What About the Big Stuff? by Richard Carlson

Author:Richard Carlson [Carlson, Richard]
Language: eng
Format: epub
ISBN: 978-1-4013-9717-3
Publisher: Hachette Books
Published: 2002-10-15T00:00:00+00:00

23. Survive Those Financial Setbacks

What goes up almost always comes down. And what comes down often goes back up. But not always. Financially, there are good times and bad, secure and insecure. The wisest people seem to take most of it, including the lows, in stride.

During the 1980s, real estate seemed like a brilliant investment in many parts of the country. Ironically, however, a few of the people I knew who were making a fortune in real estate took this perceived wisdom completely with a grain of salt. At the time, I didn’t fully realize how much knowledge these people possessed, nor how much I would use this wisdom during my lifetime. These wise few had no arrogance about having “the magic touch,” nor any assumption that the good times would last forever. Instead, they had the wisdom to know that while they were very good at many aspects of the business, many other factors outside their control were working in their favor—mostly timing. While they enjoyed the success they were having, and certainly didn’t minimize it, they had no doubt in their minds that times would change. And they did.

When real estate values declined, in some cases dramatically, those who had anticipated it had hedged their bets. These people, even those who lost most (or in select cases, all) of their earlier gains, did so with a great deal of perspective.

As a witness to what was happening, I was more impressed with the way people lost money than I was with how much money had been made. I was, and still am, in awe of the power of perspective.

There was a similar but even more dramatic and visible “mania” surrounding the United States stock market in the mid-to-late 1990s. It seemed like almost anyone “in the game” was coming out a winner. Even the most modest investors were, in many cases, looking like geniuses! At times, college-age kids (sometimes even younger) were making a fortune with their ideas, and investment returns were soaring.

Then the bottom fell out! Million-dollar portfolios were wiped out, estates were cut in half—or worse. In many cases, even the most sophisticated investors were brought back to earth. Personally, my own retirement plan is down 30 to 40 percent from its high as I write this piece. Others fared much worse.

Financial perspective, as I’m defining it, means being able to take a great big step back and see (and accept) the long-term picture as it’s likely to be—without tainting it with fear, on the one hand, or arrogance, on the other. With the correct vantage point and a crystal clear mind (not a crystal ball), panic or irrational enthusiasm is replaced with calm wisdom. It’s precisely such wisdom that allows people to do everything possible to put the odds in their favor without being immobilized if the results aren’t what they hoped for.

One of my earlier books, Don’t Sweat the Small Stuff About Money, had a lot to do with keeping your financial and creative bearings, and realizing that any success we enjoy is usually despite our worry, not because of it.

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