What Would You Tell Your Younger Self About Financial Mistakes Not To Make?

What would you tell your younger self about financial mistakes not to make? 


 


What would you tell your early 20s self? 


 


Someone told me that I should use an android app called "mint" to organize my finances. 


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Comments

  • ACH85ACH85 ✭✭

    Mint is helpful if you have a lot expenses to keep track of. Something else it does that I found very useful is it analyzes your spending habits and can give you recommendations on the best credit card, bank account, etc., based on your spending. Meaning, some cards give you 4% cash back on dining out, 2% on gas, and for 3 months a year 5% on shopping. How do you compare that to a card that gives you 3% cash back on everything, or another card that prioritizes rewards on travel? Mint looks at your spending history, crunches the numbers, and shows you how much cash/rewards points you'd end up with with each card. Also does this for checking accounts etc. 


  • SkeletorSkeletor The Conqueror Worm ✭✭✭

    "Hey, kid. Don't ever take out a loan, for anything. Get a job right out of high school, skip college, and live with your folks as long as you can. Save money, pay for everything in cash. Credit is only worthwhile if you're looking to live outside of your means. Work smarter so that you can afford a high standard of living without getting too deeply into debt."


     


    And possibly: "Don't marry or have kids. A vasectomy sounds expensive right now, but it'll be the best money you ever spend, saving you many, many thousands in the long-run. Families are nice, but you know what's nicer? The efficiency and freedom of having absolutely zero responsibility to anyone else."


    "I know how to despise mere cool intelligence. What I want is intelligence matched by pure, physical existence, like a statue." --Yukio Mishima

     

    Let's be friends on MyFitnessPal!

  • "...if a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of ten thousand brothers or cousins of the original."


     


    Jesse Livermore


    Reminiscences of a Stock Operator


     


    Aristotle wrote that to live a good life one needs four things: health, sufficient wealth, virtue, and luck.   Never underestimate the last of these.


     


    Learn to play poker and think deeply about how assessing odds applies to every aspect of life.  As much as anything I know this helps reduce the impact of all kinds of mistakes.  I find life largely about optimizing decision after decision in the face of uncertainty.  Mathematics and information theory have some ways to think about this.  Mathematician, Ed Thorpe's book Beat the Dealer, provides a great place to start.


     


    I'd make nearly opposite recommendations to DemonofChouka.  Use credit or leverage to make calculated investments.  Use other peoples' money, pay them well for the use of it, and you'll always have a stake available for whatever you want to pursue.  This relates to things like borrowing tools from a neighbor.  Return them in better condition then when you got them and you can always borrow what you need.


     


    Have kids and treat them well.  You can't afford them.  No one can.  They cost everything - blood, sweat, tears, emotion, and dollars - but the payback comes as close to infinite as any of us will likely experience.  Also, when you turn old and decrepit after your last BBS workout at 175, they'll take care of you.


     


    Oh, play poker with your kids.

  • RekaReka ✭✭✭

    I wanted to learn poker for a long time now. This was the final nudge I needed to actually start it. Any suggestions on how to begin it fast and efficient? (Sorry for the off.)


     


     




    "...if a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of ten thousand brothers or cousins of the original."


     


    Jesse Livermore


    Reminiscences of a Stock Operator


     


    Aristotle wrote that to live a good life one needs four things: health, sufficient wealth, virtue, and luck.   Never underestimate the last of these.


     


    Learn to play poker and think deeply about how assessing odds applies to every aspect of life.  As much as anything I know this helps reduce the impact of all kinds of mistakes.  I find life largely about optimizing decision after decision in the face of uncertainty.  Mathematics and information theory have some ways to think about this.  Mathematician, Ed Thorpe's book Beat the Dealer, provides a great place to start.


     


    I'd make nearly opposite recommendations to DemonofChouka.  Use credit or leverage to make calculated investments.  Use other peoples' money, pay them well for the use of it, and you'll always have a stake available for whatever you want to pursue.  This relates to things like borrowing tools from a neighbor.  Return them in better condition then when you got them and you can always borrow what you need.


     


    Have kids and treat them well.  You can't afford them.  No one can.  They cost everything - blood, sweat, tears, emotion, and dollars - but the payback comes as close to infinite as any of us will likely experience.  Also, when you turn old and decrepit after your last BBS workout at 175, they'll take care of you.


