#21 The Importance Of Losing

Losing, like failing, is so important to learn. Failing is a key component in Trial & Error. It's the Error side.

Life is all about trying (trial) and failing (error). Success is actually not even in the phrase. It's not Trial & Error & Success, it's just Trial & Error. Success is such an occasional occurrence that it doesn't even get the time of day to be in the name.

Trial & Error is critical for children and adults to become resourceful and mature. Trial & Error is the best "experience".

Trial & Error should be applied to every aspect of life. Whether it's learning how to read, learning how to do some simple house repairs, or managing your finances.

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When it comes to money I've had many opportunities to make decisions where I had to sign a piece of paper and be committed. These are my trials.

Countless times I have made errors particularly when it comes to managing money. It's one of the reasons I believe I have become good at managing money.

In the past, I invested in stocks I didn't understand on recommendations from people I didn't know anything about. This cost me over $30,000 over several years. That's the same price I paid for my formal education.

I got a fixed rate mortgage when a variable rate would have saved me $3,200. At the time a fixed rate mortgage seemed like the best decision, but I was wrong in my forecast of where interest rates were going. 

I bought a vanity from Home Depot for $700 when I could have gotten something similar from IKEA for half the price.

I could go on, but you get the point.

Losing is something I don't like to do. But I never really dwell on it for very long. The quote that comes to mind is:

"You win some, you lose some." 

Despite have $30,000 in losing stock investments. I also made some good stock investments, which now form the base of my investment philosophy. 

This trial and error allowed me to find the ways I can be successful. I never let the failures stand in my way continuing to try. 

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A short memory of bad and good events lets you move on quickly. 

"Don't dwell on the past, the past can't be changed".

My secret to a happy life is to remember not to worry about things outside my control. And the one big thing that I cannot control is the past. The big thing I can control is how I act in the future. 

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Being a helicopter parent, a parent that hovers and helps their kid at the slightest misstep is a detriment to their development.

At the same time, being an adult and asking for help at the first sign of failure prevents us from learning to think critically about problems, and finding our own solutions.

In both cases, we must step back, and let our children and ourselves keep trying a little more and a little more. We might actually figure it out ourselves.

Some guidance is ok from a technical standpoint, but we should never do things for our children that they should learn to do themselves, and we should be more vigilant to do things ourselves first before asking others to help us.

Jeff Bezos, Founder and CEO of Amazon said his wife believes she "would much rather have a kid with nine fingers than a resourceless kid". This is a "fantastic attitude about life" according to Jeff. 

I concur.

 

Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.

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