Author Topic: What has been more harmful on your journey to financial independence?  (Read 3892 times)

Money Ronin

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Taking too little or too much risk? 

I am risk averse by nature so for me it was taking too little risk.  Examples include buying a smaller house than I could afford in an location where appreciation has been significant or always taking the 30 year fixed rate loan over a 5 year arm.  Just these two decisions alone probably cost me hundreds of thousands.

As I grew older I learned to take more risk financially and it has made a world of difference. That’s what separates me from my peers who are well paid working professionals but likely will never attain FIRE.

Not that FIRE is necessarily their goal but I feel most people (among my peers) are overly risk averse given their financial situation and age.

Sam

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Re: What has been more harmful on your journey to financial independence?
« Reply #1 on: February 05, 2019, 09:19:19 AM »
 I felt I could’ve taken more risk if I was more educated early on. This is why I think it’s good to learn as much about personal finance as possible in high school.

I think in general, most people do not take as much risk as they should or could.
Regards,

Sam

LittleSeedsOfWealth

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Re: What has been more harmful on your journey to financial independence?
« Reply #2 on: February 08, 2019, 04:51:00 PM »
Yup sometimes I wish I'd doubled down on an opportunity. Looking back everything is always clear. But would I have done differently? Maybe not. I know higher risk comes with higher (potential) reward, but if taking higher risk comes with losing my sleep everyday it's probably not worth it.

Most people just don't have that high of a risk tolerance.   

MyFreedomDollar

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Re: What has been more harmful on your journey to financial independence?
« Reply #3 on: February 15, 2019, 12:55:29 PM »
@Money Ronin - I am with you, risk averse by nature... I am sure that holding too much cash has been harmful for my journey to financial independence.  Now that I have been invested for an extended period of time I can recognize the material significance that time in the market provides to an investment portfolio. There is something comfortable about having a nice cash hoard, but it has cost me tens of thousands over my relatively short investing career.  I hate to think about the missed returns over the next 30 years!

Young And The Invested

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Re: What has been more harmful on your journey to financial independence?
« Reply #4 on: April 04, 2019, 08:18:12 AM »
Having only reached 30 this year, I'm not sure I've had enough time to have regrets about my risk exposure.  Truthfully, I've made better decisions as I've gotten older and learned from my mistakes (mostly, I hope).

I'm fairly tolerant of risk, though the 20% pullback in November/December was a doozy that caught my off-guard.  Despite that sudden drop, I didn't make changes during the fall.  Now, however, I'm moving money out of stocks and into much more conservative investments to hold funds for my down payment savings.
https://youngandtheinvested.com/

ForgingFinance

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Re: What has been more harmful on your journey to financial independence?
« Reply #5 on: April 07, 2019, 12:01:31 PM »
I actually took on too much risk in my 20's, losing more than I care to admit thinking I could play hedge fund manager. 

I'm fortunate enough to have had the presence of mind to take a deep dive into my investments around the age of 29. I compared my individual stock investment results with what would have happened had I invested in a total market index fund instead.

The results were ugly and motivated me to get on a better path.

whitetail

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Re: What has been more harmful on your journey to financial independence?
« Reply #6 on: April 07, 2019, 05:30:45 PM »
I took far too little risk early on and I probably overcommitted funds to retirement accounts too early.

I'd like to have more of that after tax and ready for riskier (for me) ventures now.

Money Ronin

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Re: What has been more harmful on your journey to financial independence?
« Reply #7 on: April 08, 2019, 02:02:37 PM »
I actually took on too much risk in my 20's, losing more than I care to admit thinking I could play hedge fund manager. 

I'm fortunate enough to have had the presence of mind to take a deep dive into my investments around the age of 29. I compared my individual stock investment results with what would have happened had I invested in a total market index fund instead.

The results were ugly and motivated me to get on a better path.

I lost half of my 401K buying individual stocks during the dot com bust.  I invested in some Midwest properties in 2010/2011 that were nothing but headaches and money pits.  I graduated during a recession twice in my life.  In hindsight, these were inexpensive lessons because the absolute numbers were small. I've been able to bounce back from these lessons and continue to invest in the stock market and real estate with much more success. 

I'm glad you are on a better path.

My Money Wizard

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Really interesting question! One that I hadn't thought about until now.

Probably too little risk for me. I've wanted to pull the trigger on a rental property for a while now, but each time I get cold feet. Several of those options have seen pretty staggering appreciation after I decided to pass.
Tracking my progress to financial freedom on my blog,
MyMoneyWizard.com.

BrittneyChristy

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Taking health insurance plan after the retirement is the best and good option, as one can do the care of health problem if it is not pocket friendly. Different health insurance plans are available to take like Mutual of Omaha health insurance, Mutual of Omaha Medicare supplement plan G rates, AARP Medicare supplement plan G https://www.thehealthexchangeagency.com/aarp-unitedhealthcare-plan-g, Mutual of Omaha Medicare and more. Each plan has different coverage to the medical expenses.




FinancialNordic.com

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Re: What has been more harmful on your journey to financial independence?
« Reply #10 on: July 11, 2019, 10:00:59 PM »
My biggest mistake has been that I've not lived as frugally as I should have.. It would be so much better for my budget to live together with someone, but I've only done that occasionally. Last month when I started to calculate my expenses, I noticed that I need to cut down my expenses seriously in order to become financially independent!

- NF
NF, blogging at financialnordic.com