It looked good on paper and the plans made sense. You backed your plan with the necessary finances, things started taking shape and you were excited. Then things started going south – it may have been sudden or gradual, but something was clearly wrong and at the end of it all you lost your investment. You thought you’d managed all the risks and ticked all the boxes, but life has a way of throwing occasional curveballs into our well-laid plans.
This a reality that happens to us all at some point in time in our lives. We then come to the realization that we cannot control what life throws at us all the time, but what truly matters is how we choose to respond.
Let’s talk about some things you should do when you face financial loss:
- Acceptance: The first step is accepting that it happened – don’t blame anyone or yourself, just accept that it has happened. Sometimes after losing our investment – especially if it’s substantial – we act like nothing has happened to deny the reality of the situation. Acceptance is one part of a two-faced coin: denial on one side will only leave you in a state of frustration and possibly throwing more effort, energy, and money, into a situation you should be exiting. Acceptance on the other side helps you to be honest with yourself and those around you about what’s happened and helps you move on to the next step.
- Assessment: Once you’ve accepted what has happened, you can now look objectively at your current situation and assess the extent of the damage and potential areas that can be salvaged so you have a full picture of what you are dealing with. Did you borrow money – have you approached your creditors to work out a realistic repayment plan? Are there any legal implications to consider? This isn’t something to be done in a hurry or without the right professional advice where needed. Don’t be a people-pleaser: try and avoid making sudden moves under pressure without fully exploring all available options and accurately assessing what works for you.
- Reflection: Take some time out to reflect on what went wrong and what could have been avoided– if anything at all. Not to blame yourself or others, but to know what to do or not do next time around. For instance, were your expectations too high and projections too aggressive? Did you have the right information and structure in place? Did you put too much in one venture? Should it be an area you should invest in again or completely steer clear of? Think through these and more. Use the lessons you’ve learned to guide you in making better decisions.
- Be creative: Financial loss means a hole has been dug somewhere, how do you fill it back? What opportunities are there you can take advantage of? What value can you create that can generate income for you? For instance, let’s say you invested in a business that has been negatively impacted by new government policies. Can you still continue in that line of business, but with a different value proposition? Do you have the inventory you can sell to recoup some funds? Can you introduce new technology to kickstart things in a new direction? Don’t be afraid to start thinking again.
- Lean on your Support System: Reach out to the people you can fall back on when things get tough. Financial loss, especially when it’s a major source of income can be quite painful – to our self-esteem, sense of judgment and ability to step out again. Surround yourself with those who will be there for you and tell you the truth, not to condemn you, but help you move forward.
- Never give up: This too shall pass. It may not look like it at the moment, but it will. Don’t give up on yourself or your ability to get back up. You have what it takes to get it right, you have done it before and you will do it better now with new knowledge and understanding on how to avoid errors of the past.
I understand how hard it can be to deal with a financial setback, but you’re not alone. It happens more often than you may realize. You will get back stronger and wiser. Just hang in there, take it one day at a time, be on the lookout for opportunities, be realistic and kind to yourself.