Profit, Loss, Profitable Loss and the Importance
When it comes to money, making it and loosing it are quite touchy topics as no one wants to loose it and everyone wants to make it or perhaps make more of it, including myself. In the world of economics, Money as a financial tool is not an achievement but the means to arrive at an achievement.
Conventionally, people render services and get paid with money, people acquire services with money, the more money one has access to, the more services one is liable to have demand for and the more services one is able to render the more money such person is able to make.
In the world of investment, money is used to make more money, when investment yields favorable results, money invested is increased, we say the investment is profitable. When an investment go bad, we say its a loss, money invested has either reduced in value, or has been lost.
But is it really a loss when lessons have been learnt? In life, the lessons learnt in a classroom which one pays for is just a minuscule part of the lessons life itself will teach you without intentionally paying for it. Life itself is a big unending classroom.
In school, one can fail a subject repeatedly and pay to retake the classes without still learning the lessons the class ought to teach. That is what I see "loss" as, however in the bigger school of life, when one makes a bad investment decision, we loose money but we often gain lessons from it, lessons that could either help us recoup the loss, prevent us from repeating such investment decision or direct us to making the right choices. Show me a prominent investor and I will show you how much he has lost learnt.
So is it really loss when one gains lessons? For me, investing through the school of life and making losses has taught me more lessons than I would have learnt by not making losses, I can tell when someone is bullshitting me with sweet words, I have better ideas of what to look out for before making my investment decisions, I'm more exposed, sturdy, better suited to take risks that I wouldnt have had the guts for had I been making only profits.
So it begs me to question profit when one isn't learning and loss when one is learning from it. I hope to make lesser losses anyway, but peradventure it doesn't go as planned, then I hope to learn from the losses made.
What do you Leofinancers say?
Thanks for reading.
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