Why you should try to laugh at your financial mistakes
EVERYBODY makes mistakes with their money, and those who try to smile in the face of failure are likely to be better off down the track. Here’s why.
Saver HQ
Don't miss out on the headlines from Saver HQ. Followed categories will be added to My News.
LAUGHTER is the best medicine, they say.
And while having a cackle at your past money mistakes won’t cure your finances, it will put you in better shape for the future.
The alternative to laughing is to beat yourself up, over and over, or blame others for your financial misfortune. Neither is healthy.
WEALTH: Think like a rich investor
DAVID KOCH: How to make your kids rich
MORE: Why you should talk to your kids about money
Everybody has hard luck stories. Did you buy into Bitcoin is the great cryptocurrency rush late last year — just before it halved in value? Bummer.
Did you miss a bill payment and get slugged with late penalties? Double bummer.
Were you frozen by indecision while family and friends bought into an investment that made them wealthier, or did you spend money in a relationship that turned sour? That hurts.
Sometimes the big money mistakes are things we didn’t do. For example, if you had bought $1000 of Amazon shares a decade ago they would be worth $24,000 today.
If you’d instead bought Netflix shares back then, your $1000 would now be worth $81,000.
Closer to home, a $1000 investment in Aussie biotech giant CSL has grown to $5500 since 2008 while $1000 invested in REA Group — which has built an online property empire with realestate.com.au — is now worth $22,500.
MORE: How to stop investment scams
MORE: Super can save you money, here’s how
Financial experts often say that doing something — anything — is better than doing nothing with your money, because at least you’re giving yourself a chance to get richer.
I’ve frequently called myself a goose — and other more colourful descriptions — over the years when it comes to money stuff-ups. I’ve invested in shares that became worthless, wasted piles of money on credit card interest before realising how ridiculously expensive that was, and missed countless Netflix and Amazon investment opportunities.
Learning to laugh at my money mistakes has stopped any excessive dwelling on the negatives too much, and hopefully resulted in valuable lessons rather than anger.
Here are a few common mistakes that might make people mad:
• Following the investment herd like a wildebeest, only to be caught out when financial markets reverse.
• Ignoring owning multiple super funds, potentially costing hundreds of dollars a year in wasted fees and life insurance premiums. Left to compound over four decades, $700 a year in lost fees becomes $180,000.
• Accepting bills without questioning if there’s a better deal for electricity, gas, insurance or home loans.
• Putting off moves to grow wealth until next week, next month or next year. Nothing will come to people who don’t act.
Many of the wealthiest and most successful Australians laugh in the face of financial fear. Many are successful thanks to learning from because past money mistakes. Failed businesses, lost homes and bankruptcies are no uncommon among the super successful. It shows they had a go.
If you can’t bring yourself to laugh, at least try to put your money issues into perspective. Any Aussie earning the average wage of around $80,000 is in the top 0.3 per cent of income earners globally. Someone earning half that — $40,000 — is within the top 2 per cent globally.
You’ve got to smile at that level of wealth.
Originally published as Why you should try to laugh at your financial mistakes