     


    Oh, play poker with your kids.



    It doesn't get easier... It's you who gets better.

     

    Is your social worker in that horse?

     

    Success has a price, not a secret.

  • Reka -- A group of Artificial Intelligence researchers from Alberta developed adaptive poker algorithms (bots) and have a great commercial app called Poker Genius ( http://www.poker-genius.com ).


     


    This software will enable you to play thousands of hands in a short time and really help hone your skill and understanding.


     


    Any of David Sklansky's books on poker will help.  I particularly like "Hold'em Poker".  Sklansky may understand and describe the game better than anyone else. 


  • RekaReka ✭✭✭

    Thank you, these seem excellence resources.


     




    Reka -- A group of Artificial Intelligence researchers from Alberta developed adaptive poker algorithms (bots) and have a great commercial app called Poker Genius ( http://www.poker-genius.com ).


     


    This software will enable you to play thousands of hands in a short time and really help hone your skill and understanding.


     


    Any of David Sklansky's books on poker will help.  I particularly like "Hold'em Poker".  Sklansky may understand and describe the game better than anyone else. 



    It doesn't get easier... It's you who gets better.

     

    Is your social worker in that horse?

     

    Success has a price, not a secret.

  • ACH85ACH85 ✭✭

    I'm not a great poker player by any means, but I've won a few tournaments against friends. If you know people that play, I'd say just jump in, so you have some context and a reason to learn the finer points. No limit tournaments for a small amount of money is a great way to have some stakes without spending too much. The tournament format means you everyone buys in for some low amount and starts with the same number of chips, and when you're out, you're out. This way you don't keep reaching into your wallet to keep playing, and if the person across from you has more money than you, it doesn't matter. If you set the buy-in for the same price as a movie ticket you're not really wasting your money if you're in the game having fun for an hour or two, there are stakes, and you're learning without spending too much. 


  • Reka -- I'd recommend starting with Texas Hold'em Limit poker rather than No-limit.  Fewer free (and highly random) variables in the game.


  • RekaReka ✭✭✭

    Great. I just started reading Sklansky's book. Looks like a fun challenge and intense learning experience.


    It doesn't get easier... It's you who gets better.

     

    Is your social worker in that horse?

     

    Success has a price, not a secret.

  • Anyone else watch 21 and was ready to book a flight to Vegas?


  • Comic books and baseball cards. If I could go back to when I was five years old and ask all my relatives for comic books and baseball cards every birthday and Christmas, anytime I could bother my mom or dad for something like that while I was in the store… By the time I was college-age I would probably have enough money wrapped up in collectibles that I might be able to make a dent in my school loans or maybe even get started investing early.


    It seems like it might be good to help get your kids started reading early, baseball cards might get them interested in the numbers/ratio and maybe understanding the long-term value of a collectible could help them understand the power of delayed gratification early on… The whole one cookie now versus two cookies later, you know the study I'm talking about.
  • Oh yeah and my 20-year-old self I would tell to start putting money into index funds. I remember shortly after the stock market crash listening to an interview with Warren Buffett where he said that index funds have repeatedly outperformed mutual funds.


    Start early just put some money in there and forget about it and pretend like it's not even your money anymore and wait.
  • I'd tell myself:


     


    Get your attitude straight. Take care of the depression, the ADHD, the disorganization, the social anxiety -- all those personal problems that will hold you back from more career success. Make contact with entrepreneurs, leaders, and good-hearted and smart people who can teach you a lot. Seek out mentors. Learn that office politics is a necessity and that the best way to do office politics is just to be a positive person, talk with people, be nice, and show appreciation. Keep in touch with former colleagues and bosses so they can write you recommendations and refer you to new possible opportunities. Don't let social anxiety get in the way of networking. Don't think the world owes you anything because you're smart. Smart is far less important than positivity, discipline, and organization. Positivity, discipline, and organization will get you further, and these are the skills you need to develop.


  • StevoStevo Upgrade in Progress
    Save 20% of every dollar that comes your way. No matter what.


  • What would you tell your younger self about financial mistakes not to make? 


     


    What would you tell your early 20s self? 


     


    Someone told me that I should use an android app called "mint" to organize my finances. 




