Although I have worked for years in the financial industry, I don’t always get it right
February 2, 2024 6:00 am(Updated 6:03 am)
My father gave me some advice when I was younger – “never make the same mistake twice.”
Despite his guidance – and the fact I am a maths teacher and former trader at some of the worlds biggest banks – I have made several poor financial decisions.
In sharing the faux-pas I’ve made, I hope to show you that we can all learn from our mistakes – and these will shape better decisions in the future.
Not buying a property because I was single
My twenties was the peak of my financial pulling power due to bumper City pay packets. I was handsomely rewarded, earning six figures for my time as a trader at investment banks Lehman Brothers and Nomura and as a chartered accountant at PwC.
As a result, I had a sufficient enough deposit to purchase my own place in the late 2000s.
However, I decided to stall until I met a partner which turned out to be somewhat of an error.
I nearly bought a three-bedroom house in east London for £200,000 which is now worth in excess of £700,000. I wish I signed that mortgage agreement rather than waiting another decade.
With bricks and mortar, even without capital appreciation, you can always just decide to live in it. Lesson learnt.
Investing in crypto
Bum bags, fluorescent shell suits and the Harlem Shake. Only Mystic Megs can prophesy which trends are here to stay.
Around 2019, some of my school students confessed: “Sir, I swear down, my cousins have made bare P’s from crypto.” To translate, “I promise my cousins have made lots of money from crypto.”
Much later during lockdown, cryptocurrency including bitcoin and meme coins like Dogecoin received mainstream media attention so I pumped my spare cash into the sector.
While trying to channel the Wall Street film Gordon Gecko’s infamous “greed is good”, I probably got involved a bit too late. I got a little burnt and lost a few grand.
As I haven’t crystallised the losses by selling, I’ve inadvertently become a long-term investor in crypto.
You do have to speculate to accumulate. However, a sensible investor might cut their losses and reinvest elsewhere.
Ignoring my pension in my twenties
Since I turned 18 and worked with accountancy firm KPMG, I’ve always put 10 per cent of my earnings into financial markets and roughly the same into my pension.
I continued that same approach in my twenties while working in the City.
I have perhaps four or five 5 decades before retirement so a very high-risk approach in my pension allocation would have been suitable.
However, I had a busy lifestyle in my twenties – I was the co-founder of an educational social enterprise supporting disadvantaged students apply to university and spent most weekends on this.
This meant I could morally justify why I didn’t make the time to pore over the finer details of my pension. I opted for a reasonably diversified and balanced portfolio. Half in equities, but the other half in bonds and lower-risk lifestyle funds.
The reality is that we can probably always take a bit more risk with our pension funds, within reason.
It may be worth seeking professional advice to see what is the best course of action for you.
Unnecessary lockdown purchases
Lockdown might seem like a hazy memory, but many of us will have physical reminders of purchases we regretted from the Covid period.
I’m looking at your Peloton cycles, bread makers or even hot tubs. I myself was not immune from financial splurges, parting with £250 for a high-end air fryer.
I justified the expenditure through mentally spreading the overall cost of £250 over a long time frame of 10 years, so £25 a year.
Unfortunately, I didn’t end up becoming a master chef like Gordon Ramsay and barely utilised the air fryer.
Using consumer data into impulse buys, I calculated that shoppers should pause for at least two days and 21 hours after finding an item they want to buy before splashing the cash.
The dangers of dating
As a perennial singleton for more than a decade, neither my time on Netflix dating show Indian Matchmaking or my 129 first dates have uncovered a Mrs Seagull.
As with the typical single UK adult, I spent an average of £60 per date. But it doesn’t take a maths teacher to explain that there will be dates costing below and above that average.
On a rare fourth date, I planned a surprise date. She enjoyed musicals, so I booked premium tickets to a West End show followed by a fancy restaurant booking.
Just as the musical was due to start, I received a text “I’m not feeling well, sorry can’t make it”. My mood for attending any upbeat musical was quashed (I left) and I cancelled my restaurant booking. My wallet cried at the loss of £200. I’ve never heard from her since (Google “ghosting”).
Nowadays, I’m much more cautious about booking pricier surprise dates. Bill Shakespeare did warn me that “the course of true love never did run smooth”.