Personal Finance

The importance of failing

“Only those who risk going too far can possibly find out how far they can go.” – T.S. Eliot

I recently read the book “The Up Side of Down” by Megan McCardle which explores not only how much can be learned from failing but also how many opportunities can be lost to people with a fear of failing. The book intrigued and inspired me. Partly because I believe that our personal failures, like all our challenging experiences, can be very powerful in strengthening and shaping our future selves and partly because I believe that by overprotecting people we deprive them of opportunities to learn and grow. (This is especially true when it comes to our children.) I really enjoyed this book (which I’m now reading for the second time) and because the information in it can easily be applied to many areas of life, including finances, I thought I’d share some of my favorite learning moments in this week’s post:

Less overthinking. More failing

Researchers split several groups of people into groups of 3-4 and gave them 20 pieces of dry spaghetti, a meter of tape, a marshmallow and some string. The groups were given 20 minutes to create the tallest freestanding structure they could use the materials provided that were capable of supporting the marshmallow. The groups included business undergraduates, doctors, lawyers, and engineers but interestingly none of these groups managed to build the tallest structure. The winning group was made up of four kindergarten students. How did these 4 & 5-year-olds manage to build the winning structure? Simply put, they weren’t afraid to fail. They were also the only group who asked for more spaghetti! This allowed them to quickly discover what didn’t work and allowed them to pursue the things that did. The other groups spent the majority of their time planning and organizing their group and discussing their strategies and very little time actually building.

Learn from what doesn’t work

In life, we learn a lot from trying and failing that we are able to apply in a way that leads us to greater success. As kids, we learned that whether we’re climbing trees, navigating monkey bars or trying to guide an animated hero through multiple levels of a video game there is a great deal of value in learning what doesn’t work. This is especially true for new situations (like the building task that was given to the groups) where we don’t have any prior understanding to draw on. As one of the researchers commented, “no one really understands the structural properties of spaghetti” so the kindergarteners’ willingness to just dive in and try different approaches until they figured out what worked is what led them to victory. Instead of being discouraged by their initial lack of success they simply chose a different way of attacking the problem. The fact that the prospect of failing didn’t intimidate them and their willingness to learn from failure was the key to their success.

Sometimes we learn from the failures of others, sometimes we learn from our own. What’s important is that we take those lessons and then try an alternative approach to achieving our goals rather than giving up or taking the failure as evidence that we will never succeed, I know in my own life, that many of the successes I’m currently enjoying are rooted in my biggest failures. While the experiences themselves are not anything I ever want to repeat, I don’t think I would have learned the lessons as effectively any other way.

The importance of bouncing back

Even though so much can be learned from failing, it’s definitely not a comfortable route to success. As human beings, we have a deep-rooted desire for approval and recognition and the idea of being noticed for being unsuccessful strikes fear into the heart of many. This might explain why public speaking always ranks in the top 5 list of fears because one thing that’s definitely worse than failing is failing in public. As unpleasant as it can feel to fail though, some of the most successful people are those who embrace failure because they understand that failure is only temporary and it’s a key part of the success process. In Silicon Valley, being part of a startup that failed actually enhances your resume in the eyes of prospective employers. Being able to bounce back from adversity and apply the lessons learned to a new project is a sought after quality in an industry that is built on innovation and out of the box thinking. Failing in this environment is a badge of honor as opposed to a source of shame.

Our kids need to experience failure

There is value in failing and yet we do everything that we can to protect our children from the evils of competition so that they don’t have to experience the pain of not meeting a given standard. We lower the monkey bars to protect them from falling and in doing so we prevent them from experiencing the joy of climbing high. We give out participation ribbons to protect them from the pain of not winning and in doing so we deprive them of the exhilaration of victory. We hand out passing grades to failing students and expect them to be motivated to excel. We are driven to protect them from pain but in overprotecting them from failing we are robbing them of a wealth of knowledge, experience, and skills that they might need to draw on in the future.

Don’t let a fear of failing hold you back

When it comes to finances, failure can be a painful and embarrassing experience but we need to remember that it is often rooted in misinformation, apathy or a lack of understanding rather than bad luck or a lack of skill. Even if we’ve achieved significant success, it’s possible that a fear of failure is holding us back from taking advantage of great opportunities to be even more successful. Habit, conditioning, and fear all play a role in keeping us on the safely familiar path. If we have a hankering to be walking a different path or a sense that we could be doing something different then perhaps it’s worth asking ourselves if fear of failure is holding us back and whether that fear is justified. As Dr. Robert Schuller once asked, “what would you attempt to do if you knew you could not fail?” It’s a good question to think about… if you’d like to share your thoughts, I’d love to hear them!


  1. Joie

    Great post….will be passing this one on.

  2. Sarah

    Thanks Joie! I’m glad you liked it : )

  3. Rebecca

    Really enjoyed your article – good topic and well written.

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