Financial Experts Break Down The Worst Financial Decisions They've Ever Seen A Client Make
Bottoming out!
The world of finance is a constant gamble. Algorithms change, dows drops, stocks pivot.... it's a never ending game, more intense and bloody than Game of Thrones and a 007 film. That's why its so important to find and listen to the people who become experts in this field. So why do so many of us gamble with our coins based on our own thoughts? Or intuitions? Especially since most of us never got past Algebra II.
Redditor u/weekendbrainsurgeon wanted to hear from those in finance field about bad decisions they've witnessed that we all should never try by asking.... Bankers, Accountants, Financial Professionals, and Insurance Agents of reddit, What's the worst financial decision you've seen a client make?Tilray Down
mickey mouse smh GIF by ABC NetworkGiphyI had a client in her 70s put her whole savings in Tilray stock.
Tilray at the time was trading above 150 per share. I told her it was a terrible idea to put all of her savings in one investment but she told me I was wrong. She argued with me for a good 15 minutes until I relented and said okay, it's your money. So she put 300k into Tilray.
Couple weeks later it starts dropping, I call her and get no answer. It's sitting at 6 dollars a share now, her account is down to about 12k. Last time I spoke with her I took no pleasure in telling her she's no longer my client.
The Truth is Out
Had a client who was extremely wealthy about eight years ago tell us he was no longer going to use our services. Last year we get an extremely angry phone call from his wife asking us why we haven't been filing their taxes. We showed her the paperwork where her husband said he was no longer going to use our services. And then crap hit the fan. This dude apparently just decided he wasn't going to pay taxes anymore and didn't file a return for eight years and had been lying to his wife.
They were rich and owed almost 1.4 million dollars in taxes not including interest and penalties. And oh yeah they got absolutely fried by the IRS. If you are in a relationship with someone you need to be involved in financial decisions. Never let one party handle all of the money and make all of the decisions. That is how bad things happen in both business and in relationships.
Worthless
I had a client Buy numismatic gold coins with an entire retirement account. She bought 266k worth of coins at almost double the price of bullion. I got the gold salesman on the phone and asked him to justify the reasoning and I he said it was because the dollar was paper money and worth nothing and that gold was going to go to 10000 a coin. I asked him what he exchanged this gold for and he said "well she paid me dollars". Then I said "why would you accept a worthless currency for your rapidly appreciating gold currency?" He cursed at me and hung up and said I didn't know what I was talking about.
I still haven't met a gold salesman that can answer this. Their whole pitch is that the dollar isn't worth anything but they happily take them in exchange for gold coins. The whole thing is crap. Poor lady. She can't sell them now even with gold bullion as high as it is for anything close to what she bought them for.
I am a fully registered advisor just to disclose.
600 Down
Tea Smh GIF by moodmanGiphyNot my client.
Saw a guy invest about 600k in a start-up. He confirmed in the 1.5 pages agreement that he was fully informed about everything going on.
Please if you invest in that size, ask a lawyer to at least review the agreement.
Needless to say, said guy's net worth is 600k less now.
The Accountants Know
Accountant here.
If you're a small business owner and your business provides you with even a remotely significant amount of income, then get a separate bank account for your business income and expenses and never, never, never commingle your accounts. If you find that you need to make a business payment and you don't have that money in your business account but you do in your personal, then write it down in your books as money that you give the business that then gets spent on the business expense. Likewise, if you want to use your business income, pay yourself a wage or a 'dividend'. The moment you cross your accounts is the moment that you put yourself into tremendous financial paperwork frustrations.
The Lotto Scam
Former manager at a credit union. One seemingly smart lady in her 70s got one of those lottery scam letters saying she won, but needed to send them money to process her winnings. They kept getting her to send more and more money. We were telling her it was a scam from day 1, but we couldn't stop her.
She burned through her IRA which had about 200k. Took out a loan against her paid off house for another 200k. Sold her jewelry. Probably paid out 500k total before finally realizing.
We truly did everything we could. Got her family involved. Several of us would confront her every time she came in and would plead with her to stop.
It was sad but at some point you have to cut your losses and realize it's a scam.
Edit: I was the assistant manager at that point. We brought our risk management department and other higher ups in but they wouldn't close her account.