     


    "Don't marry her" nuff said


     


    If I didn't get married, I wouldn't have gotten divorced and I wouldn't be out half my $$$ 

    Money Saving Tips and Tricks: www.DebtAdventure.com

  • This is the greatest thing I have ever read on a forum.


     


     




    "Hey, kid. Don't ever take out a loan, for anything. Get a job right out of high school, skip college, and live with your folks as long as you can. Save money, pay for everything in cash. Credit is only worthwhile if you're looking to live outside of your means. Work smarter so that you can afford a high standard of living without getting too deeply into debt."


     


    And possibly: "Don't marry or have kids. A vasectomy sounds expensive right now, but it'll be the best money you ever spend, saving you many, many thousands in the long-run. Families are nice, but you know what's nicer? The efficiency and freedom of having absolutely zero responsibility to anyone else."



  • RekaReka ✭✭✭
    edited September 2014


    "Don't marry her" nuff said


     


    If I didn't get married, I wouldn't have gotten divorced and I wouldn't be out half my $$$ 




     


    Off 1:


    This is why they give hurricanes female names: they are hot and  wet when they come into your life, and when they leave they take your car and house with them. :D


     




    Great. I just started reading Sklansky's book. Looks like a fun challenge and intense learning experience.




     


    Off 2: Few weeks ago I learned playing poker on a basic level, it is so addictive!


     


     


    On: I was sad to find out that interest rates went so low this January that they don't even cover the inflation rate anymore. You practically open a savings account to have the same amount of money later, worth less.  The account I opened 4 years ago was the best available, until this year. Now the best option is to save for a property because the state adds 30% to those, which is the exact opposite the state does 99.999% of the time (takes lol). So I opened one of those now, while also keeping my savings account. Looks like I'll have a new home in four years when the contract runs out.


    It doesn't get easier... It's you who gets better.

     

    Is your social worker in that horse?

     

    Success has a price, not a secret.

  • I'd tell myself:


     


    - a quote from a friend in the investment world: "It's not the earners that end up rich, it's the savers"


     


    - to save a little bit into a retirement fund every month, no matter what, even if it's just 5 freaking dollars.


     


    - to buy stock when the market is scared and sell when the market is greedy - really. Even when it's scary.


     


    - I'd tell my 20-something self to borrow $ from family to put a down payment on a big house in an upcoming trendy (mid gentrification) neighborhood and rent out rooms to roommates to pay for the whole thing.

  • Unless you have a crap ton of consumer debt. Then it's about clearing away that crap consumer debt as fast as you can. 




    Save 20% of every dollar that comes your way. No matter what.



  • "Create LLC's if you do procure any assets, and put EVERYTHING YOU OWN under those LLC's. Have NOTHING to your name"




    "Don't marry her" nuff said


     


    If I didn't get married, I wouldn't have gotten divorced and I wouldn't be out half my $$$ 



  • In three little words


     


    don't rent, buy!


    ...

  • I would have never bought stock, bonds, cds, etc. I would have started stacking earlier (gold silver diamonds and property) and never listen to aNY financial advisors. Buy things of value, not paper value. My thoughts today, are my investment worth something to someone other than me outside of a fiat dollar? .
  • GarrettGarrett
    edited March 2015

    You just made my day <3 <3 <3 <3


     


    *hides all of his assets way way way far away*




    Off 1:


    This is why they give hurricanes female names: they are hot and  wet when they come into your life, and when they leave they take your car and house with them. :D


     


     




     


    Oh, and I'd tell myself "Read & apply the book 'Intelligent Investor' as soon as you can"




  • In three little words


     


    don't rent, buy!




     


    Even in countries where the average house is $550K?

  • I wish I would of started living by the following guide lines earlier 


    Poor Charlie’s Almanack


     


    Guiding principles of life: Preparation, Discipline, Patience, Decisiveness


     


     


    Risk


    – All investment evaluations should begin by measuring risk, especially reputational


    • Avoid big mistakes; shun permanent capital loss
    • Incorporate an appropriate margin of safety
    • Always beware of inflation and interest rate exposures
    • Avoid dealing with people of questionable character
    • Insist upon proper compensation for risk assumed

     


    Independence


    – “Only in fairy tales are emperors told they are naked”


    • Objectivity and rationality require independence of thought
    • Mimicking the herd invites regression to the mean - merely average performance
    • Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment

