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Cost of Failure is usually less than the cost of not trying.

I spent the evening roller skating with my wife and kids. We were invited to a youth group rental of the roller skating rink, so we decided it would be fun for our 4 year old. It was a cheap way to spend the evening, as he had his own skates. The entire cost of the evening was the rental of skates for us. Great fun was had by all, including entertainment provided by yours truly.  The whole thing got me thinking of the cost of not trying, the topic for today’s post.

Weighing the Cost of Not Trying

You see, I never really learned how to skate as a child. I can count on one hand the number of times I have been. The last time I went was closer to 25 years ago than 15. I’m practically clueless, simply walking most of the time at the beginning of the night. Thankfully, after an hour or so of watching my wife skate circles around me I started to get the hang of it. Several of our friends who were in attendance commented that I was “Brave to come”. Another person commented that my wife must have had to “cajole me to come”. Neither were really the truth. I had considered the cost of not trying.

What if I Fail?

Often times when we face a new challenge the first thing we think of is, “What if I fail?” That fear of failure keeps us from taking the next step and trying new things. More ideas fail simply from lack of starting than from being bad ideas.

I wrote the other week that failure and hardship are very helpful in getting ahead. They provide lessons learned to adjust your life. They can help you keep going when things get tough by reminding you how good you have it. Obviously these things have value. I also pointed out that no one remembers your failures except you anyway. As such if you think things through the cost of failure is relatively minimal. Even then it might be a positive occurrence. What we didn’t pursue in that discussion is the cost of not trying.

Failing to Start is Failing

When we are afraid to start, what exactly are we afraid of? If you don’t start haven’t you failed already? So on some level you’ve already obtained the first level of cost by not trying, and thus not taking the first step. However, there is also a separate cost, the opportunity cost of not trying. In my roller skating example, sure I could have stayed home or watched from the sidelines. I would have avoided a few minutes of friends and family marveling at a 35 year old who can not roller skate. A minimal cost if there ever was one since I’m sure even a year from now most of them will have forgotten.

But what did I gain? I managed to learn how to skate. So the next time we go I can help my 4 year old to improve his skating abilities. I also managed to have fun with my child, whereas had I sat on the sidelines staring at the rink I would probably just have been bored and annoyed. That would have been the cost of not trying, and it was far worse than if I tried and failed to skate.

Financial Pursuits Failure Costs can be Mitigated

The same goes for your financial situation. Too​ often we do not pursue side hustles or activities because we’re afraid to step outside our comfort zone. We fear that we will fail. Now sure, you do not want to up and quit your job to start a side hustle from scratch.

Burning your existing income sources is probably not a good idea. Also, you don’t want to invest your entire nest egg on an untested idea. But, most ideas require neither you to quit your day job or for you to invest every dime you’ve ever made. Usually the cost is more in time to get the idea off the ground or fear of failure. Typically neither of these outweigh the cost of not trying a well thought out idea.

The Plan does not need to be Perfect

The second thing that tends to stop people is they want the perfect plan to avoid the possibility of failure. They get analysis paralysis and never start. Again it’s the same situation. You should have a reasonable plan going into something, but no plan will ever cover every eventuality or situation. Those eventualities however are usually less severe than the cost of not trying.

Take your idea and map out a general direction of where you want to go. Figure out the first few steps of how you will get there. If you’re​ concerned about failure define some points where you will reevaluate the situation and consider pulling out. I.E define your exit plan. Then execute. No matter how hard you try to plan, a new venture is not going to progress how you foresee, as such over planning is just a waste of time. After the first few weeks or month the plan will go out the window and a new plan will need to be formed.

Need proof of that, read articles on corporate history. Almost every major company in existence has had to pivot from their original plan in some way. It might be that they change their marketing plan, design, or in some cases they have changed the focus of the entire company. The point is they got started and then adjusted as they went. If it works for them it can work for you. So just do it already!

Do you have anything you’ve avoided starting for fear of failing or lack of the perfect plan?