The whole 500k was not with us. We had no idea about the loan, jewelry and some money in other accounts that she gave out until after it was all over.
She even thanked us later on and wishes she listened to us.
100% Gone
I've made money with both stocks and options but I get on r/wallstreetbets sometimes to see how tf someone can go tits up so easily and omg.... "I have $50,000 in my account, let me throw 100% of that on Amazon puts that expire Friday." Ive also seen people who pull in $1m in their first year and try to tell everyone else how to trade. That's like me hitting it big on a slot machine and then pretending to be an expert.
Chose HULU
cindy brady smh GIF by HULUGiphyUsing ALL of his "retirement" and daughters college tuition to short Netflix. He lost over a million dollars.
"sovereign citizen"
Best friend is a CPA, and when he had his own practice, he had some pretty big-name clients (Senators, musicians, pro athletes, etc.) One of the biggest mistakes people made were thinking they were smarter than an accountant. His biggest challenge were the people who heard about the "sovereign citizen" nonsense. To no one's surprise, a random guy on YouTube doesn't know more than an actual CPA with 40+ years experience. At least a few of these new-found "sovereign citizens" ended up doing time for tax evasion.
Just Exercise
working out richard simmons GIFGiphyA private company announced a special dividend to all shareholders as of date of record one-month in the future. $1.30/share dividend.
There was an option holder with 300,000 options at a $0.10 strike price.
He did not exercise them. Had he exercised his options for $30,000, he would have been paid $390,000 the following month.
Wordless
Not an accountant but I used to do Social Work that included some budget coaching. I was going over one family's monthly budget and trying to figure out how they were going to rearrange so they could pay the subsidized $10 copay for court ordered counseling that would make or break them keeping custody of their children. Now, budget was a little tight because only the dad worked. But he was making just under double what I made for helping them with the budget. And they were living in a gross trailer park where they paid next to nothing for rent.
And this was a step up from the gross motel room they had been living in before. And when I was nicely chewing them out for missing a counseling session, they were all too happy to explain the problem. Which, of course, was dad got paid on Thursdays (weekly) and the Counselor had them scheduled for Tuesdays (weekly.) So, there was no way they would have the $10 left to pay the Counselor on Tuesday.
The solution to this was they had to start driving across town to pay the Counselor on payday, and then drive to their (already paid for) session 5 days later. I was just getting my mind wrapped around this concept, when the mom called me all excited. She had fixed their financial problems. She refinanced their (POS 12+ year old) car. And she was so excited to tell me that instead of paying $385 a month, their new payments were only $115 a week. I still have no words.
Send in the Cars
I've seen people finance cars at over 30% interest. paying $500/mo for a 8-year old mustang, and will end up paying well over 2x the cars value, assuming they pay the loan off.
Edit: since this kinda blew up, here's a PSA for all the active duty (American) military people - any loan you took out prior to either enlistment or deployment is eligible to have the rate reduced to either 6.99 or 7.99% (google it before you call your bank, as it's been a couple years and laws change.) all you have to do is call your creditor and provide them with your orders and they have to reduce the rate, even retroactively, to the date you deployed (or enlisted.. again, google it).
Idiots.
idiots GIFGiphy- The client who joined an MLM and racked up half a million dollars worth of losses before finally listening to us and quitting.
- The client who spent $40k on Farmville over 3 months.
- The clients who give their adult children allowances that exceed my salary, fancy cars, and houses without expecting them to ever hold down a job themselves. vwh808
The Shoo-In....
Payroll accountant. I used to work for a company with an actuarial Department. There was a lovely young woman working in the call center with a masters degree in data science. She was constantly talking about how frustrated she was with making $16/hour in a call center when she had a masters degree in data science, yet no matter how many times I told her to apply to the actuarial team she wouldn't do so.
The actuarial team was HUGE about promoting within. I saw many people who wanted to learn more about what they do who had no experience whatsoever get excepted into the team because they wanted to learn. This girl was a shoo-in. And yet she never even tried despite the fact that there were always openings. She also shared with me that she was $180k in debt for that master's degree. Last time I checked in with her she had left the job completely and is now in school for art. (Insert facepalm emoji here.)
But my favorite was before I was even an accountant. I worked for a small CPA firm as a receptionist during tax time. I saw a full-grown woman sit down on the floor and start crying because she owed $900 in taxes that year when she had made about $150k that year. I rolled my eyes so hard that I hurt myself. Later that day I had a guy who owed $750k to the IRS and said "woohoo! That's way less than last year!"
The Lost Seat
Watched a client walk out of my office after I explained the risk in liquidating his 401K to start his own business. He started it with no management experience or business model, real "fly by the seat of his pants" kinda guy. Wanted to start a career flipping houses in a college town, turn them into upscale rentals. Did it in a bad neighborhood and lost EVERYTHING.
The Background
I'm a CPA and had a client whose business was going under. He started taking out payday loans on his own salary to pay his staff. When it gets this bad with no end in sight, time to reduce staff.
Also in r/accounting someone posted about wanting to file bankruptcy over $900 in credit card debt. This person was about to graduate college with an accounting degree and would have been making $50k starting out.
We all thought he was trolling us, but somehow ended up coming off as a legitimate situation. Who wants to hire a bankrupt accountant which shows up in background searches?!?!
Simple....
Feeling Dumb Jim Carrey GIFGiphyProbably not the worst, but one of the more perplexingly common...
Making over $250k (sometimes WELL over), no withholding, not paying estimated taxes throughout the year, can't afford the tax bill with the return EVERY YEAR, then complaining because they can't afford the installment payments on the taxes they owe from two years ago.
Moron, sell your gaudy, gross McMansion, take your teenage daughter's credit card away, let your drunk driving son stay in jail and get a public defender, and tell your horrible wife to stop spending all day at the tennis courts sipping mimosas. Get your mess together and pay taxes throughout the year like the rest of us. You aren't being persecuted by the IRS, you're just an idiot.
Don't Spend It!
I work for a bank. One of our branches had a customer who was basically homeless. Then, he wins the lottery! Over the next few months, the staff watched him come in to withdraw thousands of dollars every day to spend on extravagances. Everyone tried to convince him to sit with a financial advisor to help him make the most of his money. Less than a year later, he's in slightly better shape than when he started; he's at least able to live in the car he bought.
Countless Screw-ups....
What I've seen, countless times, is someone who started a business with ZERO research, no understanding of what running a business involves. (Here's a hint: practically every business involves paperwork and deadlines.). The business models come in waves... for awhile it was Barbecue shacks, then it was cupcakes, then house flippers, then food trucks. I think they see it being done on TV shows that make it look fun. It isn't fun when they come to me with debt, tax levies and lawsuits.
IRS and state labor department and health department on their backs, and suppliers taking them to court for unpaid bills. Some of them cashed out their retirement account to buy a business; others put their house up as collateral for an SBA loan. it's a nightmare. If they had come to an accountant first, we might be able to help them (or even better, dissuade then). I usually see them after 18-24 months of screw-ups and by then it's usually too late to rescue them.
ATM Issues
make it rain loop GIF by Chris TimmonsGiphyBanker. Banks charge fees for using other bank's ATMs.
I had a customer that would check his balance and then do withdrawals daily at a foreign ATM. Guy did not have a lot of money to begin with and because he did this, would overdraw his account and get slapped with an overdraft fee which put him in the hole further. We ended up taking away his ability to overdraw his account. Dude was pissed, but it helped right the ship a little.
America the beautiful.
So much to see. So much to experience.
Just because we don't have exotic oceans and ancient history doesn't mean there isn't majesty to take in.
There are many vacations to put together.
And now we don't have to use a paper map to plan.
Our apps and GPS have it all planned out.
Redditor driedkitten wanted to compare notes about the greatest ways to see the USA, so they asked:
"Where is the most beautiful place in the United States?"
So far the cliffs of California is my favorite part of the US.
The Falls
niagara falls GIFGiphy"Subjective of course, but Crater Lake is certainly a sight to behold."
KaboodleMoon
"My home state of Oregon is full of beautiful places, South Umpqua falls, Illinois River, and Multnomah falls. Are some favorites."
jlp120145
Oh Hoh...
"A tie for Acadia, Hoh rainforest, and Rainier in the fall."
ParkLaineNext
"I was going to say Acadia. It's very underrated for some reason. My mom's friend by coincidence ended up being my English professor in college and we went on a trip to see family in ME. We stopped at Acadia for a day and she said it reminded her a lot of her visit to Greece."
NunChuckNorris007
"Hoh rainforest is absolutely devastatingly beautiful. Hiked the whole Hoh river trail when I was 17 and it's still near the top of the list for my favorite things I've ever done."
Hal9000_Red_Eye
In Awe
"Glacier national park. I was continuously in awe that the place was real life."
StrebLab
"The vistas of this road, on a motorcycle, were beyond breathtaking to experience. Would 100% do it again. Being on a bike allowed for stops at the waterfalls where there was no room for vehicles to pull over, and the views from the tunnels under the road were supernatural."
tastygrrrl
The Road Ahead
"There is a stretch of the Navajo reservation where there is no cell service, AM or FM radio reception. The road stretches before you for miles surrounded by red rocks touching blue sky. The buzzing undercurrent of modern connectivity fades away and your brain can be truly still."
tulleandtiaras42
"We did a little unscheduled off-roading in that area when we came to a road closed barrier. A Navajo couple pulled up alongside us while we pondered the dirt road heading roughly in the direction we wanted to go and assured us it was passable. Really lonely place... but wonderful."
KaleidoscopeWeird310
On a Clear Day
Mountain GIF by Sunshine VillageGiphy"Mount Rainier."
WWDB
"If I stand right at the doorjamb of my front door on a clear day, I have a beautiful view. I owned this house for 15 years before I figured that out. You can't see it from any other position in the doorway, or if you're outside."
Wise_Ad_4816
Mountains are hot. That is all.
See the Country
Happy Dance GIF by PLAYMOBILGiphy"Depends on what you’re looking for. The United States is a big place."
"For me - Hawaii is hard to beat."
Own-Willingness-3935
Beautiful scenery...
"Zion National Park is the most well-known place in Utah. But my entire state is an outdoorsman's paradise. LOTs of beautiful scenery in both the northern and southern parts of the state."
nekor18670
"Totally!!! And it’s very different. I personally prefer Southern Utah because the red rocks make me feel like I’m on Mars. But I grew up in the salt lake valley, so the mountains lost a lot of their majesty. But if I’m being honest, I miss them terribly."
Bye-sexual-band-n3rd
Smell the old growth
"I’m incredibly biased, but the most beautiful place is the California redwoods. Drive up 101, and then detour towards Petrolia. There is absolutely nothing like it. Roll down your windows and drive 35mph. Smell the old growth. Stop at the pull out. Take a small hike. It’s worth it."
Altril2010
"Yes, 100%. My brother lives in McKinleyville and I am going to see him the end of April. Can't wait. It's my happy place. They are like the Grand Canyon and Niagara Falls... you have to see them to believe them. Those redwoods are something else!"
strongy78
Utopia
"Yosemite! You drive thru the tunnel and come out the other side. Looks like heaven/Utopia."
Socalrdb
"Did a hike in Yosemite on January 1 last year. A spectacular way to start the year. I had seen photos of it, seen it in movies, watched countless videos on Youtube about it but -nothing- prepares you for the sight of El Cap as you turn that corner. I was very nearly moved to tears."
ThrustersToFull
Amazing
Episode 1 Boat GIF by The SimpsonsGiphy"The Shenandoah Valley. Its an amazing place if you're an outdoorsman. Hiking, fishing, hunting, bird watching, camping."
homoco4396
All the wonders of the world. I may have to check all of these out.
What did we miss? Let us know in the comments below.
Humans really know how to waste a buck... or millions.
We spend so much on superfluous items it's ridiculous.
Do we need ten of these?
Gym memberships can be hundreds of dollars a month yet there are DVDs and apps that show you cheaper ways to do it from home.
Life doesn't have to cost this much.
Redditor bluscorp91 wanted to hear about the things we really need to financially evaluate, so they asked:
"Which everyday item do people waste too much money on?"
I waste on takeout. I can't help it. I'm me.
Go to the Fountain
Scared 30 Rock GIF by HULUGiphy"Water."
brakjeeptj
"If you have safe tap water witch most people in Europe, Australia, and US/Canada has you can save thousands on water. One gallon costs under a dollar from the tap, and one gallon from the store will cost 5 dollars or more."
mincraftpro27
Tea at Home
"Takeout coffees."
