Guide to Financial Planning 2012: Pricey Mistakes

A few things you probably shouldn't do with your money.
Illustration by Harry Campbell.

We asked the financial advisers we surveyed to tell us the
dumbest or craziest thing a client ever did (or wanted to do) with his or
her money. Some of the most common mistakes were investing in a friend’s
company, insisting on cashing out of the stock market in 2008, and helping
adult children when they couldn’t afford to. Here are some more
unusual—and memorable—answers.

“Leverage their home and pension plan to start a
distillery.”

“Buy a beach house for a dog.”

“Give it all away to charity just because they really did not
like paying taxes.”

“Buy antique Chinese cars.”

“A client purchased $760,000 in silver all at once. It’s now
valued at $300,000.”

“Buy Facebook stock.”

“Invest in a gold mine in Africa based on an e-mail
solicitation.”

“Withdraw their entire portfolio and purchase gold
bars.”

“Start another French restaurant in Georgetown.”

“Buy a herd of bison.”

“Invest in railroad boxcars.”

“He wanted to bet on Russian oil futures. We talked him out of
it.”

“Buy a racehorse with the goal of entering the Kentucky
Derby.”

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