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my least bad and least good financial decisions

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This is part of the m-network’s day of posts on our best and worst financial decisions. Both my best and worst decisions are related to pensions.

best decision

I started pension (retirement) fund contributions as soon as I started work and I’ve consistently invested them in index funds.

Why is this my best decision?

  • Starting earlier is always better than starting later.
  • The company I work for contributes double whatever I contribute up to a certain limit.
  • Index funds match my keep it simple and average philosophy.
  • I now stand a fighting chance of not being desitute in my old age.
  • I’ve never had the money, so I don’t miss it.

worst decision

I invested my non-work related pension (retirement) funds in the Virgin Money Stakeholder Pension.

Why is this my worst decision?

  • They charge a 1% fee, whilst the best provider of index funds in a pension following the same index charges 0.3%
  • I don’t have enough money invested to transfer out of this fund
  • I didn’t shop around before investing, I was sold on the advertising
  • Its difficult to get a valuation from Virgin, for some reason their system won’t let me register for online access.

I know this isn’t a really bad decision. That’s because most of my financial errors, haven’t been decisions but simply forgetting things, like:

  • how close I am to my overdraft limit
  • when the due date is on the credit card
  • getting work expenses reimbursed
  • cancelling subscriptions I no longer need

Really, I’m lazy and I procrastinate. I’m not a great decider - most of my decisions are in the ok to good range, but my non-decisions are pretty terrible.

Check out the rest of the m-networks best and worst decisions:

  • 6 financial decisions - don’t learn the hard way @ gather little by little
  • my best and worst financial decisions @ moolanomy
  • best and worst financial decisions: from the trenches @ i’ve paid for this twice already
  • my best and worst financial decisions: they might surprise you @ being frugal
  • my best and worst financial decisions @ christian finance
  • my best and worst financial decisions @ the dough roller
  • one good financial decision and a whole lotta bad ones @ debt-free revolution
  • my financial decisions, the good and the bad @ single guy money

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50 comments for “my least bad and least good financial decisions”

  1. Great post! I sure wish we had started investing in retirement a lot sooner. It’s great that you’ve been investing since you started working!

    Posted by Lynnae @ Being Frugal | October 8, 2007, 5:57 pm
  2. Good honest post. I like your assessment. Everyone can learn from both.

    Posted by CHESSNOID | October 9, 2007, 4:06 am
  3. The power of compound interest - I’ve learned the importance of starting as early as possible too.

    Posted by Raymond | October 9, 2007, 4:25 am
  4. “Index funds match my keep it simple and average philosophy.”

    You have one thing right - index funds are simple. However, they are NOT average. They are much better than average. And if you use a low-cost company, like Vanguard, they’re even better.

    Posted by Bob Smith | October 9, 2007, 5:29 am
  5. Great job on your best choice. I started young also, but it was more like you worst decision - I invested in a fund with a lot of fees. I learned from it though and quickly transferred my money out of there!

    And if that is your worst money decision, I think you’re doing all right! ;)

    Posted by Patrick | October 9, 2007, 11:38 pm
  6. I’m glad to see I’m not the only one whose made this particular mistake. Ah well, onwards and upwards.

    Posted by plonkee | October 10, 2007, 8:35 pm
  7. My best decision has been to invest in my pension (in my case 401K) as well. However, unlike you I started quite late (since I spent a lot of time in school being totally ignorant of personal finance basics). I try to make up being very aggressive in my contributions. Well, better late than never I guess!

    Posted by ispf | October 13, 2007, 5:13 pm
  8. Thanks for putting up this article and it is really nice to hear that nothing works without planning properly and investing in a retirement scheme is an excellent decision.

    Posted by Money Advice | April 12, 2008, 8:02 am
  9. Sounds like you’ve made some good financial decisions. I only wish I had starting putting aside money for retirement earlier. I would be much better off at this point.

    Posted by Lisa | April 14, 2008, 12:23 am
  10. I don’t think you should beat yourself up about that 1% fee to Virgin, people have done far worse. But if it is a problem, you can transfer to another provider?

    Posted by Monevator | November 9, 2008, 6:14 pm
  11. Yes, one should start investing from early stage. This would help in many ways. A good post on start investing!!

    Posted by Payday | June 24, 2009, 10:32 am
  12. Great post, something we all struggle with.

    Posted by Inflatable Hot Tubs | September 4, 2009, 5:38 pm
  13. Hi There. I just came across the M-Network blogs, and I am overwhelmed with the great amount of information everywhere!! Thanks for that!

    I can across this post, and your best decision was starting a pension fund right away. I’ve been in school forever, and I just started finally working 2 months ago. (I’m 30). My job has a great retirement plan that I can’t be a part of until 2011…and I know NOTHING about that kind of stuff. I mean, I’ve only been actually getting a pay check for a few months!! We’re (my husband and I) are beginning to pay debt acquired during my schooling, but I’d also like to put money away for retirement. Do you have any advise about where I can get good, simple information on where to start.

    I’ve got the debt plan under control, and it wont take us too long to pay it off…so, I don’t want to wait on starting a retirement fund. I’d like to focus on paying off our debt AND starting a retirement fund at the same time. But I don’t know where to start…any ideas?


    Posted by Meaghan | October 12, 2009, 3:05 pm
  14. I too have a virgin stakeholder scene but have been thinking of starting another one. Which company is it that you mention is the best index tracker and only has a 0.3% fee? Thanks

    Posted by Paul | November 24, 2009, 3:44 am
  15. Any help with the 0.3% pension? Would be much appreciated. Can’t find anything like that online

    Posted by Paul | December 2, 2009, 3:14 pm
  16. If we all budgeted right from the get-go, and invested money wisely, things would be so much different. Great thoughts, I love to read things on this topic!

    Posted by Portable Hot Tub | January 17, 2010, 12:21 am
  17. Very well wrote. I may use something from your article. not like many others wrote just to be.

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