Tell me about a time you lost a significant sum of money on something dumb

[honeybbq]

I gave a live in ex-boyfriend of 3 years 10k to pay for a downpayment on a house in a city where he was moving to (we were going to long distance it, it was a good opportunity for him, I was supportive, blah blah).

Turns out it was just a big scam and there was no house. The best was he came up with a crazy lie that multiple people had tried to buy the house and the title search was misdone so it was actually HE who was getting scammed, and by proxy... me. However, pretty sure that is not the case.

Anyways, I made him disappear but I never did get my money back.

I was going to volunteer to be the next ex-boyfriend, but I'm not quite sure the definition of "made him disappear."

Indeed, I am curious as well about the full story :D

On topic: On a whim, I once bought a pair of fancy black high heels for what was then a full 1/3 of my monthly take home pay. I only used them a couple of times because they were so uncomfortable. They ended up growing mold in the back of my closet before I threw them out. Never again. I stick to nice comfortable flats and wedges these days.

Ehhh the whole thing is a looooooooooooong story. Dude had a chronic history of lying, stealing money, being bad with money, not paying taxes. I guess I thought I would lead by example, I didn't need his money at all, so I could be a good role model, whatever. So, so stupid. Lucky it only cost me 10k to get rid of him, honestly. Good thing I never married the dude or it would have been a LOT LOT more.

[Cpa Cat]

Time share in Sedona.  $14000 to buy it and at least $1000/year in costs for the past 12 years. At least we paid cash.  Still trying to unload it.

This made me look up rates at my favorite spa in Sedona. And now it knows I want to go there! It keeps showing me banner ads with photos of it!

[Slee_stack]

I bought and sold a used car inside of 12 months.  Took a bath on the taxes to register it.

[AlanStache]

I have a private pilot license.

I'm guessing that you don't own an aircraft?

Nope.  And at $100/hr minimum to rent, that license doesn't see much use.

yep.  Soloing is f-ing awesome, but after that is all very expensive sitting around, long division and air sickness. 

I needed probably 4hr before the private check ride and work would have reimbursed half all expenses but work kept sending me on travel so I could not get the hours in then the weather got windy, my instructor got busy... blah, blah, blah never finished.  At this point would be way to much work and cost for something I would literally never use. 

After soloing I would say the hardest part of flying is dealing with all the bullshit. 

[humbleMouse]

I bought $30k worth of Silver and Gold in 2013/2014 and have an unrealized loss of ~$9k on it right now.

Hold onto it.  Market volatility in the coming year or two will send the price back up.

[AlanStache]

I bought $30k worth of Silver and Gold in 2013/2014 and have an unrealized loss of ~$9k on it right now.

Hold onto it.  Market volatility in the coming year or two will send the price back up.

Sarcasm?  Long term gold/silver will probably jump up at some point, the question is always to take the losses now and get market return or hope the spike is soon. 

[Cap_Scarlet]

I paid $1.4 million for a house that I sold less than a year later for $1.2

Timing is everything.

[redbird]

The only thing I can think of is the college classes I took for a few years. I've never actually completed a degree. I stopped because I moved to Hawaii and the credits wouldn't convert, nor could I take the classes online. I was also taking at a slow pace since I was going to work full time at the same time. The classes did nothing for me as far as advancing a career or increasing earnings. However, these were cheap community college courses and I paid for them 100% out of pocket, taking on no loans, so it's way cheaper than it could've been.

At least most of the courses were interesting.

[MoonShadow]

Bought Worldcom stock in 1999....

Damn, Dude.  I'm so sorry.

[RobFIRE]

I don't think I've actively lost any significant amount of money by a single bad decision.

However, on reflection, I did miss out on likely investment gains by keeping nearly all of my savings in cash savings accounts from 2009 to 2015. UK interest rates were high from 2006 to 2009, so no problem there. But from around 2009 until last year when I made the switch, I probably averaged 2% returns in cash savings, probably could have had 5 or 6% with a simple mix of Vanguard bond and equity funds, so probably missed out on about £30k in returns.

[acroy]

Spent $2k on 'extended warranty' on a vehicle, used it once to the tune of $180 repair.
Young and stupid and overly protective of that vehicle.

[forummm]

I'm confused how the numbers work out how you say? Unless you had less than 15 years left on your 30 year mortgage, you are going to pay interest for less time and you are going to pay a lower interest rate. How in the world does that cost more?

