Despite friends and family thinking I was always “smart” with money, I’ve made about every money and investing mistake one could make. Constantly learning and keeping a solid savings rate kept me in a good place, but had I not made these mistakes, my net worth could easily be at least 2x what it is now. Helping people avoid the mistakes I made and more rapidly achieve Financial Freedom is the primary purpose of this website, so I felt it was important to quickly summarize poor money mistakes and what I learned from those mistakes. I’ll explain each of these mistakes in their own blog posts, but figured it was worth providing a short summary showing just how many stupid mistakes I made so you can hopefully avoid them today. While I’m hoping to catch young people starting out to get them on the right track immediately, information is pertinent for people later in their career and closer to retirement. For those closer to retirement, we’ll delve deeper into adjusting your portfolio as you’re getting closer to to drawdown vice accumulation. While many actions to take, here’s the summary based on my mistakes:

  1. Start investing today, and if already started increase your savings rate as quickly as possible
  2. Make investing automatic – percentage to TSP, Roth IRA, Brokerage, Savings account every month – don’t let your brain get in the way of making great automatic decisions!
  3. Don’t wait years to study what to invest in – throw money into a low-fee broad based index fund -for TSP 2 quick options (Lifecycle fund of year you turn 60 or 65, or throw 75% in C and 25% S fund)
  4.  Open Roth IRA and buy something like Total US Stock Market Index Fund (VTSAX/VTI, SWTSX, or FZROX for great choices), or a Target Indexed Retirement Fund
  5. Be careful about life insurance, and don’t listen to the salesperson about whole/permanent life insurance for the vast majority of people.
  6. Teach your children/nieces/nephews/friends and get them to start investing early – match their contributions in a Roth IRA to encourage long-term investing

Mistake #1: Not investing early as an income earning child

This was a mistake solely due lack of education on personal finance – a problem rampant across the country. Like most, my parents didn’t know about investing and were struggling to make ends meet. Their idea of compound interest was putting money into a savings account – granted interest rates were higher back then compared to 2021, but that’s not investing and REAL compounding.

Lesson Learned: Encourage your children to start earning income early, and open a Roth IRA as well (requires earned income). To help them put some of their money towards long-term investing – match your child’s investments to their Roth IRA so they can also save for shorter term goals like college, or a reasonable used-car, entertainment, etc.

Mistake #2: Getting Sold on Insurance as an Investment

As a young, enlisted Sailor finally living off-base and out of the barracks after ~18 months, my roommates and I got sold on this great investment plan…guaranteed 7% interest rate, tax free…yada yada yada, a damn whole life insurance policy that we had no intention of purchasing had we known…but who would take advantage of young military, they’re trying to help us, right?! Of course, there was no mention from the salesperson that this was a whole (permanent) life insurance policy. Yep, I’m a dumbass and was too gullible and trusting – what everyone doesn’t have a sense of service and duty? This was my introduction to the preying parasites trying to suck the blood out of our young military, and something that guided much of my future service in the Navy. The experience also left a likely exaggerated poor taste in my mouth regarding whole life insurance. It also made me realize as I gained rank that I needed to actively protect my troops to prevent them from getting preyed on as well. Fortunately, I told a senior E-6 at work what we did and he had the wisdom to understand and helped us immediately cancel these policies with no loss of money. Here’s the scary part that also makes me angry, these companies seek out veterans to sell their insurance to military, yet most likely for 99+% of people an inexpensive term policy is better if any insurance is even needed at all. If some veteran is trying to sell you whole life insurance when you haven’t maxed out your TSP, Roth IRA and invested in your brokerage account, then they are definitely not your friend and IMO even worse than the jackass that tried to sell me insurance since the veteran should understand service and truly want to help, but are likely using their background in the military to be the worst type of predator. You’ll be making them rich with their huge commission, while they try to falsely sell you on the idea that they’re helping you.

Lesson Learned: Whole-life insurance is only good for the <1% and you’re likely not a part of that percent. Max out your TSP/401k, Roth IRA, (HSA as appropriate – not for AD or retired personnel), and likely your taxable account. If you’re a billionaire or have incredibly high-income, then whole-life (permanent) insurance may be a wise tax-have, but billionaires and the extremely high income earners aren’t reading this, and for the average to decent wage-earner, the excessive fees of whole-life insurance make it a horrible idea.


