Investing money with a shady guy
Your money will buy him a helicopter -- which he will land in his yard -- and copious amounts of drugs. Because he's the kind of person who sees The Wolf of Wall Street as an inspirational tale, not a cautionary one.
Not knowing the tax implications of your investments
We've already established that investing in your 401k and your Roth IRA is a smart investment move, but it's important to know how your money is taxed in each account. If you are storing away a ton of money in your 401k, know that if you ever need to withdraw that cash before you retire, you'll be charged a 10% penalty, plus taxes on any gains -- to be fair, you'd be charged that even when you withdraw your money when you retire, too.
So if you contribute the max amount of $5,500 per year, and in five years it grows to $7,500, if you need the money, you can take out the original $5,500 without any penalty. “It’s like a backup, backup emergency fund for my clients,” she says. “That’s why I encourage people to put money towards the Roth IRA.”
Investing in crappy friends
Time is money, and investing time in certain friends could be costing you quite a bit. Especially if every time you go out with certain friends on the weekend, you spend a ton of money on dinner, drinks, or tickets to see Star Wars for six or seven shows because JJ isn't going to let us down! But yeah, with all those expenses, it's no wonder you're broke. Find friends that'll do free or low-cost stuff with you, and you'll have more money to invest.