The Psychology of Failure (Or why we must not fail!)

Are you succeeding or failing?

The truth about wealth accumulation is that one never knows he has succeeded or failed until he has reached the irreversible stage when he has succeeded or failed! And this stage is usually the time when there is no more time to make up: too old to be productive, disabled, sick, dead.

And yet this stage does not come as a surprise to everyone. It is known. It is predictable. It is even describable! Which means we can set up an accumulation machinery while there is still time to do so, stay at it with patience and diligence and discipline to make it work, and enjoy the fruits come harvesttime.

Sounds easy!? As a prose, as a song, it does, but it does not happen that way.

How are we doing? Let's location-shoot. Let's locate ourselves in the accumulation journey.

A presentation material of a financial consulting outfit offers this stimulus:

Only 3 out of 20 people reaching the age of 60 have enough money to retire comfortably!

This subtle challenge to the market's consciousness anticipates a number of possible responses: If you are one of the three, congratulations! you are a model! If you are one of the 17, and you are young, and you want to experience a comfortable retirement, you can still be the 4th or the 5th or the 6th who can possibly make it. If you are getting close to an irreversible stage, you may need to doubletime. If you are there already, you are a perfect model of what must not happen, can you please inspire others to begin while there is still enough time?

Are we one of the three or one of the seventeen?

This can be our greatest secret other people may never know! But just to give us a working idea as to how the market is profiled, let's take a handle on one aspect of our financial preparation: our level of bank deposits. A report that was published recently in a national daily carried the following information on the deposit structure in the Philippines for the year 2003:

DEPOSIT ACCOUNTS 2003
(Philippine Population: 70 Million)

Bank Balance -----------Number of Accounts ------------% of Population

P 2 Million up ------------------ 206,000 --------------------------- 0.3 %
P 40,000-P2 M -------------- 4,559,000 --------------------------- 6.5 %
P 15,000-P40,000 ----------- 2,257,000 --------------------------- 3.2 %
Less than P 15,000 ----------21,537,000-------------------------- 30.0 %
No account ------------------ 41,440,000------------------------- 60.0 %

Total ----------------------- 70,000,000 ------------------------100.0%

(Note: Population count and percentages provided by this author.)

A careful analysis of this information will lead us to the following representative groupings:

1. Only 10 in 100 have deposits of at least P 15,000.
2. Only 7 in 100 have deposits of at least P 40,000.
3. Only 3 persons in 1000 have deposits of at least P 2M.

The data did not identify the age groupings of the accountholders, but even if we assume that all of the representative groupings are adults with income sources, it is plain to see that only the last group can stop working anytime and rely on their deposits for continuous sustenance.

ONLY 3 OUT OF 1000 CAN STOP WORKING ANYTIME AND LIVE COMFORTABLY!

Are we among the 3 or among the 997?

My 36 years of experience in the insurance and financial services industry, starting as an employee, then as an agent, then as a manager, then as a marketing executive, and later and currently as a professional financial and management consultant, have led me to this advocacy I call wealth trigonomics, a time-tested system of achieving future financial sufficiency. I will share this system in this website in future posts, but to provide the appropriate springboard for that presentation, let us examine first why we fail to accumulate.

Why do we fail to accumulate?

1. Because our sense of wealth is very poor!

Many of us were born to working families, where our heritage introduced us to the mentality of scarcity, of less and not more, of poverty. Very few were born with ready money to spend, which in itself is not even good. Because of that culture, we develop the personal conviction that it is not good to be wealthy, that we deserve only little, that enough is too much, that more than enough is immoral. Nobody introduced us to the importance and urgency of the "second enough."

And this culture puts us against all odds, so to speak. First, we need to work hard to earn "enough" for the present. Which means that, if say P20,000 a month is the "enough" treshold, we need to labor for it in order to survive. So we work harder to earn more, aiming to move to our "second enough" only to realize that our first treshold has moved up as we acquire additional responsibilities, get married, beget children, shift lifestyle, buy a car, buy a house, and so on.

If we are lucky, we get to earn more than we need, but instead of thinking about the future, we are taunted and tempted by the present enjoyment syndrome which seems to say: hey, why sacrifice for the future, you don't even know what's coming, you are strong, you can manage now, you can manage then!

So we enjoy now! And the more we enjoy the present, the more our sense of future slips away. And we say, "Wait till I have an excess!"

2. The excess never comes. Incomes increase, salaries increase but there is no remainder. Present obligations are completed, but new ones are contracted. Always, a new higher priority upstages the need to prepare for the future. And we say, "I'll try next time."

3. And next time. And next time. Until there is no more time. Until it is no longer possible to accumulate because we are 63 and we are retiring in two years. And because of the magnitude and formidability of the needed preparation and the near impossibility of making it, we accept the reality and leave everything to faith, or fate.

4. Or maybe we realized sooner or earlier. Except that, even before we can get a program in motion, early death or sickness or disability strikes. "System failure," I call. And everybody is caught by surprise, most especially the family. The spouse. The children. And everything falls out of place.

5. Or maybe we are within time. A financial advisor was able to convince us of the urgency of putting up a program right away. And indeed we got a headstart. But our conditioning was not deep enough to allow us to keep it through to completion. And present gratification takes over.

6. Or maybe we are disciplined. We kept our eyes glued to the future and even felt the future enjoyment in our veins. But our choice isn't good enough to prize us with our reward. Program closed. Program failed. Provider insolvent. And so goes the burning issue...

These are just six of the major obstacles to wealth accumulation. There may be more, and it is important to identify them and confront them head on right at the very start. These hurdles are within our capacity to manage. Even the contingencies, such as death, sickness and disability.

When we decide to begin our wealth accumulation program, we must be sure all these obstacles are properly addressed.

Let's summarize these six major obstacles:

1. Poor sense of wealth
2. Procrastination
3. Insufficient time
4. System failure
5. Lack of discipline
6. Program failure

If any one of these culprits has enjoyed your patronage in the past, it is time to deal with it, and for that matter all of them, with the stamp of discipline and conviction of a Spartan. After all,
we owe it to ourselves to savor "the good life" at harvest time, and there may not be another time for a set-up more suitable, and available, than now.


"Failure must be but a challenge to others." - Amelia Earheart