Mistake #3: Paralysis by Analysis – Thinking I had to study more to start investing

Ok, I want to start investing, but what do I buy? There’s such an incredible amount of information out there, some great and some that is horrible. Based on early interactions with peers and people senior to me, I thought individual stock investing was the right way to invest…but how do you know as a young adult what stocks to purchase…P/E ratios, cash flow, etc. – how do I study this? Long post later on this. What about mutual funds, what the hell is load vs no-load, active vs passive – easy to get suckered into the Morningstar ratings and pick a fund that did well in the past only to return to the mean once you purchase and perform poorly.

Lesson Learned: Don’t try to beat the market…just start putting as much away as you can into low-cost broad-based index funds:

  1. TSP:a)  L20XX (20XX=year you turn 60 or 65-my preference 65); b) 75% C / 25% S; c) 60% C / 20% S / 20% I – just pick one and go, they’ll all be within 90% the same over the next 20+ years
  2. IRA/Brokerage account:  a) Total US Stock Market Index Fund or ETF (Schwab = SWTSX or simply buy VTI; Fidelity = FZROX or just buy VTI; Vanguard = VTSAX or VTI), or buy the indexed target retirement fund based on year you turn 60 or 65.
  3. As you build wealth you can make adjustments, but these will get you 90+% of the returns and help you start building wealth immediately rather than letting your time and years of compounding slip away.


Mistake #4: Thinking Buying Individual Stocks was the Right Way to Invest

Dolphins are assholes…that will be explained in the detailed post later, but explains well why so many of us think buying individual stocks in the right way to invest. For now, realize that just starting now and consistently (automatic bi-weekly / monthly) the Total US Stock Market Index Fund or a Target Retirement Fund based on when you turn ~60-65 as a young investor working on accumulating real assets to build wealth is most likely the best choice for many reasons and will help you grow incredibly wealthy…proper investing should actually be boring and not take any of your time…just buy the index and let it ride – you just might need a doctor in 40 years to ensure you don’t have cardiac arrest when you realize much wealth you have accumulated.

Lesson Learned: is the same as in Mistake #3, just get started today with low cost broad-based index funds or low cost indexed target date funds.


Mistake #5: Buying Mutual Funds with a Load and Not Understanding Expenses

Was banking with NFCU…figured they would have good investing options…wrong, American Funds was their source for investing – while showing good returns per *Morningstar Ratings (ok, another huge mistake see below), some ridiculous 3% or so load to buy in, then even a surrender fee.

Lesson Learned: Expenses matter, so pick one of the following three discount brokers to fund your IRAs, Brokerage (taxable) accounts, and Donor Advised Funds: Schwab (, Vanguard (, or Fidelity ( They have all been leading a race to the bottom on fees. As active military and USAA member, it’s likely your accounts were moved to Schwab and that’s actually a good thing. If you were a USAA member and paid for them to manage your investments, then those accounts are likely with Victory…and I’m betting you’re paying more than expected in fees and expenses and might want to consider something different. While I’m a fan of DIY as you learn more, it’s always comforting to get an outside assessment to make sure you’re on track and doing the right things.

Lesson Learned: Again same thing as #3 above


Mistake #6: Buying Actively Managed Funds vice Passive Index Funds – Expenses Matter!

Repeat after me, “Thank you Jack Bogle!”  Thanks to Jack and starting the first ever index fund, he started a revolution to low-cost broad-based index fund investing and a race to the bottom on fees by large discount brokers, truly opening up superior investing for the average person of modest means. Now we no longer have to be buying the fund manager’s yacht with insane fees to only see our money do more poorly that the market index. The numbers are insane, but the index annually beats 75-80% or every actively managed mutual fund, and percentages only go up over time – if the actively managed fund even last more than a few years.

Lesson Learned: Again same thing as #3 above


Mistake #7: Scared out of investing by a Market Crash

My first market crash was the dotcom bubble, and for me it actually made the Great Recession of 2008 seem relatively insignificant. The market dropping by 50% clearly isn’t significant, but being an new, young investor at the time, sadly many of us put far too much into the dotcom sector…and that crash was like 85% in that sector (and actually NASDAQ didn’t recover it’s peak until 4/23/2015 – yep, only beat by the Great Depression which actually provided good dividend returns unlike the dotcom collapse). While fortunately my IRA was on automatic, TSP didn’t start until 2001 (yep, investing has become so much easier for the newer generations), but my additional savings didn’t go into a brokerage account to buy into the market while it was on sale. Fortunately, the Roth IRA and TSP got set on automatic, but all the other savings that should have been invested just sat for years in a savings account getting it’s ass-kicked by inflation.

