What is the biggest, or most regrettable, investing mistake you will never make again?
Either something that you had done (or not done), or wished you had done (or not done).
This is not to humiliate anyone.
But I would like to (try to) avoid getting myself into unnecessary investment pain.
And perhaps reading mistakes that other people have made might be really helpful.
It might help other people in the group as well.
Thank you very much for sharing.
Any asset price inevitably corrects, if you say every day "there's gonna be a crash" one day you'll be right. If it takes 10 years to happen, then in 10 years you can say "I told you so" but for 9.99 years you were wrong.
If it makes you happier the people keeping the property bubble going (investors) 60% of them are making a loss
Negative gearing/cashflow does not mean a loss, as the property value is growing but is not factored into tax. I doubt that number.
*the value of the property isn't guaranteed to grow though, that's all speculation.
And that number is the truth that the property investment 'gurus' don't want you to know about.
Its a pump and dump
@Drakesy: Pump and Dump that's going on for 40 years and just went up another 20% this year.
Keep on waiting for that 80% crash Martin keeps going on about :p
Keep on waiting for that 80% crash Martin keeps going on about :p
So indefinite rise in house prices?
@SBOB: Have you looked at how much your purchasing power has dropped in the last 12 months?
Housing is actually flat for the year when you measure against M2 money supply.
More then 25% of all dollars in existence were created in 2020 alone.. All assets are rising everywhere around the world because the dollar is falling everywhere.
Google: Global M2 Money Supply
@Drakesy: Property obviously has its ebb and flow. But you can see over a long period it only goes up.
@hobo123: I agree in the long run it is only going up.
But as you said it ebbs and flows and right now its a full blown torrent, which one would think would need to be drained soon.
the value of the property isn't guaranteed to grow though, that's all speculation
It doesn't even need to grow. You claim depreciation on an investment property which gives you a nice tax refund due to your 'loss'.
Depends on where you are looking. Plenty of properties in WA and SA that are still well short of their 2008 price.
WA resident here, got some examples lol?
Supply and demand… as long as the population keeps increasing and construction remains at similar levels prices will keep going up.
You… you don't know that migration has stopped at the moment?
Or that hundreds of apartment buildings are being finished at the moment that we can't fill…?
Temporary… long term it ain't going to stop any time soon imo
Have… have you got a st-st-stutter?
This won’t age well, let’s come back to this in three years !
Had a few, most of them are not investing when I could have/should have:
Bought an investment property when I was early-mid 20s in Welington NZ with my other half. Had to try and sell it off a couple of years later after we broke up and after the GFC. After about 12 months on the market luckily managed to sell it for about the same as we paid for it, but was a loss when considering real estate agent fees.
Not getting into crypto/BItcoin when it was cheap as I didn't understand it. To be fair, I still don't really understand how it works, but I leave my machine mining 24/7, I still haven't put any actual cash into it.
Not making full use of employee share plans which offered discounts. I now do this as much as I can and they always worked out well.
Not moving fast enough into property investment, we had enough savings to buy investment property years ago but never did. We ended up engaging a company to help us with this and that was one of the best decisions we made. They research and locate good areas to buy and they have worked out really well.
Not putting more money into shares after the market drop last year! Made a 50% gain. To be fair, with the benefit of hindsight I say this, but in the same situation again I would do the same because of my risk tolerance.
The main thing to avoid getting yourself into investment pain is to think about the risk/reward. Crypto may have got me rich quick but I could easily have lost a majority of my investment based on timing. I could have put all my money into property and had almost no buffer if I'm out of work, getting rich quick of property is highly unlikely, but in reality they are good long term as it pays for itself and is an appreciating (most of the time) asset. I could have put more into shares or thrown it all into something like AfterPay and would have made a lot more money, but I kept money in buffer as I didn't really know what would happen with COVID. So the two main questions are - what is your risk tolerance, and what is your safety net?
Hey conan2000, how did you go about finding the company to help select property to buy?
It was at a home show expo quite a few years ago.
Not getting into crypto/BItcoin when it was cheap as I didn't understand it.
Every successful investor anywhere will always tell you not to invest in what you don't know.
Just because crypto went crazy doesn't mean you didn't make the right choice at the time. Crypto was stupid.
Bitcoin cash on opening at Coinbase. Still salty.
im salty about binance coin lol, i remember in was mere 2 dollars now 3 years later 620 usd. i invested 10k elsewhere in that time, after 3 years binance is 620usd but tron trx lost 1/4 its value. oh well what can u do. live and learn.
It took about 4 years but I finally was able to exit my trx position at 1% in profit… it went on to gain 2.5x.
