I am financially illiterate and I made a series of bad financial decisions that made me effectively lose more than half a million dollars (40% of my current net worth) over the past few years, as follows:
1. Was employed with Microsoft and sold almost half of my Microsoft stock at $80/share, put them in the bank.
2. Joined Google and sold half of my stocks at ~$1600/share
3. Put the money in bad investments (post IPO companies that have spiraled down) where it lost much.
4. Was scared of a market crash that I kept half of my 401k in bonds.
5. Missed out on buying a house because I thought that the housing market was overpriced ($300k estimated loss).
Now I feel the urge to gamble with my money to compensate by making risky bets on options just to regain that loss. This is taking a toll on my emotional well being.
I am not the kind of a person who easily accepts a loss and I am naturally very stubborn but thinking of it rationally I may make things much worse by losing more money.
I wish I was just a passive investor, just held my stocks and never invested in any other stocks and bought a decent house. Have I done that I would be $550k ahead.
Anyone in the same situation? Any advice?
Net worth: $1.2M
Estimated loss: $550k
TC: $530k.
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comments
Don’t invest anything until you have properly understood what investing is.
Start at https://www.bogleheads.org/wiki/Getting_started
Don’t try to hit home runs, investing is tortoise vs hare. Be a tortoise.
That’s a loss by your definition.
You've made some not so great decisions, but you can recognize they're not great, so you're doing a lot better than most of humanity already.
Don't try to time the market. Don't invest in companies unless you're perfectly fine with losing the money. The best investors are the ones that use other people's money on the risky investments.
Stick it in an major index fund and call it a day. You'd be extremely hard pressed to make a better financial decision at this point.