How I Dealt With a $40,000 Loss on an Investment: I Acted Like a Child

What’s up everybody I hope that you’re having a great day wherever this finds you so
today’s topic is one that well to be honest a lot of people don’t like to
talk about it because it’s not super glamorous taking a loss taking an L it’s
never fun but it is an important part of the growth process sometimes you know
what happens when you have a forest fire shit burns down grows back better
stronger than before so let’s get into this topic today this
was brought to you by a comment I always appreciate your guys’ comments that you
leave so this gentleman here he says I’ve lost fifty thousand dollars in
options futures Forex markets and didn’t index from when I started working losing
hundreds of thousands of dollars in opportunity costs everyone makes
mistakes sometimes Grievous ones but life goes on this is a great message so
he was referring to a video that I did I’m gonna drop you a card somewhere up
here it’s called I want to teach English abroad but I’m scared to death of making
a mistake I hear this a lot the thumbnail says our fear of making
mistakes and bad decisions this video was actually based on a study that I
read when I was taking a business class once before and it showed that when
people make a certain amount of money I don’t know if it’s dopamine or whatever
it is in the human body but they can measure their response from that
positive situation right what they found was that when people lost the same
amount of money that the emotion was three times stronger so this means a
person makes a thousand bucks sweet a grand nice but if they lost
a thousand dollars that hurt was three times stronger more profound so this guy
right here he’s not alone he lost some money he recognizes that you know it
slowed down his star a lot of people that are older that are nearing
retirement they tell you well you know you should be more conservative in your
later years because you don’t have as many years to make it up right if a 70
year old loses half their portfolio that’s a lot more painful than an 18
year old who maybe loses half of his or her $3,000 portfolio right but at the
same time there is opportunity cost and this is not to brag but you know I make
money off of money that I made a long time ago because there is a snowball
effect and if you start early and you’re able to put that cash aside
and put it to work it is going to continually generate money and if you
are a steward of your money a good steward of your money and you continue
to invest the proceeds that is how generational wealth is created right you
pass it on to somebody else who knows what they’re doing
hopefully not like my family and the inheritance deal that went crazy as I’m
as you may have seen in another video I dealt with that for about six years this
guy right here you know talking about his situation I can tell you in 2013 I
thought I knew something about preferred stock I had read a lot of books and I
had a lot of good you know concepts in theory and you know thought that I knew
what I was doing I did not realize how directly tied the preferred stock
markets are to interest rates and I lost $40,000 in two weeks and I can remember
being in Cebu in the Philippines I had just arrived for a vacation I could not
leave my hotel room I didn’t leave for several days I couldn’t eat I couldn’t
sleep I kept kicking my own ass you know how could I being so stupid because you
know it’s amazing sometimes how long it can take to make a certain amount of
money and then it can just disappear in the blink of an eye if you know if you
don’t know what you’re doing or you’re not watching now so the biggest mistake
that people make is that they don’t learn okay you ever heard somebody
that’s like super old and should know better and they use this lame cop-out
they’re like well leaven learn and it’s like no you never learned because that’s
what it is you see a person like myself who’s falling flat on his face several
times I have at this point in my life a portfolio of mistakes that I can go
through and point to at any given time right like all these topics all these
concepts on this channel if you look if you follow BiggerPockets
calm you may have just seen that they talk about how to become wealthy on a
teacher’s salary how to do this like everything on here there’s nothing like
there’s very little I would say that’s like a brand-new brand-new brand-new
concept that nobody’s ever thought about while it may seem like people know me as
a person who talks a lot to a camera in real life and for most of my life I’ve
always listened a lot more than I speak I like to learn I like to know
conceptualize things I like to come up with ideas and then I like to try to
implement it so what I have is a huge collection of things that I’ve tried
some that work some that didn’t work how I put my own twist on it and then
sharing my own experiences with others and also kind of relating how I could
have gotten from point A to point B faster more efficiently right case in
point there was a time when I had a house
under contract that I was buying I had a lot of money into the deal I had an
earnest money deposit so I had put money down it’s you know generally speaking
not refundable unless you you know back out for for good reason caveat caveat I
had a full professional inspection done and I had a survey done and I had a
good-faith money with the with the bank for the mortgage I had all this and then
I went to close on the deal and they said well where’s your flood insurance
and I say what insurance they said flood insurance it’s in a flood zone I said
this house is not in a flood zone they brought the paper right out where the
hell did that come from they said FEMA redrew the maps you
didn’t know about this so I called my insurance broker was to
deal with it with the flood zone it’s not on my map okay so then I had to go
back to the drawing board how much is the insurance gonna cost you know and it
killed the deal um it’s a longer story but you know at that point I realized
okay this is a painful lesson gonna lose some money here but what happened I
improved my due diligence after that I never ever ever skipped the FEMA maps
again because this was the last place that you would even think that a flood
zone would be so that became part of my due diligence after that and I’ve every
single time that I’ve gone to purchase a house in Florida I always run every
single freaking map that I could possibly find because you just never
know and so going back to it I can tell you that there are entire books that are
made up of these kinds of stories of people you know who have fallen flat on
their faces but they had to get up and do it again that’s why I like teaching
kids so much more than I like teaching adults that kids they make mistakes
they’re like and whatever you know kids in my class I can be like a bla bla bla
you know get on get on them a little bit and then they’re only they they bounce
back they’re resilient all right they keep coming they keep wanting to try it
they fall off the horse they get back on you know it’s a doll too early I just
want to lick my wounds and cry myself to sleep and dwell and dwell and dwell and
dwell and think and ponder but it’s not productive thinking it’s not productive
analysis so the kid you know I remember my sister we used to get a video game as
a kid you know we die straight away in the game did you ever just throw the
game away oh I failed I’ll never try it again
hell no kids are like all right game over pass me the controller let me go
for it let me try again let me try again my sister should get a little bit and
then she died she reset it well the next time she’d go a little bit farther and
then a little bit farther and then a little bit farther and then after we
she’s like hey we need a new game because I already beat this one that’s
how you win the game it’s not just stop all right I’m gonna
stop what I did I’m a failure and now I’m gonna analyze it to death no you got
to keep going that’s the most important step is realizing that nobody’s perfect
the point A to point B is not a line that you can draw with a ruler it’s all
over the place right so no matter what you got to bounce back
and then you just stack it right back up again I hope that you are great if you would leave me
a comment and a like I would appreciate it and I’ll see you next time

