The Most Important Lesson on Your Path to Millionaire: How to Lose Money
When I decided to launch a podcast almost two years ago, I wanted to give entrepreneurs and investors a place to learn life lessons from a different point of view. I wanted to talk about failure.
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So I called this wealth-building podcast How to Lose Money. And I have to say that it brings puzzled looks or hesitation from those who first hear about it. (Is he kidding? What’s the punchline? Has he been eating too much semi-boneless ham… again?)
We are all inspired by great stories of success. We love those rags to riches tales where someone like you and me pulled themselves up by their bootstraps to become a business success, sometimes even a legend or a billionaire. I’ve often written about life lessons from people like Warren Buffett and Bill Gates—and there’s certainly a lot to learn there.
But over the years, I’ve realized that it can be easier to avoid failure than to achieve success. And sometimes avoiding failure—or at least learning from it over and over—paves the road for the success we all seek.
I once heard about a guy who was waiting for a flight. He told the guy in the next chair about his brainchild for a new startup. The guy later mailed him a check for a million dollars. They both made millions and lived happily ever after.
That’s a Great Story, But How Do I Replicate That?
Do I spend more time in airports hoping for wealthy people to tell my story to? I would probably learn more from this guy’s struggles and failures along the way than from this story.
Though all successful people have failure in their past, they seem less apt to talk about it at conferences, in their books, and at dinner parties. I think this is sad, because it can discourage those of us who are trying to learn from them.
My daughter, Hannah, and I used to attend an annual father-daughter retreat put on by a family-oriented organization at Callaway Gardens in Georgia. It was a beautiful place to enjoy a relaxed time together amidst a 6,500-acre nature preserve with lakes, woods, meadows, and a butterfly pavilion.
The speakers were all “successful” fathers who talked of their wonderful children and their creative parenting practices. They had pictures of their smiling families and their adventures to exotic places that most of us couldn’t afford. One of them even told how he planned to do a space flight with his daughter someday. (He was hoping we’d contribute.)
Though it was compelling, I noticed that it caused a bit of discontent in Hannah. And I often left the conferences feeling a mix of motivation… and discouragement.
After years of attending each spring, Hannah admitted to me that she was jealous of some of the daughters whose fathers spoke, and she secretly wished she could be part of their families from time to time. “They always go on these amazing outings and adventures, and they don’t seem to fight and argue like our family does at home.”
Less Than Perfect
And though I left these events with a list of things to do better, I was discouraged because my failures and shortcomings were ever before me, and it seemed like these guys had no roadblocks along their paths. I sensed from the “average” fathers around my table that they felt the same. “I’ll never be like those guys. Why even try?”
At one point, I got to know one of the main speakers. He was a great guy and had a heart for his kids and for the legacy that his family would leave on the earth. But in talking to his daughters, I learned that they had similar struggles as my kids. They argued, and had insecurities, and their family was actually—gasp—less than perfect.
I should have known this. But I was a young dad who was passionate to be a great dad—I had stars in my eyes. What I (and perhaps the speakers) didn’t realize was that it is important for successful people to talk about their failures along the way. Otherwise, those watching will be discouraged and think that success like that is out of reach.
Gary Keller (founder of Keller Williams) was once asked about the definition of success. Keller wisely said, “Success is failing over and over again without giving up.”
Keller says we don’t succeed our way to success, but we fail our way there. He says that whether it’s Michael Jordan being cut from his high school basketball team or Walt Disney being fired from a newspaper for his “lack of imagination,” when you look at history’s greatest successes, you’ll realize they are built on a series of failures.
After several years of attending the father-daughter retreat, I began to question the speakers on their practice of not sharing their struggles and failures. I wasn’t alone.
Share Your Struggles
In a Q&A panel session one day, someone approached the mic and said, “You guys are all great men and great fathers. We’ve heard lots of great stories and techniques for being better husbands, fathers, and men. Can you share some of your struggles?”
You could have heard a pin drop. The five men on the panel looked like a herd of deer in 500 pairs of onlooking headlights. After chuckling nervously, one of them gave a lame reply, completely dodging the question. “My great struggle is to get the next generation to catch my vision for fatherhood” or something ridiculous like that.
He was the guy I knew, and he is a good man. But somehow the micro-culture there had no tolerance for discussing failure.
I shouldn’t have been surprised when some of these families who had long kept their struggles private began to fall apart (very publicly) a few years later. I can’t pretend to know all the reasons, but I have to believe that there was a lot of pressure in those circles to keep up a good image. Sort of like the pressure I hear a lot of pastors’ and other public people’s children feel.
My daughter and I were no longer jealous, and we learned some valuable lessons.
- Everyone struggles.
- Everyone fails.
- No one is perfect.
- Every successful person’s path is lined with difficulties and setbacks along the road to the top.
- Anything or anyone that looks perfect from the outside is certainly not.
I was determined never to forget these lessons.
So when Josh Thomas and I launched our wealth-building podcast, we decided to talk with successful people who would be willing to share their failures, struggles, losses, doubts and fears along the way.
We’ve had a blast doing almost 150 How to Lose Money podcast episodes. We’ve talked to…
- The Harvard MBA who lost $70 million when the tech bubble burst
- The real estate investor and BiggerPockets member who lost $225,000 in a wire transfer fraud
- The real estate investor and BiggerPockets member who learned that his out of state single family rental was a meth house
- Two different BiggerPockets members who lost big money buying real estate in a third world country
- Gary Keller’s business partner who emotionally told us how he lost money by following the crowd in his industry
And listeners have gotten to hear about some of my trials and failures as well. Like…
- The time my friends and I sent almost a million dollars down a hole in the ground… that turned out to be more like a toilet than a successful oil well
- The time I invested $100,000 with the Charlotte entrepreneur who was making 3% per month trading currency. He will won’t tell me or his other 2,000 investors where he hid the $18 million… and he is in year 17 of his 153-year federal prison sentence
- The wireless internet startup from hell, the instant coffee business in the Ohio State laundromat, the multi-level scheme that distracted my focus for six months and more
Virtually every person we’ve asked to be on the show has agreed to come on and share their failures. Afterward, they often tell us they found liberation and joy when they shared the details of these events that had usually happened years or even decades earlier. They sometimes get emotional as they share how they have lost money, time, relationships and companies along their journey.
Related: 3 Reasons So Many Real Estate Investors Fail
Our guests have also shared how these painful experiences have taught them not to fear failure again. Every one of them bounced back. Every one of them is successful now. And surprisingly, virtually every one of them says they’re glad it happened.
These experiences were critical in shaping them into the person who is now able to handle the weight of the success they’re achieving today. These struggles and failures basically built a strong framework on which the trials and temptations of success can now hang securely. This is one of the great purposes of trials in our lives.
An ancient sage said, “We rejoice in our sufferings because we know that suffering produces perseverance; and perseverance produces character; and character produces hope.”
I don’t want any of us to get bogged down by our past mistakes or those of others. But I want to encourage us all to learn from those mistakes and avoid the traps that we or others fell into in the past. And remember the words of Gary Keller:
“Success is failing over and over again without giving up.”
Trials will either make you bitter or make you better.
What are they producing in your life today?