My biggest financial mistake: the British “Financial Times” writer admits


“What do you think of free money?”

Pilita Clark, business columnist

When I was in my early twenties, I found a job in a newspaper in a big city. This was one of the first and most serious financial mistakes I made.

In the excitement of being hired, I never thought that I should join the company pension plan.

I still remember a wide-eyed colleague looking at me in shock when he noticed this oversight. “What do you think of free money?” he cried.

He is right. By today’s standards, the plan is very generous and better than the industry-wide retirement plan that I will join a few years later.

My newspaper matches the donations of employees. Although I was paid peanuts initially, my salary has risen over the years, so that I can eventually accumulate a useful amount of money.

I know this because my husband, who is my age and a journalist, keeps boasting about how smart he is to join his newspaper project as quickly as he is.

Today, I may be protected by some measures, such as requiring employers Auto-registration Employees join a pension plan. But these rules are not universal. No matter how old you are, it is always worth maintaining financial awareness. Literally.

Take home news: read the fine print

Brooke Masters, Chief Business Commentator

When I was a regulatory reporter, I found myself reporting on a major scandal in the American mutual fund industry. Unscrupulous investment managers conducted secret transactions to allow hedge funds to buy and sell shares in their funds. This has the effect of absorbing the returns of buying and holding investors.

As a long-term investor, I am angry at these revelations. I was even more angry when I found out that I had shares in several participating funds. I eventually received small compensation checks from some of the settlements I covered.

I am one of millions of victims, which is bad enough. To make matters worse, I found that the insurance group that recommended these funds also faced sanctions by US regulators because it did not notify its clients that it would transfer their money to funds with higher fees and higher commissions. Take home information: Read the small print and ask your broker or consultant if their advice has personal financial benefits. You are the only one who really puts your best interests in mind.

How i broke out of love

Isabel Berwick, job and career editor

It took me a few years and a bank loan with a punitive interest rate (in the early 1990s) to get rid of hundreds of pounds of overdrafts and credit card debts that I had incurred during a brief relationship with a very good man.

I am a new journalist with a medical title, with an annual salary of £13,000, but I am not at all sure if I left academia right. I hedge my professional bet by studying for a master’s degree and spend every weekend in the library. The social excitement of people in their early 20s is-low.

Financial Literacy and Inclusion Campaign

When a long-term relationship ended with infidelity (him) and acrimony (me), this very good man took me away from London. We have black taxis everywhere. We have eaten at Belgo, The Eagle, Quaglino’s and Dell’Ugo. Once I met him in a bar, he was working on a laptop. This is such a weird sight, the whole bar is watching. I didn’t expect it to become popular.

He is engaged in a well-paid and glamorous TV job. I did not face up to the fact that I was destroying my financial situation. I had so much fun.

After the relationship ended (friendly), the consequences of the humble packed lunch made me sober. My point of view has matured. I became a personal finance journalist and worked for many years. I learned a lot along the way.

Nevertheless, am I looking back and regretting the events of that crazy summer? Not for a minute.

Strawberry production forever

Jonathan Guthrie, head of Lex

My biggest financial mistake—measured by my naivety rather than cost—was picking strawberries with a friend when I was a teenager. It taught me two painful lessons. First, before investing in venture capital, always target a percentage. Second, pay attention to plagiarism.

Our plan to make money is to pick fruit on the day of work in the Cheshire countryside. We don’t know what we will expect in return, and we have no experience in picking strawberries.

A family in the traveller community who harvested next to us knew exactly what they were doing. They worked very fast, and at the end of the day, his father stood on the scale to check whether their salary was reasonable. But the farm supervisor with piercing eyes can tell that we are novices and insist that half of our harvest is substandard. He fired us with change, and I think he pocketed the difference.

After deducting train and bus fares, our profit is tuppence. We tossed about possession on the way home. I fumbled to catch the ball, and the coin fell on the fence.

This experience taught me to be sensitive when evaluating transactions. The world is divided into those who can calculate percentages and those who cannot. The fewer of us who fall into the latter category, the better.

Why should I pay for this coffee table?

Claire Barrett, consumer editor

In 2003, shortly after moving into the first apartment I bought, I broke up with my boyfriend. Buying an apartment myself was a factor in our breakup-but buying with him would be a huge financial mistake! Nevertheless, he still brought the coffee table, so I went to IKEA.

The new table I chose costs about £250, with built-in magazine storage and very sturdy metal legs. On my bachelor party days, when I came home from the bar, I would lie on the floor and grab my legs, trying to stop the room from spinning, but in vain. However, when it comes to repayment, I also looked away from the ball.