Lesson Learned: Take advantage of a market crash, it’s the time that the market is on sale and thanks to the media and fear most make the wrong decision and sell instead of buy during these periods.


Mistake #8: Not Maxing out TSP (or applicable retirement plan) as Early as Possible

TSP was a new and probably the greatest thing they added to the military as an investing option back in Oct 2001. The fact that it took until late 2001 is pathetic, but at least it started. 2 mistakes here actually:

  1.  Based on mistake #4 above thinking individual stocks were the way to be smart investing, seeing TSP with only a few funds (Lifecycle funds were years later), I thought the lack of options meant they didn’t have great options…beat your face Nelson – how wrong that thinking was! TSP basically had some of the best index funds and the lowest expenses possible.
  2. Retirement/ 59.5 year old is so far away, how about I just put away maybe 10%. How stupid I was not to take full advantage of the tax-deferred or more recently Roth TSP option providing tax free growth for life. Roth TSP became an option in 2012, and yep should have jumped on that train like I did with the Roth IRA, but it wasn’t well advertised, explained or promoted…how we continue to fail our military personnel in personal finance is amazing.

Lesson Learned: See Mistake #4 above – I initially thought buying individual stocks was the way to go, and I’m still sadly trying to recover without too much of a tax burden while restructuring into wise broad-based investments. Buy the whole market and just sleep well at night instead of trying to track it and figure out when is the right time to sell (very tough). Investing should be boring, so put 90-95% of your investable assets into low-cost index funds, then you can play with 5% (at most10% – I prefer 5%) of your money into single-stocks-Bitcoin, and other speculative/gambling pursuits.


Mistake #9: Not Understanding Tax Implications and Asset Location

I didn’t maximize tax-advantaged accounts early. Instead of maxing out a TSP, then later shifting to a Roth TSP, I put in more to a brokerage account…often called a taxable account since that is exactly what it is. Important to have, but not first…

Lesson Learned: make sure to take advantage of the tax-advantaged options first (TSP, Roth IRA, 401k, 457, etc.), then invest in your brokerage/taxable account.


Mistake #10: Lack of Diversification and putting most in one sector (Dot-com bubble)

FOMO! Yes, it impacts all of us and we are not rational being, but highly emotional and that behavior is terrible for investing. When I first started, it was all about the new internet and of course you just had to buy into the new technology stocks, they’re making over 100% each year…

In 2020/2021, Tesla, Gamestop, AMC are a few examples that lead to serious recent FOMO and I get it, but that’s not investing and most people only end up losing money betting on a couple things. Electric car industry may be one of the coming bubbles since people are throwing tons of money into companies that have not shown they’re a reputable business…starting to smell dot-comish to me.

Lesson Learned…and consistently having to relearn: FOMO is real and always trying to get you to make the dumb emotional move. Stick with the plan and put your investing on automatic buying putting 95% of investable money into low-cost broad-based index funds. With 5% go ahead and gamble on some FOMO idea – if it’s right you’ll improve your financial life, and if you’re wrong which is more likely, at least you didn’t throw away your long term financial well-being.


Mistake #11: Buying a New Car because I Deserved It

Ok, actually I was very good about not blowing too much money on a car for most of my career, and I contribute much of my financial success to that fact. Repeat after me, “A car payment SHOULD NOT be a normal monthly expense!” At 19 years in the Navy after selecting for Commander, I decided I deserved a new car. Within a week a friend test driving it scraped the tire rims against the sidewalk when parking, two weeks later some punks smashed the driver’s window to steal lame crap…yep, that new car smell faded quickly.

Lesson Learned: Not consistently blowing money on a poorly depreciating car was one of the most powerful things I actually did correctly throughout my career up to this point. When we decided recently to step up and buy the nicer home, my mortgage broker was actually surprised by the amount of assets I had compared to most other military personnel he had worked with (VA loan specialist). He actually asked me what I did differently and how others could get there. The first and most important thing that came to mind was that I had barely had a car payment in 25 years of service, and instead I was able to invest that money into the market and build wealth rather than let it deteriorate like a car. See #3 above. I look forward to sharing how quickly my first and only new car lost value within weeks of ownership. 20/3/8 rule by the Money Guy is a great rule to follow for how much car you can afford – put at least 20% down, pay off within 3 years, and car payments do not exceed 8% of gross income…and your investing amount must be higher per month than your car payment– more later.


Mistake #12: Buying a Home at the Peak of the Bubble

Yep, so I returned to the US after and incredible 26-month experience living in Mumbai, India in late 2006 at the start of my department head tour and bought a home at the peak of the market. When first returning, I went to a 5.5 month department head school in Groton, CT. I was supposed to go to San Diego after Groton, but 4 weeks from graduation, I was told “my skills were critically needed in Norfolk, VA.” That’s code for somebody they’re getting F’ed hard in the military, but trying to make you feel like you’re getting a good deal because you’re special and important-total BS and I knew it, but also didn’t really have a choice since they are orders.

Went to Norfolk, and stories about that tour will be forthcoming, but in December 2006 I felt I had to purchase a home. It’s the American Dream, right? Renting is just throwing your money away and… insert next thing the banks and society have been telling us to keep us indebted and forced to continue working for the man…

I’m an even bigger idiot than you think, as I was stunned by the prices, and actually researched the median home price to median income and believed there was a bubble, but still bought – sorry mom, your son really was retarded. While I firmly believe real estate is an important and often the real part of people’s wealth, it is not guaranteed and you can also lose a ton of money that could have been better placed in the market. Most of the “real-estate experts” selling their advice now bought all of their homes following the 2008 housing collapse – best time to buy ever, but their cash flow model likely cannot be equally repeated with the crazy housing market today.

 Lesson Learned: Despite popular opinion, there is a good argument on both sides of the rent vs. buy debate. These are going to be fighting words for a few, but… Buying a home to live in that is not house-hacking (i.e., roommates paying part of mortgage, multi-family unit, or granny flat, etc.) is more of a large illiquid savings account than an investment. Yes, property values typically go up in value, but nothing close to putting a similar amount into the S&P 500 or Total US Stock Market Index Fund over 15 years. People don’t add in all the taxes, insurance, repair costs etc. which typically means a house actually gains at about 2% per year – about at the rate of inflation. Buying rental properties as an investment is a great way to secure long-term wealth, but it takes more work that people think and is not a guarantee to success.


Mistake #13: How much Money I Blew at Bars:

Mart-Haler, you reminded me of this one…and I’m hoping you blew even more money than I did hereyou topped me at this expense!

I don’t even want to think how much I blew over my early years at various bars especially You definitely need to have fun and let loose, but as I learned later…make a plan ahead of time and set limits while still clear-headed. If I had been wiser, I would have only brought cash and left the credit/debit cards at home. Judgment can get quickly impaired, and then dumb like buying drinks for everyone, or drinks for that beauty that had no interest in me, except getting free drinks for the night.

Lesson Learned: Create the plan before you go out and lose your judgment: 1) leave your credit/debit card at home and only bring as much cash as you’re ready to spend that night; 2) Don’t drive – use taxi, Uber, etc. and keep you and all your friends safe; 3) Invest the same amount or more than you spent at the bar each time


Mistake #14: Not Harvesting Long-Term Capital Gains

Advanced strategy, but while not making a huge income, have the tax-advantage of the military and hopefully no state income tax (if you have state income tax as active-duty military, fix it by changing residence when possible – FL most common, WA and TX good options, many out there). Here’s the quick skinny, in your non-retirement accounts (brokerage/taxable accounts) do capital gains harvesting by selling your gains while you have zero capital gains tax and reset the cost-basis to the new higher level.

Lesson Learned: Holy crap how much I could have saved in taxes if I knew this much earlier. It’s simple, if you’re in the 0% capital gains bracket, sell your long-term capital gains (assets you’ve held more than a year) and then immediately rebuy. Currently, if single and you’re single/married and your AGI (adjusted gross income) is $40k/$80k or less you will pay 0% capital gains. Go Curry Cracker has a great post on this ( and we’ll discuss more later as the military is in a better position than most to take advantage of this with all our tax-free income.

Note: Short-term capital gains tax is taxed as ordinary income, and those are profits from the sale of an asset held for < 1 year (1 year + 1 day = long-term capital gains)


Mistake #15+:

Sadly each hour I spend thinking of the dumbass mistakes I’ve made, more tend to appear…so I’ll just add update this post when “valuable” money mistakes come to mind.


To your life and hoping this moves you closer to achieving what you want, with who you want, when you want.


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