In a perfect world, every financial decision would be well-thought out and rational. Unfortunately, there is no such thing as a perfect world, and people make bad money-related choices time and again. Whether it’s bad luck or plain foolishness to blame, some are so unfortunate, they sound too bad to be true.
Oh, but they are; members of the ‘Ask Reddit’ community recently discussed some of such instances. The user u/BasalTripod9684 asked them about the worst financial decisions they’ve ever seen others make, and they were ready with stories, covering everything from scammers to gambling, and beyond. Scroll down to find their answers on the list below and use this chance to learn from someone else’s mistakes.
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Had a co worker with 5 kids who could all go to USC for free once he has worked there for 15 years (even if he quit). He quit at 14.5 years for a job that barely paid more than he made at USC. Cost all 5 kids a free education at a top school since he couldnt wait 6 more months.
This just sounds selfish to me. As a parent, especially of 5 children, you're supposed to put them first and provide and sacrifice what you can. Not too many people are even able to get an opportunity to send all of their kids to college for free and this guy just threw it all away.. so infuriating!
My former sister-in-law had a thriving medical practice. She got so stressed that she joined the Scientologist and started taking their classes. She opened up five-six credit cards without telling my brother, maxed the cards out with hundreds of thousands in cash withdrawals, and gave it to that cult.
My cousin spent 100% of her inheritance and took out a lien on her home to buy a 2nd home in the mountains... thing is it was being pushed over by a mountain...and they thought they could fix it... I went and seen it and every door jam was crooked and the doors wouldn't shut.. They took me down into the basement and they were trying to use I beams to "stop the mountain from pushing on the home". I was just like "what the hell are you doing, that won't solve anything" fast forward 6 months and they asked me for 50k to help and I declined. Fast forward a year and the home collapsed and now they owe over 300k+ for a home that doesn't exist and if they don't make the payments they lose their other house too because they used the original home as collateral and could not get insurance on the 2nd home..total money lost upwards of 700k
Put everything in his gf's name to hide assets as he owed the IRS, the gf sold his business, cashed out his accounts and ran.
Buying a TV on Black Friday instead of fixing their leaking roof
A leaking roof is not very entertaining, is it? At least they won’t be bored while watching their roof leak.
When my grandmother's 2nd husband (who I know as my grandpa) died, she spent nearly all $50k of his life insurance money on a South African scammer who promised her romance and more money than she gave. She refused to listen to family telling her to stop. She subverted efforts by her own bank to stop her frequent questionable money transfers. Eventually my parents had to close her bank account to force her to stop blowing my grandfather's money. I will never not resent her ignorance, selfishness, and inability to listen to anyone but herself.
The grandchild is an awful person. "I hate my grandmother because a scammer took advantage of her during an intense period of grief when she likely wasn't thinking straight." Wtf?
They won thousands of dollars and bought a new entertainment system instead of getting current on their mortgage. Foreclosed on later that year. The thing was, the area had recently become the new **it** area for young families, and housing prices had skyrocketed. They easily could have just sold the house, paid cash for a larger house 20 minutes up the road, and still had tens of thousands leftover.
This older lady worked part-time in my kitchen. It was a fine dining, fast paced environment. She would only work about 20 hrs per week doing busy work u.e. peeling vegetables, washing produce, etc. Tasks I knew she could handle and wouldn't get overwhelmed.
Unfortunately her husband passed away and she requested a few months off. I totally understood and said take all the time you need. Let me know when you feel comfortable coming back to work, if at all. Take care Barbara.
8 months later she contacted me for a job. I was more than willing to have her back in my kitchen. I nonchalantly asked her how she was coping with her loss. She broke down in tears. She apparently got a $500000 insurance payout from her husband's death. Within those i months she attempted to open a restaurant and sink every dime into the establishment. It went out of business in 6 months.
She was now broke as an elderly lady having to go back to work.
At that age, that is a good amount to be called a safety net, if I had that amount in my younger years I still wouldn’t put it in the restaurant business, watched too many Ramsey and Irvin shows
Sending a televangelist money for a "blessing" and then not having enough to rent a moving truck. So I had to be the "blessing"
Not knocking anyone's faith (or lack of), deities do not need earthlings money or possessions, nor the priest/evangelist/cult leader etc has a direct line with whatever deity
My brother's ex fell for a Craig's list scam. She found a motorcycle and the guy "needed money up front to pay bills" before she even saw it. We told her don't do it, it's a scam. She said she already sent $1000. Of course, he was never available to show her the bike and we found out from my brother after they broke up she actually continued sending him money in hopes of getting the motorcycle. I think she was out $3,000 by the end.
A guy in my fraternity got 30k for an undisclosed reason, I’m guessing a family death or something and he bet it all on the Yankees winning one game. They lost
I used to be really on the side of "it's a person's choice to gamble, if we make it illegal then underground betting etc will still exist. Some people can do it and just have fun and be responsible." but then I spent a few months working at a bingo hall with slots room. And you suddenly realise that the percentage of happy grannies coming to meet friends and play once a week are the minority. People are pouring their wages/benefits into slot machines sometimes 4 or 5 times a week. Neglecting personal hygiene, nutrition, relationships, and everything else just to get the dopamine rush. Slots especially are pernicious... there are designers who sit there and work out which sound effect will give you the biggest hit of dopamine, which win ratio is a best for getting you hooked, which graphics will make you stay the longest. We had a lord of the rings themed slot game. Tolkien would be spinning in his grave if he knew.
