Scrabble pieces spelling "failure"

Understanding Why We Fail Financially

A couple of months back I reiterated my goal for the year of publishing an article per week here at Abovare. Today, the merciless calendar shows us that the date is June 3rd, while the most recent article here shows May 8th as its publication date. Where did the month of May go, and why did I fail so spectacularly so shortly after restating my commitment to this goal, and how does this tie in with failure when it comes to building wealth?

The Secret Ingredient of Success

Every single failure is, of course, unique, and has its own set of circumstances and explanations behind why it came crashing down. However, I a firm believer that in the vast majority of cases where we fail to reach the goals we set for ourselves, the number one reason is the lack of one key ingredient behind almost every significant success: Persistence.

The importance of persistence is perfectly illustrated by this old quote, by former American President Calvin Coolidge, recently featured in the movie The Founder, which details the early days of the McDonald’s fast food empire:

Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.

As a society, we so often misattribute success to “Eureka!” moments and motivation. But if you listen to anyone who has succeeded at something talk about how they got there, you will rarely hear them talk about how it was that one great idea that pulled them over the line. Nor will they be telling you how supremely motivated they were throughout the endeavour, to the extent that working on their thing felt like playtime. No, good ideas are a dime a dozen, and motivation is what will get you started. But what keeps the tough going when the going gets tough is persistence, and that is a matter of fact whether we are discussing writing with a particular frequency, or building wealth.

At this point, it is easy to step back, throw your hands in the air and say: “That’s it! Persistence is a character trait which eludes me, so I can’t build wealth or achieve anything else of note.” But before you throw in the towel, let me fill in some additional tidbits of information regarding my month of May, and my failures. Remember how I also aimed to do a fair bit of running this year? I am crushing that goal, currently on track to do double the mileage I targeted for 2017. And more importantly, despite spending hardly any time thinking about money, I am still on track to meet my financial goals for the year.

If persistence, which is, at least to some degree, a character trait, is the most important ingredient for realising your ambitions, how can it be that one person can reach some of his goals, and fail miserably at other targets? Can people be persistent in some matters, while susceptible to quitting at the first hint of friction in others? Probably, but the key is how we spend those precious days or weeks at the beginning, where motivation is plentiful. While planning on everything we aim to achieve, we also set ourselves up for either success or failure. And if persistence is key, we need to emulate it somehow.

How To Fake Persistence

As illustrated by my failings featured in the opening anecdote, I am not a particularly persistent person, if we measure character features. That fact hasn’t stopped me from completing quite a few feats throughout the years that, from the outside, seem like they could only be pulled off through perseverance and grit. The secret? Habits, and systems devised to form them.

Tiger facepalms
Even the coolest cat experiences the odd facepalm-moment on account of their failures. Photo by Tambako.

Motivation, as mentioned earlier in the post, will only get you so far. Once that initial burst of excitement fades, it is persistence which will pull you through, but you can fake persistence by making it as easy as possible to complete whatever it is you aim to achieve. If we once again consider my own, featured mistake, it is easy to see where I went wrong: Eager to read new and inspiring content from other sources, and write and publish new content myself, I made no clear, set schedule for when I should be writing the content. Given the fact that I am a person of no particular endurance as it pertains to completing lofty goals, my productivity decreased as soon as my burst of motivation waned. A month later, here we are, and I have to pull myself up by bootstraps in a what feels like a grand fashion to write another article and get back on track.

Contrast this to the area where I did succeed, running, and what I did differently: In addition to setting concrete goals for what I wanted to achieve with my running, I also created specific plans for how to do it. My training plan detailed when I should be running, for how long, at and which intensity. I alleviated myself of the burden of having to consciously contemplate when, how and what I should by doing to reach my goals, and as a result significantly increased my chances of reaching the goal. Before long, the runs in my plan became a habit, something I looked forward to doing. And then the real magic happened because the progression from following my original plan motivated me to push further and harder, and I was able to build on the established habits to throw in additional sessions to reach my goals sooner.

Create Your Financial Plan Now!

Given that you are reading this right now, it is reasonable to assume that you are motivated, to some degree, to make changes in your financial life. You have likely already thought about what you want to achieve, and perhaps some of the steps you can take to get there. But don’t stop there! I’m not saying that everyone is as devoid of persistence as I am, but why take the chance when it concerns something as important as your finances, your future, and your freedom?

If you haven’t already done it, sit down and get to work on creating a concrete and actionable plan for how you are going to achieve your financial goals. Detail what you are going to do, when you need to do it, to make sure that you save yourself from having to figure that out each time.

