Train Wreck Tuesdays - The Dangers of Personal Finance
- Train Wreck Tuesday
- Our Train Wreck series features stories of financial woe submitted anonymously by our readers. Submit your own story, and if selected, you'll win a Mint t-shirt!
Have you ever done something dumb with your Personal Finances?
I know I have held onto a few stocks for too long, bought a car from the wrong person and suffered through many other twists and turns. We thought it would be educational and fun, then, to post Personal Finance nightmare stories in that same vein.
If your story is posted you get a free Mint t-shirt from the Mint team. The best comment gets the same prize, as well! Stories are posted regularly on Tuesday. All stories are posted anonymously.
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I paid for a car with cash. While it was nice to have no debt, I could’ve probably gotten a better deal & done something else with my money (my stock returns were a better return than the cost of paying interest on the loan).
Other than that, like most people do in their twenties, I put myself deep into credit card debt (not a problem now).
I learned the hard way The Danger of Being Greedy.
After doing a significant amount of research and listening to advice from friends and investors, I bought into SAI Corp when it IPO’d. The initial performance was mediocre, but after about a month, the stock rose about 15%. I should have sold at that point and pocketed a nice 20% return, but instead I fell into the dangerous trap of greed. I kept telling myself “It’s gone up this much already, if I wait just a little longer it’ll go up even more,” then when it started to fall, “it was up so high before, surely it’ll go back up to where it was.”
I told myself that for two more months while the stock dropped down to below its IPO price. In the end I wound up with a 1% loss instead of the 20% gain I could have had. So here’s the moral: keep emotion out of your wallet. Set rules for any investment and stick to them regardless of what your feelings tell you; in the end you’ll end up a much better investor because of it.