24 thoughts on “How I Dealt With a $40,000 Loss on an Investment: I Acted Like a Child

  1. I wonder if that study is where the idea that a teacher should give 3 positive reinforcements for every 1 negative comes from.

  2. You described why the rich love socialism – for themselves. Privatize the gains, socialize the losses.

  3. I thought the whole state of Florida was a flood zone. If it's not hurricanes, it's global warming.

  4. I love this message!
    PS: anyone know where I can get beginner info on any good source of investments? I am South African so property is not a great option for me!

  5. I’d lose my shit if an investment lost 40k of my capital as well, can’t blame your reaction at all

  6. Keep out of Forex and options – they're trash. Buy stocks on a longer time frame.

  7. Hello! My name is Julia I’m 21 years old and I’m studying to become a full time traveler. I know what you're thinking, you don’t need to study to travel, which is true. I spent a few months traveling off my savings and realized I love this lifestyle and I need to find a way to earn money while traveling.

    Basically my current job offers me a free bachelors degree and I heard its easier to get an ESL job with a bachelors degree so that’s the path I chose. After looking over many options I decided to put in some work so I can get the proper training and school to be able to get jobs all over.

    One of my classes asked us to interview and educator in our field. I have seen your youtube videos and I would love to have a 15 minute interview with you with some questions I’ve prepared. Maybe over the phone or Skype or even email. I hope you can spare little time to help me. Have a good day!

  8. Great lessons here Ben when life hits hard we have to get back up again and again. I love that example about Children, they are wonderful teachers to us adults.

  9. So when you lost all that money did you sell and cut your losses or did you hold? If you held onto them did they rebound over time?

  10. Feels strange wishing I could afford to make $40,000 mistakes, but then I remember I've been paying double on student loans since 2015. Not a penny to my name, but by the time I do have two pennies to rub together, I'll be better for it. Thanks Ben keeping things real in the interim.

  11. Hi Ben

    Shoutout from the states.

    Have you ever done Chile?

  12. Life is too short to learn from your mistakes, so learn from others. Thanks for sharing with us this profound inspiring story. Mistakes are inevitable but to learn from them is crucial.

  13. Great points! In my last career in financial services I thought I knew everything, and lost considerable money on common stocks. Now that I'm an ESL teacher I can't really afford to lose money with my salary. I'm taking a more conservative approach with my portfolio and sticking to ETFs and mutual funds.

  14. Great lesson, Ben. You are absolutely right, learn and keep going. Happy Saturday.

  15. Hey Ben,

    Thanks for this. I've been wanting to jump in, but that fear….. Would you have a chance to give us info concerning doing what you've done, but with a family?

    Thanks again and have a good one!!

  16. Great video! One of problems has always been figuring out what the lesson is in each failure. I always know its their but often I misinterpret it. Great perspective though, big ups!

  17. I appreciate the video man. Nobody ever teaches you how to have a healthy relationship with money and it drives people off a cliff.

  18. I appreciate the video man. Nobody ever teaches you how to have a healthy relationship with money and it drives people off a cliff.

  19. I had a £95k loss… took me 18 months to get over. Made a big error and lost another £20k. BUT very recently realised that I would not be doing, what I'm doing now if I hadn't lost!!

  20. I would prefer teaching kids as well. They're more flexible and open. I try to be open. Failures are the door to success; will you pull? Do you even have the door? When I was young I always was told to listen to "authority figures"; but that can go too far. When I became an adult I was not trained to think for myself. Both are necessary. Naturally I'm very independent and determined, but my childhood taught me to listen. I go in assuming I need to learn.

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