
When you were a kid and you saw the pretty flame with its rainbow of blues and yellows and oranges flickering from the kitchen stove, did you ever reach out and try to touch it?
Yow!
That was a quick and painful lesson, wasn’t it?
Maybe your mother or father told you not to touch a hot stove again, like you even needed reminding.
But, your parents could have just as easily said: “Never turn on a stove!!! Avoid fire!!! Run into the darkness to escape the pain of possible heat!!! Eat only raw meat and uncooked vegetables!!!”
(If your parents did give you this type of advice, they might have been members of the fear-mongering media, who seem bent on teaching people the wrong lessons about finance and investing.)
When you made mistakes–whether it was failing a Geometry test (several times in my case) or falling off your bike–you hopefully got back on the bike, or back into class, and tried again. Those lessons improved your potential or opened up better opportunities. You didn’t abandon all hope of ever using two-wheeled transport again, or decried people who were good at Geometry as evil villains (OK, maybe I did that a little).
This is how you should approach investing. A vicious downturn in the economy shouldn’t teach you never to spend again… or not to buy a house… or not to invest again. What you should learn is how to spend properly, how to buy the right house, and how to invest intelligently.
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