We all have regrets — money regrets, that is. But, like all mistakes, we wouldn't be who — or where — we are today without them. In our "Money Fails" series, real people share how they bounced back from financial slip-ups, and what they learned along the way.  

Here, a freelance writer takes her friend's (sort of) investing advice. 

Molly and I were sitting at our favorite cafe, where we tend to grab a latte after we drop off our kids. As our conversation wandered from day care gossip to work drama, she mentioned how she and her husband had recently purchased Bitcoin and other cryptocurrency. Her husband, an investment analyst, was fascinated by its role in the future of investing. 

As I listened to Molly explain how their $5,000 investment had reached something like $65,000, I decided I needed to get on the cryptocurrency bandwagon. I had read articles about how the price of Bitcoin, as well as other currencies like Ethereum, Litecoin and Ripple, had undergone similarly incredible gains. I wanted in. 

As soon as we left the coffee shop, I opened my laptop. I'd recently completed a well paying project, which meant I had money in my account that wasn’t earmarked for bills, rent or day care tuition. My usual strategy was to take this cash and put 70% of it in an investment account, and use the rest for other spending. This time, I took $1,000 and bought 5% of a Bitcoin — a full coin was already valued north of $16,000. I took another $1,000 and divided it across cryptocurrencies. 

I immediately texted Molly. 

"I didn’t tell you to buy it," she texted back, followed by three ellipses. "Chris can’t believe you did that either. Do you even know what you’re doing?" 

I was annoyed by Molly’s lack of enthusiasm.  

When a Buy Goes Bust 

Turns out, Molly’s hesitance was right on the money. The next week, the cryptocurrency bubble burst, and my $1,000 of Bitcoin was worth a little more than $400. The other cryptocurrencies suffered similar losses. 

If I had taken that $2,000 and put it in my investing fund, assuming an 8% return, that $2,000 could be worth nearly $10,000 in 20 years. By investing in cryptocurrency, I have no way of knowing how much — if anything — my money will be worth down the road. Of course, these cryptocurrencies could all experience another bounce. But I’m (literally!) not betting my money on it. 

It was an expensive lesson, but one I could luckily afford: Don’t invest in what you don’t understand. 

I stretched my budget because I thought I needed to buy a “substantial” amount of cryptocurrency. But since I was just dipping my toe into the concept, I could have learned the same lessons by starting with $100 to track performance, do more research and make an informed decision if I wanted to buy more. 

The move did make me far more interested in the evolution of cryptocurrency and blockchain technology. It also made me more serious about “traditional” investing and encouraged me to be more active in selecting stocks for my portfolio. 

What to Consider Before Taking Financial Advice From a Friend 

Michelle Waymire, a certified financial advisor and owner of Young + Scrappy, shares her tips for keeping money and friendship separate.  

Consider the source. Even if your friend is an investment pro, that doesn’t mean they know your full financial picture or needs, Waymire says. That’s why it can be helpful to run ideas past a financial advisor. “A good financial advisor will give you their honest opinion on what types of investments might be suitable — or unsuitable — for you.” 

Don’t get caught up in someone else's success. Sure, your friend made a ton of money, but that doesn’t mean you will. Do your own research before making similar moves. "If you’re trying to guess whether Bitcoin will keep going up, it becomes too easy to look for stories that support that thesis, and ignore the rest," Waymire says. "When doing research, try and find an equal number of pro and con articles to review.” 

Know your risk tolerance. Cryptocurrencies, individual stocks and IPOs are different than a diversified investment portfolio, and it’s important to recognize that, Waymire says. “I tell clients to remember that these can be a gamble, and only invest money you can truly afford to potentially lose.” 

Get over your FOMO. Investing FOMO is a thing. Don't invest in something just because everyone else in your peer group is doing so. If you look at what you have and realize it's a solid investing strategy already, you can quiet the sense of urgency and truly assess the right move for you.