UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFeatnbybears Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3869  
Subject: Debt Date: 10/15/2007 11:58 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 14
My dumbest investment over the years has been using debt to make purchases on Items I know will drop in value and at the same time save me nothing.

When you buy a house, it is something you expect will go up in value. If on that same house, you wish to finance repairs and improvements (within reason) you expect a payback or at least and even trade vs sell price. You also replace rent with house payments.

I can remember my father taking on a second job in order to make a down payment, purchase a car, get ready for vacation or get some gizmo he wanted to have. When I entered the purchasing world I discovered almost endless credit. If I charged it I could have it right now, what was my old man thinking?

Years later I looked back at the auto purchases (no logic, just lust) the TV's Stereos, vacations and furniture that went on the "so easy to use cards" and questioned each one.

I was lucky that I caught on to dad's cash and carry mentality early enough to stop the cycle and not get into using second mortgages as bail out fail safes.

But dumbest investments? For sure it was not having that patience to set aside $200 a month for a year to buy that big screen TV, not only because of the debt, but a year after the desire hit, I got a better set at a lower cost than when the impulse hit me.

How much of a relaxation return do you achieve by running up a couple grand for a vacation that will keep you cursing for the rest of the year as you struggle to pay it down.

How much better does the drive to work seem in a brand new car vs one that has been purchased used with four years of someone else eating that "new car value loss"

Now, of course the above logic must include the concept of creating enough end of the month extra cash that you can stash any amount into savings/investments. With that come the logic, that even if $100 seems like a small amount, compounded over 25 years of good investment will make the difference between a enjoyable retirement or sitting at home worrying about money more than when you were working.

I have made many dumb stock investments, but none compare to the mistakes I made with credit and purchases those first years that I felt I needed "everything"

Bears
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement