“It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
-Warren Buffett
At Stewardship, we are advisors and experts. However, we too have made financial mistakes and want to share a few of them with you. I hope you are encouraged as you read these and think of your own financial journey and realize we all mess up, even us professionals.
Greg Suiter, Home Loan Advisor
I took out student loans without knowing how much I was actually borrowing, what my payments would be, and how long I’d have to make payments. If I hadn’t been able to pay them off by selling my house, I’d still be paying on them. Essentially, my “adviser” just told me where to sign each semester.
Greg’s financial mistake is common. Student loans aren’t necessarily bad, but too often students don’t equip themselves with the proper knowledge before they take out the debt, including how much their eventual payments will be!
Do you empathize with Greg? Are you wondering if you’re on the right student loan repayment plan? Read our blog about how to pay off your loans.
Brandon Ream, Insurance Advisor & Co-Founder of Stewardship Insurance
In 2007 my wife and I bought a house before we were ready. We were newlyweds and believed the lie we were going to miss out on the real estate market, which would prohibit us from getting the home we want in the future.
As a result, we put ourselves in a financial situation where we weren’t able to build wealth—we were in survival mode. It cost us several years of financial growth.
We all remember the crazy real estate market in the mid-2000’s, especially in Arizona. FOMO (the “fear of missing out”) is real, and it can explain a lot of financial mistakes. If you weren’t financially on your own at that time, don’t let hindsight bias lead you to believe you wouldn’t have acted like Brandon. Things were moving FAST, and many felt pressured to buy a house—even if it wasn’t the best time for them.
Are you thinking about buying a bigger house? Read our blog about how to do this while staying under budget.
Grant Botma, Co-Founder of Stewardship
The biggest financial mistake I ever made was when I purchased real estate to fix it up, flip it, and make a profit. The mistake associated with this endeavor is likely not what you are thinking.
I did well on the investment. It was not my first fix and flip, I had experience. I knew what I was doing and was able to follow a solid and proven process. I bought the right kind of property, bought it at a good price, and was able to sell it for much more than I bought it for.
The problem? The amount of time and energy this investment sucked away from my life.
Like most people, I have a full-time job and a family. If I’m honest, I barely have enough time to manage that to the level I want. So, adding a real estate project to my life was not ideal.
Sure, I made money. But I would say overall it was a mistake. It stole time from my wife, kids, career, and church. As a result, those areas of my life suffered during the six months it took to make this real estate investment come to life. My business didn’t grow the way it should have, my kids didn’t get all of their dad, my wife did not get all of her husband, and my church did not get all of me as a volunteer.
This response from Grant is awesome. His investment was a financial success, but it cost him personally. Money should cause you to enjoy life—not take away from it. Too often, our financial decisions can just add stress.
If you’re thinking about taking on a fix and flip investment, I highly recommend Mike’s article, “5 Tips for Fix and Flipping Homes”!
Jake Norton, Investment Advisor and Co-Founder of Stewardship Financial
My biggest financial regret was buying “too much” car. It was at a time in our lives when my income was increasing, so it was an easy purchase to justify. The problem was, my income was also variable, and the car loan was higher than what we should have gotten. It sucked out the margin in our budget and it meant less saving, putting us behind financially.
The consequences of my mistake are similar to Greg (student loans) and Brandon (buying a house before they were ready). We didn’t get the “big things” right. Cars, houses, and other debt can really prevent you from doing things like saving for retirement.
Your turn! What is your biggest financial mistake? What did you learn from it? Are you still reaping the consequences, or have you made it to the other side?
If you enjoyed this blog, check out our recent episode of the Defining Stewardship Podcast, where Jeremy and Grant explore the 5 Crucial Mistakes to Avoid.
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