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The speaker shares a personal experience to explain the risks associated with time and materials contracts. After moving into a condo, they were concerned about water quality and decided to purchase a water filter advertised as easy to install. However, upon attempting installation, they discovered it required cutting a hole in the metal sink. Realizing this task was beyond their comfort level, they feared making mistakes that could lead to costly repairs. This situation illustrates the potential dangers of time and materials contracts, where unforeseen complications can arise, resulting in expenses that exceed initial expectations.