When I checked out at IKEA, I was persuaded to take out a store card to charge for this table (I also bought some houseplants, but didn’t live after the first bill). The reward is 10% of my first purchase. This is a compelling proposal; the less obvious small print indicates that the interest rate on the store card is more than 20% and the minimum monthly payment is about £7.

Claer Barrett and the very expensive IKEA coffee table

In the context of busy social life, this feels very cost-effective-until one day, years later, I thought “Why on earth should I pay for this table?” When I opened the online statement, I could see that the interest charged to me over the years not only offset the introductory discount, but also increased the total cost by approximately £100.

I am really angry that I sleepwalking into this debt trap, but learned a valuable lesson-always pay off my credit card at the end of the month.

Since then, regulators have banned these lingering minimum repayments. If this becomes a model, credit card companies will be required to contact the borrower.

If you borrowed £3,000 with a credit card when you were 21 years old and only paid the minimum repayment, you will be close to 50 years old when you pay off the debt-and the interest charges paid will exceed the interest you borrowed. This is assuming a typical credit card APR (annual interest rate) of 20%-although some credit cards with poor credit history have an APR close to 50%. The speed at which small debt swells is a powerful but terrifying example of compound interest being bad for you.

Credit cards can be a useful financial tool, but the increase in debt in your hedonistic 20s may continue into your 30s. Credit card companies use various offers, including points, zero-interest transactions, and other incentives to allow us to spend money on things we might not even need, hoping to squeeze profits from us in the future.

There is also a coffee table? After paying the price for it, I am happy to say that after 18 years of use, it still has a place in my living room-and the legs are still very strong.

The fatal temptation of a huge black TV

Matthew Vincent, editor, FT Project Publishing

We are told that two heads are better than one. Except, it seems, when they belong to a few junior financial reporters. I am half of this short duo and are jointly responsible for the double mistake.

Can’t wait to watch England’s withdrawal from the penalty shootout of the football championship that year on the big screen-but lack of cash-we visited the local TV rental shop (that was a long time ago). After two signatures, we have a huge black plastic TV and a consumer credit agreement with extortion clauses that we don’t know about.

Three years later, we may have paid enough money to buy this TV several times. Thankfully, we are making enough money to buy our own apartment (that was a long time ago). So the equipment was returned to the rental shop, and our stupidity was recorded in history. Or we think so.

Then I received a letter from my mortgage lender saying that my credit history was damaged by the late payment of the lease agreement. When the TV direct debit was about to leave our account, one or two of us had already overdrawn. I need a letter from my roommate to justify me. He wrote an article kindly. It turns out that he was financially smarter than me: he eventually left the press and found a higher-paying job in New York City.

“If you have to pay someone,” he said. ..

Sarah O’Connor, employment columnist

I remember the only financial advice I received at school was from our technical teacher on our last day. The thought of the 16-year-old boy in front of him is about to enter the real world, and the only thing he taught us how to use the soldering iron, he may feel a little uneasy.

Listen to everyone, he said. If you have to pay someone but you don’t have the money, you can do this: write a check but write the wrong date on it. They may not notice right away, which will buy you some time.

Smart advice? Maybe not, but it really persisted for me-unlike how to use a soldering iron.

The heavy price of having a child

Lucy Kellaway, author of the British “Financial Times”

The worst financial thing I have ever done? It’s too easy-that is to have four children.

This is a financial disaster, but there is a message in it, that is, although finances are very, very important, they are not everything in life. So I still don’t regret it.

Losing money is always expected

Paul Lewis, host BBC Money Box

I was 15 years old and went to London by myself—an hour by train from Maidstone—and I had a £5 note, which was a lot of money at the time. I was walking down Oxford Street, and these people were doing “finding that lady” with crates and playing cards. I think this is easy, I can do it. So I put down my £5-of course, I lost. It was a catastrophe for me, but since then I have never gambled again. In fact, I am very opposed to it and how it develops in our society. This is a good lesson, although I didn’t realize it at the time.

My four-wheel shortcomings

Ken Okoroafor, FT Money columnist and blogger

The worst financial mistake I ever made was to buy a very expensive car—a Mercedes Coupe C-200—to attract a life partner. It was a disaster; I broke up after breaking up, financially, it was the worst thing I ever did. When I sold that car and bought a much cheaper one, I met my amazing wife Mary, and we have been together for 10 years.

What is your biggest financial mistake? What did it teach you? Please comment below.

How should we teach children financial knowledge?Participate in live Q&A Fortis At 12 noon on Wednesday, September 22, Claer Barrett, Consumer Editor of the Financial Times, and Aimée Allam, Executive Director of the Financial Literacy and Inclusion Campaign, Financial Times Give a speech on the homepage.


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