Ep. 596 — Mistakes Were Made

Great episode by 3 fun people.

I wasn't aware of the FI/FIRE community or any it's best practices until learning I/ we were already FI. I had brute forced my/our way just by what I thought made sense.

Had I been aware of FI/FIRE, I would have learned about DIY index fund investing. My biggest Accumulation Phase mistake was always investing with the family's trusted active management broker, who picked individual stocks, etc. Had I learned about this stuff earlier, I could have easily retired with the same FI Number 5+ years sooner (than my FIRE at 45), or retired at the same age with easily 20+% more in the portfolio.

My biggest mistake in FIRE, still ongoing and sorting out, is some misalignment in the competing priorities of "being a great husband and father" vs "making sure I get what -I- need and want out of life, for myself". I haven't yet decoded how to be appropriately selfish for the greater good. I do have some concern that I am in, some ways, "wasting" my best years of early retirement, waiting for the other stakeholders.

WOW! This podcast has helped me significantly financially…but this episode I truly feel is helping me grow into a better person. I actually teared up hearing Alan apologize to his friend Paul. Such a powerful moment. Thank you so much for sharing that vulnerable mistake. I also really identified with Katie talking about how much she doesn't enjoy making mistakes or reflecting on them (at least until she did and said it was cathartic - counting on that 😄)

And so, I'll share two of mine. One financial, one personal.

1. Financially, I feel super lucky and privileged to have worked for a company that was a smallish, successful, private start-up. It was a software company in the hey day of software and it was FANTASTIC. I was a customer and loved it (changed my life, not hyperbole especially considering how much impact our work has on our life). Anyway, I got shares of stock when I joined and about 5 years later we went public. My strike price was less than a dollar…the company IPOd at $16, I sold at $48 (didn't exercise my stocks and hold for 1 year so paid short-term cap gains/income tax rates in my highest earning years). I made a significant amount of money and I'm so grateful and again feel so super lucky. AND…the company sat at $120-150 for a long while. All that said, I know that holding a single company's stock isn't recommended but it was pretty much free money. And even if I had sold and immediately reinvested the profit into index funds (I was too scared to invest all of it, but did invest 50% of it into a balanced robo-advised fund which has performed very well the last 10 years thankfully!) that would have been better. And also…I knew the company, the strategy, the product (it was great AND WE WERE FUN!) and I could have double or tripled my profit or at least been smarter on taxes (even just holding for a year to get long term gains……..!). Sigh. I guess the lesson I hope others learn is that if they come into a windfall, try to get some help/education making the wisest decision (and of course also be careful of people taking advantage of you). If I'd have been listening (and acting) to ChooseFI I might be FI or 90% FI today where I'm actually 5-7 years away).
2. Personally, while I want to be super clear that I lucked out (blessed, however you think of these huge things working out better than you deserve), I got married too young (23). I'm still married and we just celebrated our 15th anniversary. And while we have and are still working to build a wonderful life and have had so much fun (and our share of not fun), I share it as a mistake given how poorly my life could have developed had my 23 year old self with 1.5 years of knowledge of this person, and very few years of knowledge of life on our own (I have never lived alone - another mistake tied up in this one I'm sure!) not lucked out. I really lose sleep over it thinking about how it could have been. SO thankful I'm not sharing this with lots of trauma though I've learned from many wise people who learned by more pain and suffering and I just feel so strongly now to share (and I've read some young people on here recently looking to learn!). You may actually have the best person ever at 23 (or 20 or 25, whatever age)….and if they are that great, they (and marriage, finances especially!) can wait some time for you to shore up your own confidence, experience, and growth. And coming from a super religious, conservative upbringing I reaaaaally understand you if you decide to ignore this advice and I hope and pray you get as lucky as I did! But this community is awesome and I see many out here supporting folks as we learn from and work out of our mistakes. I'm not a marriage hater I promise. Just…wish more of us had the encouragement and support to not rush into it. So maybe that is the lesson regardless of age? Anyway….

GREAT episode, thank you again for being so open and generous with your learnings!

I appreciate the compassion in this episode. We're all human, we make mistakes and grow from them. Here are some of my mistakes:

1. I left too much cash in a bank savings account when I should have invested it. Instead of a 0.01% interest rate, just imagine getting 10% annual returns in the market.
2. I rarely looked at my pay statements and company benefits, so oblivious to how much money I was leaving on the table.
3. I didn't realize I can choose where my 401K was invested in. I was automatically enrolled in a Target Date Fund, which wasn't necessarily bad, but I changed it a more aggressive fund with a low expense ratio.
4. I regret not attending my friend’s wedding overseas. I made the decision not to go because I simply didn’t know how much it would cost, or how to manage the logistics. I just assumed it would be too expensive and too much of a hassle. It was a chance in a lifetime and I missed out on the memory dividends (to quote Bill Perkins in his book Die with Zero).
5. I didn't prioritize my health and stayed at a toxic job for too long. I ignored my health issues until I could no longer. I ended up in the ER and had to pay the full $7,500 deductible.

Question for you all: Was it a mistake to pick a health insurance plan with the lowest premium and highest deductible? I was relatively healthy and wasn’t planning on needing medical care aside from the typical checkups…until I ended up in the ER 😞… I'm open to your opinions!

What an incredible episode - let’s start the petition now for more of these!!! I am listening to it a second time as I type this 😄

I work in healthcare and our organization’s journey is to be highly reliable, among many other things that are intertwined. One of the pillars of being a highly reliable organization (imagine air traffic control, nuclear energy, etc. where like healthcare, outcomes can be catastrohic) is transparency and the sharing of lessons learned - it’s by far one of my favorite parts of the quality work I do! So needless to say, I was overjoyed to hear this episode. So ofter, failures and even successes (the “how to” picture) are gatekept, and that’s disappointing.

