As our friendship developed, I soon discovered that my first impressions were both naive and wrong. Indeed, my friend had made a lot of money in the business world, but he had also occasionally lost money, certainly more money than I was capable of making in a year.
Once, when discussing a business venture that had turned sour, he revealed to me his financial loss. I gasped and after regaining my composure I asked, “How can you tolerate such a loss? Doesn’t it keep you up at night?”
He smiled (probably amused by the naivete of my youth) and assured me that he always got a good night’s sleep. How? Rethinking the substantial loss, my next question came across as somewhat of a plea.
“Isn’t there anything else you can do? Something? Anything to salvage your loss? Again he smiled and ever so casually spoke words of profound wisdom. “I have learned to never throw good money after bad.” That was it. Not complicated. Not difficult to understand. No lengthy explanation.
As I have grown in understanding over the course of a lifetime, I have learned that cutting my losses and certainly not milking a loss, is not only important in regard to financial management, but important in living a quality life. Let’s face it. All of us make poor decisions. We make mistakes. We invest where we shouldn’t. We goof. We aren’t perfect.
The temptation is to spend an inordinate amount of time trying to undo the mistake, trying to justify it, trying to excuse it. Rather than cut our losses and move on, we invest more and more emotional, physical, spiritual, financial, social, and cognitive energy trying our best to resolve the mistake.
As important as it is to understand why a mistake has been made, it is equally important to know when to let go of the mistake, cut our losses, and move on. Failure to do so not only results in years of being trapped in the mistake, but also years robbed of new life after the mistake. After all, new investments are impossible as long as you are holding on to the old investment. Your life has only so much room.
What are you holding onto? A marriage that didn’t work? A former addiction? An investment turned sour? An unsatisfying relationship with a parent? An affair that should never have happened? Resentment toward a friend? A violation of your trust? A missed opportunity?
Let it go. Move on. Cut your losses. Don’t throw good life after bad.