The most I ever paid for a piece of electronics was 40% of my life savings.
Because I was being cheap.
I invest in index funds, and keep track of how they’re moving by reading The Economist. It’s a once a week newspaper. I don’t check the prices online unless I’m ready to buy or sell. I don’t watch the evening news, nor read any other newspapers, nor do I talk much about the news with people, so without this weekly digest, I am practically in an information vacuum.
If I had been reading the news each week in October of 2008, as I usually do, I would have been able to see the burst of the Irish property bubble. Since I was invested in an Irish industrials fund, the news would have stood out.
Unfortunately, I had let my subscription to The Economist lapse because they were giving USB keys to new subscribers, and I wanted one. There was a four-week period when I didn’t read the news, and the next time my news magazine came, the bursting of the Irish property bubble was already history, and the flight of capital from Ireland and other markets I was well underway. I lost about 40% of my life savings, more if you count losses on what I didn’t sell.
A few days later the USB key came, but before I could get around to using it, DropBox was available, and I had no need for USB keys anymore.
Happy ending: I’ve since continued to invest, and earned my losses back and more.
I now have my subscription to The Economist on auto-renew. It costs ¥41 400 (over $400 USD). They have occasional 30% discount specials for new subscribers that I miss out on, but I don’t fret about it.
Another thing is that I’m not much swayed by “special deals” anymore. I used to look at prices of items in a restaurant and weigh them in my order. For example, if if cost extra to get soup with the lunch special, I wouldn’t order soup. But losing and earning 40% of my life savings shifts the decimal point over when making such valuations. The cost of the soup doesn’t make much of a difference in my finances. But this is true regardless of whether one is investing in general! Sometimes people try to get a “good deal,” to take advantage of “special offers,” spending energy well above and beyond the money that they are supposedly saving. Some people see money as their limited resource, but it’s not – time is. Forget about it. Spend a little more, worry a little less. Win some, lose some.