     


    Preparation


    – “The only way to win is to work, work, work, work, and hope to have a few insights”


    • More important than the will to win is the will to prepare
    • If you want to get smart, the question you have to keep asking is “why, why, why?”
    • Develop fluency in mental models from the major academic disciplines
    • Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day

     


    Intellectual humility


    – Acknowledging what you don’t know is the dawning of wisdom


    • Identify and reconcile disconfirming evidence
    • Stay within a well-defined circle of competence
    • Resist the craving for false precision, false certainties, etc.
    • Above all, never fool yourself, and remember that you are the easiest person to fool
    • “Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

     


    Analytic rigor


    – Use of the scientific method and effective checklists minimizes errors and omissions


    • Determine value apart from price; progress apart from activity; wealth apart from size
    • Be a business analyst, not a market, macroeconomic, or security analyst
    • Consider totality of risk and effect; look always at potential second order and higher level impacts
    • Think forwards and backwards – Invert, always invert
    • It is better to remember the obvious than to grasp the esoteric

     


    Allocation


    – Proper allocation of capital is an investor’s number one job


    • Remember that highest and best use is always measured by the next best use (opportunity cost)
    • Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily
    • Don’t “fall in love” with an investment – be situation-dependent and opportunity-driven

     


    Patience


    – Resist the natural human bias to act


    • “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily
    • Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
    • Be alert for the arrival of luck
    • Enjoy the process along with the proceeds, because the process is where you live

     


    Decisiveness


    – When proper circumstances present themselves, act with decisiveness and conviction


    • Be fearful when others are greedy, and greedy when others are fearful
    • Opportunity doesn’t come often, so seize it when it comes
    • Opportunity meeting the prepared mind; that’s the game

     


    Change


    – Live with change and accept unremovable complexity


    • Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
    • Continually challenge and willingly amend your “best-loved ideas”
    • Recognize reality even when you don’t like it – especially when you don’t like it

     


    Focus


    – Keep things simple and remember what you set out to do


    • Face your big troubles; don’t sweep them under the rug
    • Guard against the effects of hubris (arrogance) and boredom
    • Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat
    • Don’t overlook the obvious by drowning in minutiae - the small details
    • Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”
  • Danno RedDanno Red Practical Man
    edited April 2015

    #1: Don't be afraid to negotiate your salary. I've made this mistake twice. The next job change I won't threepete it. (Alex Kouts on Art of Charm Podcast)


     


    #2: Reka: when you're done with Sklansky's book, take the time to study Caro's "Book of Tells." There's an instant that you must witness from time to time where no human can contain 100% of their honesty. Knowing when to look and for what can save your a$$ in hands or help you sniff out golden opportunities. Doyle Brunson's super system and the like can help you grind out wins by playing the odds alone, but you must be aware of the psychology to really take your game to the next level.




  • #1: Don't be afraid to negotiate your salary. I've made this mistake twice. The next job change I won't threepete it. (Alex Kouts on Art of Charm Podcast)


     


    #2: Reka: when you're done with Sklansky's book, take the time to study Caro's "Book of Tells." There's an instant that you must witness from time to time where no human can contain 100% of their honesty. Knowing when to look and for what can save your a$$ in hands or help you sniff out golden opportunities. Doyle Brunson's super system and the like can help you grind out wins by playing the odds alone, but you must be aware of the psychology to really take your game to the next level.




    Harrington on hold em is good aswel.


     


    Taken from the Motley Fool:


     


    Hey Fellow Fool,

    There are 56,956 personal finance books on Amazon.com. In aggregate they contain more than 3 billion words.

    This seems absurd, because 99% of personal finance can be summarized in nine words: Work a lot, spend a little, invest the difference.

    I'm a big believer that the most important financial lessons can - and should - be distilled down into simple lessons no more than a few sentences in length.

    As Nietzsche said, "It is my ambition to say in ten sentences what others say in a whole book."

    Here's my attempt to summarize the most important money rules.

    Spending money to show people how much money you have is the surest way to have less money. Singer Rhianna earns tens of millions of dollars, but found herself "effectively bankrupt" in 2009. When she sued her financial advisor for not doing his job, he offered a legendary response: "Was it really necessary to tell her that if you spend money on things, you will end up with the things and not the money?"

