People are usually quite eager to share their stories of amazing wealth and riches. If you bought Apple in the early years or Bitcoin at $40, why not mention that at a party? Folks are usually much more quiet 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 potential dangers.
Options trading. Meme stock mania was born as people learned 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 make a bunch of aggressive options trades:
That’s not even the worst part. The user admits in the comments (verified by their previous post history) that they ended up borrowing $200,000 at 10% interest:
Unfortunately I lost in options. I borrowed money and now I am paying 10% on 200k.
Assuming that is the full picture, they are negative $100,000 and the juice is still running.
Rental real estate. Many people do build wealth over time with rental real estate, but things can still go wrong. No landlord rents to a squatter that they have to evict on purpose:
While I’ve seen plenty of threads on having rentals at part of a FIRE strategy, I’ve rarely seen comments from experienced landlords that outline the challenges or negative outcomes that can come along with being a landlord.
I sold my rental property a couple of months ago, ending my 11-year stint as an accidental landlord. I thought this would be a good time to provide my experience. And before all the “rental moguls” show up to shit on this post, let me qualify that I am not claiming to be an expert. In hindsight there were a lot of things I would have done differently/better. However, I feel I can provide real world examples of what a new landlord can experience.
If done correctly, there can be a lot of financial upside. However, being a landlord is not as hassle/risk free as most people think it is – and there is no guarantee you will make money.
Crypto. The Twitter account shares “anonymous crypto confessions”. These days, there are many people afraid to tell even their spouses how much they lost betting on crypto.
I still haven’t told my wife we lost 50% of our savings in Anchor. I’m putting what’s leftover from my paychecks into restoring it back to the initial amount, hoping she won’t notice. It will take me approx. 5 years with my current salary. We planned to buy a house next year.
— Coinfessions (@coinfessions)
I’ve gone through hair loss and am in no financial state to get married. I will never spend a penny on crypto ever again.
— Coinfessions (@coinfessions)
I thought about these stories when reading about the growing popularity of DraftKings and FanDuel: . 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 the easy money, but also prefer to ignore where it will come from. My children will be told that gambling addiction runs in their family history (there’s my little confession) and that the best path is to never bet at all, even casually (and to never marry someone who gambles). Don’t be the dumb money.
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