People are usually very eager to share their stories of incredible wealth and wealth. If you bought Apple in the early years or Bitcoin at $40, why not mention it at a party? People are generally much more discreet about their failures. But you can find such admissions thanks to the anonymous nature of social media. Reading these confessions can hopefully provide a clearer perspective of the potential dangers.
Options trading. Meme stock mania was born when people learned about the power of leveraged positions, but others ended up being the joke instead.
How do you get $100,000? You start with $700,000 and do a bunch of aggressive options trades: My losses, your gains. My unhappy journey so far.
It’s not even the worst. The user admits in the comments (verified by his previous post history) that he ended up borrowing $200,000 at 10% interest:
Unfortunately I lost in the options. I borrowed money and now I’m paying 10% on 200k.
Assuming this is the full picture they are negative $100,000 and the juice is still flowing.
Rental real estate. Many people build wealth over time with rental real estate, but things can always go wrong. No landlord rents to a squatter whom he has to evict on purpose: Lessons from an accidental former owner…
While I’ve seen many topics about renting as part of a FIRE strategy, I’ve rarely seen comments from experienced landlords that describe the challenges or negative outcomes that can come with being a landlord.
I sold my rental property a few months ago, ending my 11 year tenure as an accidental landlord. I thought it would be a good time to contribute my experience. And before all the “rental tycoons” show up to shit on this post, let me make it clear that I don’t claim to be an expert. Looking back, there were a lot of things I would have done differently/better. However, I feel I can provide concrete examples of what a new owner may experience.
If done correctly, there can be a lot of financial benefits. However, being a landlord isn’t as hassle-free or risk-free as most people think – and there’s no guarantee you’ll make money.
Crypto. The Twitter account @coinfessions shares “anonymous crypto confessions”. These days, many people are afraid to tell even their spouses how much they have lost betting on crypto.
I still haven’t told my wife that we lost 50% of our savings at Anchor. I put what’s left of my paychecks into the reinstatement of the original amount, hoping she won’t notice. It will take me approx. 5 years with my current salary. We had planned to buy a house next year.
— Coinfessions (@coinfessions) July 18, 2022
I have suffered hair loss and am not in a financial condition to get married. I will never spend a dime on crypto again. pic.twitter.com/1xnTkDbnN2
— Coinfessions (@coinfessions) September 12, 2022
I thought of these stories while reading about the growing popularity of DraftKings and FanDuel: DraftKings come for your stupid money at Wrigley Field. This is not a net positive development for our society. The Chicago Cubs (and soon your favorite team as well) just can’t say no to easy money, but also prefer not to know where it will come from. My children will be told that gambling addiction is in their family history (it’s my little confession) and that the best way is never to bet, even casually (and never to marry someone who gambles) . Don’t be stupid money.