    Wealth is the stuff you don't see. It's the cars not purchased, the clothes not bought, the jewelry forgone. Money buys things, but wealth - assets like cash, stocks, bonds, in the bank and unspent - buys freedom and security. Pick which one you want, and pick wisely.

    You should know the difference between unemotional and oblivious. Unemotional is staying calm when disaster strikes. Oblivious is not knowing that disaster is capable of striking.

    The only way to build wealth is to have a gap between your ego and your income. Getting rich has little to do with your income and everything to do with your savings rate. And your savings rate is just the difference between your ego and your income - how much you can spend in relation to how much you actually spend. Keep that gap in check and you should be fine over time.

    The goal of investing isn't to minimize boredom. It's to maximize returns. Successful investing is pretty boring. Its main requirement is patience and inaction. You buy a group of stocks or bonds, and then you wait - for years, and years, and years. That's too boring for many people, who insist on tweaking, fiddling, and adjusting their investments. That might be exciting, but it also tends to destroy wealth. If you want to be better than average at anything, you have to do something that most people can't. In investing, that means keeping your hands off and embracing boredom. It's a serious skill.

    You should know the difference between patience and stubbornness. Patient people are willing to wait a long time, but they're also willing to change their minds when they're proven wrong. Stubborn people are also willing to wait a long time, but no amount of facts can change their opinion. They come up with new reasons to believe something when the original reason is proven wrong. It causes untold amounts of bad decisions in investing.

    Those who do the best care the least about what others think.Most people are bad with money, so being good means doing things differently than they do. You won't spend as much. You'll invest differently. You'll grow wealth slower. This can make you look like a fool in the short run. But who cares? As billionaire Charlie Munger put it, "Someone will always be getting richer faster than you. This is not a tragedy." Not only is it not a tragedy, it's a necessity. The ability to not care what other people think about what you're doing is mandatory to achieving abnormal results.

    Spend more time studying those who failed than those who won. You can learn more about money from the person who went bankrupt with a subprime mortgage than you can from Warren Buffett. That's because it's easier and more common to be stupid than it is to be brilliant, so you should spend more effort trying to avoid bad decisions than making good ones. Erik Falkenstein summed this up well: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."

    Wealth is completely relative. According to World Bank economist Branko Milanovic, "the poorest [5%] of Americans are better off than more than two-thirds of the world population." Furthermore, "only about 3 percent of the Indian population have incomes higher than the bottom (the very poorest) U.S. percentile." And those figures are adjusted for differences in cost of living.

    The easiest way to judge how well you're doing is to compare yourself to people around you. The curse of living in America is that most people are doing well, so your own success looks ordinary. If you want to feel rich, look at the 90% of the world that isn't American or European. You'll realize that feeling rich is just a mental game.

    Everything else, as they say, is cream cheese.

     

    Step one is to set up 2 accounts, one for investing, one for savings. the biggest liability to your portfolio is your decisions.  When the money comes in direct debit a certain amount into each. Make sure each are untouchable.  This is the only way to do it, the brain will CONSTANTLY find things it needs to occupy its time and things it "needs".  You won't even notice the 10-15% missing from your wage. Richest man in Babylon, intelligent investor, all the theory you need. 

    And no matter how hot you think you are speculation never works, unless you have a way of sticking to the limits of about 5% of your bank, which defeats the purpose of speculation as the turnover is not good enough to be exciting or make a material difference to your bankroll - I'm in danger of blowing my whole betting account if Spieith doesen't win today!! 
  • Do not go into investments you know nothing about. Analyze every financial decision.


  • Great advice here. If I could give myself one advice: don't do university if you don't have a passion for it. Everyone around me said otherwise but I absolutely regret it.


  • This is some bad advice about the poker, no offense. If u need help with poker u can pm me Reka.


     




    #1: Don't be afraid to negotiate your salary. I've made this mistake twice. The next job change I won't threepete it. (Alex Kouts on Art of Charm Podcast)


     


    #2: Reka: when you're done with Sklansky's book, take the time to study Caro's "Book of Tells." There's an instant that you must witness from time to time where no human can contain 100% of their honesty. Knowing when to look and for what can save your a$$ in hands or help you sniff out golden opportunities. Doyle Brunson's super system and the like can help you grind out wins by playing the odds alone, but you must be aware of the psychology to really take your game to the next level.



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