I became a schoolboy bookmaker
Andrew Hill, senior business writer
My mother is a keen follower of horseracing and still enjoys a modest flutter. As a child, Saturday afternoons were often spent in front of the television cheering on the horses she had backed.
Visits to race meetings and familiarity with bookies’ odds and betting habits instilled a false confidence. When I was 13, I organised a book on an end-of-year school table tennis tournament, offering odds on the contestants to fellow pupils, in return for pocket-money stakes.
It turns out there is more to bookmaking than self-confidence and knowledge of the difference between odds-on and odds-against. Much more.
I must have confessed to my avuncular headmaster that I was in over my head because he closed down my gambling den and cancelled all bets before I bankrupted myself. I don’t recall any adverse consequences, except some gentle mockery.
These days, I dare say I might have faced suspension, or even expulsion, and you’d find me at Haydock Park on a wet December afternoon, offering odds on the handicap hurdle, instead of peddling business and management advice in the pages of the FT.
Bubble bias
Gillian Tett, FT columnist and member of the editorial board.
My worst financial mistake arose because of arrogance, complacency and a failure to remember my past training as an anthropologist. It started back in early 2016 when the overwhelming proportion of my savings were denominated in sterling, because I was British.
However, I had also lived in the US for several years, had expenses in dollars and expected to stay for a while. Thus, when the Brexit vote loomed, I vaguely wondered if should diversify — but failed to do so since I assumed that it was impossible for the British public to vote for it.
Why? I had become blinkered, since I was spending much of my time in a bubble of people who — like me — had an urban, globalist, economics-based view. I assumed everyone would agree that leaving the EU would be against our rational self interest.
This tunnel vision was counter to everything that I had once championed as an anthropologist. That is a discipline which teaches you to immerse yourself in the world view of people who seem alien to you, to understand cognitive difference — with respect. If only I had remembered to cultivate this, I would have recognised the anger among much of the British public — and diversified. I didn’t — and suffered a big hit when sterling slumped in value against the dollar following the vote.
The lessons? Get out of your bubble. Cultivate more imagination about the shocks that could occur. Above all else — hedge, hedge and hedge, even if you are utterly confident about what voters could or should do.
I fell for a beautiful painting
Stuart Kirk, FT Money columnist
After nearly two score years in finance, half as a managing director, the fact I still earn a living suggests a litany of investment balls-ups. Many of these I’ve mentioned in my Skin in the Game column — from deciding to focus on Japanese equities in the mid-1990s (rather than something called the internet) to turning down a 3,000 sq ft condo in Miami post-financial crisis for 80 grand.
By miles the biggest investment boo-boo I made, however, was buying a painting called “Australian Sun, English Moon”, by an artist named Rhea O’Neill. On display at a show in New York a dozen years ago, it was love at first sight. The gallerist who delivered it to my apartment downtown is now my ex-wife.
Somehow, I managed to keep the work. But in the end, it cost me almost all of my accumulated assets as well as an eye-popping monthly liability stream. Financially ruinous, sure. But when I cuddle my beautiful girls, or gaze at the canvas, I have no regrets.
The picturesque cottage on the Pembrokeshire coast
Patrick Jenkins, FT deputy editor
Much as it pains me to admit it to my (far more rational) wife, my biggest financial mistake was probably buying a holiday home. It means our family’s assets are now overwhelmingly exposed to the vagaries of the UK property market.
The picturesque cottage on the Pembrokeshire coast was supposed to be a practical bolt hole for us, and a way to generate a steady income — we use the place ourselves for three or four weeks a year, but let it out for the rest of the time. In one sense, this does make for an attractive arrangement — we love the location of the house and get staycation breaks without the cost and hassle of going abroad. But in pure financial terms, mixing business and pleasure is not a good idea.
Our refurbishment was fancier and our furnishings plusher than a hard-nosed landlord would probably have plumped for. Repairing damage and breakages can get very expensive. The most annoying to date was a guest who didn’t read the (admittedly absurdly complicated) instructions for opening the bifold doors, ended up jamming them back together and bending the main hinge in the process. It took months to find someone who could fix them, he had to travel from 250 miles away, and the bill came to £900.
After 13 years of ownership, during which we’ve made steady improvements, we’ve just completed a painfully pricey overhaul (sandblasting and sealing our underpinning steel beams, fixing a penetrating damp issue, new carpets, etc). This has wiped out more than a year’s profit from the house. In other words a gross yield of about 5 per cent has gone below zero. A financial mistake, yes. Still a delightful holiday home.
I was an overcautious investor
Katie Martin, markets columnist
I come from fairly hardscrabble roots, so I have always understood the value of money and never take it for granted, to the point of being terrified of losing it. As soon as I was able, I started paying into a company pension, and I’m glad of that every day.
I’ve gone wrong in two main ways. One is that I’ve been too cautious. Over the years I have squirrelled away any spare bits of money in cash — nice and safe but dull as ditch water and not exactly a source of high returns (though it served me quite well in 2022 when stocks and bonds took a huge knock). Even more stupidly, until recently I failed to do that inside a tax-free Isa.
