Many times in my life, I have continued doing something, even though I knew it was the wrong thing (or the stupid thing to do), just because I couldn’t figure out how to end things. You may recollect some of my more significant screw-ups from My Top 5 Investing Regrets in my Life, but there are plenty of others out there as well.
Do you say you’d like examples of these humiliations in my life? I am nothing if not accommodating:
- Continuing to pay for whole life insurance long after I had figured out I was paying too much for something I didn’t need at the time (I was 24 at the time). Why didn’t I just walk away sooner? Stupidity is as good a guess as any.
- Had a mortgage at 12% annual rate and didn’t go in to renegotiate when rates had gone down to 6% and I had a year still left!
- Held onto Nortel shares for far too long, and got badly burned by it’s eventual demise. I’d like to say I did the same with stock options, but my options were never worth any more than $326.51 (which I never saw).
- Didn’t get out of TD Mutual funds in my kids’ RESP accounts, in fact I should have transferred it all over to TD Waterhouse, now I didn’t really lose money on the deal, but it does still beg the question, “What was I thinking?”
- Left money on my credit cards and paid the outrageous credit card interest rates for about 2 years, again, “What was I thinking?”
The Ultimate Example
This photo shows the ultimate example of someone who should have just stopped and waited for a tow truck. Â If you look closely, you see a missing right rear tire and an imprint in the parking lot where the driver pulled it into this parking spot. I took this photo a while ago, but it sticks with me as an excellent example of, what were you thinking?
“I just figured I’d drive and find a spot to park the car,” that is the only thing that I can guess the driver was thinking.
My financial blunder was renting an apartment without getting any renters insurance. My unit caught fire and I lost everything. One of the worst days of my life!
HOLY CRAP! OK, I better get that for my daughter…
I’m not sure why, but you should consider blaming the “commitment heuristic”:
http://en.wikipedia.org/wiki/Escalation_of_commitment
hahah those photo is too funny. He would definitely regret that decision when finding out how much he increased his repair costs. It must’ve been an entertaining sparks show though.
With me it was also paying too much on credit card interest. For a while I was funding a large amount of PPC advertising for some of my websites. I went way overboard to the point that I was having to wait for the next month’s commission cheque to be able to pay off the balance. What was I thinking?
Doing things without thinking or ignoring problems is avoiding the issue. I constantly review my expenses to see if I can improve or reduce the expenses.