How relevant is failure to success?

[always_learning]

Success is a lousy teacher. It seduces smart people into thinking they can't lose.
Bill Gates

After a few too many glasses of Yarra Yerring Estate Pinot-Noir ( nice drop BTW).

My life certainly has not been without failure, however I have never experience the fallout as I have today with my development project failing. I have hurt my friend (development partner) and cause deep problems with my family. My previous failures have of course made significant problems to just myself; but this time my failure has impacted others. Accepting full and absolute responsibility and apologies are not good enough and only go so far.

Can failure that hurts others be turned into success or even neutral?

 

[geoffw]

AL

You've been hurt hard. And you've been outstanding in sharing the troubles you've gone through with your family.

You've done well in selecting a wine which must be absolutely unpronouncable by the Japanese (I had a friend with the surname of Durrell who married a Japanese lady- she had a terrible time just pronouncing her new surname).

I've had some rough times not too long ago- with the tax effective schemes. Having had to pay $53K to the ATO for following financial advice (approved by my accountant) hit hard. Relationships were hit very hard, and some big compromises had to be made. My children were especially affected (back to government school).

It's bloody hard to get through while you're there. There seems to be no light at the end of the tunnel. There's this huge great big axe hanging over your head, readxy to drop at any moment.

This was all in respect of only one year's involvement in an agricultural investment. I had three years. And I spent a long time waiting for that axe to fall. If they had come at me for my subsequent years' involvement, I would have lost my house and my wife.

There was a compromise for me (from the ATO), and the axe was pulled away.

Sorry AL, you don't need another sob story or a platitude at the moment.

Just to say, when you do come through it all (which you will, in time), the feeling is so much sweeter than it would have been otherwise.

 

[Aceyducey]

Al,

I've had one situation where six weeks after moving my family (with a newborn & young son) to another state the Angel funding my company pulled the plug on the cash with 4 days notice.

Five of us had to decide whether to go on with no income or resources & try to make the company a success or fold up shop (and for my family, move back to Sydney & find a new source of income).

This event wasn't my fault (though it felt much the same) - just as what happened to your development wasn't your fault...but in both cases these matters have to be dealt with.

I learnt a great deal about negotiation, team building & prioritising through our decision to keep the company alive & move it forward.

The company is still doing well today - though I'm no longer involved.

The key learning for me out of the events were that provided you have the support of your family & teammates & you have contingencies in place for the worse case scenarios, you can always succeed.

It's meant that in everything I do I ensure that I have the full support of the others involved and I have the support of my family. If the support's not there, success is much harder.

So in relation to your situation AL, I guess that I believe that taking the blame really isn't the solution to mending fences. The solution is to be honest and take control and make things go the right way.

And, to be brutally frank, if your family doesn't support you when you stumble, there are some deep rooted issues you need to resolve...even where a family doesn't agree with certain decisions, if they're not there to pick you up afterwards, do they hold the same definition of what is a family as you do?

Cheers,

Aceyducey

 

[skater]

I had some very tough times a little while back. My husband & myself put all our finances (except PPOR & 1 IP) into a new business. Things started out fine, but slowly went from bad to worse. We were tied to a lease on business premises that we couldn't get out of & homes were in personal names, so could not walk away. Landlord was a Solicitor & would have made life difficult if we tried to leave. We were loosing $2000 per week.

Our solution, move from PPOR into upstairs office (there was bathroom facilities). Sell PPOR & payout Business Loan. Keep enough cash in an offset account to see us through until we were once again free. Buy a couple of very cashflow positive properties with remaining money. (Bank had already approved more money based on profit & loss of the first couple of months when things looked good, so decided to take a chance because the way things were going we were about to loose the lot anyway) Husband go back to work and I would run the business with the help of the children (ages 7 & 9). Best job he could get was in Pennant Hills & we were in Wollongong. Even doing this, our business was open many evenings as well & Hubby still had to work then after he had finished his day job.

We had to keep this up for 2 years. Hubby's income was only about $800 per week, so didn't come close to what we were loosing. In the mean time the children, who were hit very badly by this, learnt some very valuable work skills.