Even if you only had 5 years left on the 30 year loan and you extended that out another 15 years, why not just pay the old payment amount and get rid of the loan in 5 years again?

I pay less in interest but I pay more per month. So when I have paid the 15 year loan in full I will have paid 130k. Plus the extra ~129 a month over 15 years is ~23k. So that's ~153k.
If I had just paid the original loan I think it would have been 150k. But I haven't looked at it in awhile. I only had it a year when I refinanced. If I'm thinking about this wrong feel free to pm me.

Yep, thinking about it wrong. Principal is money you get to keep. Interest is money you don't. A 15 year mortgage always has higher monthly payments than a 30 years mortgage because you are paying more principal each month. The benefit is you make half as many payments and have a smaller interest rate.

[Apples]

I'm confused how the numbers work out how you say? Unless you had less than 15 years left on your 30 year mortgage, you are going to pay interest for less time and you are going to pay a lower interest rate. How in the world does that cost more?

Even if you only had 5 years left on the 30 year loan and you extended that out another 15 years, why not just pay the old payment amount and get rid of the loan in 5 years again?

I pay less in interest but I pay more per month. So when I have paid the 15 year loan in full I will have paid 130k. Plus the extra ~129 a month over 15 years is ~23k. So that's ~153k.
If I had just paid the original loan I think it would have been 150k. But I haven't looked at it in awhile. I only had it a year when I refinanced. If I'm thinking about this wrong feel free to pm me.

The bolded part is how much you're paying with the 15 year loan.  Don't add the extra per month-that's principal you're paying off faster and already included in the 130k.  Based on these numbers you saved about $20k by refinancing.

[StartingEarly]

Launched an Escape which is not the greatest offroad vehicle into the air a few feet. That was over a year ago and I'm still fixing things that got damaged when that happened. Some of it would have been replaced due to miles anyways though (160K).

Probably the main thing is keeping so much of my money out of the market to keep liquidity since I had and still do have such uncertain job outlooks.

[CapLimited]

I'm another real estate dumba--.  I moved to a small military town for a new job and immediately bought a house -- reasoning was that if I rented first, I would have to pay to move when I eventually bought.  So just skip the rental part, right? 

I hated the job and hated the town.  After a year, I bailed and went back to the city.  What to do with the house?  Why, rent it to all the nice military families, of course!  Rent just barely covered my mortgage payment, HOA fees, and property management -- it was out of pocket for repairs, of which there were several, new paint between tenants, and new carpet after the last one.  Meanwhile, rents kept dropping because the local developers were throwing up new houses as fast as they could go, and since the wars were winding down, there were fewer tenants to go around.  I finally unloaded the stupid house this April, after seven years of renting it out, for half of my original purchase price.  I had to write a $10,000 check to close.  At least it convinced me that I'm not landlady material -- I'll stick to those nice boring Vanguard index funds in the future.

[CapLimited]

There was a period of about 4-5 years a decade ago when I only contributed 1% to my TSP because I was convinced I couldn't afford to contribute 5% in order to get the full match. Now I max it out every year, but still shake my head at my younger self. If losing out on free money isn't dumb, I don't know what is.

I did this, too, for the first two years of my career.  After all, that TSP contribution would have cut into my $300/month dining out budget.  I finally read "Your Money or Your Life" and got wise a few years ago.

[DirtDiva]

Bought a house in 2005, overpaid for it, did some upgrade type work on it (some necessary, some not).

When it finally sells for 20-30k less than we paid for it 11 years ago, we will have sunk at least 80k total into it.

[Yaeger]

I bought $30k worth of Silver and Gold in 2013/2014 and have an unrealized loss of ~$9k on it right now.

Haha, I bought $10k worth of gold and silver in 2014, then another $20k in 2015. I've just now broken even.

I'm going to keep them though, I didn't purchase as an investment.

[2Birds1Stone]

I bought $30k worth of Silver and Gold in 2013/2014 and have an unrealized loss of ~$9k on it right now.

Haha, I bought $10k worth of gold and silver in 2014, then another $20k in 2015. I've just now broken even.

I'm going to keep them though, I didn't purchase as an investment.

Neither did I, more of an insurance policy than anything else.

