Mistakes. They are a part of life. We all make them. And mistakes when it comes to money are a fact of life. But like turning lemons into lemonade, we can either benefit from our mistakes and make the most of them, or we can run from them and pretend they don’t exist.
This hit home for me recently in an email exchange I had with a reader. In a recent post that discussed peer-to-peer lending, I made a mistake. I spelled principal (as in principal and interest) with a “ple” at the end. Talk about a dumb mistake for a personal finance blogger to make who claims to know something about making money. So a kind reader sent me the following email:
Very good analysis. However, she has paid off some principal on the loan, not principle (although we all agree that, in principle, it is a good idea to pay off some of the principal).
I was mortified. I immediately corrected the error. I then responded to the reader thanking him for pointing out my mistake. It was his response that became the motivation for this post. He wrote,
Hey, we all make mistakes, otherwise we wouldn’t be blogging, we’d be golfing or whatever it is that you’d like. You know, it is amazing how many times I find errors like that and how few authors accept the comment without getting all huffy over it. You got class.
The fact is that some of our best successes are born out of mistakes. I've made many mistakes with The Dough Roller, and most of them have allowed me greater success down the road. In one case I made a terrible mistake with a post in terms of Search Engine Optimization (SEO). I went from a #2 ranking and 500+ search engine visitors a day to virtually no ranking and about 20 visitors a day. But I learned several important and valuable lessons about SEO.
Of all the things we talk about on this site, learning from our mistakes is one of the most important. If you can learn from your mistakes, you can do just about anything. So here are a few suggestions on how to do that. (And I've made seven mistakes in the list; can you find them all?)
- Acknowledge: The absolute first thing to recognize is that you will make mistakes. We all do. If you go into an investment or a business or anything without recognizing that mistakes happen, you’ll be in for a big letdown. If you acknowledge that mistakes are one way we learn and improve, you’ll be better able to take your mistakes and turn them into opportunities.
- Accept: I know folks who refuse to accept they’ve made a mistake. Unfortunately, I know some politicians who do the same thing. Deep down, I think it’s fear and pride that keep many from accepting that they’ve made a mistake. Whether it’s fear of rejection, fear of failure, or just plain pride, failure to recognize when you’ve made a mistake prevents you from learning and improving. If I didn’t learn from the mistakes I’ve made investing, I’d still own high-fee load mutual funds and would have no foreign investments.
- Accept NOT: A corollary to accepting when you’ve made a mistake is NOT accepting responsibility for others’ mistakes. As a manager, I believe one must accept responsibility for the mistakes of subordinates, but that’s not what I’m talking about here. I’ve known people who seem to blame themselves for everything. Just like refusing to accept responsibility for your own mistakes will keep you from improving, so will blaming yourself for mistakes others have made.
- Analyze: Once you accept that you’ve made a mistake, you need to analyze what happened as objectively as possible. It’s difficult to be objective. I don’t look at The Dough Roller objectively. How can I? I’ve poured countless hours into this site. But I can do my best to assess my mistakes as objectively as possible. And the same is true at work, in relationships, and with investing. Have you ever found yourself enamored with a stock pick you made, even if it turned out to be a mistake? Read this--DON’T fall in love with your investments, they don’t love you!
- Acquire:: This is critical--we can never stop acquiring knowledge. The most horrendous mistake is the one we don’t realize we’ve made. That’s why I was so grateful when a reader pointed out that I had misspelled principal. It’s the mistakes we don’t realize we’ve made that can do the most damage. So we can never stop learning and acquiring new information and new skills. I’m constantly asking myself what I can learn when it comes to blogging, internet marketing and SEO. Just this week I’ve learned new skills that I believe will make me a lot of money online. We shall see.
So what about my stupid principle--principal mistake? Well, that reader and I have exchanged emails since then. I got one from him just the other day. Had I ignored his correction, or worse, made the change in the article without acknowledging the mistake, I may have lost a faithful reader. I would have turned one mistake into several. Now that’s a mistake worth avoiding. And speaking of mistakes, did you find the seven I made in the list?