5 financial fails that I encountered recently

Although I am a self-declared personal finance expert here on Tawcan.com, I tend to avoid talking about personal finance unless I know you well (must be the polite Canadian in me). I typically listen in on discussions and see where the discussions end up going. Recently I have encountered 5 financial fails that simply don’t make any sense to me. They resulted in me scratching my head wondering what the heck. Perhaps I really should be more vocal when people talk about personal finance and provide a tip or two…


#1 Apps and in-game purchases.

During a conversation someone stated that he buys apps and makes in-game purchases at $0.99 almost every other day. When we started talking about saving for retirement this person kept saying that he didn’t have any money to put toward retirement savings. Not even $5 each week.



#2 Gadget reviews and investment tips

Are you one of these people that spend hours and hours reading reviews on a gadget before pulling the buy trigger? I certainly am one of these people.

How often do you invest money in a stock or mutual fund without doing any research? How often do you invest money in a stock or mutual fund because someone gave you a hot tip?

So many people invest in a stock without reading the quarterly and annual financial results or researching how the company performed over the last 3 or 5 years. They also fail to evaluate company’s future growth. Some people invest in mutual funds without even taking a look at the MER fees. They invest in these mutual funds simply because the funds have been performing better than the market the past year. Unfortunately, past performance doesn’t guarantee future performance.

A recent conversation goes something along the line that a person spent hours on comparing between Google Pixel XL and Apple iPhone 7 Plus before making a purchase decision. The same person then went on saying he just purchased $7,000 worth of Twitter stock in his RRSP because “everyone uses Twitter” and his gut feeling tells him that Twitter stock price will only go up after down from its all time high of over $60. I kept my mouth shut during this conversation…

Spending hours and hours when spending a few hundred of dollars but no research when buying an investment for your retirement?



#3 Buy a car with 0% finance

Can you believe that some people believe that buying a car on a 84 month 0% financing term with $5,000 down is an excellent deal? Dude & dudette, that’s a 7 year term! Are you going to keep the car for more than 7 years? Oh wait, you like to change your car every 3 years and trade in your year with a 4 year lease term left? Boy oh boy, you’ll be surprised what the numbers look like…

What’s doesn’t make sense is when these people start ridiculing someone for buying a car using cash. Whatever happen to the tenet, “If you can’t pay for something in cash, you can’t afford it?”



#4 Drive extra distance to save on gas

I drive to the states to fill up my car about every 2 weeks. According to my calculation, the saving is about $0.30 per liter, which corresponds to about $33 saving per month. The total driving distance is about 8 km per trip. At about 7 liter/100km fuel consumption (about 40 MPG), the monthly cross border trips cost me about $0.34 in total. So it makes a lot of sense to drive a little extra distance to save money.

BUT some people drive extra distance just to save as little as $0.05 per liter on gas. When calculate the fuel cost on the extra distance, it’s higher than the actual saving. That totally doesn’t make any sense at all.



#5 Flying extra distance to earn frequent miles

On our return from Denmark we were told that we were being rerouted to fly through Beijing from Frankfurt to come back to Vancouver. We thought it was a ridiculous idea. A few readers joked about all the extra frequent miles we would be able to accumulate if we were to do that.

As funny is it sounds, I actually encountered a few people that decided to fly extra distance just to earn frequent miles. Instead of a quick 3 hour trip with a non Star Alliance airline, one person decided to fly with a Star Alliance airline to sit in a connection airport for 6 hours, making the entire trip to about 10 hours. This person did all this to get some Start Alliance frequent miles. Similarly, another person decided that it was a great idea to make two separate Asian trips from North America in back to back weeks rather than simply staying in Asia for the weekend. This person decided to fly extra 10+ hours each way just so he could get some extra frequent miles.

Didn’t you know that time is money? Sorry to break your bubble, I’m pretty sure those extra frequent miles don’t worth as much as your time.

Unfortunately, not considering how much your time worth it one of the biggest financial failures that many people do on a regular basis.



Dear readers, have you encountered any financial failures recently that you want to share?




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25 thoughts on “5 financial fails that I encountered recently”

  1. I hear #1 and #2 a lot from people around the office. Always bemoaning that they don’t have enough to save for retirement, and then in the same breath talking about the new car/phone/haircut/app/gadget that they just got. Another one is talking about no extra money and then talking about all of the monthly subscriptions they have and need to cancel due to non-use. Palm slap to my forehead – but I just sit and listen and nod my head.

