The Internet loves a good financial fiasco, and 2014 was a banner year for stories of people winning it all, losing even more – and sometimes fabricating their entire fortunes. Luckily for us, there’s definitely some lessons to be learned from the year’s most retweet-worthy financial stories. Here are the top fails of 2014, and some advice on how to avoid them next year.
NHL player Jack Johnson learned the hard way that you need to be careful who you put in charge of your finances. Johnson’s parents were part of the team managing his fortune, with over $18 million earned in nine years. Thanks to mom and dad’s mismanagement (and a whole host of luxury purchases) Johnson is now between $10 and $15 million in debt. Johnson trusted that his money was being handled properly, not realizing that some of those luxury purchases went into collections and resulted in three lawsuits. His current paycheques, amounting to $5 million per season, are garnished so heavily he has almost no take-home income.
The lesson: Always be aware of where your money is going, and find a professional to manage your accounts. Make sure you’re involved with your monthly bills, investments, and income, and hire a professional to manage your finances, not someone who shares a branch on the family tree.
In this story, some Minnesotan #humblebraggers posted selfies with their paycheques and bank details. In the end 24 would-be thieves were charged with conspiracy to cash counterfeit cheques, after they used the details in those social media photos to open bank accounts. Though they were caught, they made $2 million before the jig was up.
The lession: Don’t post your personal financial details online, ever, ever, under any circumstances. If you just got a raise, and feel the need to tweet, go treat yourself and post your haul from the mall instead. (Within moderation, of course)
Late in 2014, this story went super-viral before completely collapsing within days. The teen in question, Mohammad Islam, was interviewed by a New York media outlet and claimed that trading stocks on his lunch breaks was allowing him to live an incredibly lavish lifestyle, including owning a brand-new BMW he’s not old enough to drive. Only two days later, his claims were revealed to be fabricated. His parents reportedly want to disown him, and his reputation – as well as the reputation of the journalist who reported on his story – is permanently dented.
The lession: Don’t lie about your financial situation – it only ends in trouble. To live a lifestyle within your means, it’s essential to be honest about what you’re making – and for heaven sakes, don’t put it on the Internet!
In this story, a Canadian couple took a trip to the States nine weeks before their baby’s due date. The woman went into labour in the States, and had her baby there on December 10 of last year. Despite being assured by her Blue Cross insurance broker that she was covered, Blue Cross denied the claim – and now the family’s stuck with a $1 million bill. Yikes.
The lession: Do your due diligence on insurance. Double check your insurance, whether it’s travel, home, car, life or otherwise. Being clear on what your plan covers, and what it won’t, will keep you prepared for any situation, no matter how unpredictable. This advice is applicable for any contract, including your credit card agreement.
It’s easy to forget WiFi isn’t free, but someone should have reminded this unfortunate traveller. After buying a $30 Wifi access package on a Singapore Airline flight, he landed and was greeted by a $1,000+ bill for extra data usage. The worst part? The airline says their process is completely transparent, so this unlucky traveller is still on the hook since the agreement did say usage above and behind his 30MB package would incur extra charges.
The lession: This story illustrates how important it is to read the fine print. Whether it’s service charges on a product, or the terms of an investment, contract or credit card, the devil’s in the details and by skipping five minutes of reading, you might set yourself up for huge liabilities down the line.
In our personal favourite financial horror story from 2014 – because really, Get Rich or Die Tryin’ (Sorry, we had to) – we watch an Ohio couple live the high life by stealing personal information from Carmelo Anthony, 50 Cent and five other high rollers in the States. Most purchases were made online or by phone – and all of the information they used to make the purchases was gained from details freely available on the Internet, in addition to stolen credit card numbers.
The lession: Pay attention to your credit card statements. There are a number of lessons to be learned here, but the most important? Keep your credit card info under wraps, and check every statement you get. “Dozens” of Vespas is a pretty big red flag – but you have to watch for it!
We hope you’ll pay attention to these lessons so we can keep you off the list next year. If you’re thinking of buying a home or getting a new credit card in 2015 check out RateHub for the most up-to-date mortgage rates, and the most comprehensive credit card comparison tools. And if you’re looking to make over your finances in 2015, the team at Consolidated Credit Counseling Services of Canada are here to help make your debt more manageable. Happy New Year!