My Worst Financial Decisions

hey everyone welcome back to the channel so in this video I'm gonna share some of my personal financial mistakes and even though we discussed personal finance on this channel nearly every week for the past year and a half there's still some times where people can make mistakes even if they think that they have their finances totally laid out and in control so I'm gonna share those with you today in this video and hopefully you don't make these mistakes and hopefully if you have made these in the past that you've already corrected them but let's just kind of get started with this video this is much more of a personal video kind of a slower paced one but I just want to share it with everyone here today so one of the first mistakes that I made and these aren't necessarily in chronological order but ones that I think are of importance and so one of the first ones that I can think of that I've made was actually co-signing a loan for a friend now there's a lot of problems with this and at the time in many cases people don't really think about it or realize it but when you're co-signing a loan for somebody essentially what this means is that maybe your friend or your family member doesn't have very good credit and they want to get a loan maybe it's a student loan maybe it's a home mortgage a car loan a personal loan but if you cosign for is it essentially means that if they at some point default or they can't make those payments any more than you the cosigner are liable for it so even if you didn't buy that house but you co-signed for that house to help somebody get a loan well now suddenly you owe the money for the house and it can drastically hurt your credit score if that person is not paying off those loans on time so for me it didn't hurt my credit score because my friend that I co-signed a loan for it made all of the payments but it still does create just a little bit more stress on top of your everyday life and other stresses throughout your life but I would really try to suggest avoiding co-signing loans for friends and family now obviously if it's your kids and you want to help them and get student loans and that's understandable but it kind of creates this sort of problem I kind of view it the same way as when somebody is running a business and they hire their family members in the business you can't really fire them easily it kind of just creates this weird vibe the same idea with co-signing alone for somebody if it's your best friend that you co-signed a loan for and they suddenly stopped making payments you want to tell them like hey you need make these payments but you don't want to break up your friendship and so it just creates sort of this conflict of interest that I would try my best to avoid in the future and I probably won't be Co signing any loans in the future for myself that's one that I think's just really important now let's talk about the next one which is something that I didn't have at first and it's really just not having a very solid well laid out debt plan for yourself so I know most of us here watching these videos probably have some level of student loans or maybe you have some auto loans or some credit card bills whatever it may be you want to make sure that you have a solid plan laid out for paying off those loans I know when I stopped college I didn't really have a plan for how I was going to pay my loans but eventually I said you know what I really don't like debt and even though my loans might be say 5% interest that I would still like to just pay them off in full even though I could technically if you think about opportunity cost you could say well what if you invested money into the stock market and got 10% and then used that money to pay off your loans I would personally try to avoid that that's just my opinion I'm not a financial advisor that's just what I like to do because I don't like debt and there's nothing better of a feeling than climbing above that zero dollar mark where you don't owe anybody any money it's just such a great feeling that I love to have so have a solid well laid out debt plan if if you look at your student loans right now and you say well if I pay this amount per month then I should have my loans paid off in eight years well maybe just find a way to cut that in half get it down to four years three years even two years depending on how really crazy about it you can be because it really does feel so uplifting once you get to that zero dollar mark and you owe no money to anybody so that's one that I think is important and another one I was going to sleep in here and very quickly is just paying too much in fees for financial products overall I think I mentioned this before on this channel so we're not gonna go too into depth on it but when I was younger I was using TD Ameritrade and some of these other stockbrokers that would charge you ten dollar transaction fees and they still do exist you can still use them but there's really no point in paying transaction fees for buying and selling stocks in 2019 because of the way that it's shifting there's so many free options out there Robin Hood is a great one and one finance is probably my favorite of them I do have links for them down in the description below if you're interested but there's a number of different stock brokerage firms that allow you to invest for free without paying any types of fees for buying and selling types of investment and that goes for expense ratios as well just thinking about how much you're paying fees if you're paying for financial advisors and try to get those fees as low as possible without kind of sacrificing the ability to grow your portfolio now one other things I want to discuss that I think was actually a mistake for myself was actually being too frugal on myself especially let's say my freshman year in college even my sophomore year in college when I really didn't have very much money and so I was too frugal to the point where if my friends were going to say a hockey game it cost $30 I'd say you know what I really can't afford to spend $30 so I just wouldn't go and I just wouldn't go out with my friends and have as much fun because I was trying to be financially responsible and I think there's a really nice balance there I think the key to really succeeding financially and in life as well is to take care of your finances to budget to make sure that you're able to put money aside for say a hockey game but then you're you're still able to be in a good financial position so just kind of make sure that you're able to balance it out well you're having fun you're spending money but you are still able to control your finances properly now the next one is interesting because a problem that I had is that I found that I was actually hanging out with people that were spending too much money and I was kind of hanging out with the wrong crowd so I'll just give you an example here when I really got into college a lot of my friends that I just ended up in this friend group where a lot of them had trust funds lined up and and so because of that if they're walking around campus with an American Express Platinum Card just kind of swiping and it doesn't really register in their head that they're spending money because it's their parents money so if you're hanging out with people like that they really don't appreciate money as much from life out I don't like to generalize but if you're hanging out with six people and they're all spending $200 on a weekend chances are you're probably gonna be spending $200 or close to it as well because of going on these extravagant vacations or doing these things that you want to be a part of because you're a part of that friend group so that's just something I found to kind of find the right friends for yourself find