The Upside of Financial Trauma, PART 2: My Money Mistakes from the Past 20 Years

by | Jan 17, 2022 | Own, Popular

Excuse the 22-year-old half naked boy above. She thirsty.

In the first part of this 2-part post, I shared how my financial trauma of 2008 gave me the financial discipline to buck the social norms and take the road less traveled on my path to financial freedom. In this post, I want to share with you how there may be mistakes and challenges along the way. And to not let perfection scare you away from getting started.

If I could turn back time…

Indestructible Diva

To get to a place of better money habits, I had to make mistakes. Lots of mistakes. And they did knock me down for a hot minute. But like Cher, I didn’t let those things stop me from getting back up, dusting myself off, and moving forward.

So allow me to spill the T on my past and what I’ve learned from each of those life lessons. My hope is that my experience will help you avoid my same mistakes if possible. But if not, that’s okay too. Some lessons need to be lived, and I can definitely attest to that.

Here’s my not-to-do list for 2022, based on 20 years of f*ck ups.

NOT To Do #1: Delay your retirement contributions. Girl… you better not!

When I was in the Navy, I contributed to my Thrift Savings Plan—the military and government’s version of a 401(k)—but not much. I didn’t really understand the paperwork. I didn’t really understand the different fund options we had. And I DEFINITELY didn’t understand the power of compound interest over time.

Looking back, if I had maxed out my Thrift Savings Plan during that time in the Navy, from 2001-2007, and never even put another penny in after that time, I would have over $300,000 right now to start out 2022.

If a 401(k) were maxed out from 2001 to 2007
Today, I max out ALL my retirement accounts first, and then decide what to save, spend, and budget for with the rest. To see a detailed breakdown how I prioritize the “buckets” of my savings now, check out my Christmas post about just that.

NOT To Do #2: Buy real estate based purely on speculation. Just say no!

In 2003, I bought my starter home, a 2-bed 1-bath condo in San Diego. I didn’t know what I was doing, but I figured home ownership was what people were supposed to do, so I’d give it a shot. I heard the VA loan was a thing to get a place with $0 down, so I gave it a shot.

Endless pages of paperwork later and boom! I had the keys to my own condo. I was 24 years old and had started my journey of adulting!

Two years later, the sub-prime loan scandal “helped” my $240,000 condo skyrocket in equity to $340,000. So, what did I do? I got a home equity line of credit, because… why not? That’s a thing that people do, right?!

To level myself up, I made myself a proud dual-homeowner. To make it happen, I took the $100,000 (temporary) equity I had from my starter-home condo and used it as a 20% down payment on a house with some kind of new-fangled mortgage called an “adjustable rate, principal-only loan.” Fancy!

Real estate never goes down, right? Long story short, I finished my service obligation in the Navy and was honorably discharged at the end of 2007 and the housing market crashed in 2008. Due to my extreme drop in income to cover the mortgages on my own, as soon as I had a vacancy in one of the properties, I defaulted on the loans and ended up losing them both.

Today, I always run the numbers first. San Diego is such an expensive city, that I buy for appreciation and not usually cash flow. So, after putting down 20%, I check to see if the total expenses will be covered if I’m renting out the property on Airbnb or Furnished Finder, based on comparable properties in the area. And if the short-term market dries up, I run numbers for a Plan B as well. Will my expenses be covered if I need to fill the property with a long-term renter? For this, I check and for my comps. I don’t trust because their Zestimates tend to be overly optimistic.

NOT To Do #3: Hire a commission-based financial planner. Don’t do it!

I wrote about this in my very first blog post/rant.

Back in 2011, I scraped together the $10,000 I had at the time and hired a financial planner. He reaaaaaally wanted me to invest in some type of whole-life insurance, even though I was single with no plans to have kids.

I resisted his “expert recommendations” and stuck to the traditional investments he offered instead, which were fee-based mutual funds. About a year later, I asked him some questions from the “Retirement Gamble” documentary:

“Was he willing to put in writing that he was acting as my fiduciary (someone legally bound to act in my best interest)?”

“Would the growth of the fee-based mutual funds he set me up with be eroded by the 1-2% commissions they talk about in the movie?”