How much money do you have available to spend on buying fidget spinners? These are points you need to cover in your plan, and if you are out of funds in the relevant category, then no spinner until you refill that lot. How much money should you be saving each month? So many people make the mistake of thinking that they will just save whatever’s left at the end of the month, meaning that every purchase decision they make has to be weighed up against saving. It requires ridiculous mental strength and restraint to be sensible every single time you’re forced with a decision between “fun and awesome” and “boring and safe.” That’s why you need to make a plan and decide right now that you should be saving $x every single month. Make a non-negotiable commitment to yourself, so that you don’t have to rely on your sound judgement.

If you are unsure where you should start when making your plan, I covered the basics of how I set myself up for financial progress in this post titled How I Learned to Stop Worrying and Love Saving Money, and it is¬†a good place to start. After you’ve finished that, leave a comment if you have any questions or need assistance. I will welcome the distraction from sitting down and figuring out my plan for how I will be reaching my goals for Abovare from here on and out.

Title photo by airpix.

Wall art of a t-shirt with the text failure is cool

The Path to Financial Freedom is Full of Failures

A few months into my first real job after graduating, I was flying high. The early onset imposter syndrome was starting to recede after a flurry of positive feedback, and I was starting to get comfortable in my position. That feeling didn’t last particularly long before I, in horrible screw-up, managed to publish our entire customer list to every single one of our customers. My world came crashing down, and I was inconsolable.

After a while, people forget all about that mistake, and while I’m sure my bosses had to smooth talk and cajole to avoid any fall outs, my mistake ended up not being anywhere near as bad as I thought. When it comes to personal finances, the reality is much the same. While you can structure your life, and your habits, in a way that lets you minimise splurges and unnecessary spending, you will end up spending money you didn’t plan to spend. And you can read page up and page down regarding the risks and rewards associated with every single investment opportunity that comes along, but you will end up making bad investments.

When each of those things happens, and they will, along with a whole host of other mishaps that impacts your path to wealth, that in hindsight could have been avoided, you will feel terrible. And it is fine to do so, but only for a little while. Because, and I am going to dig deep into the vault of cliches here, we have only failed if we fail to learn from our failures.

We have only failed if we fail to learn from our failures.

I recently finished reading the book Creativity, Inc. by Pixar head honcho Ed Catmull. In the book, Catmull lays out his approach to leading in a creative environment and highlights the methods that he believes have helped Pixar grow from being a division of Lucasarts into the most successful maker of animation movies. A recurring theme throughout the book and Catmull’s career is the importance of failing, and handling failure in a productive manner.

Catmull states that there are two meanings of failure: One that we screw up, learn and grow, and, two, we are idiots because we failed. The key to handling failure in a productive manner is to “recognise both the reality of the pain and the benefit of the resulting growth,” says Catmull. He frequently puts forth the example of Pixar director Andrew Stanton’s philosophy and catchphrases to exemplify their company philosophy towards failure, like “fail early, and fail fast” and “be wrong as fast as you can.”

Funny plan for life by kid, which includes failure
A good plan should account for failure, like this one. Photo by Beth Kanter.

I am highlighting the way they approach failure at Pixar because I want to illustrate that even big, successful corporations not only fail, the rely on failures to discover the path to success. And I believe that unless we consciously prepare ourselves to handle failure in a productive manner, we are likely to let our failures weigh too heavily on us. Another adverse effect of failure, unless we process it in a productive matter, is the tendency to overcompensate to avoid making the same mistake over again. As the old saying goes, once bitten, twice shy. Sometimes we fail because circumstances weren’t right, and avoiding similar opportunities because we failed once before can be both irrational and costly.

Another adverse effect of failure, unless we process it in a productive matter, is the tendency to overcompensate to avoid making the same mistake over again.

One of my favourite stories about failing in the context of personal finance is Miss Mazuma’s brutally honest recollection of the rise and fall of her real estate empire. It is a fascinating read, and the important takeaway here is that Miss Mazuma didn’t let her ill-fated decisions decide her fate. She got back up, did what she had to do, and rebuilt her wealth to the extent that she is now enjoying financial freedom beyond what most people ever get to experience.

So, in-between making all your plans for how you are going to build your wealth, I want you to take some time to plan your approach to failure. Because, as mentioned before, you will fail. But, like Pixar, one of the most revered creative companies in the world, you should incorporate your failures into your solution.

Header photo by Nicolas Nova.