Mistakes I made on the way to £100,000

As a content writer within the financial independence space I have avoided revealing my real net worth, and this is still the case. But I think the 100k mark (be it in £ or $) for net worth is a key milestone for most people who are on the same journey as I.


It has been a few years since I reached this milestone for myself so I decided to reflect back a little and think over some of the mistakes I made that either cost me money or cost me more time than it was worth.


Before getting into it though, I want to clarify that this isn't me telling you not to do these things.


While I think my own journey went through rough patches due to some of these mistakes, there's no way I would've learnt as much had I not made them. So I'm just going to write these mistakes, explain why I consider them mistakes, and let you decide what to do with it.


Let's get started.




Matched betting


As so many wannabee viral content creators out there suggest this as a "money making machine" I couldn't resist putting it as the first item on my mistakes list; not that there is any meaning to being first or last on this list.


Firstly - I did end up making money through matched betting overall, but the return on my investment started to drop off significantly towards the latter stages.


Once I got through all of the sign-up bonuses I was then trying to capitalise on the numerous offers that would periodically come up. Eventually I stopped receiving so many offers since the bookies were on to me, and on many of the major platforms my accounts got banned or restricted.


Getting my money out of those platforms was a massive pain, but this isn't the mistake I want to point out.


The thing about matched betting is that you have to behave like a robot that simply follows a set algorithm. But since we're human there are going to be times when our non-robotic senses kick in.


"Surely Manchester United will beat this lower ranked team..."


"It's 1-1 and there are only 2 minutes left in this match. I think it's safe to bet on a draw even though it's Barcelona against Espanyol."


"I'll just wait for the odds to get a little better before I put my lay-bet on. How far can it get anyways?"


I could give many more examples but you probably get the point - the human side of me often took on real gambling risk by making assumptions I thought were "safe".


As it turns out, Manchester United were held to a draw, Messi scored in the last free-kick of the match, and the odds started to get way worse.


As the betting offers started to get more and more sparse I found myself taking on more and more obscure bets in order to keep trying to milk the cash cow, which led to more risky gambles as the margins I was able to find were not as lucrative as they once were.


If I remember correctly I was eventually limited to the greyhound races where I would spend an hour scouring the various odds in order to make a profit of about £10.


That's basically minimum wage, but with more financial risk.



Leveraged betting on the markets


This was something I ended up doing after seeing my cousin do it with some amount of (temporary) success. He showed me an account on a particular platform where he had made around £20,000 profit in around a week or two.


His secret, leveraging his positions by something like 20x and... getting lucky.


I soon signed up and had an account of my own.


Expecting similar results (don't ask me why) I deposited a thousand and started buying the same things he had bought, with the same amount of high leverage.


I distinctly remember we were up at like 2am setting up my account, so you can imagine what sort of bizarre market I was getting involved in. Anyways...


After putting on the bet we went to sleep and the next morning I was in the green. Things looked great, I had made a couple of hundred in about 8 hours sleep. But those gains were soon lost as the market dropped slightly.


But then lunch-time came around and I was up around five hundred. This reinforced my misguided impression that the only thing I needed to do was wait out all the dips. The roller coaster continued and I was paying a fee each day to keep my position open.


Why?


I was waiting for lift-off of course...


And this is where the mistake gets real; all I could think of was my leveraged position, frequently checking in. Honestly I don't think I went a full hour without opening up the app to see if I was rich.


It affected everything in life for the next week or so; I wasn't focused in work, I didn't stick to my workout schedules, and I couldn't enjoy my evenings.


Everything was consumed by that position which was fluctuating, and causing me to be up or down by a few hundred. All the while costing me some sort of fee each day.


As these things go, the position eventually went bad enough so that I lost all my money.


Guess what I did?


Obviously I put in another thousand and re-bought into my position with the same amount of leverage. I was certain things would turn out ok since the market had already dropped, but this time my position lasted about 2 days before I was stopped out automatically.


And that's the story of how I lost £2,000 in about a week and a half.


Totally not worth it.



Spent too much time on spreadsheets


Being an analytical sort of person I naturally made loads of different spreadsheets when I was first getting started with my journey towards financial independence.


I made a spreadsheet to forecast my potential returns over time.


I made a spreadsheet for my various investment holdings so that I could analyse overall portfolio performance.


I made a spreadsheet to track how much I spent on which day, on what, and if my running-spend for the year was over or under budget.


I made a spreadsheet to analyse different stocks, where I pulled in the ticker price and whatever I could get from Google Finance and took regular notes.


And more.


I would spend time adjusting percentages and calculations on my forecasting spreadsheet, just to see "what would happen" if the markets did this or that, or if I increased/decreased my monthly investments by a certain amount.


I would record the investment funds I bought into another spreadsheet, how many units at what price, and try to chart out what that meant based on the closing prices of the fund. I was trying to see under/over performers within my personal portfolio.