[mozar]

The bolded part is how much you're paying with the 15 year loan.  Don't add the extra per month-that's principal you're paying off faster and already included in the 130k.  Based on these numbers you saved about $20k by refinancing.

My bad. I'll have to look at my first loan and see what the pay off amount was.

To make up for it, I spent about $5000 in test fees for a test I never passed.

[OlyFish]

I decided to put my student loans in forbearance during residency instead of choosing to do income based repayment. I think that mistake probably cost me about $20k at least in accumulated interest.

[clarkfan1979]

I made $500 on penny stocks. I then lost about $1000.

[Caymanite]

I lost $16k gambling online without DW knowing.  I never had savings (positive NW) before and thought I was loaded after working for a couple of years...

That was 6-7 years ago.  NW >$1m now.  I learned my lesson but I still hate what I did to myself and DW.

[Philbert]

I bought a couch that couldn't fit through my front door. I wound up having to return it and pay a restocking fee as well as for failed delivery. All told, my loss was only about $200 or so, but I was really embarrassed. I felt like I'd been swindled, and I didn't stand up for myself.

My dad said that I just made a payment to the tuition of life, and those words have stuck with me ever since. We'll all make money mistakes in our lives. That's how we learn. It's payments into the tuition of life. You can bet when I got my next couch, I brought measuring tape to the store.

[Tyson]

How about a dumb hobby?  Spent stupid amounts of $$ on audio equipment (and video equipment).  Man did I waste a lot of $$.  On the other hand, my audio system and hi-rez recordings bring me great joy on a daily basis.  So I'm happy, but I wish I had been less wasteful getting to this point...

[Jack]

I'm confused how the numbers work out how you say? Unless you had less than 15 years left on your 30 year mortgage, you are going to pay interest for less time and you are going to pay a lower interest rate. How in the world does that cost more?

Even if you only had 5 years left on the 30 year loan and you extended that out another 15 years, why not just pay the old payment amount and get rid of the loan in 5 years again?

I pay less in interest but I pay more per month. So when I have paid the 15 year loan in full I will have paid 130k. Plus the extra ~129 a month over 15 years is ~23k. So that's ~153k.
If I had just paid the original loan I think it would have been 150k. But I haven't looked at it in awhile. I only had it a year when I refinanced. If I'm thinking about this wrong feel free to pm me.

Wait, what?

An example loan of 200k for 30 yrs at 5% - total interest paid is $186k
An example loan of 200k for 15 yrs at 3.5% - total interest paid is 57k.

Am I missing something?

Yeah, something's wrong with mozer's math here.

It is possible for refinancing to a shorter term at lower interest to be a bad idea, but that would be due to the opportunity cost of making the larger mortgage payment instead of investing in the stock market, not due to the repayment terms considered in isolation.

[forummm]

To make up for it, I spent about $5000 in test fees for a test I never passed.

#Fail

[Jack]

I decided to put my student loans in forbearance during residency instead of choosing to do income based repayment. I think that mistake probably cost me about $20k at least in accumulated interest.

Now that sounds like something the CPFB could fix. Reforms like debt forgiveness, interest rate subsidies, etc. are politically controversial, but retroactively forcing loan servicers to give borrowers the best of the terms that they were eligible for all along is something that it would be relatively hard for a reasonable person to argue against.

[PeachFuzzInVA]

I shorted 5,000 shares of Bank of America @ $5 in 2009. It went to $17 the next day and I was away from the computer all day.

[marty998]

I shorted 5,000 shares of Bank of America @ $5 in 2009. It went to $17 the next day and I was away from the computer all day.

Normally I equate shorters with baby murderers but I feel a pinch of sympathy for you.

Hope you read up on "guaranteed stop losses" shortly (no pun intended) after.

[NoCreativity]

Recently took a $5,000 bath to get out of a variable universal life insurance policy I was sold a couple of years ago by some tricky financial adviser dudes....

[dougules]

I didn't negotiate my salary a bit back.  It probably cost me at least $50k of the course of a few years. 

[MoonShadow]

I shorted 5,000 shares of Bank of America @ $5 in 2009. It went to $17 the next day and I was away from the computer all day.

Normally I equate shorters with baby murderers but I feel a pinch of sympathy for you.

Hope you read up on "guaranteed stop losses" shortly (no pun intended) after.

Um, why?

[rocketpj]

Hated my job and ate lunch out every day for 5 years.  Was always broke.