I would not want to do that again, but I'm glad now it happened. We learnt a lot. Firstly asset protection. Secondly bad times don't last, you just have to tough it out. The kids learnt alot about work ethic, family pulling together. They also came out of this as very confident, self assured young ladies that can tackle anything & have a lot more maturity in some areas than many adults. They were thrown into a situation where it was expected that they act like adults & did admirably. These days they are 13 & 15 and I think even they would say that they are glad they went through this even though they hated every minute at the time.

BTW the two houses we bought during this time were in Tassy. One we sold prematurely, but with a reasonable cap gain, the other tripled in value & we are selling now. Both had 13% yield when we bought.

 

[Garry K]

Can failure that hurts others be turned into success or even neutral?

It can, depends on the attitudes from here on.

My situation nearly 10 years ago, lost $50K on a business venture that failed over 18 months.
But I certainly learnt a lot about pushing myself outside my comfort zone - and if I look back now, the $50K was probably a good investment in self confidence.
Luckily, partner is always supportive - and we are way ahead now.
Actually, that failing, opened new doors that I think have more than compensated financially too.

Always, give it some time, and don't beat yourself up about it (it's easy to do) - look for any activity to get involved with. You'll be surprised later what you have learnt from this difficult situation.

GarryK

 

[Sunfish]

" Success is a lousy teacher. It seduces smart people into thinking they can't lose."
Bill Gates

What a wonderful quote. I have seen people on the stock chat boards seduced this way with predictable results and fear for some on this board.

T

 

[Sunstone]

Can failure that hurts others be turned into success or even neutral?

Dear AL,

A good question.

First of all I take my hat off to you by having the guts to do your first development. Are all developments going to be perfect? No. (The same as there is not a perfect investment property.) But I can see that if you choose to be, that you will be a stronger and better investor as a result.

Failure and mistakes are a fact and a key part of ones personal development. You cannot become a great investor without having at least one or two mistakes (and learning from them) along the way.

In my earlier times one of my customers that was listed on the Australian stock exchange went into liquidation. That cost myself $80,000.00 in a single bad debt when $80k had a much bigger effect on my net worth then it would today. Could I have handled this better in hindsight? Hindsight is always a luxury. However the flipside is when you are paying $12,000/year in trade indemnity insurance you expect that on a valid claim that this “should” protect you. This insurance experience contributed to my “education” about how insurance companies really work. (See the movie “The Rainmaker” for more info.)

The failure/loss that you personally have experienced is a cost of education. Education that it is up to you to utilise. The Always Learning that I would like to think I know will grasp this education in both hands and know that the cup is not half empty. It is in fact clearly half full.

You took a calculated risk in order to improve your families situation. What you owe them now is to use this education, fix the mistakes, reduce the risks and make it a winner for next time.

See_Change’s old quote is very apt “The opposite of success is not failure. It is quitting”.

AL, life is short. Time to get back on your bicycle, improve your mousetrap, and then do it better than the next guy.

Enjoy the journey.

Cheers,

Sunstone.

 

[Mr. Fabulous]

Why do you feel like it's all your fault? Why do you feel that others are hurting because of you? No one made your partner get involved. They did on their own. No one is to blame. That's part and parcel of doing business. You make mistakes, you learn from them, you move forward. Keep your chin up AL, no one who 'made it' did it without making mistakes.

 

[Corsa]

Hi AL

Firstly, thank-you for having the courage to admit that things have not worked out as expected and that you acknowledge that your family and friends are hurting and that you are feeling that you have disappointed them.

The key for you now is to rebuild your faith in yourself and learn from this experience so that you can continue to head towards acheiving your goals for the futures of both yourself and your loved onces. Once you have addressed the areas of self doubt, then can you move onto rebuilding the bridges of trust and faith with your family and friends to turn this situation around.

I don't really have any words of wisdom or any stories to share, but I sincerely wish you the best in getting through this difficult time and rebuilding for the time when you are ready to take managed risk for mutal reward in the future.

All the best

Kind regards

Corsa

 

[stargazer]

Hi AL

Not pleasant to see that things havent gone according to your estimations. I am not totally familiar with your project but from reading i understand that you had a project for 3 townhouses.

