News
4 Purchases that financial experts regret and wish they had spent money on
Images by Tom Merton/Getty
Financial advisors can know many things about spend money wisely, but they don’t know everything. Even the most educated, most knowledgeable, and most knowledgeable financial expert is still, at the end of the day, a human being trying to make the best decisions based on the information at hand.
Sometimes these advisors regret their decisions retrospectively. And sometimes, remembering the purchases they regret most will teach experts in a more intimate way than they could in their studies or work.
GOBankingRates spoke to some financial experts about the purchases they regret most and what they now wish they had bought.
Be aware: Worth the Money: 8 Best Deals at Kohl’s for Summer 2024
For you: 4 genius things all rich people do with their money
Investing in a startup
As co-founder and CEO of Dependent insurance group It is Financial helping hand, Ben Klesinger is an experienced financial professional. But that doesn’t mean he didn’t have to acquire some of his knowledge the hard way, making investments he would later regret.
Early in his career, Klesinger invested heavily in what he called “a promising but unproven fintech startup.” Citing generally high levels of enthusiasm for the technology, he invested about $200,000 of his own capital. Although he expected to see quick returns, what he got were a lot of headaches.
“The startup struggled with regulatory issues and market competition. In the end, we lost almost all of the investment,” he said. “I learned the hard way that even if a business idea seems revolutionary, due diligence is essential.”
In retrospect, Klesinger wishes he had taken a more balanced approach, such as investing in a diversified portfolio of technology-focused mutual funds or even ETFs, which would have allowed him to gain exposure to the technology sector without taking on as much risk.
View more: 4 Affordable Car Brands You Won’t Regret Buying in 2024
A fancy car
Like many people who have worked hard and want to show off their success, Klesinger once bought “a fancy car” that he also hoped would serve as a solid investment. Unfortunately, that car that cost him $150,000 turned out to be more trouble than fun, depreciating in value much faster than he expected.
“Maintenance costs have also increased, decreasing the overall value,” he said. “I later realized that investing the same amount in rental properties or a combination of dividend-yielding stocks would have generated consistent, appreciated income over time.”
Real estate
John Pace, certified public accountant (CPA) and tax partner at Pace & Associates, CPAs, has worked for over 40 years in the area of tax consultancy and real estate planning. He said his experience helped him see how decisions made by individuals and businesses can impact their financial health – and he himself is no exception.
The story continues
“One of my most regrettable purchases was investing in a highly speculative commercial real estate venture early in my career,” he said. “We invested about $500,000 in a poorly evaluated project, only to see it fail within two years.”
Pace later realized that he had neglected to perform critical due diligence, such as thoroughly analyzing market demand and obtaining reliable financial projections.
“Instead, I wish we had diversified our investment portfolio by placing these funds in a combination of low-risk bonds and blue-chip stocks,” he said. “This would have provided stable returns and reduced our risk exposure.”
Vacation Properties
Another learning experience for Pace would come with the purchase of a luxury vacation property. He spent a large sum on the property, hoping that it would be valuable in terms of personal enjoyment and a profitable sale in the future.
Unfortunately, reality crept into the dream property in the form of maintenance costs and the property’s poor performance on the rental market – which turned it into a financial drain.
“Instead, we would have been better off investing that money in low-cost index funds, which have historically offered more reliable returns and require far fewer ongoing expenses,” he said.
More from GOBankingRates
This article originally appeared on GOBankingRates. with: 4 Purchases that financial experts regret and wish they had spent money on