Owned 2 sailboats (at different times).  Wonderful, expensive items, sailboats.

[geekette]

Bought our return flights for the day before our cruise returned to port.  Oops. 

[BlueMR2]

Oh geez, the list is endless.  Just the first few samples off the top of my head.

- I had ISDN (BRI) Internet service installed way back in the day so I could have 128 kbps instead of 26.4.  Cost $140/mo instead of $20.

- Bought a fully tricked out Mac laptop for $2500.  Turned into a big loss when I found out that I find Macs infuriatingly awkward to use as a primary machine.  Was happy to trade it for a $500 whitebox PC and a $150 Sun Workstation just 9 months later.

- MP3 players.  Early adopter, bought some expensive "Creative" player (design like a CD player).  Skipped all the time because the hard drive was too slow in it.  Took a huge loss and bought an iPod.  Then took another big loss selling the iPodwhen stupid iTunes ate all my music.  Finally ended up on a Zune HD (which BTW is the best MP3 player ever, unfortunately it came out FAR too late, people were mostly already switched to smartphone players by then), which I won in a drawing.

- I bought race wheels and tires for my car.  Totally not worth it.  Yes, the car was faster on track, but the pain of having to change tires twice each raceday rapidly became annoying.  Better to just race with good street tires and compare times with OTHER street tire people (plus the bragging rights when you win on street tires against someone on race tires is tremendous :-)  ).

- Built a super light weight race bicycle ($4500).  I rarely ride it because most of my riding is in town and my old $150 MTB does a better job there.  I've salvaged it somewhat by putting fly pedals on it now since the majority of the issue is the awkwardness of "clipless" pedals in town (although the whole ride/position is also awkward).

- Upgraded the exhaust, intercooler, and piping on my car ($2500).  Gained 50 hp and 75 lb-ft, but ended up costing me another $1000 because I had to go to a much stiffer clutch.  Plus my engine may have been damaged during the dyno tuning due to my old boost controller flaking out on one of the runs (Briefly hit 32 psi when set to 21).  Got what sounds like a rod knock now and am looking at $10k engine rebuild.  The car was already faster than I could use.  I got greedy.  Now I'm gonna pay.

I could go on for pages.  I'm really a slow learner it seems...

[MoonShadow]

Hated my job and ate lunch out every day for 5 years.  Was always broke.

Owned 2 sailboats (at different times).  Wonderful, expensive items, sailboats.

They are indeed expensive.  But they can be cheaper than a house, but of course, that requires that you actually live on one.

[gliderpilot567]

Four years ago, I bought a partly finished kit airplane (I fly a ton for work and have all the civilian ratings through ATP, so I thought it would get plenty of use). Paid 24k cash for the bare airframe; financed the engine, prop, avionics, and deposit for a 10k paint job, for a total of 65k more. Paid 300 a month hangar fee plus 1000-2000 a month for a guy to work on building it at $50/hour. Oh also there were still parts to buy. After I ran out of money, paid only the $300 hangar fee each month. And 950/year insurance. Never got it finished.

2 years ago, sold the entire damn project for 72k which was the most I could get. Managed to get back 9k of the 10k paint job deposit; the painter stiffed me for the remaining 1k.

Overall I must have sunk 120-130 into this thing plus almost $10k in insurance and hangar fees.... probably lost about 60 grand total. As they say, tuition....

Fortunately, now through my new mustachified ways we've dug out of debt and now saved near half that amount in a few months. There may be an airplane in the future; but it will be done smartly and after FI :)

[ramblez]

Back in the "old days", I realized at the end of the term that I was enrolled in a college course which I had never been to.  This was pre-Internet (signed up for courses over the phone) and I had moved so my updated course schedule had gotten lost in the mail.

I was on the hook for the $ (which felt like a huge amount back then).  No way to ever recoup that money.

Even worse, I was on the hook for actually taking the course which would have ruined my GPA/future prospects for grad school etc.  I had to get a signed form by the professor of the course to say I had never been the course etc. With huge classes, the prof. did not believe that I had never been to the course.   I cried the ugly cry.  I think he signed the paper just to get rid of me, not because he believed me...

[Kaspian]

Back in the "old days", I realized at the end of the term that I was enrolled in a college course which I had never been to.  This was pre-Internet (signed up for courses over the phone) and I had moved so my updated course schedule had gotten lost in the mail.