SIGHHHHHH
well yeh my initial 10k its back to 4k now, so im still down 6k which still sucks, but at one point it was as low as 1k lol
I got ICO rug pulled out of a decent amount of ETH (about $200k in today's terms) in 2018…that sucked
Bitcoin, what else. Knew about it at $80 and $800 and didn't do anything about it. After reading up more on in finally went all in.
What price did you finally buy in at?
$18,000 prolly
$3500 - $8000 mainly.
Buying crypto currency…
missing out on all the freebie crypto
I sold my $50 worth of Dogecoin I bought in 2017 for $2500 in Feb after first surge. Its now worth over $30k
I want to make this mistake again, teach me please
At least you made some money, feel bad for James Howells (https://www.9news.com.au/world/bitcoin-fortune-lost-landfill…)
Never actively invested. Just have this pile of cash in my offset.
Me too, but this year I'm going to start to invest. Interest rates are too low, not worth putting anymore money in my offset.
This probably works out better than investing tbh. You have liquid cash that's actively keeping your interest down.
A lot of survivor bias in trading. Sometimes your money is locked in a underperforming stock for years.
I do the same thing.
I will say though that if you do invest some of your offset money you will want to earn more than what your interest rate is because of tax implications.
Example
Say your home loan interest rate is 3% then you will need to earn 3% + plus whatever tax bracket you are in.
$10,000.00 in offset you save $300 a year.
$10,000.00 invested at 3% gives you $300 a year. You pay tax on that $300.00 say it's 33% then you only made $200. Your returns would probably need to around 4% to break even. Any higher and it is worth it.
You need to consider risk too.
Almost any investment is going to have significantly higher risk that your totally risk free offset savings.
FOMO and not being FOMO - Trying to get a bargain in stocks by setting a slightly lower than market buy limit, but never comes down and have to buy at a even higher price.
buy high sell low
Same situation happened recently in a stock I had a lot of faith in. Missed my buy order by 0.1¢ then shot up 50%. FOMO made me buy in and now down 10%, but still hodling as I believe it'll go up much more in the near future.
Which stock?
This happens to me a lot.
I put a buy on doge at 5c when it was at 6c :/
Didn't get into shares earlier is the latest mistake. I put all my capital in investment properties but would be far better off had I invested an equal amount in shares. I now invest in index funds at a steady pace. Regardless of what happens, I won't sell properties. I am a believer in buy and hold strategy.
I think this is my mistake as well.
Shares seem to perform just as well if not better, and have the added bonus that you can sell them a lot easier than a house.
Ahh well - you live and learn.
Not only can you sell them easier. Shares are a lot less admin/hassle. There's a lot of BS involved in owning investment property.
Depends on your life experience. I put half in shares and half in property from 2001 to 2009.
Property boomed, shares were average. Thought i'd be retiring at 37. Then the GFC hit, 2 of my large share holdings collapsed completely to $0, even MQG got down to $19 a share.
Fast forward to today. Some properties still aren't half way to 2008 pricing. 1 has almost doubled. MQG getting close to $200 per share.
In summary, it's not the investment class, it's picking the right part of that investment, timing of that investment and 3/5ths pure luck.
3/5ths pure luck
Pure luck ratio likely higher than this ;)
Curious to know which 2 holdings went to $0 if you don't mind sharing.
https://www.afr.com/companies/financial-services/ten-years-o…
Here is a lesson on it doesn't matter what they are doing/ how safe they appear, the market is bigger than any company. If someone (ie. a bot) see's an open wound, the water will soon be stained with blood. I had first hand knowledge, and it still fell over. For what it's worth, One Steel/ Arrium (collapsed to $) and is now GFG. They have not changed a single thing in they way they operate. Not one. But the government threw 100's million$ at it, and the price of Iron Ore is now 4 fold what it was. I drive past this place all the time and it annoys me no end that my shares in the same bricks are now worth nothing.
https://www.michaelwest.com.au/barely-legal-arrium-a-fee-fes…
P.S.I'm about to dip my toes into Crypto…my apologise if it all collapses ;)
@tunzafun001: Interesting to note. Thanks for sharing.
I feel like none of the top 200 ASX companies are worth buying individually. Better to just buy something like VAS or AFI and be done with it if you want to go down that route.
Of course there are unicorns like APT that come along once in a blue moon but by the time they become an ASX200 company, it's too late to hop on.
@tunzafun001: Great link on the Michael West / Arrium article.
Some of their investigations into the mining company shenanigans absolutely blows my mind.
Like the number of international gas companies paying essentially 0% tax while harvesting Australian gas resources.
Funny that we never hear about this stuff in the mainstream media…
@Telios: Yep, convenient ey.
Just an FYI, another big bag of money was thrown at GFG (British btw) just 5 days ago as GFG's capital came from the now defunct Greensill. Same thing for Greensill investors. They want to see the Whyalla steel plant pulled apart and sold off to get some of their money back. But it won't happen, GFG gets another money bag handout from the government to pay Greensill bank debts, ceo severance pays etc (share holders get nothing), and a US firm now gets its fingers in the Aussie pie to make up the rest.
