Financial failure can mean different things to anyone experiencing financial strain. For purposes of this article, I define a financial failure as a situation caused by a choice or circumstance that was either unpreventable or the outcome unforeseeable and it leaves the victim fearful they will not get through the current situation and/or ever financially recover from the unexpected financial ruin.
With financial failure comes emotional and mental stress often manifested in physical symptoms, worsening your situation. Whether it was an investment, decision, business plan, job, or unfortunate event that caused it, it is seemingly impossible to find your way out at times. But as any failure in life, financial failure can often make you stronger.
Here is what you must understand if you are going to become better from your financial failure.
Someone else has experienced an even worse financial catastrophe.
It might seem selfish to use someone else’s misfortune to console yourself in the midst of your woes, but it often helps to realize that someone has gone through even worse things and come out stronger and better. Twenty years after writing The Adventures of Tom Sawyer, Mark Twain lost his entire fortune to poor business decisions and unlucky investments. One of America’s greatest authors, he not only restored his fortune by speaking tours and writing, he repaid all his creditors even after the debts were discharged in bankruptcy. If Mark Twain is not dire enough, think Enron employees and Bernie Madoff victims. Just be thankful you are not them (hopefully).
Every decade you get a chance to try again.
Many financially successful people experience decades of financial failures, bankruptcies and do-overs until they finally “hit it rich”. We only hear about the successes, but I promise, behind all those financial triumphs is a list of numerous failures.
George Foreman, possibly the greatest boxer in history, was almost forced into bankruptcy until he recovered by lending his name to what is now known as the “Foreman Grill”. This business venture quadrupled his net worth overnight. Only in America do you have a chance to start over today, no matter what your circumstances and choices up to this point.
Make a plan to move forward.
Do not obsess about what has happened; instead focus on what you can do to cut your losses and move forward. There are no do-overs in life and in many financially detrimental situations, time is of the essence. Continuing down a path of uncertainty may only worsen the situation as the longer you dwell, the harder it becomes to see straight. Do not indefinitely live the ongoing nightmare of financial stress.
You must honestly evaluate the situation, and make an immediate plan to address it. Whether that is borrowing money, finding investors, downsizing your life, reducing your cash flow, declaring bankruptcy, or seeking other professional advice.
It will pass.
For those currently experiencing financial disaster, I can promise you, it will pass. Like any problem, don’t box yourself in. Instead, get up, reevaluate, and do what you need to do to move forward. My greatest coping skill when I was in the middle of my own financial failure was creating a 90 day countdown. Somehow, I knew 90 days from the midst of the stress and what seemed like an impossible situation, things would look very different. Tell yourself, just make it through today, if you do that 90 times, things are so different looking back.
If you can write a check it isn’t a problem.
Keep this motto with you. For those of us who have experienced financial devastation, we know full well the power and freedom money can buy. Let that reality motivate you to get up solve your current crisis and try again. Promise yourself next time the disaster sideswipes you, you will be more prepared, at the very least mentally and emotionally.
Need to adapt your financial plan because of a financial failure? Discussed in Hardcore Navy SEALS, the Laws of Combat, and Financial Planning, apply the laws of combat and get back on track to financial victory.