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When you work in the financial services industry (like I did for eight years) you have the opportunity to see everything. The good, the bad, the ugly, and the funny!
I saw people become millionaires by letting their money ride on a start up called Google. I witnessed others lose 35 years of savings by holding on to a stock from the company they worked for all of their lives.
When it comes to money, people typically don’t think rationally (including me). I could literally write a book on the money moves I saw over the years.
Here is a list of Eight of the worst, best, and funniest financial decisions I have seen people make.
1) Send Me Money and I’ll Send You My Cat
A couple wanted a cat and I guess they wanted it badly. There was a person they found on Craig’s List who was selling their three year old cat. It wasn’t a fancy cat or one with the smooshed faced, just an old cat.
The seller told the couple to send her $2,000 Western Union and then she would send the cat and the $1,500 back with the cat. Needless to say the couple never got the cat and never got the money they were promised.
2) There is No Rental Property?
There was a family who found a house to rent in South Carolina on Craig’s List (do you see a connection here?). They saw pictures of the house, planned well in advance, and made three payments to the “owner”. They even received a contract.
Well, unfortunately the family drove down to South Carolina and there was no house to rent. They even went to the “rental” office, but the office had no idea what they were talking about. The couple was out $5,000 and had no where to stay.
3) It’s Tight on a $175,000 Income
Most people would love to earn $175,000 a year, but there are some who think this is a tight budget. It is unfathomable to think you would overdraft your account more than 300 times a year (that’s $30 per over draft) on this income, but it happened.
What could you do with that extra $9,000 in overdraft fees?
4) You Mean You Can’t Roll Over Your IRA Twice in One Year?
Usually it is a great idea to roll over your 401(k). However, you are not allowed to do roll over your money twice in the same year. You can “transfer” the money as many times as you want and there is a BIG difference.
When you roll the money over twice in one year it becomes a taxable event. Could you imagine making that mistake on a million dollar 401(k) plan?
5) I Hope You Enjoyed that Snapple, Because it Cost You $32
When I first started in the banking industry, I had to work on the teller line as part of training. Out of college, I was not very polished and a lot of things just rolled off my tongue.
Anyways, I guy came up to me and was complaining about the overdraft on his account (it was like his 15th of the year) and demanded an explanation. I asked him when did he go to the gas station and spend $2. He told me last night he bought a Snapple. I then said, I hope that tasted good because that was an expensive drink. It costed $32.
Maybe not the best way to phrase it to a customer, but I chalked that up as a learning experience.
6) Maybe I shouldn’t Have Used that Equity to Day Trade
Personally, I am a fan of equity lines of credit. I don’t think you need to max them out, but there is a time and a place for them. Unfortunately, that time and place is not to buy penny stocks.
When I was managing a branch, I saw a guy take out an equity loan. He was approved for $100,000. At the time, we didn’t ask him why he needed the money, but he place it all in his checking account.
Later in the year, I noticed he had maxed it out. Then I learned he was using that line of credit to day trade. He lost all the money in three months. Needless to say his wife was pissed!
7) Should Have Looked Into the Farmers Almanac
We live in Ohio and in the winter the weather can just be ridiculous. There have been times when we had two feet of snow well into April.
Well one year, a guy decided to purchase three snow plow trucks with all the works. He was ready for the snow and even hired people to stand by. I mean this dude easily spent $150,000 on trucks and materials.
Unfortunately for him, that year we hardly had any snow. He was forced to go bankrupt, his wife left him, and he was forced to sell the trucks at a steep discount.
8) Oh, I Didn’t Know I Had to Take a Mortgage Out for the Entire Offer
I had a young lady who was pre-approved for a house she really wanted. She was actually in a bidding war with another person, but she didn’t really understand…well anything.
She was approved to purchase a home for $200,000 and the house she wanted was listed for $140,000 and appraised for $145,000. There was another person who wanted it, so our customer put a bid on the property for over the asking price – $160,000. The seller immediately accepted.
The problem was that our customer didn’t think she actually had to pay $160,000. She thought she didn’t have to pay more than the $145,000 appraisal. Good thing rates were low!
I hope you enjoyed these…what are some financial mistakes or financial funnies you have witnessed?
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