friends who are financially responsible and I like to position myself around people who really are a 10 to succeed in life not just sitting around and doing nothing on the weekends and having absolutely no ambition and you don't have to have crazy ambition to become president or something but it is great to hang out with people who are uplifting who aren't just putting you down all the time and then we're kind of getting away from finances here but it really does all tie back to it to being financially successful and financially stable by hanging out with the right crowd because I've said this in a previous video and I think a lot of people understood it pretty well that if you're hanging out with five losers chances are you might be loser number six and it holds so much truth to it so just kind of really think about that later on today so one other thing that I did that I think was a mistake was actually signing leases with the wrong people so you want to really be careful with this because if you're signing a lease with some friends saying you know if you're younger maybe you live with roommates if you're in your 30s or 40s maybe you just live by yourself or with your family so maybe this doesn't pertain to you as much but I know for myself if if I'm signing leases I want to make sure that I'm assigning them with people that I really can get along with very well because if if the chemistry's wrong in your apartment and I know for myself I've had six people in a three-bedroom apartment and really all it takes is for just some people to not see eye-to-eye and then just create this whole problem and you're locked in on say a 12-month lease so it can be quite a long time so make sure that you're just signing leases or entering any type of commitments with the right people and really kind of filter them out and that goes for businesses as well if you're gonna start a business I wouldn't recommend just kind of finding a random business partner but make sure that you really know that person well before going on any ventures with somebody and kind of getting into a binding legal binding contract with someone so one other thing that I wanted to mention here is is that my goals I kind of think that they were too low in a sense and maybe you might find some value in this but I know that I read I think he was grant cardones book it's called the 10x rule and one of the the points in there well the primary point was that you should really 10x their goals and I found this to be so true because for example my goals for 2019 I set five primary goals that I wanted to hit some of them were monetary some of them were totally unrelated to finances but I've hit two of them so far I'm hopefully gonna hit a third one but there's no way I'm gonna hit all five of my goals and I think if you're hitting all of your goals your goals might be too low now I'll give you an example here say that in the next five years you want to save fifty thousand dollars you wanna have fifty thousand dollars invested or in your bank account but what if you sort of increased that goal to say you wanted to have five hundred thousand dollars in the next five years now that might sound like a lot of money you might say well I only get paid 40,000 per year how is that possible but you can find that if you set these goals that are not absolutely outlandish but something that seems a little bit far away that you can then work towards but what if you set that goal for $500,000 and five years later you have $300,000 well sure you didn't hit that goal but it's a hell of a lot more than if you set that goal for say $50,000 saved and invested by that time so set those goals a little bit higher without putting something where it's absolutely insane like you wanna make a billion dollars next year that might be a little bit difficult if you set them to difficult then it's gonna get to the point where you're just kind of gonna become discouraged you're gonna forget about that goal and you're not actually going to attempt to even work on that goal because it just seems so far away but says something that is higher than what you are at now you shouldn't be hitting on all of your goals in my opinion I think hitting about half of them is the right number for yourself so I really don't have very many regrets in life and this is really because I think that everything can be a learning experience and if you didn't make that mistake in the past then you're probably gonna make it in the future but then once you make that mistake you're not going to make it again so something else that I really found was sort of mistaken away or just if I could kind of go back and change it a little bit it would be to spend a lot less money on my college education and if you look in America the average student loan debt in America is absolutely ridiculous we have over one and a half trillion student loan in America and so there's a lot of ways to cut back on that if you're a teenager or you're thinking about going to school then there's so many ways you can do that you can finish college in three years instead of four save a lot of money you can load up on credits or you can test out of classes I did do that a little bit but I should have done it more where you can take something called the clap it's CL EP and you essentially just test out of classes for $100 for the exam instead of paying eighteen hundred dollars for the actual college class for a lot of these gen Ed's that that you can be taking also just consider going to Community College for the first year or two rather than just spending four years at a big school somewhere like when I did at Penn State where I ended up spending a lot of money for some classes that really to be honest they weren't really worth the money in my personal opinion I don't have regrets about it I do still love college it's a great experience but it is something that you want to think about just ways to cut back on that and paying for out-of-state tuition if you have kids you're sending them to school somewhere paying out-of-state tuition I think is one of the dumbest things that you can do there's really no purpose for it because you're not getting a better education than anybody else if you're just sending your kid out of state you're gonna pay an extra probably $10,000 a year for absolutely no reason whatsoever just to be cool essentially by going somewhere else but those are really the primary things that I wanted to mention in this video if I had any other regrets it would probably just be kind of spending a little bit too little of money on food especially when I was a freshman in college and I was really hungry and I'd say you know what I want to get this food but I don't have any money you know why five ten dollars should I spend four dollars on this Pizza and I would just say no and I'd end up kind of starving that idea and make sure that you're getting good food although pizzas not very healthy but either way make sure you're getting enough food and and don't cheap out on that so like I said this video is a little bit more personal but if you found any value in it make sure you drop a like on the video subscribe if you haven't done so already I preciate all the support we're coming up on 250,000 subscribers and really excited for that I can't thank everyone enough so thank you and I'll see everybody in the next video

Channel: Nate O'Brien

Views: 46,534

Rating: 4.9603782 out of 5

Keywords: bank accounts, financial freedom, financial tips, how to save money, how to save money fast, manage money, money, money management, money saving tips, nate obrien, personal finance, save money, save money 2019, saving money, spend money, ways to save money, money mistakes

Id: fR9_ZfJYeBQ

Length: 12min 45sec (765 seconds)

Published: Fri Sep 27 2019