Prosper Newsletter: May 2007 > Financial
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
The Power of Failure
The power of failure is a concept taken from an article written by Dr. Charles Manz from the University of Massachusetts. Dr. Manz views failure as a necessary process that leads people towards achieving success. Most Americans have a deeply engrained fear of failure and they worry that each setback is a blow to their self-image and proves them to be incompetent. The tragedy of this fear is that it prevents many people from taking risks at all.
The truth is that it is only rarely that failure truly suggests a lack of competence. People who never fail are rarely the most skilled. They are, however, the ones who will play it safe more often than not. They do not challenge themselves or test their potential. Anyone that would like to be innovative must stretch and prove himself, thus increasing the possibility of failure. The key is to embrace our mistakes and learn from them.
Consider your failure in a rational manner. Think of the failure as an experiment that produced a result that was different from the one you expected. Try to analyze the facts as dispassionately and with as little emotion as possible, much like the way a scientist would analyze data from a lab experiment. Search for the reasons why things progressed differently than how you expected them to go. Discover the flaws in your logic. Did you make an incorrect assumption? Was your timing or execution flawed? When you figure out what you did wrong, you are then able to avoid making the same mistake. Use this technique to analyze all of your successes in order to be able to repeat the good things that you do as well.
View failure as a necessary step in the process that leads to success. Failure can bring about new ideas, expose wrong assumptions, and even prevent us from becoming too satisfied and comfortable with ourselves. Bill Gates has pointed out that some of his Microsoft company's greatest failures led it to it's greatest successes.
Do not be afraid to give it your all. If you don't succeed because you put in a half-hearted effort, you will not be able to learn adequately from your mistakes. You will never know if you failed because your idea was flawed or because you didn't try hard enough.
Failure can test our patience, but most great victories come through perseverance. Even the people who are might not be the most intelligent people in the world have achieved success because they simply did not give up. Focus on your goals and expect setbacks.
Remain cool under pressure. Experiencing failure gives us an opportunity to see how we will react under fire. The more times you experience failure, the more practice you will have in reacting to it. Remaining calm during trials takes practice.
Remember that the greatest risk from failure is not the risk itself; it is the possibility that it will make us think of ourselves as failures and cause us not to try again. Thomas Edison had close to 100 light bulb prototypes before he was able to create one that actually worked.
Financial Fitness
I found the TDIW program to be the best thing I have done for my family and myself in many years. The educational degrees I have earned over the years did not prepare me for the 'real world of finances'. TDIW program did. I have learned to set up and operate on a spending plan. I learned about my net worth importance (assets and liability). The most important thing I learned however is that I do not have to be afraid of financial fitness or remain ignorant in regard to it. Knowledge is power and we all must pump up or fitness level when it comes to our money and finances. We do not have to live in poverty or drown in debt. Thanks to the program, I have paid off two debts and am working on a third by May. I will (with God's grace) be debt free in 7 years, house and all!! Thank you.
Thomas and Antonia G.
It's interesting to see that even though students have very diverse backgrounds, one thing is certain; they are often financially illiterate. In school you learn to read and write words and numbers but, in many cases, you don't learn how to read and write finances. One of the basic fundamental principles of finance is learning how to read the numbers. The numbers tell a story letting us know exactly what's going on; not only with a person's current financial situation, but also, how that situation came about. If you think about it, personal finance is just a new language. It is no different from a law student studying the language of law and a medical student studying the language of medicine. Now don't think you have to be a graduate student to understand finances. It will just take a little more work than reading a novel.
What I recommend is to start with a comprehensive program like John Cummuta's, Transforming Debt into Wealth that gives you both manuals and audio recordings. A program like this allows you to learn finances in different ways.
The first thing you'll want to do is familiarize yourself with the material. Listen through the audio recordings once and browse through the manuals. Once you've familiarized yourself with the course then go back and go through the material again. This time pay close attention to the content. If there are words you don't understand stop, write them down and research their meanings. See if they're explained in other sections of the material.
After you've defined the unknown terms, continue reading the material and listening to the audio recordings. Pay close attention to the action steps. One of the biggest challenges students run into is analysis paralysis. They arrive at the point where the author calls for action. The first question that comes to mind is, "do I feel like doing this action?" At that moment, the body and mind take a journey through doing that activity. The mind then compares that activity to what the individual is doing before they ask the question. Chances are what the individual is already doing is more comfortable than doing the task the author recommends so the new activity is placed on the back burner. Don't ever think about whether or not you feel like doing something; just think about what doing that activity will do for you.
Finally, go back and re-read the material from time to time. Keep your mind open; never take on the attitude that you already know it all. You'll be surprised at what you're able to pull from it each time you go through the program.