    I also ehar about #2 a lot. “I really need to learn more about stocks and investing – omg did you hear about this new tablet?! It’s supposed to be super awesome! I read all about it this weekend and can’t wait to get one!” Yet the same person doesn’t have time to read about stocks or investing. However, that person is more like me, because except for blogs and some other one offs I just don’t get enthused about the prospect of reading about financial related things – mostly. I do it, but it sometimes feels more like homework than an enjoyable learning experience, lol. Maybe that’s the reason more people will research phones rather than stocks?

  2. Sorry but there is nothing wrong with financing a car at 0% interest for 7 years if I plan on driving the car for 7 years. Why would I pay cash if its ZERO INTEREST??

  3. If you’re doing it just for points it doesn’t make sense. But. Credit card points don’t count towards elite frequent flyer status. Elite status gets you business class seat upgrades, airport lounge access, priority luggage handling and a host of other things that make your trips far more bearable. If a couple extra days of misery will tip me over the cutoff for experiencing much less misery on frequent work trips it is absolutely worth it.

      • Doing it once or twice is absolutely worth it if it ticks you over into the next level. That saves you 30-45 minutes on each future check-in, 20 minutes on each luggage pick-up, priority booking for flights, and a far, far, far more comfortable ride for each 9 hour flight to London.

  4. #5 I can’t believe people are still doing “mileage runs.” They sound unbearable to me. Especially considering how many credit cards are out there for Americans to rack up bonus miles much more easily. Although I suppose these people were Canadian 🙂

  5. The biggest financial fail I have seen over and over is people debating whether they should pay their credit card or invest the money. Some people split it 50/50. Credit cards charge 18% interest, it makes no sense to invest in something that will give you 5 to 10% gains when you have debt at 18% interest!

  6. One thing that always gets me is being at the Supermarket to see a $3 perishable item advertised as “Buy 2 for $5”. Typically I used to buy the ‘discount’ thinking I was saving money, only to have one sit in the fridge and get old before I’d used the other…so I actually just throw $2 into the bin! Crazy!

  7. You live 4kms from the border? Your car really uses 7L/100kms (have you calculated it yourself? My car was sold to me with this number, but when I calculate it myself it is more like 9L/100km with regular tires, 13L/100km with winter tires). Lucky you.

    A typical person in Vancouver lives 35kms from the border and about 47 minutes each way. That is a round trip would be 70kms and 1.5 hours. The average fuel economy in 2008 for new cars, light trucks and SUVs in the United States was 9L/100km. Hence for a typical person a trip to the US to ‘gas up’ would cost:

    70kms*9/10=6.3L, at 1CAD$/L in the US, this is $6.3.

    Assuming that the savings are $0.3 per litter, the maximum savings for a 60L car would be $18 (60L*$0.3)-$6 (cost of the trip) =$12 (assuming that the car arrives with an empty tank at the border).

    So to save $12 you need to spend 1.5 hours. That is ignoring wear and tear in the car and potential delays because of traffic. Following your point #5, time is money, and for most people gassing up in the US makes no sense.

    • Yup I live 4 km from the border so it makes a lot of sense to drive down there and get gas, especially when I have Nexus card. And yes 7 L/100kms is based on my calculation. Best I’ve done is 5.4L/100kms.

  8. “#4 Drive extra distance to save on gas” Oh, man…this one gets to me. Even if the trip does save some money, is it worth the time? I will see people spending an extra 20 minutes to drive across town and back when they are only saving a buck or two when you actually stop and do the math.

  9. Oh man, I make money fails all the damn time! One that still haunts me is the $5 crappy pillow I bought on a whim in January. It is the WORST throw pillow ever but I can’t bring myself to toss it. Ugh.

  10. Great list Bob…but I’m really curious about #4.

    Isn’t there a gigantic line at the border? I would think you’d spend more than $0.34 in gas with the car just waiting in the customs line.

    We go to Vancouver occasionally and the border is always like a half-an-hour or more of waiting around.

    • Not if you have Nexus which costs $50 for 5 years. The other day the border wait time was listed as 20 minutes but there was no line for the Nexus lanes. I zipped right through. The customs officer just waved me right through without asking a question.


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