My Biggest Financial Mistakes

"Fear Kills More Dreams Than Failure Ever Will"

- Suzy Kassem

When was the last time you were at a cocktail party, a work team-building event, a family dinner, or even a wedding, and discussed how you lost thousands of dollars on an investment failure? Likely for most of us the answer is… ‘never’, or ‘not in quite some time.’

Why do you think that is?

I believe it’s due to the fact that finances/wealth/money in our society is as taboo as talking about politics or religion. It’s a polarizing topic that usually ends up in muted conversation and blank stares. However, discussing financial mistakes is crucial for improving financial literacy and helping others avoid similar pitfalls.

Fortunately for me and my investment journey, I avoided one of the biggest biases, in my opinion, and that is one of early success. I believe early success in any aspect of life is a very poor teacher, especially in the investing world. All too often, we tend to place skill above luck in our success and assume that we can replicate the same results in our next venture. That’s usually not the case.

In my case, instead of making money in my first real estate deal, I lost thousands of dollars and hundreds of hours of my time.

Mistake #1 ❌ Losing $8,000 and evicting my first-ever tenant in the first 3 months of owning the home for nonpayment/deceit.

Lesson #1 ✍ Treat your investment like a business. Screen your tenants well. Understand the arena you are investing in. Trust but verify.

Success #1 ✅ I have been able to cash flow and pay down principal every year since that initial eviction and I’ve been lucky to take advantage of the yearly appreciation of the surrounding area. The cash flow was due to strategic analysis, the appreciation was pure dumb luck.

Reflection: This experience taught me the importance of due diligence and proactive management. It reshaped my approach to real estate investments, making me more cautious and analytical.

Mistake #2 ❌ Losing ~$25,000 in a real estate investment that went sour. Not only that but losing TFSA contribution room as well.

Lesson #2 ✍ Understand the rules behind certain real estate trusts/mortgages. Read the prospectus thoroughly, and familiarize yourself with the various risks instead of focusing purely on the potential upside. Know the rules surrounding investing through your TFSA. Trust but verify.

Success #2 ✅ I have not made that same mistake yet. I have become extremely diligent with subsequent investments. I end up saying ‘no’ a lot more than ‘yes’ to investment opportunities. I spent $25,000 as tuition in my learning, and I am confident that I will make multiples on that mistake in profit throughout my financial journey.

Reflection: This costly mistake emphasized the importance of thorough research and risk management. It instilled in me a more conservative and thoughtful investment strategy.

Mistake #3 ❌ Wasting way too much of my time investing in people/businesses that did not have my best interests at heart. We were out of alignment and it took me several years/several thousands of $$ to realize it.

Lesson #3 ✍ Align yourself with people who have a vested interest in your success. Know the difference between someone who has a fiduciary responsibility and someone who does not. Ask the people who you are entrusting your money to the correct questions:

• What is your investment track record?

• What is your investment philosophy?

• Do you own the same investments?

• What are ALL the fees involved?

Success #3 ✅ I have not made that same mistake yet. I have surrounded myself with professionals who succeed when I succeed. We are aligned. We share similar investment philosophies and respect and value our time. Without these people in my life, I would not be in the position I am.

Reflection: This mistake taught me the value of alignment and trust in professional relationships. It highlighted the need for careful vetting and clear communication with those managing my investments.

Those were my largest mistakes but not all of them. I did also commit a few of the top 5 biggest financial mistakes most people make

Common Financial Mistakes People Make

1. Not Having an Emergency Fund: Failing to set aside funds for unexpected expenses can lead to debt and financial stress.

2. Overspending and Poor Budgeting: Living beyond one’s means and not tracking expenses can quickly lead to financial trouble.

3. Ignoring Retirement Savings: Not prioritizing retirement savings early in one’s career can result in insufficient funds during retirement.

4. Lack of Diversification: Investing too heavily in one asset or sector increases risk and potential for significant loss.

5. High-Interest Debt: Accumulating high-interest debt, such as credit card debt, can become a financial burden and hinder wealth-building efforts.

Sure, we all make mistakes. Some of us learn from them. Others repeat them. However, a large majority of us choose not to even attempt to make them, as to prevent us from the thought of failure. For me, I would rather fail than regret not trying.