Benjamin Franklin, one of the leading intellectuals of his time and one of the founding fathers of America once made a mistake that haunted him for seventy years [1][2]. This is the story of how Benjamin Franklin learnt first-hand about the consequences of not being able to cut his losses and move on, as told by Dale Carnegie.
When Benjamin Franklin was seven years old, he saw a whistle that excited him. In a state of eager enthusiasm, he poured out his coppers and scattered them onto the counter of the store and demanded the whistle without even asking the price. He felt sheer joy and whistled all over the house that day. However, as soon as his siblings found out that he had paid far more for the whistle than he should have, they made fun of him and gave him real grilling. Young Benjamin took this to heart and cried in a state of rage.
Years later as an adult, he still remembered that incident and it still invoked feelings of rebellion, rage, anger and resentment. However, as time went on he started observing the actions of people and noticed a similar habit. He realised that too many people were eaten up by bitter memories that caused poor mental and physical health. He realised that people paid too much for their whistle, just like he did. But he wasn't referring to overpaying with money, he was referring to people overpaying by losing their happiness and peace of mind. It dawned on him that the miseries that plagued mankind were often self-created as, in this instance, they had simply exaggerated the importance of trivial matters that had already been and gone. And if he and others had survived the actual event and come out unscathed, they should be perfectly healthy after the event had occurred. But their health was being jeopardised by suffering, which is always mental and brought on purely by themselves.
"Remember, today is the tomorrow you worried about yesterday." - Dale Carnegie
Well done Benjamin, you learnt an important lesson about cutting your losses, and the serious consequences people face from cherishing long time resentments of which are self-created and useless in every way. I for one have paid too much for many whistles in the past, perhaps you have too? Perhaps you're still paying for a whistle that's well over a decade old!
"You do not not get stomach ulcers from what you eat. You get ulcers from what is eating you." Dr. Montague
Cutting losses is a strategy that traders in the stock market use – they do this by using a stop loss [3]. Although this guarantees a loss, the maximum loss is well known beforehand which gives the trader and the company peace of mind. Any losses incurred are therefore accepted, written off and discarded with no hesitation. Perhaps we should have the same attitude with our worries, anxieties and toxic thoughts that, in the long term, cause more damage and harm than the past event ever did.
Although this sage advice from Benjamin Franklin and investment analysts are based on truth and experience, no one spells this out clearer than Mr Sylvester Stallone from Rocky Balboa (2006).
"But it ain't about how hard you hit. It's about how hard you can get it and keep moving forward. How much you can take and keep moving forward. That's how winning is done!" - Rocky Balboa
Takeaway: If you have experienced a situation where you've wasted a lot of resources such as time due to something failing or not coming to fruition, or have incurred a huge loss, just remember it was an experience for you to learn and simply move on from. This simple change in attitude has taken many over a lifetime to understand. Past experiences only exist in that one moment, but many take it as a life sentence going forward. In any situation where loss has incurred, follow the process given below:
Clearly write down the loss that has incurred.
Write down the worst-case scenario that can now take place.
Accept the loss and the worst-case scenario as your current reality. Mentally cut your losses and view things with this new perspective. The loss will no longer have power over you as you would have freed yourself in this step.
If your incurred loss or worst-case scenario seems significant, devote your time to improve the situation at hand.
"If it costs you peace of mind, it's too expensive." - Big Sean
References
Wikipedia - Benjamin Franklin: https://en.wikipedia.org/wiki/Benjamin_Franklin
Dale Carnegie (1948). How to stop worrying and start living: Vermilion. pp. 114. ISBN 978-0-74-930723-3.
Investopedia - Stop-Loss Order: https://www.investopedia.com/terms/s/stop-lossorder.asp
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