I Made These 4 Major Money Mistakes—and Still Made My First $1M in My 30s

A photo to accompany a story about money mistakes Belterz/Getty Images; Hunter Newton/Next Advisor
Bernadette Joy fell for bad advice and risky investments before she found wealth. “You have to keep moving on,” she writes.
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When people hear that I paid off $300,000 of debt in three years and built my first $1 million of net worth in my 30s, here are some of the reactions I get: 

I could never do that. 

It’s too late for me.

I’m in debt and have no savings. Becoming a millionaire is just a dream. 

As I delved into these conversations, a pattern emerged. It turns out most people assumed I was able to dramatically improve my finances because I’m smart, educated, and always good with money.

And that’s partially true! I do believe I’m smart and educated. My husband, AJ, and I have learned to be resourceful, vowing that we wouldn’t make the mistakes our immigrant Filipino parents made with money when they moved to the US. 

But that doesn’t mean we didn’t make plenty of our own mistakes along the way. In fact, we’ve made some of the biggest: like losing tens of thousands of dollars on a house, making bad investments that turned to $0, and incurring fees and penalties by pulling money out of our 401(k). 

Here’s the secret: you don’t have to be perfect to be wealthy. You just have to keep trying. In this new series of columns, which I’m calling Mess to Million, I’ll share the lessons I learned from a lifetime of money fails — and how I recovered to build the financial life of my dreams. Hopefully you can avoid some of these mistakes yourself. But even if you don’t, rest assured: your mess can still lead to millions. 

Pro Tip

This is the first of a 5-part column from Bernadette Joy. In “Mess to Million,” she’ll show that you don’t have to be perfect to get rich. Follow @nextadvisor on Instagram for updates and live Q&As with Bernadette.

Mistake No. 1: We Bought a Home That Turned Out To Be a Money Pit 

AJ bought his first home in 2009 in upstate New York, before we met. Both of us, in our 20s, thought he had done great buying a house so young. Being a homeowner means you’re a responsible adult, right? And owning a home is wiser than renting, right? 

Not in our case. When we got married in 2011, we were excited to start our life together in a new city. And this meant selling AJ’s home. 

It turned out to be a major financial burden. AJ hadn’t considered that he might move after only a few years. Because he bought his home with little money down, his mortgage payments during those first few years were mostly going toward interest and private mortgage insurance (PMI). He barely had any equity. On top of that, his seemingly great investment went down in value during the recession. We ended up paying $10,000 to sell the house, not including all the money we lost on interest and PMI.

Mistake No. 2: We Invested in Something We Didn’t Understand — And Lost It All

I was heavily into the startup tech scene in my city, and one day I met a CEO who said he was looking for seed funding for his business. I went to two meetings with him and without any due diligence, handed this guy a $5,000 check. In hindsight, if you asked me what that business actually did, I wouldn’t be able to tell you for sure. He sounded super confident and I didn’t bother to ask more questions. I was afraid he would think I wasn’t smart.

I totally fell for shiny object syndrome and was convinced I found the next Apple. Instead, the business went under within a few months and we never got our money back. We felt totally scammed. I still think about how I should have put that $5,000 into an IRA and how much it could have grown, instead of just trying to look cool to my tech friends.

Mistake No. 3: Gasp! We Withdrew From Our 401(k) With a Penalty When We Didn’t Have To

I still cringe when I think about this. In our pursuit of keeping with the Joneses, we took tens of thousands out of AJ’s 401(k) to buy an investment property that, in hindsight, we weren’t financially or emotionally mature enough to manage. Back then, we thought of our 401(k) as a black hole where money went, so we didn’t care about pulling money out of it, even though it came with a tax bill and a 10% early withdrawal penalty. Now that I know and understand how retirement plans work, I wouldn’t recommend doing that again for a discretionary purchase that I could have saved up for instead.

Mistake No. 4: I Was a Job Hopper — But I Went Down in Salary Instead of Up

Changing jobs, when done strategically, can seriously increase your income. But I did it haphazardly.

I hopped from job to job in my 20s, never having a job longer than three years, and some as short as six months. I was always looking for the grass to be greener, and moved around so much that I ended up having to take a pay cut because my job history was such a mess. At one point my salary was $100,000 and a few years later it was half that. The irony? My career was in HR and recruiting, and I knew better than to do this! This is what happens when you’re not clear on your career and financial goals. 

Just Because You Made Mistakes With Money, Doesn’t Mean That You Can’t Still Become a Millionaire!

In my opinion, learning how to manage money well is more like music than math. You have to practice an instrument for a while and move on even when you make mistakes if you eventually want to play a full song!

