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I keep hearing that mistakes are good as it's a way that we learn to be better at the things we do. My question is that if that's true, why is every body so afraid of making mistakes? Shouldn't we all embrace people taking risks even if that means failure sometimes and encourage them to do so so they can learn better?
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Good philosophical question.
Nobody likes to be wrong.
Often mistakes have consequences. Since this is a financial forum, we can focus on those consequences. If you make an investment mistake, it may cost you money. If you make a borrowing mistake, it can mess up your credit score. If you make a spending mistake, it may leave you unable to pay other expenses. Those are just a few examples but they illustrate why people don't want to make mistakes and may be hesitant to take risks.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going. -
But don't all investments come with risks? Aren't you even worse off if you don't do anything at all when it comes to money?Originally posted by disneysteve View PostComment
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Sure, but there are different types of risk and people assign different value to them. There is also a knowledge level to consider.Originally posted by coolpix View Post
Person A might be most concerned with maintaining principal. They couldn't stomach watching their portfolio drop 20%.
Person B might be most concerned with maintaining buying power and combatting inflation. They couldn't bear to leave their money in the bank earning 1% or less.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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I like to play a board game called go. When teaching new people to play, I encourage them to play quickly and to try not to worry about making mistakes. Often, people are tempted to spend a lot of time thinking about each move when they still lack the experience to see why it may or may not work. Learning goes much more quickly if they just make a move and find out if it works or not when their opponents respond. There is a go proverb that says, "Lose your first 50 games as quickly as possible." The make-lots-of-mistakes strategy works great in go because the stakes are low and a lost game hurts nothing more than one's pride. Once people get some experience, however, there are plenty of other great ways to learn that don't involve the pain of making mistakes.
I think learning by making mistakes is only a good learning strategy when the negative consequences of the mistakes are fairly low. A kid learning from a mistake on a homework assignment is great, a kid learning from a mistake on a final exam could spoil a good GPA. A young, first time investor learning the dangers of picking individual stocks is good, an older retiree learning the same lesson could lose money that was needed for retirement.
Sometimes mistakes are really painful. If one can say he learned something from them, came away a stronger person, or found some other positive consequence, that's great. It's good to have a positive outlook that enables one to see the best in a bad situation. But, when there are alternative, less painful ways to achieve positive results, why not at least try to avoid mistakes?Comment
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Aw, if only people learned from their mistakes and made the effort to fix it before it gets worse. Nope, that's not what I see. For example, not yet a permanent employee, already saddled with $60K - $80K mortgage-like student loans, rush out and buy a new car whose first two years depreciation has them further under water.
Too many families are two pay cheques from homelessness. The figures for this last decade Baby Boomers who have insufficient saving for retirement are truly frightening.Comment
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I find that as I get older I am more averse to risk. There is less time and opportunity to recover from mistakes.Comment
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Most times mistakes are unavoidable but when you can avoid making one it's always best to do so. Seek advice before making a move, weigh options and then take a risk. There is always that risk worth taking. Don't forget to learn from other people's mistakes though...it may just help you avoid making the same ones. Seize the day!Comment
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I've always been the type to learn from other people's mistakes. PHEW!! Much easier. (My sister just has that personality where she has to learn *everything* the hard way - that is a rough road).
I like phantom's post too - I very much agree. & that is how I approach a new game. Let's just figure out the basics and go from there. But it's not like "failure" at a game has any consequences. Aside from being a little embarrassing.
Which speaks to how much caution I approach any learning opportunity. We are really careful about our finances because the results can be huge. But, you know, don't sweat the small stuff.
Lord knows there are plenty of mistakes and lessons to learn no matter how cautious and "quick to correct" you are. I think the learning curve is steep and we hopefully make less mistakes with age. But, I don't think we ever stop learning. My first comment are mostly in regard to the BIGGER things in life. We live in an age of information and if we pay attention it seems like there are a lot of mistakes we can avoid if we keep our ears open and listen to other's experiences.
I do try to keep this front of mind with my kids. We try to share our past trials and failures. All they see is our current successes. I try to make it a point that we are human and we have made our mistakes. IT's not the mistakes that matter so much. It's how you recover and learn and grow.Comment
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Very true. It is so much better to avoid mistakes by paying attention to what works and what doesn't work for others. I think that is a big benefit of sites like this. People can ask a question and get answers from folks who have had similar experiences.Originally posted by MonkeyMama View Post
The sad thing is that so many people only post here after they've made the mistake, after they've bought the expensive car or taken out the ARM or gotten the whole life policy. I often wish people would do their homework BEFORE spending the money rather than after.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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& snafu - OMG. The fiscal irresponsibility is maddening here. I have had friends lose their modest homes to foreclosure, and so they go out and buy bigger more extravagant homes.
You can't afford the $300,000 house, so you bought a $500,000 house??? I don't get it. You would think that losing your home would be a harsh lesson. For some, it's just something to whine and complain and be the victim about. If 90% of the people I know in this city have lost their house, I can count on one hand the people I know who appeared to downsize while they recover financially. Most scary, most of them are in their late 40s. Imagine having -0- dollars for housing, nearing retirement age. My first choice would not to buy a mansion and then to BRAG about it to everyone I knew. I know because they brag. They feel very entitled.
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