Originally published by Stephen Guise on his personal website.
All winners have one thing in common — they aren’t afraid to lose.
Most meaningful “wins” in life involve risk of loss. The potential loss could be financial, emotional, ego-related, or something more abstract. This might sound like a familiar and obvious topic, but I think there’s a nuance here worth exploring.
Here’s that nuance: if you find yourself unsatisfied with your life and the moves you’re making (or more likely, not making), you’re probably trying to win in life by avoiding loss. This is hoping that life will reward you for no reason.
It’s tricky, though. It seems logical to approach life with a loss aversion perspective, because if winning and losing are mutually exclusive — which they generally are — then it stands to say that if you’re not losing, you must be winning. But we know from experience that that’s not true. Sitting on your hands all day, you’ll avoid many potential losses, but you won’t be winning, because doing nothing is actually a harder-to-detect type of losing.
When 100,000 Tiny Losses Combine…
The truth is, in life, you’re always winning or losing. Those who fear losing don’t actually avoid losing as they intend — they suffer many smaller losses. Every missed opportunity is a tiny loss, and as I mentioned recently, we have thousands of new opportunities every day. That adds up to many thousands of losses a day!
When you consider the potential return for some of the opportunities you have, those little losses can actually be big losses individually. If you don’t convert a life-changing opportunity, you’ve lost something that you never had.
Missing What You Could Have Had Is Still A Loss
Why is it so easy for us to lose by doing nothing? Because we don’t feel it.
- If I lose $100 because I had a hole in my pocket, I will feel the impact of that loss immediately. I had $100 and lost it without getting anything in return. Ouch.
- If I have an opportunity to make $100 and I do nothing, I will not feel it at all, especially if the $100 wasn’t guaranteed (and nothing in life is guaranteed but death and taxes). The $100 loss isn’t tangible enough to be felt, but it’s just as important as any other $100.
We have two scenarios in which we’re $100 poorer than we should have been, one because of a stitching blunder and the other because of passivity. They’re both quite unfortunate, but because we don’t feel passive losses, we don’t avoid them like we do other losses.
Reflect on this phenomenon for a moment. Can you see how the painlessness of passive losses has steered you in the wrong direction many times? I can!
How to Apply This to Your Life
1. Tweak your fears.
Instead of fearing loss, what if you feared missed opportunities the most? What if you most feared the idea of not talking to that attractive stranger, not trying to start a business, not trying to write and publish a book, not contacting a personal trainer, not moving to a better place, not investing in yourself, or not traveling? These missed opportunities could offer massive upside for little risk — if you don’t try, the loss is huge, whether you feel it or not.
Try to make passive losses feel more tangible. You are losing something by not taking action. It’s not neutral. With that point of view, your fear of action will decrease, because you risk losing either way. If you might lose if you act and will definitely lose if you don’t act, do you know what that means? You have nothing to lose!
2. Think in terms of risk/reward instead of comfort.
There are two ways to think about life. One way is to focus on how comfortableyou are with various risks — this heavily favors inaction, as doing nothing is quite comfortable! This is flawed thinking, as there might be a very uncomfortable action that carries very little downside risk and high upside (talking to people, asking for something, etc.). It’s best to compare the literal downside risk of loss to the potential upside if it goes well. The latter is obviously a more exciting way to view life, and it will give you a much greater incentive to act when it’s favorable to do so.
Warren Buffett is arguably the greatest investor of all time because his philosophy is to invest in stocks that have very little downside and considerable upside. Many investors do poorly because they trade based on their emotions, rather than evaluating the real risk/reward. Buffett’s had losing investments just like anyone else, but those losses are overshadowed by his numerous, sometimes massive wins. We can apply his philosophy to our lives by looking for attractive risk/reward situations with an objective eye.
3. Seek to win.
Don’t play life to avoid losing. Constantly look for potential wins — big and small — within your reach. If you practice seizing opportunities to win — even something as small as a friendly conversation in the elevator to make everyone’s day better — you’ll be ready when bigger opportunities come your way. And more often than you’d think, those small wins can grow into big wins all by themselves. Elevator conversations have changed people’s lives!
The lesson here isn’t to seek out the nearest elevator and start yapping at people. The applications are much broader than that. Those who seek to win understand that losing is a part of life, so they might as well try to win. If you don’t try to win, you’ll still lose on a daily basis, which should reframe how you see losing. Losing is not something to avoid, because it’s unavoidable. By trying to avoid loss, all you’ll really do is avoid winning!
One time, I talked to a guy in the airport and mentioned I was planning a vacation in Hawaii. He mentioned he owned property there, and my friends and I ended up renting his guest house and truck in Kauai for 10 days for only $500 total; we had an incredible time. He even took us spear fishing! And that came from a single conversation.
4. Don’t be afraid to lose.
Easier said than done, I know. But there are some thoughts that can help. First, everyone loses. Losing is not something that happens to losers, it happens to everyone. Second, winners lose more than losers do, because winners try more often. Third, losing doesn’t have to be a miserable experience. Some people are poor losers, and get upset or feel bad when they lose, but that’s their choice. You can lose gracefully and say, “Oh well. I’ll get ’em next time.”
All in all, losing needn’t be some dreadful occurrence to avoid at all costs. It’s more like the sawdust that comes from making a beautiful piece of furniture. The carpenter who fears sawdust makes no furniture!
Losing is an occasional byproduct of trying to win, and byproducts aren’t to be focused upon, let alone feared!