How to Recover From a Financial Loss

How to Recover From a Financial Loss

While a financial loss can be devastating, it doesn’t mean that your situation can’t be improved.

Sometimes, your loss can even, ironically, spur you on towards future success.

Imagine that you lost an important piece, such as a bishop, or even your queen, in a game of chess. You wouldn’t just get up and walk away from the chessboard. You would look at the way your pieces are set up and try to see where you went wrong. Perhaps you need to change your strategy or rearrange your pieces so that you can strengthen your defense. Losing an important piece doesn’t always mean the end of the game. If you regroup, you may still have a chance of winning. In this case, your loss may lead you to become a better player.

Setbacks can be a stepping stone to success

Remember the proverb, “If at first you don’t succeed, try, try again.” Some of the most famous investors and entrepreneurs followed this advice, and even though they initially failed in their efforts, their determination eventually led to success.

For example, Col. Harland Sanders failed at several businesses before, at age 40, he began selling fried chicken at a gas station in Kentucky. He didn’t give up on his efforts to succeed in the food industry. This enterprise eventually became Kentucky Fried Chicken, one of the most famous fast-food chains in the world.

You can still turn things around

Don’t consider a monetary loss to be the end of your financial world. Use it as a chance to reassess the way you manage your finances and a springboard to becoming a better investor. Look at what you did until then and ask yourself the following:

  • Are my financial goals realistic?
  • Do I have a proper emergency fund to head off future crises?
  • Do I have an accurate picture of my risk tolerance level?
  • Am I getting good professional financial advice?

For more about how to turn your financial losses into success, click here.

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Douglas Goldstein, co-author of Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing, is an avid chess fan, international investment advisor and Certified Financial Planner.TM