He evaded my questions with lots of “it depends” answers, was unwilling to watch the documentary himself, and sent me endless pages of documents I had to log on to a server to view and sort through myself. It seemed clear to me that commission-based financial planners have mad skills at making finance seem like the subject just too much trouble to learn and/or to ever change the “solutions” they have you invested in.

In the end, I decided to cut my losses. Since I was early in my investing journey, I just paid the multiple surrender fees to liquidate my account. Looking back, I consider the entire experience to be part of the “tuition” for my financial education.

The exceptions to this rule when I’ll consider seeking professional advice for my own finances: (1) I have $1MM+ in net worth and need to navigate a tricky tax decision, (2) I’m approaching retirement, or (3) I’m receiving a windfall of cash (such as an inheritance) and want advice on how to optimize it for growth and taxes.

However, in those specialized situations, a commission-based financial planner/life insurance salesperson is still NOT the way I would ever go. If you listen to podcast interviews with millionaires and early retirees in the FIRE community, you’ll hear a common theme of them saying the same thing.

In short, if you hire a financial planner, they should be fee-based and also, be willing to sign a fiduciary agreement.

Today, I’m self-taught. After covering the basics, I actually enjoy learning new aspects of personal finance. Since personal finance is usually a slow, boring, get-rich-slow process, I think most people out there can learn the basics and get started on their own, too. If you want to follow in my footsteps of your own financial education, I list out the things that got me more comfortable managing my money in the Resources tab of my blog. Or check out my eBook that spills all the T on the steps I’ve taken to start playing the money game by my own playbook: “My Road to Opulence.”

My Road to Opulence (eBook on an iPad)

Your turn!

While it would’ve been nice to only have made good financial decisions throughout my life, I’m grateful my path has helped me become a more mindful investor today. I believe these multiple falls on my pretty little face have come with the silver lining: the missteps above b*tch-slapped me awake so I had the motivation to educate myself and take calculated risks with my finances.

I hope by sharing this 2-part post you’ll feel encouraged that when it comes to your finances, you don’t have to get it perfect. You just have to get it started.

Have you learned any financial lessons from the “school of hard knocks” that you’d recommend others avoid as they start their journey to financial independence? Or on the flip side, is there anything you feel motivated to do to get the party started with your own finances?

Tell us in the comments!

When it comes to your financial journey, you don’t have to get it perfect. You just have to get it started.
Homo Money


  1. Eric

    Thanks for this !! Great advice and insight.

    • H.M.

      Thanks Eric, I appreciate your feedback!

  2. Mel

    Great advice! I stumbled upon your post and was enticed by the title because it always feels good to know you’re not alone in your mistakes. (No, I lie…it was the hot boy pic 😉 straight lady here, but whatever…fine is fine). I’ve definitely made plenty of my own mistakes over the years so I could relate. I was curious if the movie you refer to is the PBS/Frontline doc about retirement savings? That got me fired up when I saw it about 5 years ago. I too set off on a quest to find someone to offer me guidance who didn’t operate on commissions. I found a fee-based planner who advised me to plunk everything into a Vanguard Index fund based on my age. He didn’t even charge me for that appointment so I knew I’d found someone trustworthy. Warren Buffet advises the same so that’s always what I tell friends to do now. I love your writing! Sending high-fives from Detroit :)Mel

    • H.M.

      Hey Mel! First off, I love love LOVE your comment! Glad to know my pix can still work it as some internet click-bait. 🙂 And yes, that Frontline doc is exactly what I was referring to. In fact, I have a link to it right here on the Resources page of my blog. And similar to you, it was the thing that got me fired up and ready to start managing my own finances, too. Sounds like you’re in good hands with your fee-based advisor and an account with Vanguard to minimize your fees. Love that my sassy LGBT style had some crossover appeal for a money-smart straight lady in Detroit. Similar to the show RuPaul’s Drag Race, I’d always hoped that my blog’s unique style would eventually reach a mainstream audience so it’s great to hear that it happened to early into my journey as a blogger! I’m also a midwesterner (from southern Illinois) so we may both have an advantage of frugality being ingrained in us and not having as much of a drive to have flashy things to keep up with the Joneses. Keep up the good work, and don’t be a stranger on the “inter-webs!”


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