So this was a welcomed episode that I hope will be repeated with many other guests; lived experiences are our best form of learning.

Key takeaway here for me:

Even amidst all these expensive, time consuming errors (that you each so freely shared), you each came out alive, on top, and living the FI life you desired 💜 These hiccups are part of the pathway, we live and we learn, and we do it again differently and better! I saw a quote recently and I feel it belongs here: “success is not final, failure is not fatal.”

Great episode! I think learning vicariously is powerful and the episode also gave me the opportunity to reflect on "my own" mistakes. I also just really loves hearing more about everyone's person stories and history. Thanks for a great episode and keep the wisdom coming!

PS I did rebel finance last time you ran it and found a lot of value in it!

I LOVED this episode! Can we have a part 2? Thank you!!

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Great episode and thanks for opening yourselves up like that. We invested a bunch of money we had left over from a business we ended into a franchise that never made an annual profit. Had we invested that in the stock market or even property we’d likely be done now. But we sold that finally at a huge loss and jumped on the FI train So much better now and almost there. It’s never too late (we are 58). Lesson is to cut your losses and rip the bandaid off even though it’s not pleasant. Thanks again for your candor (and yes, Musk ran Twitter into the ground- agreed!!)

Great episode except the comments about Musk and other tech leaders. You come across like you are better than them because of some moral high ground. Don’t forget they built real business that have helped the world.

Great episode. Being willing to share our mistakes so others can learn from them takes so much vulnerability and willingness to admit. It’s a great act.

What’s just as hard, is for others to accept the lessons and learn from them. I’ve spent the last 10 years focusing on this in corporate and too often ego, pride, guilt get in the way to accept the lessons. But all we can do is keep on sharing the mistakes, make them front and center as the why we share the good and bad to help others.

a few of my mistakes….

1. not having the self confidence to ask for raises and talk truth to power in fear of what others thought or fear of my job.
2. Trusting a financial advisor for 15 years, several of those when I knew better thanks to this group, but trusted that my employer suggested this person for good reason. Needless to say, fell way short of market returns all while paying 1% AUM.
3. The year that I thought I was a stock picker during COVID. Not even the financial aspect but all the time spent researching and focusing on it, all while my kids were growing up right beside me. Time I’ll never get back.

This episode was fantastic! Thank you to Alan, Katie, and Brad for being so open and honest. There were some great notable quotes, too!

One of my biggest financial mistakes (and there's been many) was buying a $35K vehicle with $10K cash down (our entire savings account) on a 0% loan right before starting a family and moving to a HCOL state. A mistake on so many levels! I'm still driving that same vehicle, but I'll never make a mistake like that again.

I have heard the Dongegans mention several times how important it is to build your self confidence as it if is simply something you can just do...I get the impression that they know this is difficult, but they present it as if it is simple or easy or procedural. Well then, HOW? In most things, like lifting weights, progress is hard but simple and predictable. If you train consistently and use progressive overload, and you eat and sleep, you will get stronger. What is the "confidence" equivalent. How do you actually, build confidence beyond self help book platitudes?

As someone who struggles with imposter syndrome, who by most objective metrics is a competent, capable, and personable, I just can't seem to find a way to feel confident and it holds me back from living the life I want. Even as I approach my FI number in my early 40s, I don't find that lack of confidence getting any better. I have read so many books on the topic, but often when I try to implement those recommendations, and it doesn't work, I find that I feel LESS confidence, like I have just failed again. Constructive failure is important, but is there are "tipping point" where failing too often just leads to despair? I have tried therapy, and even that felt like just another failure. My frustration with the, "work on your confidence" recommendation is that OF COURSE building confidence is important and will make your life better, but what the heck does that even mean?

One of my favorite episodes in recent weeks/months! Thanks to the 3 of you!! I am currently 58, FI, and blissfully happy. And looking back on my life and my financial mistakes, I view them with kind eyes. I don't feel bad for any of my choices, but hindsight sure reveals a lot! Here are some of my mistakes:

1) I let a sleazy 401K administrator talk me into putting a TON of my 401k dollars into an annuity product. It was there for 15 years, and didn't capture returns anywhere close to the S&P. That mistake has since been remedied!

2) I actually read MMM's "Shocking Math" article back in 2012 and it just didn't sink in. I changed nothing. If I would have dove into it, I'd probably have a couple more million dollars now. D'oh!!

3) I had a long-term relationship from 1999-2014 with a guy who I spent SO much money on. Those were my peak commission-earning years and I made SO much money! I've never been into "stuff" but believe me, HE was! I bought him whatever toy he wanted - including a Cessna airplane. Like Brad, I have resisted doing the math to calculate how much higher my net worth would be had I not lavished my hard-earned money on that guy.

4) We are currently renting a house to a former friend. I regret doing this. We are rather stuck. He won't move out. California (which I still LOVE DEARLY) makes evicting near impossible. We make money on it (as the house is paid off), and the house has appreciated about 6% a year since 2014. But I do feel stuck with it.

5) The thing that stings the most when I look back, is my lack of confidence – in work, in personal relationships. I reflect back on younger me and just wish that sweet, hard-working, intellectually-curious, kind-hearted young woman realized how badass she was!

Thanks again to Brad and the Donegan's for a great episode. You guys rock!