I set a rigid budget that specified exactly what I could or couldn't spend money on, and was obsessively recording every penny that I was spending each day. I could still tell you how much money I spent on a particular day 5 years ago, and whether or not I was running over budget for the year at that particular point in time.


I love a good spreadsheet and still use them, but the amount of time and effort I spent tinkering on my early versions was simply way too high for very little in return.


Ultimately, getting to all that detail didn't really help me make any strategic decisions that boosted my progress. I would just look at the findings and simply continue doing what I was already doing.


All that meant was that I lost a bunch of weekends where I could've enjoyed the time for myself or with my girlfriend.


Bad investment of time.



Setting a FIRE number


£1 million.


Even though today's value of money has diminished this great milestone over time, it's still one heck of an achievement to become a millionaire. So that's the number I initially set as my FIRE number.


The problem with this is that it drove all other financial decisions of mine. How much I needed to invest each month, how much I could spend on living costs, and so on.


I became highly stressed about everything I spent money on, making poor compromises such as buying lower quality groceries. It led to me becoming overly frugal and started to affect the quality of my life and happiness.


Not only did the FIRE number make things far too rigid, it didn't even make sense.


I was living life like a pauper in my push to reach FIRE as fast as possible, but then what?


Would I start to live life in a more regular manner?


If not, then why do I need a million?


If so, couldn't I live a regular life right now and still make progress on my goal in a more sustainable manner?


Abandoning the constraint of a FIRE number and loosening my spending habits was perhaps one of the best decisions I ever made for my continuance on this path.


I set a life rule of not letting myself become too frugal; I'm allowed to enjoy that coffee, or stay in a nice hotel, or spend money on an evening out with my fiancée - provided I'm being financially responsible to myself.


I still have a north star guiding me in the right direction, but I no longer have a set FIRE number that hangs over me. The only thing I make sure now is whether or not I'm making healthy progress.


If the answer is "yes" I know I don't need to worry too much about the details.


In a way, abandoning my FIRE number actually brought me closer to the goal.



Let it get in the way of my career


Many people trying to achieve financial independence will often cite "escaping the rat race" as their main reason; and I was no different.


We dislike the fact that we need to "take orders" from a manager or a boss, and the fear of losing our job hangs ominously over our head constantly.


"How will I pay my bills if I suddenly get laid off and can't find a new job quick enough?"


We also end up loathing our fear; every day we're stuck in work is another day lost from our dream life.


Soon enough, all we can think of is getting out and regaining control.


For me, this type of thinking was a huge mistake. It might even be my biggest mistake.


Anything and everything became overcast with this veil of financial independence which was telling me that I needed to do all I could to get out.


I lost motivation in the work that I was doing, lacked focus, and my relationships with my team and colleagues soured. I started getting up later and later in the mornings, and whenever I got home in the evening I felt too drained to do anything else.


"Just keep investing as much of my income as I can and there'll be a day where I can leave this all behind."


Leave what behind?


A great job with great pay, where I felt like I was actually doing something interesting, had influence, and had plenty of flexibility to strike a work-life balance that mostly worked for me?


Sure there were and are some gripes about the job, but nothing in life is perfect. Look beyond those and the vast majority of things about the job is actually very good for me.


Needing to leave the working world as soon as possible is like disliking pineapple on pizza. We simply agree with it because so many other people, usually on the internet, tell us to.


Obviously if you have a bad job that truly makes you unhappy you need to take action and improve things for yourself. But this was not the situation I was in, and pushing for FIRE may not actually be the answer.


Funnily enough, once I changed my thinking I saw big increases in my performance and productivity in and outside of work. I got raises, more bonuses, and many other things that will propel me further down the path.


I never needed to escape work; I actually needed to escape the spell that FIRE cast over me.



Final scribbles


Like I said at the start, these are mistakes that I felt I made in my own journey towards financial independence. Many of these things that I did taught me a huge amount and have shaped the way I look at things in the present day.


They are also things that I think most people will probably have to go through for themselves since many of the extremities such as over-tracking, over-analysing, and becoming obsessive are actually things that help at the very start.


The good thing about making mistakes is that they tell you how you can do things better in the future.


These days I am far beyond the 100k milestone and the closest I have ever been to reaching financial independence.


But this is a result of me learning and "loosening back up" on some of the extremes.


So if you're feeling somewhat burnt out in your own efforts and questioning if you can keep up the pace for another decade, maybe try to re-adjust in order to make the journey more sustainable.

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Don't wait for some magical number before you start "living". Life is full of surprises and you'll never be able to plan it perfectly. If you're doing sensible things with your money you'll eventually reach your goal. So start living now. The longer you wait, the less time you'll have. Money can be made, but time cannot. You are the barrier to the life you want to live, not a 4% safe withdrawal rate.

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