LucyVialli
"What I don’t get is how people have TIME for that in the morning."
"There’s a coffee stand place by me that consistently has a huge line that sometimes blocks traffic. The few times I have been there on days off I have waited over 20 mins and that wasn’t even during rush hour."
"Like who has time to spend 20-40 mins before work in line getting coffee?!?"
pooponacandle
Skins
"Fortnite."
anyma6
"The skins are cool as sh*t, I'll admit it, but damn, $20 per skin? People are out here claiming it's fine because it's a free game, but $20 per skin means if you have 3 skins, you could've gotten a completely different game all together. And most kids have hundreds of skins. My coworkers son spends all of his allowance, Christmas, and birthday money on Fortnite skins."
"He's claimed that his son has spent over $1200 on Fortnite. That's f**king insane."
"My buddies are full grown men and they buy like one skin ever 4-5 days, it's crazy. They spend anywhere from $80-$120 a month on Fortnite. I literally don't understand at all. It's an entire bill to pay every month. I play it with them from time to time and only have like three skins. I still feel like I spent too much on that."
B3RS3RK_CR0W
Vroom
"Cars. I don't know how so many people can afford the mortgage on cars that cost twice the average annual salary around here. And they are legion."
"If you want to save money, you drive a 10+ year old beater. It is paid for, you will have to repair it every year for a couple of hundred bucks, but the cost per mile is a fraction of that for a new Polestar 2 or Volvo XC60."
"I'm guessing I am seeing the caste that lucked out on the housing market."
Derpygoras
For Good
Mothers Day Netflix GIF by Grace and FrankieGiphy"Netflix."
OptimumRedditor
"10 bucks a month is worth it."
RandomBloke2021
"Netflix prime Hulu, Appletv, Disney+ and all that crap that we can just find free on the internet free. Hell no I'm not paying for 100 different subscription services."
gracie4questions
There are way too many options. YouTube is cheaper.
MOOOO!!!
Stone Cold Reaction GIF by WWEGiphy"My Family spends A LOT of money on milk, since my entire family drink like 2 bottles a day total. Not with coffee or anything, just plain milk."
MonkeeBoi123
All that milk... I hope they change the flavors.
Last Call
Happy Hour Drinking GIFGiphy"Alcohol."
orbittheorb
"Buying alcohol at the bars. Seriously, downtown Chicago, 'Can I please have 2 rum & cokes and a Bud Light?'"
"'Ok that will be $35.'"
"Forget that mess."
Angel--Wonderland
A Communication Must
"Phones."
DrLycFerno
"I'm going to disagree since you left your reply so basic. Now if you buy the newest phone at launch, and repeat that every new release, yes that is wasteful. I bought a 1 year old model 4 years ago and it's still fine. If it turned into a brick tonight, I would drop like $800 on a 1 year old model and be good for several more years. That isn't wasteful."
somedude456
Need a Roof
"Rent."
abby_normally
"If our economy wasn't trash right now, I'd say buy your own place. I rented for 3 months then bought... renting is like flushing your money and any potential home equity (God I hate that word these days) down the toilet."
Runner_Girl1217
"It’s too expensive but unless you’re living outside your means the money is not wasted. Shelter is pretty important, it’s right up there with food and water."
HutSutRawlson
Clean Up
Toilet Paper Poop GIF by Paper PooGiphy"Toilet paper. Wash your butt with water, and you can save tons of toilet paper."
"Never could understand what it is with toilets with nowhere to wash, and walking around with chocolate caked holes."
lefttheovenoff
Next Day Problems
"Surprised no one else has said this. Throwing away left over food instead of eating it later. I've worked in the restaurant industry for years and it's appalling the amount of food that gets thrown away that would be perfectly fine the next day. I constantly pack my leftovers and eat them for lunch."
Angel--Wonderland
We really need to evaluate our spending.
They say ignorance is bliss, and there is truth to that statement.
Whether it involves trying a new fashion fad, type of food, or starting a new activity that spikes your endorphins, it's to go back to the way things were prior to experiencing them.
It's like opening Pandora's Box. The joy of discovery is exciting, but it also has the potential to consume you.
Curious to hear from strangers online who were unable to get the toothpaste back into the tube, Redditor Kapuishon88 asked:
"What’s something you can’t live without once you’ve tried it?"
