The Best Way to Fix a Financial Mistake

The Best Way to Fix a Financial Mistake

Everyone makes mistakes. What separates the winners from everyone else, is how you fix your mistakes.

When playing chess, it’s easy to make the wrong move. If you notice your mistake while the game is on, you can choose one of three responses:

1. Ignore it and keep on playing. Maybe your opponent will follow suit and also make a mistake.

2. Try to find a way to rectify the damage. While you can’t actually turn back the clock and reverse the bad move, you might be able to limit any subsequent damage, by changing your strategy. For example, if you find you are now boxed in at the back of the board with nowhere to go, look for a way to open up a better path for yourself.

3. Learn from your mistake. Now that you realize your mistake and can see its effects, make sure not to make the same mistake twice.

Failure doesn’t always have to result in a loss

The first of the three options, ignoring your mistake, is not a good idea, as it means you are no longer in control. But the second two options applied either together or separately can help you save your situation. This is true of whether the situation is a chess game or your investment portfolio.

If you invested in something that turns out to be a bad position, there’s no point in holding onto it and hoping it the situation will improve. Sell as soon as you can and look for something that better meets your needs. Even if the bad investment caused you a loss, it is prudent to move on, find something better – and also learn for the next time.

Learn from your failures to ensure that a small loss doesn’t become a bigger one. And by learning this lesson from it, your earlier loss may ultimately become your gain.

For more about loss and why it shouldn’t intimidate you, click here.

 

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