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Learning the Hard Way and Being Ready to Learn





This is a column by regular contributor Clark.

I’ve read that unless a person is ready to learn something, any advice offered is virtually useless. I say virtually because the advice makes the receiver aware that there is a different way to their present path (for better or worse – not all advice is good!). But, the knowledge is useful only when applied to obtain a practical solution. In the personal finance world, writers do their best to help readers avoid pitfalls by offering suggestions and examples and sharing experiences about getting out of debt, remaining debt-free and planning for retirement.

I’m positive that many people benefit from them but for those who just won’t listen, I wonder if it is such a bad thing to get burned to feel the pain and then, get prepared to listen and learn. I realize that there are situations which could become irreparable or those that make a severe dent to change one’s path forever. Nonetheless, I’d like to use three random cases to highlight my views.

A Car Crash and Work Incident

1. “Speed thrills but could kill” is a universal truth but I had to learn it the hard way to realize my folly and become a responsible driver. I won’t go into the details – let’s just say that I was fortunate to not get injured in the single-vehicle collision and I got the message!

2. At work, a colleague and I are in charge of a specific department. The job profiles are not strictly delineated and since we share the space, I have, more than once, covered for the person. Without getting into the specifics, let’s say that there are certain tasks that run on an abnormal schedule. Such a protocol is prone to errors due to forgetfulness – a person needs to watch and do the needful when required (one can set reminders and alerts but they still need to be acted upon!). I have reminded my colleague on several occasions about the impending maintenance task.

The colleague has remembered to do the task some times and forgotten on other occasions when I did it to cover and keep the department going. There were the “thank you” and “taken for granted” situations in equal measure. Recently, I reminded the colleague on a Thursday that the maintenance task needed to be done before the weekend and forgot about it myself (trust me, I really did!). The colleague duly forgot about it and got called late in the night during the weekend to fix errors/interruptions that had happened because of the forgotten maintenance. A couple of weeks later, though the maintenance was not due until the following week, I noticed the colleague performing it at the end of the week. I smiled to myself and realized that learning a lesson the hard way definitely does have its benefits as I’ve seen myself.

My Progression in Personal Finance

3. Three years ago, I was making the minimum payments on my student loans and did not have any credit card debt or savings account. However, I did not understand (actually, I never stopped to think about it) that dragging a loan to its full term is not the only way and prepaying it would save me money. My reasoning was that the monthly payments would remain the same even if I paid more than the minimum; so, why bother? (the time factor never crossed my mind and I never discussed with anyone either!). Sometime later, a friend mentioned about the ING savings account in passing (I had seen ING ads but never paid attention to what they were for) and that kick-started my enthusiasm for personal finance.

I opened one account, pumped excess cash flow into it, and a year later I had a substantial amount in my ING savings account; I wondered why I shouldn’t pay off the student loans in one go. I did the math and realized that I fell short by a little more than a thousand dollars. I could have waited until the next month’s paycheck but couldn’t resist; so, I borrowed from my credit line to pay off the loans a week after the thought first occurred. Actually, paying off the loans by borrowing from my credit line for a few days worked out marginally cheaper than waiting until the end of the month (for the paycheck) would have been but that is beside the point.

It felt great to be debt-free and to have increased cash flow. Two years later, here I am, saving diligently, banking my raises, investing in stocks and questioning why I need to do things a certain way for the sake of convention. As I look back, I realize that 2007 was the year when I was prepared to learn! In fact, more than being prepared to learn, I started to think better and questioned why I should or shouldn’t do things in a pre-set way.

This post is not meant to showcase my good fortune or prudence but to underscore the fact that being ready to learn by asking questions than accepting the status quo and learning the hard way give us a better frame of mind to grasp, retain and utilize the lessons learned. Sometimes, things may not end well but many times, they are not as bad as they seem!

Do you have stories (not necessarily PF-related) where you wish you had listened the first time? Have you got burned despite being advised to the contrary?

About the Author: Clark is a twenty-something Saskatchewan resident employed in the manufacturing sector. He repaid around $20,000 in student loans and has been working to build his investment portfolio as a DIY investor (not trader) while nurturing plans to retire early. He loves reading (and using the lessons learned) about personal finance, technology and minimalism.





10 Comments, Comment or Ping

  1. 1. DG

    In the late 90′s my roommate and I had an opportunity to purchase the condo that we were renting. I had zero interest in PF at the time, and had inherited very conservative financial habits from my parents. Even though I had no other debt, taking on 25k of mortgage debt seemed insane at the time, but I slap my forehead now for not jumping at the opportunity. I am educated in PF now and am willing to take reasonable risks.

    One of my profs used to say, “If you didn’t make any mistakes you didn’t learn anything.”

  2. … or if you didn’t make any mistakes, you never tried anything did you?

    You can’t push a rope, people will learn when they are ready to learn, not when you are ready to teach them (necessarily).

  3. Mistakes are the name of the game! I’ve made numerous financial mistakes over the years, but best thing is to learn from them, and move forward. Ie. Buying Nortel @ $60 and holding until the end. :)

  4. 4. Adam

    It’s funny how a situation, such as the Nortel case, could have gone much differently and someone may have extrapolated a different lesson from it. If someone would have loaded up on BMO in Mar 2009 and then doubled their money within 8 months – they may have said that buying a stock when the sky is seemingly falling is a great idea, whereas the person who held Nortel and averaged down until failure would state they learned the opposite lesson.

    What is the real, absolute, lesson that can be extracted from those situations, rather than the situational circumstantial lesson?

    I would venture that there is not much of a lesson to be learned at all, as the results would have greatly skewed the persons perception. The BMO individual may walk away stating they have a high tolerance for risk and take another chance and consequently lose it all… The Nortel individual may walk away stating they are completely risk adverse, going forward, and miss a great opportunity in the future.

  5. I had this problem just in school. Overloaded on my first quarter in college and miserably failed my calculus class. I could’ve totally just listened to my counselor but I had to learn the hard way. Needless to say, I took it the second time around and passed!

  6. @ Adam, that’s a great point. For me, it was the lesson to never follow the crowd or listen to stock tips without doing my own due diligence!

  7. Mistakes happen, always have, always will. With all of us. Hopefully when they do, we can all be a little more reflective and learn from them. You have to want to do that.

    Nice post Clark. Keep up the good work man.

  8. 8. Clark

    Thanks for the comments.

    @Adam: A one-off situation is never a good basis for a conclusion; it will likely lead to illusionary competence or incompetence. However, I agree that if the signs last, then it is better to go another way.

    @ Ms Save Money: Calculus has never been my strong suit either!

    @FrugalTrader: I cannot see myself following a stock tip blindly either! If I have the time to research the company, then fine; else, I’ll settle for lesser returns from my bucket of analyzed stocks. If interest wanes or time becomes unavailable, then I’d just buy index ETFs and do whatever demands my attention at that time.

    @Financial Cents: Thank you! I never want to repeat a mistake and would prefer to make new ones!

  9. These are some amazing lessons. Thanks. Learning the hard way helps not repeat the same mistake twice :)

  10. 10. Oslobåden

    You can’t push. People will learn when they are ready to learn, not when you are ready to teach them (necessarily).

    But that doesn’t take away from the effort of trying :)

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