Instead of investing in individual shares, you could have just invested in market ETF like VAS or IVV, you would have made more money.
Any decent crypto ETFs / index funds? That being said, staking BNB sort of gives you the same thing (with better returns).
You hear a ton of people talk about how they bought at $X and they're renting at $X.
in their yield calculations they use the cost base of the asset, when you hsould actually be calculating your yield based on the current price, and lo and behold the yields are comparable to a savings account or even negative.
yes, there are supposed capital gains to be had (my opinion is that houses can only go so high, but could be proven wrong constantly over the last 20 years, but that's besides the point, I'm trying to make)
the capital gains, only realise if you sell the asset, and it takes months to sell a house and with a huge cost.
The liquidity of shares rules.. just invest in property through shares if you really like property as an asset class, and leave someone more qualified than you to turn a profit.
Thank you. Interesting insight.
Having Super spread around in multiple accounts, delaying amalgamating into a good, low fee account.
This is a good, sensible one
So many people do/have done this!!! Myself included. It is so important! Much more than people think it is.
Not starting in my 20s
Binary options. Now banned by ASIC.
Not investing. Never taking the time and making the effort to understand any investment area. It still isn't too late for me but I just wished I had started this perhaps 5 years ago.
My advise would be invest in whatever you want but make sure you research your field well. Don't leave things for too late.
Not buying a house to live in earlier in life.
Practically every China-connected ASX company I've invested in has been a scam or ended up bankrupt for whatever reason.
AU companies have a lower scam rate.
enron was american… so was worldcom, bernie madoff endless list of yank crooks, and they're here now - yeah its so great…. we love american frauds and tax dodgers , we love their greed….
To be honest man, those sound like penny stocks, and all penny stocks are pretty much scams.
When you can't say in one sentence what exactly a company does and why it loses $20m plus a year then yeah, it's a scam.
I know one pennystock making 40 million a year, 17% dividend and the price hasn't changed and they are debt free.
Still hovering around 3 to 4c
Problem is the ASX and ASIC are a joke
Not even China-connected but companies that relied heavily on China as a consumer. For me, it was A2M.
Well you can blame scotty from marketing for that
A2 is a NZ company
Using a Financial Adviser.
Just curious were they a fiduciary? Non fiduciaries can really rip you off
Wasting Bitcoin on SilkRoad in 2013.
what were you buying thooo
A skinny latte and a blueberry muffin with Bitcoin that's worth $18 million today.
That isn't really an investment though. That being said it is sad as I was the same. Alphabay, dream markets, if only we kept extra!
If you missed investing in yourself like so many people do. Invest in your kids so they get to prosper. There is more to life than money. Although it helps.
Not so much a regret, but in hindsight, if i just started to read about finances when i was younger, i would be in a much better place, not that im not in a good place now tho. Cant blame my parents, they didnt know any better, but the internet certainly makes it so easy to research any topic.
So, "invest" in yourself, expand your mindset.
I listened to too many 'financial experts' like the barefoot investor, Scott Phillips etc and didnt buy into crypto sooner and wasted too much time on shares and ETFs - not that i didnt make money on Vanguard etc but the return compared to BTC is really a joke
on a % basis im doing better in 6 months of crypto then almost 10 years of stocks….
If i started 3 years ago i'd be up for retirement be before i get to my 35th birthday
The ASX is a waste of time if you going to do shares stick to the US market - there is no money in Australia (bar Mining which is high risk) - sure one or two companies might spark well but overall it is a rubbish market for capital gains - it is alright if you're already rich and want to live off dividends.
If you dont believe my just remember APPL market cap is larger than the cap of the entire ASX
If you're comparing from inception, the ASX has outperformed the S&P 500 over it's lifetime. This is neither here or there though.
There are hundreds of investments that would have outperformed ETFs or even crypto. You either roll the dice or stick to an ETF. The data shows that you're far more likely to underperform over the long term.
Which data? whos doing the data?
is this data done buy Billionaires? if not then i'd argue that data is invalid
around a 3rd of Buffets investment portfolio is APPL but 'data would tell you' that is too much to have in one stock
around a 3rd of Buffets investment portfolio is APPL
about 40% by $ based on recent articles.
S&P track the performance of actively managed funds and how many manage to beat their index. Something like 95% of large cap funds fail to beat the index over 15 years.
@Autonomic: Perhaps because most actively managed funds are managed by idiots who are over paid morons?
Funds that are run by people who actually are 'rich' the ARK ETFs for example generally have done well….
