Once you have shed your old skin, the next step in recovering quickly from any setback is to accept there most likely be some painful adjustments to endure. A person battling a cancer diagnosis knows that they may have to face many rounds of chemotherapy and radiation treatments in order to defeat the disease, They will suffer the pain and the unpleasant side effects if it means they have a good chance of surviving and hopefully thriving again. In marriage breakdowns, the couples involved may have to endure the emotional rollercoaster of anger, resentment , blame, self doubt and fear as part of the process of getting through to the other end to start a new life, perhaps a new relationship in time, and with the potential to be happier in the long run.
When I worked in the financial services sector in Australia back in the mid nineties I had a really interesting job as a money market dealer in the treasury division of a bank
I was really only starting out and learning this aspect of the finance business on the job and I was surrounded by a group of bright, experienced and ambitious financial traders. They were known as proprietary traders where they each had a responsibility to trade their own portfolio of the bank’s capital reserves and to take very carefully measured risk and hopefully make a profit. They did this, primarily, by studying the trends in the market place and then adopting a position on the direction of interest rates. Their trading position could be as large as a few hundred million dollars at anyone time so even a minute change in interest rates could tip their portfolio over in to a substantial profit or loss situation very quickly. These guys were clever and had the ability to think quickly in a high pressure environment and they were very well rewarded for their efforts and results.
The best performer among them was also the youngest and least experienced trader in the room. His name was Sheldon and I remember him well because he was a good humoured, intelligent and confident, if not slightly cocky, guy. One day I asked him to explain to me why he was so successful compared to his older and more experienced colleagues. He said that it came down to one thing over all and that was his ability to take the pain. He explained that what separated him from the others was his ability to recognise when a trade was going wrong and to be disciplined enough to cut his losses quickly. Sheldon said that to be successful as a trader he did not need to be right 100% of the time. He just needed to be right more often that he was wrong and he estimated that on average he was right with his trading positions about 60% of the time. “How you handle your losses is crucial to your success” he explained. He said the mistake people make is that when the market starts going against them, they refuse to accept it, they kick an scream and demand that the market swings back their way and they neglect to cut their losses and minimise the damage to their portfolio. They end up with comparatively bigger losses than Sheldon did because the refuse to take the pain when they need to. This means that their over all profit levels are reduced because they are having to cover larger than necessary losses.
I took on board that advice and I eventually put it to good use when I was going through my financial crisis. By finally accepting the depth and gravity of my situation, I then disciplined myself to take the pain full on by declaring myself bankrupt. Please understand that I did not take that decision lightly. Bankruptcy, after going through a lengthy process, offers you the opportunity to wipe the slate clean and start again. You don’t get away with anything as you must be willing to give up all your valuables and assets, in order to have the right to start again with nothing. It was the best thing for me to do at that time and it would have the right option for many others as well who were in a similar position to me but not everyone is willing and able to make that choice. Some people are just not willing to accept the consequences that go with availing of the bankruptcy process. It means that you declare all your assets and liabilities and you sell off everything you can to pay down your debt as much as possible.
In my case this included our family home and as a result I ended up having to rent a house to live in with my family for many years afterwards. For some, that is too painful because it means that you have to acknowledge to yourself and others the reality of our circumstances. Many of my colleagues and clients at that time could have done so much better for themselves in the longer run if they followed the same steps that I took. Instead they wriggled and wrangled their way through the next few years and they continued ducking and diving in terms of dealing with their creditors, all to no avail. Most of them who took that approach are still stuck in a rut 10 years later where they have no closure in terms of their debts and they are still accountable to their banks for all their outstanding legacy loans from the boom times.
The lesson I have learned is that it is worth taking the pain in the short term in order to free yourself up to gain over the long haul.