Has it totally gone as wrong as you estimate. Is there or have you explored ways to perhaps being able to salvage this. Mind you i am not totally aware of all the facts.

I had a bad experience with a property financial advisor nearly lost my house but i wont go into to it. But if i may say what i took from it:

Who is taking the risk?
Are all the what ifs covered
Can i cope if things go really Bad

Dont make any move doesnt matter how good it looks unless you are comfortable with the above.

Just keep pushing through as i can imagine your feelings and how the gut must feel.

I think Corsa said it right rebuild your faith in yourself.

All the best
BC

 

[House_Keeper]

AL,

We are all learning.

I knew nothing about property investments a few years ago, and I have made quite a few mistakes too. Perhaps I have been lucky enough so that my mistakes haven't totally wiped me out, or cause suffering to my family.

Nevertheless, I found it difficult to recover from my mistakes. I have had a tendency to blame myself, to focus on what went wrong and what I could have done differently. With hindsight, it would have been much better to focus on what went right, what can I learn from the experience, how can I do it better next time, and how can I move forward from there. I am sure that many of us have read something like this many times. DOING IT is a bit harder though. Like everything, it takes a bit of practice.

I haven't met any successful person that hasn't tried a lot of times and made a few mistakes along the way. Some mistakes are more painful than others, but that doesn't make anybody a 'failure'.

What I am trying to say is I believe that mistakes are part of the process. It is painful, sometimes very painful, for a while. But if you persist and eventually reach your goal, it beats doing nothing and wondering at the end of your life what you could have accomplished if you tried.

Cheers,

 

[keithj]

Looking at it from a slightly different angle.

Share traders expect to lose on around 30% of their trades. They take calculated risks, and they learn from those losses. They don't consider those 30% as failures, they take them in their stride & take the next calculated risk.

We in the IP trading/investing/development business have a higher expectancy of success, and we can do more to influence our success than share traders, also success has been easy in the last 4-5 years. However, many of the same principles apply, take calculated risks, take small losses early, learn from that 30% - all of which AL has done.

 

[Lissy]

Always Learning
Hang in there, you'll come out the other end of the tunnel and move on. I think you're being too harsh to totally blame yourself for what's happened. Reality is that in any venture there are risks, and all you can do is try and anticipate and plan for all the risks you can. And then another one will come along that nobody could have forseen. That's life sometimes.
I've made plenty of mistakes in buying houses, but you know what? I don't make the same mistake again. In the end that's the most valuable thing you can take away from a mistake - knowledge.
The hardest thing is going to be convincing those around you that this was a one off, and that next time things will be better. I know my hubby can be a nervous nellie sometimes about what I do, and yes, when I stuff up, he gets more nervous and can have a meltdown. But in the end I've always found a way to move on, and because he supports and believes in me, he's reluctantly come along. After all, in amongst the mistakes there are plenty of wins too, and sometimes I need to refocus him on those!
You may have to accept that it's going to take a little time for this to recede and be resolved, so remember, patience is virtue!

 

[Mikhaila]

Can failure that hurts others be turned into success or even neutral?

Hi AL,

The answer to your question is Yes and No. You raised probably the toughest question an investor can face during the journey. Success rarely (if ever) comes without mistakes. Mistakes are integral part of any process and you know it well being in IT industry. Failures however is opposite of success. I know many will/may say - call it whatever you like failure or mistake but we lost huge amount of money and that is your fault! How you take it is completely up to you. It is worth remembering that these many will more likely never be financially independent. It is easily possible to be a failure without doing anything, but it is rarely possible to be a success without making mistakes.

M.

 

[kierank]

As Melannie McDonald said at the last BIG meeting:

"We all fall - it's the successful ones who get up!!!" (or something like that if I haven't quoted her correctly word for word).

AL, when you are ready, I believe we are all waiting for you to get up.