Most people in finance are 'shit' at it - the have a churned out Uni degree which teaches them little to nothing about practical investing
I wouldnt take personal training advice from a guy who is 50kg over-weight why do you take investing advice from people with relatively small net worth?
There is nothing wrong with investing is passive ETFs but if you got half a brain you can beat the market, and beat basic ETFs like VAS.
It really isnt that difficult - you just need to know how to read
@Trying2SaveABuck: The people who run these hedge funds ARE rich. Like, really, really, really rich:
https://www.marketwatch.com/story/hedge-fund-managers-to-tay…
@Autonomic: I stand corrected still think the current 'advice' in mainstream media is junk/generic if you follow it you will work your whole life and if you are lucky enough to get rich by the time you retire you still run the risk of dying or being in poor or average health to enjoy the wealth you have spend the better years of your life accumulating
Most advice revolves around the super long term it goes on the assumption that you going to live 100% health up until 85-90 years old - the avg life expectancy in Australia is 79 for males and 80 for females in which the last 5 or so years are spent in poor health….
@Trying2SaveABuck: If it was so easy to beat the market then everyone would be doing it. Hedge fund managers are rich. They have no lack of resources. They're going to do everything possible to maximise their returns and yet they still manage to fall short.
If you genuinely believe that you have an edge over all of that then more power to you.
Personally I'd rather invest in ETFs and be rich in retirement than believe I can beat the market and be poor in retirement.
Cryptos are not based on fundamentals though. It's going to end very badly…no doubt about it.
I used too think that i dont anymore - but i can understand why anyone would think that
BTC has been around 12 years and has only gone up in value - ANY OTHER INVESTMENT would be seen as blue chip ie Gold, ETFs etc if it did the same
Im not sure why people still think it will 'crash' and be worthless there is almost a bn people who have some kind of crypto investment - i agree it is high risk and volatile but it has almost made regular investors VERY rich and though the lack or regulation is an issue. I have been investing in shares for a decade and the market has so much manipulation from insiders and bots it is a joke.
Crypto is a zero sum game. Everyone who gains money is making it off someone else who's lost it.
@Autonomic: Lol this is trut for Shares, Property, art, sports memorabilia ….
for one to make money someone else has to lose…
@Trying2SaveABuck: It's not true for shares or property.
Property generates income from rent.
Shares represent part ownership of a company which includes physical assets and IP - you own tangible assets. On top of that, companies can pay dividends or buyback shares.
Crypto on the other hand has none of these.
@Autonomic: You can stake crypto - which generates a income
Property - land doesnt generate anything? - but still increased in value due to supply limits
Shares - yes but i cannot PHYSICALLY hold a share this is no different to crypto
Crypto is a digital asset a number of projects are built on 'block chain' technology
I'd also add this Crypto is generally limited to a 'fixed' supply, a company can capital raise and dilute shares at the drop of a hat…. if anything shares are more of a scam then anything the whole GME (not allowing retail investors to buy and only sell) shows how fixed the game is.
Similar to land there is a supply limit
Gold in addition is given value based on? nothing
Silver the same?
What about Mona Lisa it is worth close too 1bn but it generates no actual income?
You need to change you're thinking
scams from traditional investments - lying about financials, sunset clauses, bankruptcy laws (you put a depost on that new home and the builder goes under well too bad my friend), dilution of shares, over-stating estimates, new houses on toxic land etc etc
Just recently AMP had to pay out a couple Million for a CEO who was in the job for a month due to his sexual acts towards a female staff member!! whilst Share holders have been bleeding for almost 2 years now….. - not a scam?
I have been investing a long time if you're calling Crypto a 'bubble' 'scam' etc i got news for you all investments are scams until someone makes money then they are 'good investments'
You dont have to invest in Crypto you dont have to like it but set the same standards for all your investments and you will probably see that most things are scams
@Trying2SaveABuck: Art is a zero sum game. Land, by itself, is a zero sum game. In reality it's almost always used for something - crops, housing, commercial applications, storage etc. Commodities at least have real world use cases.
Not being able to physically touch a share is meaningless - the company and it's physical assets exist. You can touch those if you wanted to.
Staking crypto doesn't generate income - it generates crypto. It's still a zero sum game.
I'm not saying don't invest in it - do what you want - but you should acknowledge that the only way people make money off it is by taking it from others who's lost it.
I think the other part of that quote is also important though "that's the same thing, Michael". I agree that it's overvalued and overdue for a crash. If a crash finally happens in the next few years then does that mean you shouldn't have bought 10 years ago? My opinion is no, still would've been a sound choice. If we predict a crash then we could cash out now and enjoy 10 years of appreciation (a solid investment). As a side-note: part of me also wonders, given just how much of our country's wealth is tied up in real estate since there aren't many alternatives that compare, whether it's a "too big to fail" à la the GFC and property investors get bailed out.