Money Talk: Don’t Make These Ten Stupid Money Mistakes I’ve Made

Money Talk: Don’t Make These Ten Stupid Money Mistakes I’ve Made

Editor’s note: Competence is something one gains over the course of making mistakes and failures. The trick is to turn these failures into lessons and use these inbaluable assets to one’s advantage. Acquiring wisdom is the key for any sphere of our lives, especially in finance management and building one’s own wealth.

Ken Doghudje, the financial expert contributing to, talks about his own “top ten” money-. mistakes so that you, our esteemed readers, can recognise the red flags and deal with potential loss of your money and dignity.

Nowadays, I get a fair amount of feedback from people who read my articles and see me as a financial expert. However, when it comes to money I have made more than my fair share of mistakes. Truth be told, my expertise stems from the fact that I learned the hard way from my mistakes. My mistakes have been opportunities for learning and progress, with something good eventually coming out.

I urge you to not be afraid of making mistakes, thus, I decided to compile ten of my stupid money mistakes with the hope that you could perhaps learn something from them.

The first stupid mistake I made with my money was giving people loans from my savings. From time to time, friends and loved ones request to borrow money. In order to help them, I took out of my savings, which they promised to repay promptly. Most times, they defaulted, with a few paying the money back in bits over a longer period. This is not what savings are meant for. My savings should be put to good use working to produce more for me, and not seen as a loan to others. That’s why I have stopped giving loans, preferring to give people cash gifts if I can afford it instead.

Stupid mistake number two usually took place at the end of every year during the Yuletide season. This was the time my employer would pay me a thirteenth month bonus, one additional month’s salary. For many years, this bonus was “Christmas spending money,” and I went all out to blow it away by the New Year. A bonus rather should be invested in ventures that will generate profit because it is a lump sum payment. Money spent can no longer be put to work producing for you until you earn another.

Taking my hard-earned money and entrusting it into the hands of a stockbroker to invest it for me also qualifies as a stupid mistake. I didn’t want to take the time to learn about money and investing, so I entrusted my savings to my stockbroker for him to make money on my behalf. This was extremely foolish! Thank goodness my stockbroker didn’t run away with my money, but he was just an employee in a stock broking firm and didn’t have any money of his own. How can a man who isn’t rich make me money? According to Warren Buffett: “Wall Street is the only place that people drive to in a Rolls Royce to take advice from people who ride the subway”. Eventually, I lost money due to bad investment advice from someone who didn’t know better. I thus took up the gauntlet to take charge of my own financial life and slowly started to master money and investing.

You might find the fourth stupid money mistake I’ve made quite amusing. This involved dating someone who only saw me as a . of income to assuage her needs and wants. I was once in a relationship where I kept giving and giving, while getting next to nothing. Relationships are supposed to be about both giving and taking. I thus had no choice but to end the relationship, with my account considerably lighter. Our society is filled with many gold-diggers. You would do well to open your eyes before getting into any relationships. Anyone who keeps demanding for money from you should be avoided at all costs.

My fifth money mistake involved taking a loan from a bank to finance purchases such as a car, home appliances and the like. Simply put, I took a loan with the associated interest and fees to purchase something that I wanted but did not need. Even though payment was spread, I ended up paying back far more than the value of my purchases. The main point is that none of these purchases were assets. An asset is meant to bring in money for me, and a brand new car for my personal use cannot bring in any additional income. I would have been better off saving to purchase a used car instead of a brand new one. Loans are meant to be used to procure assets.

I’ve also had experience investing in businesses I did not know much about. I remember investing thousands of naira going to learn Online Forex trading and losing it all because the opportunity did not materialise as promised by the service provider. There are many scams out there posing as business opportunities on the lookout for the innocent, naïve and gullible to fall prey. Ensure you do your proper and due diligence before you put your hard-earned money into any venture. If the returns sound too good to be true, they probably are.

What about the lottery, promotions and the like? I’ve fallen victim on more than one occasion, seduced by all those advertising messages that tell you to give a little and get so much in return. It usually involves buying products or patronising services, and in return, you could be the lucky winner of a cash prize worth far more than one’s initial outlay. The bad news is that millions of other people are literally thinking the same way, so the chances of winning are remote. I have even had to over-patronise the product in hope, yet still winning nothing. Going down this route is unrealistic and stupid.

Embarking on expensive foreign trips in the guise of going on holidays and spending all your savings is a stupid money mistake I happen to have indulged in previously. For two years in a row, I took all the money I was supposed to invest and got on the plane to visit foreign lands and relax and unwind. After all, life is short! I’m not saying holidays aren’t necessary, but why not holiday nearby or within the African continent? There are many excellent holiday destinations closer to home that cost a fraction of what it would cost travelling to far and distant lands. Holiday is holiday, as far as I reckon.

Ninth mistake: I went ahead several years ago to rent a sprawling edifice for a home which was far more than what I needed for my growing family. A duplex in an exclusive neighbourhood was my desire and I would not rest until I achieved it. A few years later when I calculated the amount I was spending I discovered that it could have built me a house in a less exclusive neighbourhood. This was most definitely an unwise move. There’s nothing wrong in starting small and seeking to build your own house as soon as possible.

Finally, making use of credit cards to make purchases without checking and fully understanding the payment terms was my tenth stupid money mistake. Failure to pay back more than the minimum monthly limit caused the interest to pile up until the interest paid for the few months I had used the card became higher than what I had bought with it. It was at this stage that I learned that the best way to use a credit card is to try to pay off the whole or a large portion of the amount outstanding before the due date. This would substantially reduce the interest.

I am pleased to have made all these mistakes because I have become more knowledgeable and savvy about money as a result. These mistakes and the resulting consequences of losing everything that one has financially has driven me to acquire an expertise on money affairs and to have some resources at my disposal. I don’t know where I would have been without them, probably financially illiterate and living in lack and poverty.

Mistakes are not necessarily a bad thing, it is not learning from them that is bad. Learning by making mistakes is actually the best way to learn because the learning curve comes with experience and not only knowledge. Experience is one of the best teachers one could ever have or hope for. Have you made mistakes like the ones above or perhaps others? Congratulations in advance because you have a better chance at achieving wealth — provided you learn from them.



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