Computer-related activity is addictive.
Gaming
"Video games."
"Started in 1983 before I had reliable memories of anything. It's been a daily obsession since then."
– Kneejerk_Nihilist
Decades-Long Obsession
"Original Zelda. Level 1. 32 years ago. Resistance was futile."
– inarog
Online Activity
"Fast internet."
– Pufferfishgrimm
Opening Up The Periphery
"A second monitor."
– Gaby07
The following involve the things that make life easier.
Selective Hearing
"For me it’s noise canceling headphones."
– Kapuishon88
Wages
"A decent income."
– [deleted]
Preference For The Dark
"Blackout curtains for me. The noise-cancelling headphones of light."
– _CPR_
Sheer Comfort
"Quality underwear / socks."
– thevectorvictor
It's a hygienic thing.
The Perfect Backsplash
"A bidet."
– walkswithelias
The Backup
"Was gonna say the same. I explain to people that once you use one, you'll feel like a peasent when you wipe your a** with TP."
– walkswithelias
For Multi-Use
"Baby wipes. Damn, they are good at cleaning up so many things! The kids are 10 and 15 now and we still buy them by the case. Clean the counters, clean your shoes, get stains out of your clothes, bring them with you when you go eat ribs. Better than a napkin. Clean the table. Clean the desk. Clean the island. Wipe up the spill."
– ScienceMomCO
I have to agree about bidets being a life-changing discovery.
Ever since I was a kid going to visit my relatives in Japan and noticing virtually every toilet having a built-in spray 'n wash button, I was like, "Why doesn't America have these wondrous devices installed in every toilet?"
Not only is it super satisfying, it saves trees.
Most of us love animals and take stock of other people's pets. Some people have a better chance of remembering another person's pet's name than the person themselves.
Part of that allure has to do with the fun and creative names that many people come up with for their pets.
The Redditor, who has since deleted their account, asked:
"What is the best pet's name you've ever heard?"
The Autobots Would Be Proud
"I had a friend once who had a bunny named Hoptimus Prime."
- nellirn
Extra Hoppy Beer
"I live in northern Colorado which has a pretty big craft beer scene. One of our biggest and most popular breweries is Odell Brewing."
"One of my coworkers named her dog Odell because he had three legs which, in her words, made him extra hoppy."
- fiveironfreshy
At the Race Track
"I once heard of a race horse named Thunderbritches!"
- whiskey_weasel_
From the 'Tragedy of Julius Caesar'
"I had a friend who had a 14-foot python as a pet named Julius Squeezer."
- TSchwifty35
An Ode to Eminem
"My wife's fish was named Swim Shady."
- josephexotic
Such a Giant, Cuddly Dog
"An Old English Sheepdog named 'Woolly.'"
- Back2Bach
Not Like the Movies
"My cat's name, he's named 'Gremlin'."
"A lot of people believe the movies were the inspiration, I just wanted to give my cat a weird but cute name."
- EldritchDWX
What a Tongue-Twister
"My guinea pig was Wanda Wilhelmina Wobblebottom."
- 84dg3r0u50n3
Tiny But Mighty
"A Redditor once posted a photo of their little, black kitten named Admiral Anchovies."
"That is all."
- Voyeurism_Bot
Social Creatures
"A little pug named Barbecue, or perhaps a corgi mutt with eyebrows named Party Time."
- BaronMatfei
Adorable Stage Names
"I still love the name Kitty Purry (Katy Perry's cat)."
- pirate_elle
Historic References
"Someone in the 'backyardchickens' subReddit named one of their girls Attila the Hen."
- dontforgetthel?be
A Name Upgrade
"A friend of a friend had a cat named Snack."
"Eventually, Snack had a few too many snacks, and they started calling him Meal."
- JuRoJa
Sounds Like a Big Boy
"A French bulldog called Tankerbell."
- blackday44
A Fair Question
"Between Chairman Meow and Benito Meowsolini, uh, there are a lotta cats with dictator names. What's next, Meowseph Stalin? Kitler?"
"Then again, cats are all wannabe dictators..."
- centaurquestions
Not only are some of these names hilarious, but these pet owners were on high creative alert when they named their furry loved ones.