 

[pennyk]

I have just lost over $100K in a failed business venture. My partner was supportive, but felt we should have pulled the plug earlier, and not borrowed extra. But we did borrow extra, because we had an investor lined up to buy a 50% share in the company, and I thought we just needed some extra to tide us over. But, in the end, one of our businesses was a black hole, and we ended up "giving" it to the investor, in exchange for a small share in his company. we kept the debts and he took the running costs of the business off our hands. I've spent much time over the past few months feeling guilty about the financial strain that this has placed our family in. I think it's accentuated when, like you, my partner wasn't that supportive of getting the additional debt.

I think the guilt is actually really destructive, cause it seems to stop you from seeing the solutions all around you, and it also blocks you off in your relationships, so they can't be resolved. It probably took us about 2 months - and a fantastic one month holiday, before we could actually talk about what had happened, how we both felt and what we were going to do.

Interestingly, this week we have begun to see some of the good things about the failure. As a result of the split in the company, I began to work as an employee of the investor. It has been a really difficult time, and highlighted major differences in our attitudes and approaches that weren't evident before. we have had major conflicts most weeks, and what was a good working relationship has really deteriorated. So, we are so glad we are not stuck being partners in a business. In hindsight, it would have been a disaster! even more so than the financial disaster we went through.

It has also really helped me to clarify what I want to do. We have spent the best part of 6 years establishing 3 businesses. One has gone reasonably well, one has failed and the other is just starting to get established. and in this failure process, I realised that I enjoyed investing more than running a business. So, we have decided to pursue regular employment more so than business, as that makes it easier to actually secure investments. So, we are heading in a slightly different direction, with my husband starting a full time permanent job in a couple of weeks.

After that settles down, I'm thinking we'll probably refinance our business debt onto our line of credit and pay it off a bit slower than at present, and see how we go!

I hope you are able to find you way through this AL, particularly with your relationships.

Pen

 

[giveitago]

Some of the most sucessful people in the world have been knocked off their perch more than once. The reason they became successful is they got back on the perch one more time than they got knocked off.

Did you know that Henry Ford was stone broke at the age of forty.

Colonel Harland Sanders (KFC) was sixty-five years old and penniless. He retired and received his first social security check which was for one hundred and five dollars. He decided to peddle his finger licken chicken to restaurants. The rest is history.

Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed.
--Booker T. Washington

Don't ever give up.

giveitago

 

[see_change]

Share traders expect to lose on around 30% of their trades. They take calculated risks, and they learn from those losses

If a share trader is only loosing on 30 % of their trades , they're a genius. Most are happy with a 50 / 50 ratio. The thing that swings the pendulum in their favour is the gains being bigger than their losses.

AL, the first thing I notice is the fact that you are concerned about the effect you are concerned about the effect your actions have on others. That means that people will have no problems wanting to deal with you in the future. I have a feeling that many people on the forum at the moment will look back in a few years time and find that the people who are responsible for their success are the people they're meeting at the moment.

When we sold our nice new house in Pymble , my wife was told by several friends that they'd have to be dragged out kicking and screaming ( or dead...) before they'd sell it. It took about a year of gental persuasion and hints about our future financial situation before Vicki was "happy" about selling. Looking back now, she knows what an important step that was for us, in freeing up money that we've been able to invest to effect over the last 2 1/2 years.

Sometimes things take time for people to work through.

Good luck. Have to catch up when you finally get back to Australia.

See Change

 

[perky29]

AL,
Seech is right in what he says.
Maybe next time you come to OZ with your family, we can organise another Sydney Picnic around that time. Then your wife can meet some of the generous (with their time/experience and optimism) people and families of the forum. Chin up mate

 

[always_learning]

Dear All

Thanks for all your replies.

After another tough week between my wife and I, visit to the Australian embassy to sign Stat Dec's etc in regard to the sale of one of the units...it was not a good week, unit still not rented dispite dropping the rent to below market value.

I will take heart in PennyK's comment

I think the guilt is actually really destructive, cause it seems to stop you from seeing the solutions all around you, and it also blocks you off in your relationships, so they can't be resolved. It probably took us about 2 months - and a fantastic one month holiday, before we could actually talk about what had happened, how we both felt and what we were going to do.

Yes nothing can be fixed quicky, I hope that time is require all that is required before rational discussion can take place. A good months holiday would be very nice. If I can get to Sydney then a BBQ would be very nice!