Lessons Learned Financially

When Will We Ever Learn?

One of the things I end up doing a great deal as part of my regular job is looking back on projects and doing a Lessons Learned exercise to see what went right and what went wrong with the project that I might be managing or helping out with, with the hope that we repeat the things we did well and not repeat those things we didn’t do as well (that is the theory of the exercise at least).

For those of you who love a little history here is what Karl Marx has to say about this:

History repeats itself, first as tragedy, second as farce.

and this is the danger of not looking back on what you have done to see where you might improve your methodologies, or plans.

Surely, we must all learn from our mistakes, and learn our lessons from them? You’d think that wouldn’t you, but if we did the world might be a quite different place.

There are many things in my life that I did learn a lesson from after my first mistake:

• When a loved one asks, do I look fat in this outfit, honesty is not the best policy
• Never drop boiling hot water or soup in your lap.
• If someone says, “Let me be honest”, asking if that meant they were lying to you all along is not an appropriate answer (unless you want to start a fight).
• Things can always get worse than they currently are. There is no Karmic scoreboard that stops bad things from happening, they just keep coming.

I think from that abbreviated list you get the concept that I am bringing forward, but unfortunately, with money our mistakes are not quite as brilliantly stupid (and thus easy to grasp as a mistake), so even if you did a Lessons Learned on your Financial World you might not catch those apparent mistakes that you have made over the years (or you might not heed the warnings if you were about to make the same mistake again).

Some pedagogic examples/queries:

• If we all learned how bad credit card interest rates could be, why do we keep carrying balances?
• We didn’t win the $50M last week, so why are we buying another lottery ticket this week?
• If we all learned from bouncing our first cheque not to spend money we don’t have, why is their overdraft protection (and better still why do we get that service)?
• Coffee is cheaper at home, so why is there a new Starbucks/Tim Horton’s opening every week in Ottawa?
• We can get free banking if we bargain or move to a different bank, so why don’t we do it?

Some of those examples are very much World Hunger issues and if I could make people stop doing them I could make a bloody fortune, but the point I am trying to make is the best way to learn from our mistakes is to first identify our mistakes then at least we don’t have excuses for why we keep doing the same things over and over again.

A financial quote from Einstein for you to ponder on this topic:

The definition of insanity is doing the same thing over and over again and expecting a different result.

Allegedly Albert Einstein

Some people learn from their mistakes, but others are like the fish that never learns it can’t ride a bicycle.