This year I decided to put that right. I’ve kept a decent chunk of money in cash for emergencies, but I’ve also put some to work in stocks Isas, which are doing quite nicely thanks very much. Yes, I am aware that as someone who has written about markets for decades, this is somewhat tardy, but my fear of losing money has been overwhelming and I’m more aware than most that even the experts don’t really know what stock markets are going to do next.
My other big mistake is that I have indulged my teenage kids too much and failed to make them work for their money. They have heard my lectures about the hours I spent waitressing and working behind bars at their age but, fundamentally, I am a walking, talking cash machine. I fear the harsh reality of work will hit them hard in the coming years.
I didn’t get fully back into the market for years, missing huge gains
Robert Armstrong, US financial commentator
My biggest financial blunder resulted directly from one of my best financial decisions — destroying all the gains from it, and then some.
Back in the great financial crisis, through the usual combination of luck and intelligence, I managed radically to reduce my exposure to stocks before the worst of the market crash took hold. Predictably, this led me to overrate my intelligence and underrate my luck.
Even after the market bottomed and had started to rise again, I thought it was too expensive and it was not safe to get back into the water. Of course, the more the market rose, the more sure I was we were seeing an echo bubble form. Idiot! The result was that I didn’t get fully back into the market for years, missing huge gains. If I had learned a few years earlier that fear is often a buy signal, I would be a richer man today.
Not taking my first job’s company pension might have cost me £62,000
Claer Barrett, FT consumer editor
My biggest financial regret is not opting to pay into the company pension scheme in my first “proper” job after graduating from university.
Back in the early 2000s, we didn’t have automatic enrolment — workers actively had to decide to opt into a workplace pension. That meant understanding the benefits: “free money” from your employer, tax relief on contributions and tax-free investment growth.
However, I mistakenly fixated on the downsides. I would have to give up a percentage of my take-home pay on top of student loan repayments at a time when I was trying to save for a house deposit. For a worker in her 20s, these felt far more pressing priorities than a pension.
I was on a fairly low salary, but I still reckon I could have amassed £15,000 from the combined total of my contributions and the company’s matched contributions over those years.
Had I invested this in a cheap fund tracking the US’s S&P 500 index, 17 years later that pot could be worth nearly £62,000 (based on average annual returns of 8.7 per cent over the past 20 years, but not accounting for inflation or investment fees).
Seeing as I don’t intend to retire any time soon, that money could have nearly 20 more years to compound away. Assuming (optimistically) that the S&P maintains the same average growth rate, calculations suggest it could grow to over £327,000. Sheesh.
I bought a jalopy
Nathan Brooker, FT Money editor
In 2007, aged about 21, I bought a 2002 Citroën Saxo Forte in mid-claret for £2,000 — and, boy, did the guy who sold it to me see me coming.
From the day I bought it, things started to go wrong. The electrics were iffy, the CD player would skip whenever you went over a speed bump, and if you had someone weighing more than about eight stone in the front passenger seat, the wheel would grind against the wheel arch when you took a corner. I had problems with the tracking and the exhaust — it fell off on the M4 — but mostly it was a horribly plasticky, flimsy thing to drive.
And for this, I’d given up my inherited Vauxhall Nova. Built in 1985, it was a tiny white tank of a car, with four-forward gears and a manual choke. My uncle, a mechanic, serviced it for me once and, in an expert piece of ribbing, it came back with a pink stripe around the outside. It may only have had an AM radio, and did 0-60 in 24 seconds, but it had a lot of grit and charm.
We scrapped the Saxo in 2009. What did it teach me? Newer and sleeker is no match for character. And in a transaction, asymmetric information can be a costly business.
I was scammed on holiday
Simon Edelsten, FT Money columnist
Like many students I had a madcap travel plan which taught me a good deal. I knew little about Egypt, which seemed a good enough reason to head there. I had arranged a rendezvous with my friend Eleanor in Aswan and from there we hired a felucca to sail to Luxor. We entrusted a chunk of our holiday money to the felucca owner to buy provisions. Suffice it to say these failed to appear and one felucca looks much like another when you are trying to chase down missing cash.
In this way I had early experience of “permanent loss of capital”. As a fund manager this builds into you an aversion to stocks which might go bust. By and large, over the long run, avoiding busts leads to decent investment returns.
I returned to London with precisely no cash, rather skinny, a deep tan and memories of charitable Egyptians.
Simon Edelsten is chair of the investment committee at Goshawk Asset Management
When I first started work, I wanted a really flash TV
James Max, Rich People’s Problems columnist
I want never gets. Except when you use debt. Because whatever you want you can have, on credit.
It may work well for a mortgage, where the amount is so large and the benefit for your life may be significant — and, if prices are rising faster than the rate of your interest payments, a leveraged return can be impressive.
But not on a telly. When I first started work, I wanted a really flash television, so off I went with an empty bank account yet full of confidence. Interest rates were at a rather high 10 per cent at the time, but consumer rates were well into the 20s.
But who cares when you can have the telly you want right now?
Six months into the 24-month contract that I couldn’t break, I realised that if I had simply waited and saved the money instead, I’d have been able to buy the kit outright — plus, I’d not have any debt and my credit rating wouldn’t be wrecked. And by that time, the telly I bought was already out of date.
Lesson learnt. Save before you spend.
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