Here are what I consider three of the most egregious mistakes you can make with your finances. Buyer beware.

Going Long On Short-Term Money

Stocks, bonds, and real estate are long-term investments. If you need money in a few months, you have no business putting it into any of these. Use a savings or money market account instead. The price volatility of these investments dramatically outweighs any benefit you might see and you are likely to lose money in the short term. If investing short-term money in solid long-term investments that produce earnings, interest, and rents is just gambling, where does that put speculating into precious metals or cryptocurrencies? You might as well take next quarter’s estimated tax payment down to the roulette table.

Taking On Too Much Debt

The mathematical benefits of investing with leverage, especially fixed, long-term, low-interest-rate debt, cannot be denied. However, just because a little bit of something might be good does not mean that a lot of it is better. Given the higher than historical investment returns in all asset classes over the last decade and with interest rates less than the rate of inflation, it is a tempting time to invest with borrowed money. Some people do this by delaying the payoff of a mortgage or student loans, or they do it deliberately with cash-out refinances and margin loans. If you have borrowed half of the money you have invested and the investment drops 50% in value, your entire investment is wiped out. If you borrowed 80% of the money you have invested and the investment drops 50% in value, you may find yourself in front of a judge declaring bankruptcy. Be careful how much you borrow to invest.

Treating Play Assets Seriously

Many investors enjoy learning about their investments, doing research, and investing in the cutting edge of technology. Maybe they’re trying to time the market by picking individual stocks or speculating on which cryptocurrency the world will eventually adopt. I view my entire portfolio as serious money and do not do bother with alternative or speculative investments, but I agree it's fine to do this so long as you only do it with play money. Play money is 5% or less of your portfolio. If you want to put 5% of your portfolio into Bitcoin or Doge (though after the last crash you should be especially careful here), knock yourself out. But if you put 5% into each of those and another 20% into GameStop or whatever the latest meme stock is, history has shown that doing so does not usually end well.

What mistakes have you made in the pursuit of money?