The reason I started writing about money is because I didn’t want people to make the same financial mistakes that I made. Looking back, I feel like I fool that I didn’t catch these mistakes earlier, but I recognize that it can happen to any of us. It’s not like we’re naturally good with money, we need to learn about it on our own and most people have no interest
Learning about money isn’t exactly fun; it’s much more rewarding to spend money. Financial mistakes are bound to happen, what you want to do is recognize and correct them before they do any real damage to your long term plan.
Don’t make these mistakes that I made
Not doing more due diligence – This is a problem that almost every investor comes across at some time. It’s incredibly easy to accept things at face value without asking any serious questions. I made the mistake of blindly trusting my bank financial sales representative and then my “financial advisor” when they recommended me certain funds. I had no idea how these fit into my overall plan and it turns out that some of these funds were selected to help them make more money. Don’t get me wrong, there are plenty of great advisors out there, but you really need to know what to look for.
Taking my time to learn about money – This ties right into not doing more due diligence. I had a basic understanding of management expense ratios (MER), but I never realized how much it would eat from my returns. It also took me a little while to get into investing, fortunately, I always had savings so it was about improving my knowledge. I’m now a do-it-yourself investor and you can become one too with a little bit of help.
Investing in things I knew nothing about – I’m sad to say I fell victim to this a few times before I got my act together. One time I purchased a stock because it had an attractive dividend, nevermind the fact that I knew nothing about their core business. When I switched to index investing, instead of sticking to the model portfolios, I modified mine to include some riskier products. I was essentially trying to beat a proven system even though I had limited experience when it came to investing. Avoiding financial mistakes can be easy if you keep things simple.
Not travelling more – Financial mistakes come and go, but lost opportunities are what bother me most. I have family in Europe and there was always an open invitation to stay with them for free, but I wasn’t interested in travelling when I was in high school. Later in life, a good friend of mine worked on cruise ships for a few years and there was also an invitation to stay for just a few dollars a day. Since I was a new grad, I decided to focus on my career search instead. These days I realize how valuable experiences are so I wish I travelled more when I had the chance.
Spending on “things” – I’ve been working every since I was 16. It’s incredible how much money I wasted on “things” during me teens and early 20’s. I would buy CDs, DVDs, Blu-Rays, and action figures whenever I got paid. This really wasn’t a huge deal at the time, but the stuff I was buying was junk that I really didn’t need. When I got engaged I was able to sell some of my action figures (at a loss), but these days you can’t even give DVDs away. I don’t have a problem with people spending, but I wish I had spent my money on experiences instead of things.
This article originally appeared on moneywehave.com and has been republished with permission.
Barry Choi is a personal finance and budget travel expert at @barrychoi . He has been quoted by media in Canada and the United States including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live. You can follow him on Twitter: