MW What is the worst financial decision you've ever made?

By Quentin Fottrell

Listening without prejudice to people's worst financial decisions may be helpful in avoiding the same mistakes

Generally, people are more willing to talk about their own good financial decisions than the bad ones.

We are living in an era of high-stakes financial decisions - both political and personal.

President Donald Trump may be judged by his major economic policies, which, like Reaganomics, will likely be debated for years to come. Will Trump's tariffs and his "big beautiful bill" be a boon or a bust for the American economy? Time, as always, will tell.

It invites the question: What are some of the worst financial decisions people have made in their lifetimes, from bad investments and dodgy spending decisions to falling for scams? If you didn't sell, you may be hoping that your out-of-favor stock will find its place in the firmament once again.

Timing is everything, in fact, which is why people read financial sites like MarketWatch. A little intel and a little luck - as one Nvidia (NVDA) investor found out - can go a long way. He was a fan of "World of Warcraft" and liked the graphics cards so much that he bought some stock.

For some, once-in-a-lifetime clunkers have included: "I do." "Buy Enron" or "Buy Lehman Brothers." "This timeshare will change your life." "Congratulations on your new store card." "Buy now and pay later." "I've noticed some unusual activity on your account" ...

Our worst decisions can be driven by fear. For that reason, the good ones can be easier to identify.

The other worst advice you may have avoided: to unload Microsoft $(MSFT)$, Nvidia, Amazon (AMZN), Alphabet $(GOOGL)$, Meta $(META)$, Netflix $(NFLX)$ or Tesla $(TSLA)$ in their early days. Some analysts have even advised investors to steer clear of Apple $(AAPL)$.

Our worst decisions can be driven by fear. For that reason, the good ones can be easier to identify. But life sometimes gets in the way: This reader, who had reached the grand old age of 80, regretted putting $220,000 into a $250,000 term-life insurance policy.

And our best decisions? The motifs are duller: Prepare for the worst (health insurance and home insurance). Don't look at your 401(k), especially when the market is undergoing a painful correction. Strive for and maintain financial independence.

Do people always want to hear good advice? As this Moneyist reader, who retired very comfortably, said, "Friends in my age group who see how comfortable I live want to know my advice on investments." His strategy was simple: He started investing, a little at a time, in his 20s.

Generally, people are more willing to talk about those good financial decisions than the bad ones. We have more power over our timing if we start investing early. A growing chorus of experts indicates you will need more than $1 million to get through retirement.

Don't miss: 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell?

A shift in perception

Listening to people's worst financial decisions may be helpful in avoiding the potholes on our own paths to retirement. These include acting upon advice to take money from your 401(k) or taking out a HELOC (unless, perhaps, if you are paying off your credit-card debts).

Bad luck aside, why do we listen to bad advice and/or make risky decisions? Robert Pearl, lecturer in organizational behavior at Stanford University, has written about a "brainshift," a neurobiological sequence and shift in perception related to high anxiety and a major reward.

"The science of behavioral economics tells us that after we've made a decision, even an illogical one, we tend to cling to it," he wrote. "That is, we filter out dissenting information while seeking data that confirms our original viewpoints. Psychologists call this 'anchoring.' "

"The combination of distorted perception and anchoring explains why a bevy of venture capitalists, high-ranking generals, and business tycoons all lined up to invest in Theranos, the now-disgraced blood-testing startup founded by Elizabeth Holmes," Pearl added.

Many people cite parents and advisers as the biggest perpetrators of the worst financial advice.

As one Moneyist reader said, their worst decision centered on that immortal question: "Will you marry me?" Your choice of partner is one of the biggest financial decisions you'll ever make. Best to recognize a bad romantic investment on the first date.

Other financial regrets held up as the "worst ever" include lending money to family and friends (always operate on the basis that you'll never see it again), taking out a student loan and going to college, and taking out whole-life insurance.

Bad decisions are like reversible raincoats - green on one side, red on the other - they can be horrible for one person while reaping dividends for another. Hence, the perennial debate over, say, whether paying for a college education is actually worth it.

Another interesting common thread among Moneyist readers on this topic: Many people cite their parents and financial advisers as the biggest perpetrators of the worst financial advice ever. As one wrote: "At 24, my parents told me not to buy a condo in D.C. for $92,000."

Some people bitterly regret saying yes when an adviser or wealth manager said, "Let us manage it." Still, if they tell you not to panic during a market correction and you insist, despite their protests, on selling, you may end up, like one Moneyist reader, wishing you'd listened.

Financial advisers are not perfect, but we are all responsible for our own financial future.

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

More columns from Quentin Fottrell:

'I have a secret: I've been happily married for 25 years, but I made a big financial mistake

'This scam stuff is going to get worse': A man approached me in my car with a crazy story

My wife and I are in our 70s. We gave our son $40K for his L.A. wedding. He wants more.

-Quentin Fottrell

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August 11, 2025 10:20 ET (14:20 GMT)

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