Can you rewind it and see what happened just now? Because I can’t remember what happened to the $1000.”
“No, we can’t do that.”
Tears started to rolling from my face. How couldn’t I be that stupid? In the end, a bank employee took sympathy towards me. ” If you didn’t take the money and nobody else did, the money could be taken back to the machine. It’ll be added back to your bank account if that’s the case. Just wait for 2 weeks for it to work out.” With that in mind, I left the bank.
You might have gathered by now, I didn’t end up buying that unit. Truth is, nobody else did either. There wasn’t another buying going to pay deposit that day. So my stupid mistake at ATM actually prevented me falling for a common trick of a real estate agent.
And for your information, the $1000 was deposited back to my bank account after 2 weeks.
Paying for yearly membership then never ever use it.
I guess this could be a common one to a lot people but I bet it happens to me more often than others. I used to buy yearly gym membership but only went twice then forgot about it. The worst thing is that, I was too lazy to cancel the membership and let that automatically renewed for 3+ years. After eventually cancelling my gym membership, I got the $1500 yearly yoga pass. This time, it was slightly better. I attended about 10 yoga classes before giving up going for the rest of the year. That happened 3 years in a row. In the mean time I bought aquatic centre pass intending to go swimming regularly but never ended up using it even once.
There were a number of other club memberships that I paid for but never ever used them. Looking back, it’s easy to understand why I didn’t accumulate any wealth.
Still paying rent to my old rental apartment months after moving out.
Setting up an automatic monthly payment to pay rent is normal, but forgot to cancel the monthly rental payments after you move out is not. It was only after a few month when the rental property manager mentioned to me, “Btw, we noticed you are still paying rent to our account.” did I realise there was something very important to be done.
Paying for a car deposit without buying the car (then losing the $500 deposit of course).
I’ve had a lot of impulse purchases. There were many things bought that belonged to that “bought and forgot” category. But at least I get the pleasure of owning them. But that car purchase was not the case.
Impulse purchase is always a bad idea. It made it so hard to declutter. I wanted to learn to play piano so a piano was bought. I wanted to learn to play tennis so I bought the whole set of gear, special shoes and lots of cute outfit to go with it. The same happened to golf, badminton etc etc. Of course I didn’t have any patience to learn any of those.
Sold my old wallet but forgot to take money out.
So I sold one of my used Louis Vuitton wallet but there was still a $50 note in it. Lucy the buyer is honest and told me about it and transferred the money back to me.
There are many bad examples and there’s no need to list more. Will I ever change my bad money habit? I think so, because there’s no other choice. Who wants to grow into the old age, being stupid and destitute? Is it too late for me to learn the value of money? Well.
It’s better late than never.