Turning Financial Setbacks into Stepping Stones

We all make financial mistakes. They are often quite painful. More often than not, we get to part with our hard-earned money. Someone we trusted collected money from us and did not deliver the goods, or delivered inferior goods. Somebody borrows and does not pay back. A business deal goes sour due to bad partners or lack of due diligence on our part. We pass up a very good deal because of fear from past experiences. The list goes on and on.

We are bound to make mistakes both financial and otherwise, somewhere down the line. That is part of being human. Reminds me of a joke a read in someone’s office a while back…

To err is human, to forgive is not company policy.

No one is infallible. Mistakes are bound to happen. That is not the issue. The issue is what we do with it. Learn or blame. Blaming is taking the easy way out and learning no lessons. Learning is expensive. Part of the cost of learning life’s lessons is making mistakes. When you make mistakes, you learn, hopefully. A key lesson learned from a mistake is never to repeat it. This means that one wrong option has been ruled out. This makes the chances brighter of going for the right option if you don’t give up.

Napoleon Hill went to visit Thomas Edison while gathering materials for his all-time bestseller – Think and Grow Rich. He asked Edison what he would have done if all his attempts at inventing the light bulb failed. Edison simply told Napoleon that rather than waste time talking to him, he would have been back at his lab trying new options until he finally runs out of what does not work – then all that would be left is what works.

We tend to draw back when we make financial mistakes – once bitten, twice shy. We turn stepping into a stumbling block and stopping our advance. We become suspicious of everyone and everything and withdraw into our cocoons. We lose sight of the fact that those ahead of us faced the same challenges, learned the lessons, and moved on to success. We pull back and conclude that the only trustworthy person on the planet is us and the safest way to handle our money is either to spend it or leave it in the bank.

Adversity is the University of Life. You graduate to a higher class when you learn the lessons, pass the exams, and refuse to drop out of school. Valuable lessons learned from our mistakes are the ingredients required to press forward, having a better grasp of what does not work, and seeking what does as you advance steadily towards your goals. We need to learn the lesson, avoid a recurrence, and press on with more experience.

Financial mistakes are stepping stones to better financial literacy if you learn the lessons. If you have nothing to show for all your years of working, it means you are having challenges distinguishing between assets and liabilities. If you have an acrimonious parting with your business partner of many years, it means you have challenges putting proper exit strategies and agreements in place. If you loan money to a friend or relative to start a business and the money does not come back, it means you are not yet an experienced investor. Any time you experience any financial setback, don’t just feel sorry for yourself. Look for the lessons embedded in that experience, learn it thoroughly, and turn the setback into a stepping stone.