My (awful) aunt was the trustee for my grandparents' estate. When they passed, she decided to sell their house to a random realtor who put a leaflet on the door. TO the realtor, not WITH the realtor. It wasn't put on the market, and the aunt rejected a matching offer by me after I argued hard to actually list the house and have people bid on it.
The realtor slapped a new coat of paint on it and sold it a couple of months later for literally a million dollars more than she bought it for.
I actually work in this industry and believe this should be predatory and illegal.
My supervisor took out a loan against their 401k to pay their rent because "their credit cards were maxed." Two weeks later, they bought a brand new 60k Lincoln with basically nothing down because "her daughter just had a baby and I need a bigger car for that."
A friend of mine who is very bad with money and his girlfriend bought some sort of water filtration system from a door to door salesman. He has to pay something like $300/month for this filtration system. He was all stoked because it came with a free set of pots and pans.
Fast forward a year and his girlfriend has broken up with him, moved out of the house, and he's had to sell his home because he can't afford to live there. The water filtration system is now sitting in a storage unit where he still pays $300/month for it because he's on a 2 or 3 year contract (sorry the details are fuzzy).
We have great water quality in my area.
“Did you say it comes with a free set of pots and pans? We do need pans…this must be fate.”
I knew someone who got a loan for their wedding, but decided to blow it all at a casino. Now they have a loan for 20k to pay off and nothing to show for it.
Apply for a 5k loan, didn’t accept quick enough so applied for another 5k loan, both got accepted and ended up gambling it all
At the temple my mom goes to, they needed a new roof, donations poured in from the members ( my mom included) $80,000 was raised I believe, the person they entrusted to to find a roofer took it all and lost it all at the casinos
A dude who owned a small convenience store in our town spent like $20,000 on fidget spinners. He was posting for like a year begging people to buy them as he would lose his business and his marriage was falling apart due to it.
My maternal grandmother bought an 8-plex to avoid capital gains when she sold her large house. The apartment complex was in the red and needed a lot of repairs. She hired my father to do them and be on-site manager. The place started making money. My mom (divorced from my dad) was mad that my grandma bought it in the first place, then hired my dad, then was proved wrong because it was making money. My grandma was in her 90s and my mom pressured her for years so my grandma finally sold it. That place is in a high market area and is now worth millions. My mom made a poor financial decision based on petty spite.
My dad had his own company and someone told him it made financial sense that instead of paying himself wages, he should take out a loan from his company. He built up debt for three years, while working full time, rather than paying himself. It had all sorts of bad tax effects. Like he was required to pay interest on this, which was then taxed as profit of the company, then he paid himself again paying income taxes. It took him about ten years to get out of that hole.
Then he needed to sell his house because it was too expensive. But the buyer got cold feet on the last day before the sale. Rather than having the buyer pay 10% of the price to get out of the sale he gave him an extension without an end date. The buyer then took 2 years to think about whether he wanted the house. All the while my parents needed to keep paying the mortgage and couldn't sell the house to anyone else because of the contract they had with that guy. Brought them close to bankruptcy. I've personally paid a couple of hundred a month to let them pay for the mortgage during that time.
A coworker I used to have worked every second of overtime he could for several years to save up for a house. When he applied for the house loan, he based his mortgage payment on all of the overtime he had been working. I tried to tell him that wasn't a good idea but he didn't want to hear it. He ended up divorced a few years later because his wife got tired of him always working.
A guy I dated for a short time had been joining a MLM scheme selling insurances.
I listened to his monologue and told him I had no money. He was furios and tried to sell insurance to our waiter at the restaurant. He failed again. I'm still laughing today, he was no good guy.
My coworker has 25k in anime figurines. He is in mega debt right now.
Paying twice the amount for a car over a bunch of years instead of getting something he (ok, you got me, it was me) could afford.
When my parents split up, my father didn’t want to leave the house, so my mother’s attorney convinced him to guarantee to give my mother half the value of the house AT THAT TIME whenever he sold it, and he could keep the rest. I still remember him telling me, “Housing prices only go up, I’ll come out of this way ahead, your mother is being foolish.” This was five minutes before the big housing collapse of 2008. By the time he was finally forced to sell five years later his share was worth about a nickel after having to give my mom half of what the house had been worth five years before. I think about this every time he complains about not having any money, which is basically every time he talks to me.
They got married to someone heavily in-debt. The person kept their financial situation from them until after they were married.
Knew someone who answered those scam emails thinking they would get rich. Last I heard, he lost around $50k. Emptied out savings account and maxed out credit cards. Left in debt and had to move back with ailing parents.
Not a close to them at all but more like a friend of a friend of a friend's cousin. M**********r just **WOULD NOT** listen. Genuinely thought he was going to be a millionaire. They kept stringing him along until the bitter end and then...poof. Biggest concern his friends had was him trying to milk his ailing parents for their last nickel and dime. Fortunately, he wised up and knew he been had. The last I heard of him was he had an hourly job somewhere and trying to get out of debt.
someone got too wrapped up in the sunken cost fallacy that they couldn't give it up
I'm so glad that I don't have enough money to even waste on anything stupid in the hopes that I'll get rich!
This is exactly why I have zero empathy for people (in my country, the US, at least) who are struggling financially. The vast majority of the time it's a result of many irresponsible decisions.
I'm so glad that I don't have enough money to even waste on anything stupid in the hopes that I'll get rich!
This is exactly why I have zero empathy for people (in my country, the US, at least) who are struggling financially. The vast majority of the time it's a result of many irresponsible decisions.
