Failure is inevitable.

Even the world’s most successful people experience failure many times throughout their lives.  But here’s the good news:

Failure doesn’t have to mean defeat.

I’m not an expert at a lot of things, but you could say I’m quite skilled at managing my failures.

It was during one of the lowest times in my life I happened to listen to an audiobook from best-selling author Grant Cardone that completely changed my perspective towards failure.  

Cardone, a self-made millionaire with over $350M in real estate, was talking about a time relatively early in his career that he made a bad investment and nearly lost everything. It was then he realized the importance of being so successful that no single failure could ever break you.

From that moment on I promised myself I would become so successful that no single failure could ever break me. Just as any professional boxer knows he or she will get punched many times in a fight, the point is not to get knocked out or defeated.  

In this blog, I focus on how building a high net worth allows you to fail many times without getting defeated. I focus on 4 key topics:

• Having the Right Mindset

• Creating a Solid Foundation, Slowly

• Building Your Net Worth the Right Way

• Learning from Failure

Having the Right Mindset

The economy will crash. You’ll get hit with unexpected bills. The money you were counting on will get delayed. Everything that can go wrong, will go wrong.

That’s not being pessimistic.  It’s having the necessary mindset to protect you from failure.    

Grant Cardone in his best-selling book The 10X Rule says,

“People optimistically overestimate how well things will go and then underestimate how much energy and effort it will take just to push things through.”

It’s great to hope for the best, but you should always plan for the worst. .Then, when something goes wrong, you can focus your energy on carrying out the disaster plan you already have in place rather than scrambling to create one.

It’s important to build a net worth high enough to always have a margin of safety to enable you to address problems as they arise.

You don’t need to prepare for a sunny day; you only have to walk outside in your shorts.  But you do need to have a game plan for when it rains. Don’t wait until you’re stuck in the middle of a storm to figure out how to stay dry.  

 

Creating a Solid Foundation, Slowly

Building your net worth is a marathon, not a sprint. Take the necessary time to build a solid foundation.

Think about it: would you feel more comfortable running across a bridge that was built in five days or five years?  Clearly five years. There’s a reason that the pyramids are still standing today.

It takes time to build something to last.  Build your net worth the same way.

This means take the time to build strong business relationships and multiple streams of income.

YouTube’s top content creator, Lilly Singh in her best-selling book, How to be a Bawse, gives the following career advice she followed when building her platform:

“You are building an empire, and empires are not built overnight, but nor do they fall easily. They should be built on a strong foundation so that they withstand the test of time and are resilient when threatened.”

But when faced with failure, she says:

“Empires are not built on a single pillar and similarly your career will not be built or lost on a single success. One pillar crumbling away does not destroy the entire empire and therefore one failure does not destroy everything you’ve built.”

Don’t be in a rush to build your net worth. You’re likely to be earning for 40+ years.  You have plenty of time.

If you build your net worth the right way over the long run then periodic missteps might cause you to trip up a bit but they will never cause you to fall.

Building Your Net Worth the Right Way

After you’ve established the right mindset, the next step is to get to work on building your net worth in a way that protects you during times of failure.

This doesn’t just mean having a lot of money.  

There are plenty of people who have made a lot of money but were not able to withstand failures that ended up defeating them. The media is littered with headlines of once successful athletes, musicians and celebrities making millions and then after some bad decisions, losing it all.

You have to build your net worth strategically in a way that protects you from defeat when the inevitable failures occur.  Some principles for doing this:

1. Have Priorities: Keep your priorities in order: invest first, save second, spend third.
2. Create Multiple Incomes: Create multiple streams of income from unrelated sources so if one stops it won’t affect the other.  An example of this is working as a freelancer in your spare time so even if you lose your job you still have an income source.
3. Invest What You’re Able: Never invest what you can’t afford to lose.  
4. Stay Liquid: Invest money in areas that keep you liquid enough to deal with unexpected losses. Real estate, for example, is much less liquid than stocks.  And the last thing you want to do is have to sell your assets in distress…you’ll leave a lot of money on the table.
5. Keep a Low Burn Rate: Keep a minimalist lifestyle and know the areas you could cut costs quickly if you had to.  Work to have enough savings to cover being able to go at least 12 months with no income.
6. Know About Taxes: Learn about taxes and have a strategy in place that maximizes your post-tax income.  Many successful people don’t plan for or understand taxes and it becomes their downfall.  
7. Diversify Industries: Receive income from different industries so even if one industry slows down it won’t affect the other.  You can even do this through passive investments, such as investing in stocks across many industries to insulate yourself from risk.

Learning from Failure

So far we’ve covered the importance of having the right mindset to tackle failures and the value of creating a protective net worth with a solid foundation to carry you through the long haul. The final key to protecting yourself from defeat is taking the time to learn from your failures.

Going back to our boxing analogy, as Mike Tyson says, “everyone has a plan until they get punched in the mouth.”

Getting hit is as important to learning how to box as failure is critical to success.  Failure helps guide you to success, but only if you learn from it.

Ray Dalio, founder, and CEO of the world’s largest hedge fund, in a media interview, said:

“I think the term failure almost seems like an end rather than a step. Once you start to realize it’s a step then it’s going to help you climb to the next level.”

Learn to see failure as a self-discovery of a weakness or flaw in your decision making.  Every time you discover that weakness you’re able to change for the better.

So failure isn’t a mistake but rather a necessary event for your personal evolution, as long as you keep learning from it.  

Once you start to see every failure you experience as a learning opportunity then you also remove the pain associated with failing.  Each failure becomes a lesson that gets you one step closer to where you need to go.

Final Thoughts

Let’s face it, you’re likely to fail more than once in your life.  Things rarely work out as you plan them to. It’s no surprise that the average millionaire goes bankrupt at least 3.5 times in their life.

Life happens.  And whatever can go wrong will go wrong.

So your best bet is to prepare for the inevitable with the right mindset, create a solid foundation for your long-term success, and build a strategic net worth that will protect you from defeat when things go wrong  Above all else, never stop learning from your failures – they are ultimately your keys to success.