By Reid Kanaley
The Philadelphia Inquirer.
Financial failure, in personal life or in business, is an opportunity for learning and, perhaps, a prerequisite for success — or so say a lot of experts. Here is some of their reasoning and strategy.
Will your child be a financial failure? In a post at DailyFinance.com, columnist Michele Lerner lists warning signs that parents should look for, as an opportunity to make positive changes.
Does a child always need the latest version of stuff, run up huge debts (including for college), and lend money to people who never pay back?
“A parent’s work is never done,” Lerner writes. “Throughout your offspring’s life — from childhood, the teen years, and into their 20s — there are times you’ll need to step in to educate your kids about money matters big and small.”
Writer Thomas White says he has trained entrepreneurs and knows the value of failure — or, rather — learning from failure. “I know the key for those who succeed is their ability to honestly appraise themselves. They reflect on the outcomes of their decisions and act with discipline to correct errors,” White writes.
The Entrepreneur.com piece links to related posts, including one from March titled, “Afraid of failure? Think like a scientist and get over it.”
Another is an older post by the billionaire founder of Virgin Group, Richard Branson. In “The secret to success: Failure,” Branson says, “Every successful businessperson has experienced a few failures along the way. In the United States, most investors will look at an entrepreneur’s past failures before making a decision, not because they are worried about it, but because they want to see that that person can withstand the occasional knock.”
Study failure, says this post at ImpersonalFinance.com, a site that describes itself as “Money according to hipsters.” Survivorship bias keeps us from looking at failure to learn its lessons, the post says. For example, “My parents are not great with money, and I worry about their future now that they’re nearing the traditional retirement age. . . . They might not be able to tell me what I should be doing to obtain wealth, but they can most definitely advise me on what they did wrong.” Or, “Say you’re planning on opening a department store. You would want to look not only at what Macy’s and Nordstrom did right, you would also want to look at what Sears and JC Penney did wrong.”
Colossal financial failures offer excellent case studies. Here’s one at Investopedia.com on the collapse of Lehman Brothers, the U.S. investment bank whose downfall in September 2008 helped bring on the Great Recession.