The following is a guest post from RichUncle El @ Money Watch 101.
Just imagine if you could take back all the stupid money mistakes you made during your lifetime. Well for me at least most of these were made during my 20′s. Two of them were referrals by someone I knew and I didn’t want anything to do with them initially, but I guess their sales pitch was good enough that I fell for their lies. I love personal finance and I was tricked into something that I couldn’t imagine getting into ever now. Something like a vacation package or whole life insurance. I hope all of you can ingrain these mistakes in your head and never fall victim to these dumb errors I made.
The Worst Money Mistakes I’ve Made:
I was stooped into getting Whole Life Insurance.
Number 1: I was 21 years old and somebody that used to be in my life referred me to a whole life insurance salesman. This guy talked the talk and showed me a bunch of happy go lucky graphs and pie charts, promising me tremendous returns on my investment. Yes you heard right, it was sold to me as an investment product with a life insurance protection combo. What was the damage you ask? Well I paid $100 a month for about 3 years. The hundred dollar bill covered the life insurance fee of 18 dollars and the rest was supposedly invested in a savings account for me. What a load of lies. After the third year I called and ask to find out how much I could take out just in case of an emergency and the representative told me not a penny! I couldn’t believe what I was hearing. She said that after 5 years of paying into it, I could then borrow against the life insurance policy and take out 20 grand, but then still be required to pay it back for another 10-15 years. As you can clearly see this was no savings account and a shady company to deal with, I stopped sending money to them immediately thereafter and let the policy lapse.
I bought a 10 trip vacation package for $3,500 dollars. (Only used it once)
Number 2: Oh just thinking about this vacation package scam makes me mad. I paid about 3,500 bucks for a 10 trip vacation plan. I was also pressured by a team of sales people in a brightly lit office in the 5th floor of a corporate building. Something should have clicked when the meeting was scheduled for Saturday morning. Nobody works on Saturday mornings, only sales people and bagel makers. I wanted to say no again, but was taken by the fabulous sales pitch of 10 vacations broken down by 3,500 dollars is 350 per a vacation as they quoted. But below are the fine print details, with every trip taken certain fees had to be made prior to vacationing.
189 Reservation Fee (1 Week stay at resort Free)
45 dollar per kid fee
Food All inclusive was at your expense
Flight expenses were at your expense
So you can see this vacation plan sucks, because even though I am getting the stay at a discount I still have to add all these other expenses into the full vacation price plus the 350 dollars per trip initial fee. Do you agree what a sham this is? If you add it all up it’s like I am giving them the 3,500 dollars for free.
I didn’t focus enough on building money making skills.
Number 3: I could have taken extra courses in high school and college to help me build side hustle skills. For example learning an in demand language or wood making classes or being involved in sports or learning how to play an instrument. All of these skills with the proper marketing can provide someone with side hustle money. I see tennis instructors all the time meeting clients in the local parks, I assume making some very easy dollars. How awesome would it be to know how to build your own furniture? Somebody who played Varsity basketball in high school will be more respected to teach the sport than somebody who never played on a team. I played basketball as a hobby for all my life, but never on a team for my schools.
I never researched the repercussions of driving violations and insurance penalties.
Number 4: In my late teens and early twenties I racked up a few points on my license because of speeding and stupid violations while driving. What I didn’t know was that my insurance was going to ding me with added fees and surcharges, plus the DMV was also going to charge me ticket violation fees, court fees, and ongoing surcharges through the state. Wow just thinking back on how much I forked over to settle all of those stupid mistakes I could have had a 100 shares of coca cola compounding as we speak. I blame myself and my parents for not telling me these little details of life. Yes they would always say drive safe, so I don’t hurt myself or anybody else on the road, but I never knew about all the added cost of driving I was surprised with.
I allowed one family member and a close friend to buy a Timeshare.
Number 5: Timeshares are the worst, second only to the vacation plan I mentioned in number 2. Granted these mistakes were not made in my name, but I feel as the personal finance guru in my family, I should have steered them away from this stupid mistake. If I communicated the vacation plan debacle earlier to them maybe they would have never dropped the 10 grand to purchase the stupid timeshare that drains people of their money in addition to annual maintenance fees. In both scenarios the timeshares have not been used since they bought the darn thing. It’s been about 3 years now and their week is just sitting there for nobody to use. In my defense they made the timeshare purchase and then notified me after the fact, and by that time it would have been too late to convince them otherwise. To any other friends and family reading this please never buy a timeshare.
But man communication about money mistakes is important between family members so that they can be made aware of these and not fall victim to the same errors we all can make in life.
About RichUncle El:
What defines me is accomplishing goals and succeeding in any ventures I wish to pursue. I am a debt languished(Darn Student Loans) person who enjoys talking about improving finances and money matters. In any social situation if the topic of savings or money is brought up, I immediately want to chime in and can not stop speaking about personal finance. I am a family man who pushes those people in my circle to open up about money. I guess I am a teacher at heart when it comes to financially related subject matters because I am always sharing what has and has not worked for me financially. As you clearly read I just shared what didn’t work, but you can find out what does work for me at Money Watch 101 and on Twitter – MoneyWatch101.
photo credit: flickr Images of Money