The key is you have to keep moving on. Now we know to not only repeat our parents’ mistakes, but not to make our own mistakes again. Instead we turned each of these mistakes into lessons that helped us build our first $1 million over the last six years.

Lesson No. 1: We Became Savvy Real Estate Buyers, and That Means a 20% Down Payment

In 2013 we moved to Charlotte, North Carolina, from New York City — lower home prices being the main reason. Less than a year after moving, we started looking for our first joint home. We were prequalified for at least $200,000 and as much as $400,000, but we didn’t have $40,000 in cash for a 20% down payment

What we did was unorthodox to our friends and family. Instead of buying the larger, dreamier 4-bedroom house the bank said we could afford, we bought a smaller 2-bedroom townhouse for half the price. Why? Because we could put 20% down with a 10-year mortgage at that price point. 

Was this $101,000 home our perfect, forever home? Of course not. But it was good enough for what we needed, we could afford a 20% down payment of $20,000, and it allowed us to focus on saving for other goals like graduate school and retirement. Crucially, we knew we could still pay the mortgage even if one of us lost our jobs.

With the memory of that first bad buy, we’ve since paid off three homes, each time accumulating more equity from the last home, and currently live mortgage free. By selling our last debt-free home, we were able to re-invest over $400,000 last year into other investments from the full equity we received after diligently paying the home off. 

Lesson No. 2: We Focused on Paying Down Student Loans Before Investing

Since that bad startup investment, I vowed never again would I invest my hard-earned money into something I don’t fully understand. In order to remove the fear of losing money again, AJ and I decided to work on paying down my $72,000 of student loans first. 

Many experts tell you not to wait to pay off debt before you invest. But for me, focusing on paying down my student loans gave me the confidence I would need to make riskier decisions later on. The numbers worked out pretty well, too. 

After I paid off my loans in full, I had the mental space and financial margin to learn new investment strategies. Instead of holding onto those student loans for many years, I now have that money to invest in traditional things like index funds and ETFs. AJ has taken an interest in cryptocurrency, blockchain and even bought his first NFT this year. And we both still love real estate. 

Lesson No. 3: We Now Max Out Our Retirement Accounts Every Year

We’ve committed to FIRE (financial independence, relax every day) and realized if we ever want to retire, let alone early, becoming millionaires would not be out of vanity, but out of necessity. When calculating how much we needed to retire, at a modest lifestyle of $3,600 per month, we would need $1,080,000 in investments to retire.

That’s when we looked at the purpose of tax-advantaged retirement accounts to fund our FIRE goal. This is the third year we’re on track to max out our retirement plans including a 401k ($20,500 each) and our Individual Retirement Accounts ($6,000 each). That’s $53,000 in total that we’re putting into retirement, whereas in the past we at best put up to AJ’s company match with no IRA contributions. 

Overcoming Major Money Mistakes Grew My Self-Worth To Match My Net Worth, and Now I Teach Others

When I got my highest-paying corporate job, I realized quickly that I couldn’t see myself in the role long-term. So after a short nine months, I hired my replacement within the company and left. Eventually I started my business, an education company that helps to close the wealth gap for women and communities of color by training students to crush their money goals and grow their worth.

In the past, I assumed that if I liked my job, I would have to take a pay cut, and I was afraid to negotiate. Overcoming these major money mistakes gave me confidence to at least try.

Several years later, the employee I hired in my place is still in that role. And now I’m making twice as much (doing work I love) as I ever did as a salaried employee. Imagine that. The same person who’s made so many mistakes with money now gets paid (and paid well) to teach others about money! 

I’ve often been told that what makes me a great teacher is because my students know I haven’t been perfect, and so they can be imperfect and still crush their money goals.

Bottom Line

Six years ago, when I was staring down $300,000 of debt with no clear plan, I definitely did not predict that I’d be where I am financially today. But beating myself up for past financial failures wasn’t going to fuel my future. 

Here are 4 key takeaways that I hope can help you believe in your million dollar goals:

  1. Don’t let a bad buy scare you from buying again — whether it’s a home, an investment, or even an everyday purchase. Take the experience that went wrong last time and try again because you’re smarter than you were before.
  2. Consider if paying off some debt will help you become more confident investing and taking more risk. 
  3. Do proper due diligence on any investment you make. Spend the time or energy to feel like you’re an expert at it enough to explain your investment to a friend.
  4. Start planning for retirement now, even if those numbers feel big or retirement feels far away. Knowing your FIRE numbers can help motivate you to become a long-term investor.

If you’ve made big blunders before, it’s never too late to recover from them! The beauty about money is that even when you lose it, there’s plenty more to be made.

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