Margin Calls Destroyed My Early Success
I had set aside some money to invest into stocks. So opened an account with Internaxx bank and took out a cheap subscription under a special offer with the Porter Stansberry tipping sheet.
It was around 2010 and I did remarkably well, quickly building up a nice little portfolio and collecting dividends and watching as the values increased. What could go wrong? I had a phone call from some broker in the UK who specialised in pre IPO stocks and floatations so listened and the guy explained how using CFD’s you could leverage up your position and take control of a much bigger slice of the action and make a huge amount of money…….. I think some rich guy like Warren Buffet once said if you do not fully understand what you are investing in just give it a miss. So a new account was opened and I started off making my fortune.
Well no, I ended up with a black hole which had these things called margin calls which gobbled up cash like there was no tomorrow. I quickly realised that this was not working and bailed out pretty quickly but then got into leveraged trading on gold……… It was an interesting 6 months and taught me that I was not really understanding what was going on and I would never cut it as a trader so there was something positive at least.
Related Horror Stories
Leave the clowns at the circus
Put it this way, have you ever been to a circus? You have! Well, remember those people who made you laugh? Finance advisers can also do this. But they can also make you cry. Here’s a funny story—true as well.
We had a clown, visited us as they do for many years, charging us fees, etc. Also, fees that were not revealed to us, which we discovered later. Well, after 13 years of having him sponge off us, we realized he had F.C.ED us, big style. He said the investments were not taxable as they were a specific type of investment.
Well, we realized these were taxable when we questioned him, asking, "Why did you set these investments if they are taxable?" He ran away and left us with a tax bill of 13 years, plus interest.
People will say, "Why did you not make your own enquiries into what is taxable and what is not?" Well, the answer to that is because we were paying a professional.
Well, it cost us dearly, so make sure it doesn’t happen to you. Leave the clowns in the circus!
Churned and burned
Some time in the past, a “financial advisor” convinced me that I could make a lot of money trading commodities. Wrong! I figured out he was just “churning” me (putting me into and out of too many positions, just to earn the commission), and I closed the account, buy not until he lost 80% of my money in less than a year!
Just realized how much we are paying for financial advisor
We are invested with a big name financial investment company but have a good relationship with our financial advisor. Until today I never thought about how much it cost. The rate is 1.35%. I always thought that was 1.35% of the profit but apparently it’s the entire balance. Our rate of return last year was -8%. Yes that is negative.
Well on top of this we were charged our fee of $3600. I have no idea what to do. My husband and I both have IRAs a few stocks, a CD, 2 529s for our kids. How do I get this money out and how can I invest this. I had luck with vanguard in the past when I was single but had some tax issues once we got married that is when we went to the financial advisor. Edit: so the -8% is actually April 2022-April 2023. My actual rate for jan 2022-dec31 2022 was -23.4% plus they still charged the 1.35% so in actuality in 2022 I was down 24.75%!!!!! I feel like such an idiot.
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