We all have them: the ghosts in our financial closet that haunt us months, years, decades after we thought we’d put them behind us. For some of us, it’s a regrettable investment decision that left you questioning your sanity; for others, it’s a lack of budgeting willpower that forces us to our knees, begging for monetary mercy.

My dumbest investment decision ever still follow me around, like Jacob Marley’s ghost stalking Ebeneezer Scrooge on Christmas Eve. Sometimes, I wonder how different my future would have been if I hadn’t been so blindly naive to the world around me…

The Ghost of Finances Past

It was 2005. I was 23, newly married, and carrying a newly-minted master’s degree in my proverbial pocket. As my new husband and I started our job searches, the onus quickly landed on my shoulders; my husband’s dreams of playing professional football had recently been squashed by a devastating knee injury that landed him on crutches for several weeks and on the bench instead of on the field. I began applying to every journalism job I could find – an assignment desk job in Eugene, Oregon; an overnight producer gig in Portland, Maine; a line producer position in Tallahassee, Florida.

I was shocked by the offers I received. $18,000 a year for the job in Maine; $20,000 annually for the Oregon job. I crunched the numbers, comparing the offered salary against the cost-of-living for the area. I didn’t see how we could make it work, especially with my husband still laid up with three shredded knee ligaments.

Back then, the only factor in my career decision was my annual salary. Despite being brought up by a financial wizard – my father – I was still painfully naive when it came to all the nuanced benefits of full-time employment. Sure, I knew how to avoid racking up tens of thousands of dollars in debt, how to set up a monthly budget, how to shop for deals and steals – but I didn’t have a clue about things like health insurance or a matching 401(k). So as I leapt into the final round of contract negotiations with my top two potential employers – a TV station in Macon, Georgia, and the station in Tallahassee, Florida – I asked one and only one question:

“How much will you pay me?”

The answer from the Macon station blew me away: $21,000. I was floored. After all, it was a full thousand a year over the offer from the Oregon station, which would have involved moving cross country and living an area with a decidedly higher cost of living. When the final offer from the Florida station came in, I was underwhelmed, to say the least. At $20,500 a year, it was only $500 less than the Macon station had offered.

I should have listened more carefully to what the station’s news director said after he laid out the salary offer; maybe if I had, I wouldn’t have made a decision that’s haunted my investment portfolio ever since. The economy was booming, TV jobs were plentiful, and the industry was raking in money as it never had before. For these reasons, the station was able to offer me a matching 401(k). In fact, the station would match – dollar for dollar – all my 401(k) contributions up to a whopping 10 percent of my salary. Now, granted, the station was only offering me an annual salary of $20,500, making the 10 percent contribution cap a meager $2,050. However, if I’d been able to squeeze that $2,050 out of my paychecks, I’d be rewarded with an additional $2,050 from my employer – taking my true annual salary up to $22,550 – a full $1,550 higher than the Georgia station was offering.

My Decision

You know where this was going – after all, the title of this article is my dumbest investment decision, not my smartest. Even though the Macon station offered me nothing in terms of a matching 401(k), I was lured in by the extra $500 a year in my pocket and accepted. I only stayed at the station for nine months before an industry headhunter called me out of the blue one day about a job in my dream state – North Carolina – and lured me away. But the mistake I made by passing up those amazing 401(k) contributions is one from which I’m still learning tough lessons.

The Impact On My Investment Portfolio

During those nine months in Macon, I didn’t put a single cent into my retirement accounts. Even after my husband began working as a sheriff’s deputy – a field in which he still works – we still didn’t bother thinking about the future. On one hand, we were naive; on the other hand, we weren’t that much unlike most young professionals just out of school. We were living for the present.

Over the years, I’ve wondered exactly how much my decision not to go with the company that offered me a matching 401(k) and my tandem decision not to make any 401(k) contributions at all that year. It took me until last week to finally run the numbers using an investment calculator – and I wish I hadn’t.

  • Pretax, I would have made $1708 a month at the Florida job
  • To max out the matching 401(k) of 10 percent, I would have had to put in $170.80 a month into my employer-sponsored account
  • Even if I only stayed at the job nine months – the length of time I ultimately spent at the Macon station – I would have made a total of $1,537.50 in 401(k) contributions
  • The Florida station would have matched that, bringing my total contributions to $3,075

The investment calculator – I like the one on Dave Ramsey’s website (even though I don’t like just about anything else he has to say) – showed that even if I never contributed another dime to that account, it would have been worth close to $27,000 by the time my husband and I reached age 59 1/2, assuming a modest six percent return. Take the estimated return up to eight percent, and my nine months of matching contributions would have turned into nearly $55,000 by my 60th birthday.

Instead, I opted for the quick money – $500 extra that, judging by my lifestyle at the time, probably went to cheap Mexican food and platform espadrilles.

The Lesson Learned

It didn’t take me long to realize my mistake. During contract negotiations for my second job, I made sure a matching 401(k) was part of my compensation package – although it wasn’t nearly as lucrative as what the station in Tallahassee had offered me just a year earlier.

The take home lesson here?

First, it’s never too early to invest. Even if I’d only put in three percent of my annual salary, I’d still have returned thousands of dollars on my original investment by the time I retired. The second lesson is even simpler: if your company offers you a matching 401(k), take advantage of it. It’s free money – and who in their right mind is going to walk away from that?

Reader, what’s your dumbest investment decision ever?

Libby Balke

Libby Balke