by Chris Taylor
I bought Lehman Brothers.
There, I said it. My dark secret, finally out in the open. Watching financial stocks drop like stones in the fall of 2008, I figured it was a classic case of investor panic. After Lehman went from over $90 to under $10, I almost felt bad at getting such a bargain. After all, it couldn't go to zero, right?
And then it did. My modest investment was wiped out, and I couldn't even stand to look at the Wall Street Journal for a long time afterwards. My point is that even personal-finance journalists, doling out our sage advice, can make bone-headed financial decisions. Really big ones.
That in mind, I asked a few of the nation's top personal-finance commentators about their own missteps that they'd love to forget. You might enjoy the schadenfreude, of reveling in others' misery. But hopefully you can also leverage these lessons to avoid similar screw-ups in your own life.
Think of it as a financial group therapy session. Because hey, we're all human.
Beth Kobliner, author, Get a Financial Life: Personal Finance in Your Twenties and Thirties.
When I was first offered a job as a writer at Time Inc., I was just 22. I remember having an interview with then-managing editor of Money magazine, Landon Jones. That afternoon, he called me up at my office and offered me the job with a starting salary of $30,000. I was thrilled! 'Yes!' I shouted into the phone. 'Sounds great!' I could finally afford to move out of my parents' place in Queens and move into Manhattan, into a one-bedroom on the upper, upper East Side.
As I was rapturously imagining my first microwave meal, the phone rang again. It was Landon calling back to say that he felt bad; he thought he had offered me too little money. This was my giant bay-window of opportunity, to seize the day and launch into some negotiations. But, inexplicably, I verbally jumped out the window and plunged to my financial doom. I heard myself say, 'No. That's really OK. It's more than generous! I can't wait to start.'
And there it was. A pregnant pause ensued, and both he and I knew that I couldn't take it back. My opportunity was dead on arrival. To be clear, I wasn't cavalier about money; I was poor. I had massive amounts of student loans. I had no trust fund. I barely had a bank account. And yet I found it impossible to say, 'Yes! I deserve more money.' Not only did that mess me up for my first year on the job, but it took me many, many years to catch up. Lesson: Don't undersell yourself."
Carmen Wong Ulrich, Author, The Real Cost of Living, former host of CNBC's On the Money
I used to be able to 'do it all'. But the year I had my show on CNBC, I also had a one-and-a-half-year-old at home. My hours were just insane, and juggling everything, we ended up being late filing our taxes. Because guess who's in charge of all things money? Me.
I was very, very disappointed in myself. I was embarrassed. Thankfully, once I finally got to pulling together paperwork for our accountant, we proactively called the IRS and got late filing fees waived. But I learned my lesson. Ask for help...!
Dave Ramsey, Host, The Dave Ramsey Show
After college, I found a niche in bargain real estate. By age 26, I had a rental real-estate portfolio worth more than $4 million. I had arrived at financial independence, and thought I had made it! But I had an unusual ability to finance everything. If one of my business lines of credit ran low, I would put on my custom-tailored suit and head for the bank. Bankers loved to lend me money. We had every type of credit — business lines of credit, equity lines of credit and let's not forget all those platinum and gold cards.
The problem came when our largest lender was sold to a larger bank. Most of our borrowing was in short-term notes, and because of this, the banks had the right to call most of our debt within 90 days. And that's just what they did. I had 90 days to find $1.2 million. I paid virtually all of it, but doing so destroyed my business and caused a chain reaction. I lost everything but my home and the clothes on my back, and eventually filed bankruptcy.
Hitting bottom and losing everything was the worst thing that ever happened to me — and the best thing. After this I went on a quest to learn how money really worked and how I could get control of it. I read everything I could get my hands on, and talked to rich people who made money and kept it. This quest led me on a journey over the last 20 years of helping others learn to control their money — so they don't have to go through what we went through."