The Most Expensive Financial Mistakes

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Hope all is well!

If you read last weeks edition, you know I bought a few ETFs across my brokerage and Roth IRA account (read it here). I’m holding off on any further buys this week unless I come across a deal I just can’t resist.

Of course, if that happens I’ll share it with you in the next issue.

Now, let’s get into the most popular financial mistakes from a recent twitter post.

Some of these are…well you’ll see.

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“Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor. It's about stewardship and, therefore, about achieving the good society.” - Robert J. Shiller

Over the weekend I made a post asking people to share their most expensive financial mistake.

To my amazement, it had 150,000 impressions and drew over 300 comments.

To save you some scrolling time I wanted to summarize the most popular answers and give a little of my personal insight on each one.

Not Investing Sooner Or Timing The Market

You hear it time and time again.

“Time in the market” is the most important metric for any investor.

The cool thing is that the data supports it.

A study done by Charles Schwab in 2011 using the S&P 500 shows the benefits of investing over longer periods of time. From the chart, one can see that over any 20 year period the highest annualized return was 17.9%, while the lowest annualized return was 3.1%. That means over any 20 year period the S&P 500 hasn’t returned negative.

Now past performance doesn’t guarantee future results, but as an investor this is the risk you inherit.

Another point here is the additional time compound interest has to grow your money.

If there is one thing I want you to take away from this email, it’s that time is compound interest’s best friend.

PS: If you are ready to get started today open a brokerage account with M1 Finance and get $50 free when you deposit $100.

Or just do it to get $50, that’s like half a tank of gas right now.

Marriage

I’m not a married man, so I can’t weigh in on this too much, though I do have a girlfriend.

(sorry ladies)

It’s all too common to hear of marriages that didn’t work out and resulted in someone taking advantage of the other.

Just take MacKenzie Bezos for example, Jeff Bezos now ex-wife received $38 billion dollars worth of Amazon stock in their divorce settlement.

Now this is an extreme example, but it illustrates the importance of choosing your partner.

Student Loans

We all know how outrageous college prices are.

I’m currently a college student and have experienced spending thousands of dollars per semester first hand.

To make a long story short, I think the $1.73 trillion in student debt in America is primarily a result of lack of education on what borrowers are getting into.

Many students sign up for these loans blindly, and it comes back to bite them later on in life.

Here’s my simple take.

For those looking at school, or sending a loved one, here are a few recommendations I’ve either done or heard of people doing.

• Save early if possible

• Apply for scholarships

• Look for available grants

• Evaluate ROI of the degree

• Take advantage of community colleges

In the end college is expensive no matter how you turn it.

Honorable Mention

To finish out the email here is a few other answers I thought were interesting.

Now for what you all came here for, the memes.

Resources:

M1 Finance - Open an account and get $50 free when you make a deposit of $100 or more.

Simply Invest With ETFs - Learn the in’s and out’s of ETFs and why they are the simplest and most effective way to invest.

Turbocharge Your Dividends - Generate extra income by selling covered calls on your stocks and ETFs.

Tweet Hunter - Automate your Twitter and build an account that will pay you $100 a week.

Personal Capital - Track all of your investments in one place.

Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you soon!