16 Comments

  1. Leo T. Ly
    Leo T. Ly April 24, 2017

    Quite few years ago, I was passionate about becoming a restaurant owner. I love food in general and loves to meet with customers. I discussed the idea with my friend and tried to come up with a plan. I never followed through as I couldn’t get pass the analysis paralysis stage.

    I sometimes wondered where would my career be if I followed through with that plan. I may have been very successful or penniless.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 24, 2017

      Interesting you should say that, Wednesdays post will speak to why that might not have been the best idea 😉

  2. SMM
    SMM April 24, 2017

    To add to this, I was in a training last year and the speaker said a complain many people have is they don’t have time to try new things. The speaker said that they actually don’t have the required “energy”. His whole topic was about how the requisite energy is needed to accomplish anything and then other things like time, skill, resources will correct themselves. I thought that idea was very enlightening.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 24, 2017

      Great add SMM. I strongly believe a large portion of success is putting in the effort.

  3. I just bought a second house and am really feeling some stress. I’m at the step after fear of failing..

    I had the inspection today and am going through with it. There’s a laundry list of things for me to do, and June and July will be busy months!!

    Then with my first property, I’m turning it into a rental property and will have to do some repairs there as well. Will be a great learning experience. At the end of the day, I hopefully will create $500 a month in passive income. At the end of the day, it will be great experience – though hopefully I can keep my job and everything goes smoothly!

    • fulltimefinance@fulltimefinance.com
      [email protected] April 24, 2017

      I suspect it won’t go as easy as you want, but that you’ll find a way to make it work and the learnings will translate into your later endeavors. In any case, all the best.

  4. Troy @ Market History
    Troy @ Market History April 24, 2017

    I completely agree with you. In life, the most painful things are the ones we regret not doing. I don’t want to be on my deathbed one day and think “If only I had taken a risk in life”. My life will have its ups and downs, but at least it’ll be a full life.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 24, 2017

      Good point. People tend to regret what they did not do on their death bed. Rarely its about what they actually did.

  5. Mr. Need2save
    Mr. Need2save April 24, 2017

    Taking some calculated risks has definitely served me well over the years. Just ask yourself: “What is the worst thing that can happen if this totally fails?” Most likely the worst case scenario is not too bad in the grand scheme of things.

    That said, I’m at a point in life where my children are essentially adults and we are in pretty good financial shape. So it’s easier now to take some chances. And on the personal side of things, I don’t care if other people think I look like a fool. I haven’t gone roller skating in a while, but ice skating took some practice and patience.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 25, 2017

      I’ve only been ice skating twice, but I suspect at some point I’ll get another go there as well. Thanks for the comment.

  6. the magic bean counter
    the magic bean counter April 25, 2017

    Great post, I couldn’t agree more that failure to start is failing. I’m in the same boat as you with the roller skating btw. My hat goes off to you for trying!

  7. This is something that I am working on this year. I have very much always been the person who waits to have the perfect plan and wants to be good at something before even starting. I talked about this in my recent post on growth vs. fixed mindsets, but I think my fear of failure came more from this idea that if I fail then I’m not good enough whereas if I didn’t try then it isn’t a comment on my abilities or identity. This is nonsense, of course. Like you said, I need to focus on the cost of not trying in addition to just the chance of failure.

    • fulltimefinance@fulltimefinance.com
      [email protected] April 25, 2017

      There is definitely sometimes an internal drive not to start as well. Still it’s often best to soldier forward after considering the risks.

  8. Mustard Seed Money
    Mustard Seed Money April 25, 2017

    It definitely took me longer to pursue the career that I wanted to. I was/am terrified of failure and there are times that I didn’t push myself as much as I should have. I definitely should have spoken up earlier about my interests instead of just going with the flow. But now I am working on being more assertive and pursuing my passions. Surprise surprise I’m much happier and doing really well 🙂

    • fulltimefinance@fulltimefinance.com
      [email protected] April 25, 2017

      Great point MSM. Failure to start can cause you to do things you’d prefer not to rather then pursuing your passions.

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