No one likes to fail. Failure can feel devastating and can lead to depression and hopelessness. It can destroy your self-confidence.
Everyone knows this because everyone has experienced failure. Sometimes the failures are small (e.g., you didn't finish off all the things on your to-do list for the day). In that case, there may be mild disappointment and some minor inconveniences waiting for you the next day. Usually not a big deal.
But sometimes our failures feel monumental (e.g., you bombed the SATs, you got fired from your job, your spouse left you, your business went bankrupt, etc.). In those cases, you can feel completely wiped out and lose all hope. When the stakes are high and you fall short, the sense of loss that follows can be deep and hard to bear.
So how can I say that failure is good?
Because if you want to achieve something truly meaningful (I'm talking about a really big and complex long term goal), the path is going to be lined with failures and setbacks along the way. In other words, failure is the price you pay to ultimately succeed in the long run.
In this article, we are going to discuss 7 reasons why failure is good and some of the most important lessons I learned from my failures along the way. I will also share some of my best tips for capitalizing on failures and positioning yourself for long-term success.
Let's get into it!
Note: If you prefer a condensed version of this article in video format, check out my YouTube video below.
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Failure Sharpens Your Focus
When you are starting a new business or a new job (or really any other significant enterprise), you have high hopes and a million ideas for how to succeed with that undertaking. You may try a lot of different things to see what sticks. I am not saying that is a bad approach, but it's not until some of those things you are testing actually fail that you gain traction and an understanding of what it takes to be successful.
You can use failure as a tool to sharpen your focus and identify the two or three things that really matter to your success. Failure can allow you to hone in on those areas and build them up. This type of focus on the important stuff can springboard you to far greater levels of success than the average businessperson who never knows the key things that drive success because they did not “fail” enough to identify them.
Failure Makes You Hungry for Success
Have you ever played a game where you keep on winning? After a while, you get used to it and a feeling of complacency settles in, right? But the opposite holds true when you lose. Each loss stings and makes you want to win even more. When you finally do win, you feel a rush of excitement and satisfaction. It's human nature.
Because of this, failure can make us hungry for success. It can motivate and inspire us to try new things, look for better ways to do old things, and generally drive us to improve. Why is this important? Because without motivation, noting worthwhile happens. Motivation is the fuel that drives action and success. Without it, you are stranded on the side of the road and going nowhere fast.
Failure may hurt when it happens, but it can be a powerful catalyst for change.
Failure Burns Away Your Recklessness
Start-ups have a high failure rate – nearly 90%!
Part of that is due to unbridled optimism coupled with an attitude of throwing caution to the wind.
Everyone who has started a new business knows what I am talking about – it's that incredible feeling when you discover a new idea that has promise – your heart beat quickens and your head gets a rush of excitement as you imagine the possibilities.
But diving headlong into a new enterprise (whether it's a business or any other high stakes endeavor) without exploring the risks involved is foolish. For those who have experienced failure, they know that they must identify, evaluate and ultimately mitigate risk if they want any chance of succeeding.
They've been burned before, so they have a healthy respect for risk and downside. This more controlled and mature perspective (refined by the pain of failure) will allow you to realistically look at a situation, assess the risks as well as the upside, and make informed decisions based on an accurate lay of the land.
Failure Builds Resilience
Human beings are resilient by nature.
There are incredible stories of people overcoming hardships and finding paths to greater success and happiness. But resilience is not something that is static. It can become stronger. And failure is one of the things that can build resilience.
Everyone has gone through some hardship in their life. When I look back on the toughest times in my life, I acknowledge they were hard times, but I also know that if something like that were to happen to me again, I would be able to come back from it. That's the confidence that comes from resilience. That's the confidence that comes from experiencing failure and overcoming it.
Very few things build resilience better than failure. When you become so resilient that you view failure as just another learning experience, you know that your resilience is next level. If you've achieved that, there there is going to be very little in this world that will deflate you or stop you from achieving your goals.
Failure Teaches You How to Succeed
As I just mentioned, those who are resilient have figured out that failure is just a learning experience. And what an incredible learning experience it can be.
I always took to heart the old saying that you should learn from others' mistakes. And it's great advice – you should do that whenever possible. But sometimes you must learn things the hard way. There is simply no substitute for experience when it comes to doing something new and complicated. I have realized this time and time again in every business venture I have launched.
For example, when I started investing in real estate, I read a ton of books, did extensive research online and talked to realtors and investors to learn as much as I could. I did not want to make any mistakes because I was putting a lot of money at risk. But I did make mistakes…a lot of them.
I invested in a war zone because the numbers looked really good on paper. I got Section 8 tenants because I thought that if the government is guaranteeing the payment of the rent, what's my risk? But I was wrong. I didn't pay enough attention to tenant screening because I though it didn't matter so long as I was getting Section 8 checks.
But getting bad tenants is very expensive. Just because the rent is paid doesn't mean they won't trash your place. It was a valuable lesson that I never forgot.
Now I have 9 rental properties in high end areas where the tenants have very high credit scores, great jobs, and care deeply about not messing up their good record. It is a formula for success that I never would have learned if I did not experience failure first.
Failure Makes You Humble
Arrogance can kill your chances of success.
Conceit makes you blind to your own shortcomings. If you are arrogant, you are focused on how great you are. You don't strive to get better smarter and better because you don't think you need to. In business, that can be disastrous. You will be caught sleeping while your competitors, who are more hungry than you are and improving all the time, overtake you and leave you in the dust. Of course, the same holds for academics, sports, music, or any other competitive undertaking.
It also causes you to ignore anything (and anyone) that conflicts with your viewpoint. The arrogant will often ignore experts and advisors who may have more experience because they think they are smarter or more talented than everyone else in the room. The truth is no one is right all of the time. Everyone has blind spots. If you are too full of pride to recognize yours and don't give due consideration to other points of view, you are going to be shortchanging yourself.
Being humble, though, cures these issues. And nothing makes you more humble than failing. When you fall down, you have no choice but to look at yourself and evaluate what went wrong. You are forced to cast aside your pride and figure out how to improve. That inward examination and humbleness will serve you well when you pick yourself up and start again.
Failure Opens Your Eyes to New Opportunities
When you fail, you can sometimes see opportunities that you did not see before. As I mentioned before, this can come in several forms.
You may be open to interesting suggestions or ideas from others because you are more humble and open.
You may be looking everywhere for ways to make your existing project or business work because your past failure have made you highly motivated. That can lead to brand new ideas or strategies that you never would have found if you weren't so committed.
You may shift gears and look for different ways to make your existing project work because your past failures have shown you that your current strategies are not working. Even a slight shift in strategy or approach can mean the difference between total failure and smashing success (look at my real estate example earlier – I didn't abandon real estate investing, I just moved my focus to a different neighborhood and increased my price points a bit).
Related Reading: If you want to learn more about how to start investing in real estate, check out my detailed article on the topic here.
So there you have it – 7 reasons why failure is good and some pro tips on how to make failure a launching pad for massive and sustainable success.
If you are interested in learning more about whether you have what it takes to become financially successful, check out my article on signs that you will become rich someday.
If you want a truly practical start to improving your financial life, check out my intro to personal finance. We talk about the five pillars of personal finance and how you can use them to achieve great financial stability and success.