Chapter 7 - “Strewth! I lost 21% of my wealth in 2018. What lessons have I learnt?” - The Incompetent Investor

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Thursday, January 3, 2019

Chapter 7 - “Strewth! I lost 21% of my wealth in 2018. What lessons have I learnt?”

This blog is unlike others in that I am sharing the numerous incompetent decisions I have made in my financial journey. As the blog evolves, I trust these ‘Life Lessons’ posts will become more infrequent (hopefully lol). However, for the moment given the mistakes are relatively young, I will be entirely transparent and share them with you all. Sadly, I had a huge lesson as recently as last year (2018).

This post hopes to uplift others who have made poor decisions. Many of times, when we are hit financially, we can lose confidence and feel a sense of despair. I know I did.

We all have our preferred bloggers/podcasts who are kicking goals and sharing immense amounts of knowledge. To me, these bloggers act as essential role models to motivate myself and presumably others on the path to FI.

What separates my story from other FI bloggers (I think anyway) is my journey is a bit of an underdog story. Although, let me make this very clear, I absolutely grant that I am blessed to be living in a developed country. FI is not even a possibility for many citizens living in developing countries. I just wanted to point that out because I think we can get lost in the FI community without recognising how lucky we are to even be discussing the FI concept. For many, this is not a realistic reality unfortunately. 

By now, you are probably wondering how I lost 21% of my wealth… I will share that in a moment.

First, I just want to share some of the tests I have faced on the path to FI. Some readers may resonate with some of these experiences, and if not, you could face them one day (touch wood).

When I was medically discharged from the Army, I spent a good couple of years participating in rehabilitation at the St Barbara Pain Clinic at St Vincent Hospital in Melbourne. It was a tough few years emotionally. 

The St Vincent bunch were an awesome team. Without their help, I would likely not have gone onto completing my Bachelors the following years. Surprisingly, the whole FI thing was actually a real priority of mine at the time.
Despite my eagerness to obtain FI, my mental health was poor due to the chronic pain, which transferred onto disgraceful investment decisions in an attempt to cut corners. This involved investing in speculative companies and awful newsletters seeking upwards of $400. I will share my investing newsletter experiences another day. Compounding to the existing problems was not being able to progress my career. 

After a number of years of endeavouring to get my life back on track, I eventually started my first professional job outside of the Army at the age of 31.

Now.. what you want really read about… the 21% Net Worth Hit…

One freezing day in Melbourne, I rocked up to work feeling pretty standard. Struggled to get out of bed after a late night gaming session. Had my morning dump followed by a hot cup of water. When I arrived at the office, I proceeded over to my desk to say g’day to my colleagues. I did the regular check of my stocks and other assets.

When I looked at the … yep…. BITCOIN price… I could see Bitcoin has been smashed overnight. To make matters worse, I worked in a flipping call centre (a good cultured one but still brutally busy). I rocked up to work at 8:25 and the phone lines opened at 8:30 on the dot. 

I remember having to plan bathroom breaks each day for the 2 years I worked in a call centre environment. Logging into my smart phone to either sell or at the very least get a better understanding of what was going was tough given how busy I was. I received a call smack on 8:30am. The bloke on the phone obviously had no idea how much stress I was under.

The price continued to slide… (in hindsight, probably should have ended the call and gone to the bathroom. I suppose I had too much honour and put my own foolishness before the customer. Silly? Probably).

Anyway, by the time I logged in… most of my money had vanished… BOOM.. GONE….SUMPLA (Hindi for finished).  Remember the South Park episode where the fella deposits money and the banker responds….. “… andddddddddd its gone”….. That was the essence of my CRYPTOCURRENCY experience. 21% of my total net worth down the drain in literally hours overnight. 

What the hell was I thinking? My now self would slap me across the face for even considering investing more than 5% of my total net worth into a risky asset class in Crypto. Greed at its finest.

While the lesson was expensive, what have I personally learnt from this disgusting experience?

Not to invest more than 2-5% of my total net worth into a risky asset class like Crypto
Not to invest into something I do not understand
I should have consulted somebody I trust (my father) who truly looks out for me when I was thinking irrationally. I bypassed my father and spoke to my mates who had no idea themselves. Recipe for disaster.
I have realised, at the age of 31, the path to FI is a slow and steady one. No need to cut corners aka invest in speculative assets (in my mind).  
Truly value money to avoid large irresponsible allocations towards risky investments.
Never give up on the path to FI. Have a entry level job? No dramas, spend less than you earn and hit it hard! 

In the end, if we all remain discipline, we will all hit FI eventually. It is the silly decisions that delay the process like the ones discussed above. Despite the struggles and financial hits, just remember not to take life too seriously. At some point, you will move on from this world. 

You can allow that particular event to break you, complain about it, compare yourself to others, or you can be joyful, live in the present, and learn from your mistakes

 It is easier said than done I know, however, to the best of your ability, just remember to be grateful that you are alive. If you struggle with that, go visit an ICU ward to put some of the financial lessons into perspective. Or simply hug your son, mum, dad, girlfriend, wife, husband and so on :-)... 

Peace and Happy New Year! 


  1. Ah mate, that sux! I know what you mean about getting your old man to set you right on poorly thought out decisions, I wish I had used that myself sometimes too!

    1. At least we can both acknowledge in future to consult the wiser and more experienced when irrational investment schemes enter the mind ha ha.
      Cheers for the comment.

  2. At least we can both acknowledge in future to consult the wiser and more experienced when irrational investment schemes enter the mind ha ha.
    Cheers for the comment..