Journal of Financial Planning: May 2020
One of the most common obstacles to beginning a new path or working toward a fresh goal is the fear of failure. What if we start on a path and aren’t able to accomplish what we intended? What’s even the point of trying if it’ll just be a waste of time? I remember battling these very thoughts initially after losing my investment banking job.
I’ve found that the following strategies can help you get more comfortable with failure, allowing you to move forward toward your goals and bounce back quickly when you face obstacles.
Get in the Right Mindset
In her book Mindset, Stanford University psychologist Carol Dweck, Ph.D., explains that the way you view yourself can impact how you live your life—from the goals you set and the decisions you make to whether you can achieve what’s important to you.
Dweck’s decades of research found that people think about their abilities with either a fixed or growth mindset. Those with fixed mindsets believe their skills, intelligence, and talents are set in stone. People with growth mindsets, on the other hand, believe they can build on and improve these characteristics. Dweck also found that people’s mindsets can vary by activity. For example, someone could have a fixed mindset when it comes to math, but a growth mindset for sports.
Dweck says that people are most likely to succeed at a task with a growth mindset because they’re apt to focus on growing and learning, rather than trying to prove themselves repeatedly. As she puts it, “The passion for stretching yourself and sticking to it, even (or especially) when it’s not going well, is the hallmark of the growth mindset. This is the mindset that allows people to thrive during some of the most challenging times in their lives.”
When I was younger, failing to achieve a goal would often damage my confidence and self-esteem—textbook signs of a fixed mindset. It wasn’t until I lost my job in my late 20s that I began shifting toward a growth mindset. After stumbling upon Dweck’s research, I realized that I had been thinking about my layoff as an absolutely terrible outcome, rather than seeing it as a learning opportunity that would help me eventually reach my goal of greater career satisfaction. This simple discovery marked a turning point for me.
With a growth mindset, I figured out that I could still apply and build on the analytical skills I had honed in investment banking, but within a different industry that better matched my desired lifestyle. Fortunately, I was able to find that combo when I began my new job at Google. My experience encouraged me to adopt an approach that has continued to keep me motivated when I face setbacks in life—including when it comes to optimizing my career and finances.
Diversify Your Identity
Another strategy for overcoming the fear of failure is diversification (read: not putting all your eggs in one basket)—an effective strategy when applied to your career, investments, and even your identity. By diversifying your very identity, you can take purposeful steps to avoid defining your sense of self based on a single aspect of your life, such as your job title or the size of your checking account. In other words, diversifying your identity means valuing yourself for all the characteristics that make you you.
Tim Ferriss, technology investor and author of The 4-Hour Workweek, espouses the benefits to be gained from a diversified identity. In one of his on-screen interviews, he explained, “When you have money, it’s always smart to diversify your investments. That way if one of them goes south, you don’t lose everything. It’s also smart to diversify your identity, to invest your self-esteem and what you care about into a variety of different areas—business, social life, relationships, philanthropy, athletics—so that when one goes south, you’re not completely screwed over and emotionally wrecked.”
I can relate to the picture that Ferriss paints. My mood was almost entirely dictated by how my job was going when I worked in investment banking. Sure, when I had a good day at work, I felt on top of the world, but if I happened to have a bad day, I’d quickly fall into a downward spiral. In more recent years, however, I’ve diversified my identity by starting a side hustle and prioritizing my family relationships. As a result, I’ve been able to avoid extreme emotional swings while becoming increasingly confident in my decisions across all facets of my life.
You, too, may find that a diversified identity helps you tune out messages of self-doubt that threaten to stand in the way of achieving your career and financial goals. And besides, it’ll almost certainly make you happier—and who doesn’t want that?
Don’t Take Yourself Too Seriously
In the movie “Van Wilder,” the main character (played by Ryan Reynolds) provides the following advice to an incoming freshman student: “But you know what I’ve learned in my seven years at Coolidge, Timmy? I’ve learned that you can’t treat every situation as a life-and-death matter because you’ll die a lot of times. Write that down.”
Like Timmy, I used to have a tendency to take life too seriously, especially where my job was concerned. Because I was insecure about my standing at work, I responded defensively to constructive feedback, overreacted when I made mistakes, and tried to cover up my weaknesses. Unsurprisingly, I wasn’t on the top of everyone’s list of picks when new projects or opportunities arose.
Fortunately, I discovered a mentor in my boss at Google who helped me realize the error of my ways. When I saw how he handled work situations with relative levity and ease, it dawned on me that I was making life overly difficult for myself. By mellowing out and seeing the lighter side of things, I’ve also discovered some unexpected benefits, like stronger connections with colleagues, greater stamina, and improved job performance. Best of all, I was able to build my resilience—a skill that has helped me stay true to my core career and financial goals, while opening me to opportunities for improvement.
When I asked Ramit Sethi, author of I Will Teach You to Be Rich, what one piece of advice he would give his 21-year-old self, he said, “I’d tell myself to loosen up and have more fun. When I look back, and when I was most rigid, I was less successful. The times when I was most flexible were when I was most successful, and that is true in relationships, finance, and careers.”
Roger Ma, CFP®, CDFA®, is founder of lifelaidout, author of Work Your Money, Not Your Life, and a Forbes contributor. He was selected as one of InvestmentNews’ “40 Under 40” in financial planning in 2017, and one of the top 100 Most Influential Financial Advisors by Investopedia in 2018 and 2019. He is also the 2017 recipient of the FPA diversity scholarship.
This is an excerpt from Roger Ma’s new book, Work Your Money, Not Your Life, an all-in-one guide to getting your career and finances in order—for greater clarity, happiness, and peace of mind. Available today on Amazon.