I was on the hook for the $ (which felt like a huge amount back then).  No way to ever recoup that money.

Even worse, I was on the hook for actually taking the course which would have ruined my GPA/future prospects for grad school etc.  I had to get a signed form by the professor of the course to say I had never been the course etc. With huge classes, the prof. did not believe that I had never been to the course.   I cried the ugly cry.  I think he signed the paper just to get rid of me, not because he believed me...

Holy crap!!  Sorry to hear about that!  20+ years after school ended for me I still have nightmares there was a course I completely forgot to attend.  And it happened to you for real.  Do bad dreams about school ever stop?   :(

[yuka]

There was a period of about 4-5 years a decade ago when I only contributed 1% to my TSP because I was convinced I couldn't afford to contribute 5% in order to get the full match. Now I max it out every year, but still shake my head at my younger self. If losing out on free money isn't dumb, I don't know what is.

Is there TSP matching? I thought no...

[Sailor Sam]

There was a period of about 4-5 years a decade ago when I only contributed 1% to my TSP because I was convinced I couldn't afford to contribute 5% in order to get the full match. Now I max it out every year, but still shake my head at my younger self. If losing out on free money isn't dumb, I don't know what is.

Is there TSP matching? I thought no...

Yes for civilian; no for uniformed. However, the uniformed part will change 1-Jan-2018. After that, everyone under TSP will have a match.

[fuzzy math]

Holy crap!!  Sorry to hear about that!  20+ years after school ended for me I still have nightmares there was a course I completely forgot to attend.  And it happened to you for real.  Do bad dreams about school ever stop?   :(

Me too. Had one just a couple months ago. They are so real that they're terrifying to wake up to!

[BarbeRiche]

I used to play poker.

Decided to play a 1000$ hyper turbo heads up sit n go (2 players)...on my cell phone out of a bar.

Lasted less than a minute and I lost with the best hand all in preflop.

Did a rematch and lost again.

Costly night out!

[Cpa Cat]

Holy crap!!  Sorry to hear about that!  20+ years after school ended for me I still have nightmares there was a course I completely forgot to attend.  And it happened to you for real.  Do bad dreams about school ever stop?   :(

Me too. Had one just a couple months ago. They are so real that they're terrifying to wake up to!

Me three. I am comforted to know that it's not just me. :)

[Cannot Wait!]

Reading these stories makes me feel so much better.
Thanks everyone!

[I'm a red panda]

I dropped a $500 camera this weekend. Can't be repaired.

[sleepyguy]

LOL, thought I was "da shit" about 10yrs ago... had a good run of cards at online poker and had run it close to $44k or so.  So what do you do... go play $200/400 limit holdem with some online pro for hrs on end and go ahead and lose $20k in about 4-5hr session straight... mind boggling.  It was definitely a good learning experience and I've never played anywhere close to those limits again. 

These days I know I'm a nobody as these kids have all these calculator and tools and anyone trying to go against them have zero chance of winning long term.  I do still enjoy live poker (1-2 or 2-5) and probably could squeak an ok side income from that (lower live poker is extremely poorly played, fundamental mistakes on every round).

Reading these stories makes me feel so much better.
Thanks everyone!

[kendallf]

I've done plenty of dumb things but the real estate stuff by far eclipses anything else in dollar amounts.

2006: I decide I want some property in the country so I can build my dream house and shop.  Never mind that I don't have any savings, I'll take a loan on my TSP account for the down payment!  I pay $130k for 10 acres in a planned development with horse trails and a small lake.

Yeah, the next year or so it went into free fall, after a couple more years the developer went bankrupt, and now the 5-6 owners who actually built houses and I pay our mortgages, taxes, and HOA assessments.  I still owe about $80k on it, it's currently assessed at something like $30k, and I might be able to sell it for that.  Oh, did I mention that my wife absolutely refuses to ever move out there even if I build?

I have an ARM on it that's currently at ~3.5%, so I'm just paying the mortgage and sitting on it for now.  Either values will recover before interest rates go up significantly or... they won't.  :-/

[markpst]

I put $2,000 into my IRA, it must have been the year 2000. the fund I selected was the "Dreyfus Technology Growth Fund". It made a ton of money the previous three years, so hey, sounds good.......I wish I knew then what I know now about investing.

My $2,000 was worth $400 within a year.