10 Worst Financial Mistakes of 2009

As the end of the year approaches, it’s good to look back and make sense of the mistakes made to ensure they are not repeated in 2010.

Here’s ten financial mistakes to avoid:

Not diversifying.  Seeing many stocks drop 50% or more in the recent financial upheaval left many with depleted retirement funds. Owning a diverse mixture of investments can help offset the bad years and hedge towards equal gains in good ones.

Not investing:  The only thing worse than seeing your retirement drop 50% is not having one at all.

Early Adoption:  New technologies can be great fun, but they can also be costly mistakes.  Just ask anyone that bought an HD-DVD player for $1,000.

Playing Penny Stocks:  Investing in Penny stocks can bring overnight gains of 100% or more.  More frequently than not it results in a total loss.

Investing in FOREX:  Foreign exchange markets are extremely risky.  One example, a 13% CD offered on the Icelandic Crona ended up costing investors $6,000 or more.

Not Fighting: Whether it be a wrongful tow, a denied insurance claim, or a simple overbilling standing up for yourself and fighting yields better returns than doing nothing.

Buying Cars (or anything) based on monthly expense:  The monthly payment should not be your primary method of determining your purchase.  Actual price should.

Buying things on credit:  If you cannot afford it, save until you can.  Buying things based on expected earnings or promotions often results in large credit card debt.

Not getting credit:  Credit scores require a credit history.  Failure to ever get a credit card can make getting a mortgage impossible.

Buying a Condo:  While condos can be great buys for many, those that bought just before the bust saw their value drop by as much as 90%, along with skyrocketing HOA fees.

photos: futureback credit: {Guerrilla Futures | Jason Tester}
dvd credit: hainteractive
car credit: Police_Mad_Liam
card credit: apesara