“What’s the one thing you would tell people who want to create wealth?”
If you’ve ever listened to a podcast or read an article in which a financial expert is being interviewed, you’ve likely heard them respond to a version of this question.
The guru is ready to knock it out of the park. They’ve been asked this question a million times before, so they’re ready to go with a canned answer—something along the lines of “start yesterday.” It’s meant to motivate people to take immediate action and harness the power of time with their investing.
It’s well-intended, but this advice is incomplete.
In truth, many of the people who’ve built successful businesses or achieved admirable levels of wealth had to withstand some difficult moments after getting started. Yet against all odds they tapped into their inner strength, courage and perseverance to complete the mission at hand.
Our life experience is no different. Like you, most likely, we’ve had our share of highs and lows.
In those moments, it’s completely normal to second-guess your beliefs. You may blame yourself for not doing enough research or asking better questions. You may even find yourself resenting the guru whose advice you followed because they didn’t tell you the whole story.
In actuality, your experience with financial hiccups, downturns and abject failures is unique to you. The antidote to financial turbulence is one of the most universally true pieces of advice we can give: Stick with it. Your ability to persevere will ultimately determine whether you record these experiences as wins or losses.
Like many Americans, we were shaken by the Great Recession. The starter home we purchased in 2007 lost over half of its market value less than a year after we bought it. If we had given into fear and cashed out in the following years, or stuck to the original plan and moved into a larger home sooner than we did, we would have assumed a stunning loss on that investment. Instead, we held on and continued living in it as the economy slowly but surely turned around. Eventually we renovated and converted that home into a rental property until finally selling in 2018 at a sale price 60% higher than our original purchase price.
Similarly, after building up the courage to open a brokerage account in 2014, we invested in a reputable index fund only to see it lose thousands of dollars the very next day. We could’ve questioned the credibility of our information sources and even our own abilities to make smart financial decisions. Instead, we put the loss in context, remembering we were long-term investors and not reliant on next-day gains. Now seven years later, that same fund has doubled in market value and we rest comfortably knowing it will continue to grow over the coming decades.
Last year brought its own lesson: We now know what it feels like to start a business with tons of momentum, only to have it halted by a global pandemic.
In each of these instances, there was no good choice but to do nothing—to stick it out, staying the course even if it was uncomfortable or the future was unclear.
The benefit of living in the information age is each of us has access to data and insights in the palms of our hands. At any moment, we can read articles, analyze charts and listen to pundits go back and forth about their varying predictions for the future. What we do with this information is key and whether we should act on it depends on the specific situation.
But through it all, maintaining an optimistic outlook through the good times and bad is key in determining financial outcomes. Your attitude is what makes your patience and persistence bearable.
As millennials, we’ve now experienced two frightening economic downturns in our working adult lives. The resulting fear can be paralyzing when you’re in the middle of that kind of disaster. But we’ve learned that when the dust settles, those who keep a level-head, maintain a positive attitude and act in line with their long-term goals are the ones who end up ahead.
Those old gurus aren’t wrong when they say to “start yesterday.” But having lived it, we can say that how you handle today and tomorrow is every bit as important.
This article originally appeared in the July/August 2021 issue of SUCCESS magazine.
Photo by @Gaysorn/Twenty20