On Devastating Losses and What You Get to Keep
Some lessons must be experienced
What happens when a portfolio, a relationship, and a loved one…. all die at the same time?
I used to be reasonably wealthy. However, that wealth was a low-interest-rate phenomenon. I lived out the wisdom “some lessons must be experienced”. It made me recalibrate my identity.
I went from thinking I was essentially retired, to a shocking smack in the face of how naive that assumption was. I made most of my money in stocks and some in crypto. I rode the leverage roller coaster up, and back down. Margin is a hell of a drug.
Throughout this, I also had my first true encounter with death. I’ve had grandparents and people I know die, but it never broke me or even made me cry. This was the first time I’d faced a genuinely crushing loss that permanently altered my understanding of life. It dramatically changed my empathy towards suffering. Some lessons must be experienced.
I also ended a three-year relationship during this time. It was for the best, we weren’t right for each other. I will remember it fondly.
All this coalesced to create an indescribably torturous phase of life. Calling it brutal is an understatement.
This essay will focus on navigating the loss of the material, not a loved one.
This is how I traversed the aftereffects of this cyclone, and how I can honestly say I’m glad the financial component happened. I lost part of my ego along with the money. When you perceive yourself as “successful guy” and a large part of the reason for why you are that thing is gone…. it’s not fun realizing you are no longer that thing.
You Don’t Get Over It, You Get Through It
Your loss will be consuming as you internalize the depths of your failure. It will be dark and painful. There is no way around this.
You have to try to contextualize. If you don’t contextualize, you’ll succumb to the immediacy of the anguish you’re in. A soul-crushing event feels like the most-awful, permanent thing ever while you’re enduring it. You must frame your loss and situation in the context of a life cycle. This too shall pass.
You’re at the lows, however it’s extremely unlikely you will stay at the lows. Suicidal thoughts are analogous to selling the bottom of a market crash; this is often the absolute worst time to do so, and you are not thinking clearly. Your life journey resembles a stock chart, you don’t get highs without lows. You are now getting dumped on. Your good fortune just got liquidated. Maybe you’re considering liquidating yourself now. You can interpret that however you want.
This isn’t some “hey man you’ll make it back” pep talk. You might not.
You may not make the money back, but you will make something back, because you did just learn something. It’s up to you to use what you got to keep.
Thought Experiment #1
What did you gain during this wealth creation and destruction process that you got to keep? How valuable is it?
Reflection: would I rather have…
The money I had, but no new skillset from the process
The skillset, but no money
Pretend you still have all your money and you’re told you can only keep one thing: the abilities you cultivated as a result of this cycle, or the money you made….. which would you keep?
I genuinely would make the trade for the skills and experience over the money. I consider the skillset far more valuable over the long run. I still have the skillset, that did not get liquidated. I get to keep that. What I gained personally, intellectually, and emotionally during the creation of wealth and loss of it was more valuable than the nominal wealth. It’s absolutely worth several million to me.
If I lost 8+ figures I'm not sure I'd feel this way. At a certain point the raw amount is too much to deny, and you’re just soothe-saying otherwise. This value assessment is something you must make on your own. But make it honestly and be fair to yourself.
If the “what would you trade for?” thought experiment drew a scoff…. did you not learn anything from your failures? If you’ve never failed at anything, then you’ve never done anything worth doing. I hope you have in fact failed at something and it hurt, otherwise you’re telling on yourself.
If you didn’t even pause for a bit to reflect on if you’d make that trade or your instinctive response was to mock it as “cope”, congratulations on learning absolutely nothing. “I never lose: I either win or I learn” definitely doesn’t apply to you. It’s likely you’ll eventually be parted with your money, give it time.
You Are Path Dependent, and Your Path Just Changed
A fork in the road was forced on you. How will you act differently now your money is gone? Because you will definitely act and think differently. You'll make decisions you wouldn’t have otherwise. This will likely lead you to meeting people you would not have met otherwise.
I felt quasi-retired for about 2 years, just managing my own assets and being very online (I’m still very online). I wouldn’t have looked for work had this life liquidation not happened, because I didn’t need to.
This loss galvanized a change in mentality that was downstream from my change in circumstance; I started to hunt around in DeFi (decentralized finance, aka the serious version of crypto) to see what was out there. I didn’t lose everything, so I could still be picky about what work I wanted, but I lost enough that it made me start looking. A nice sweet spot of “motivated but not desperate”.
This led me to opportunities I’m deeply grateful for. I found amazing connections and work in an industry I genuinely care about (read my other essays on crypto to understand what I mean). I relish what I’m doing now vastly more than when “retired”. This new path has incentivized me to write more, create new relationships, and has been a major catalyst for personal development.
It broke me, for the better.
Purpose Through Struggle
Hormesis: you tear something down, and when it heals, it’s stronger for it.
Occupying your time with something productive is good for you. It provides organization to your day and makes you feel like you’re contributing to something. It imbues a feeling of purpose. When others rely on you, you rise to the occasion. A sense of importance. This is eudaimonia. When I had more money, I had less of this, because I had less motivation to act.
It's deeply important for people to feel purposeful. I kind of lost that when all I was doing was managing assets. Don't get me wrong, it's a good problem to have; but it was definitely a somewhat hollow day-to-day existence.
The stories you commonly hear when someone wins the lottery or makes a lot of money and then wastes away is from the loss of purpose and responsibility that comes from losing their motivation or structure. A little bit of friction is healthy, and when we have none, we soften. Like it or not, work provides this for most people. I was not exempt from this.
An environment where others depend on you and trust you to do something well is unambiguously good. It’s nourishing for your ego, it’s empowering to create something valuable and work alongside others you respect. It instills structure, and allays depressive thoughts. To top it all off, it’s good for your bank account too. Obviously some jobs do this better than others, this does not uniformly apply to all work.
I’m not describing soul-draining office-job work, what’s known as being a “wagie” in internet parlance. It becomes wagie-ism when it’s stultifying, rote work that you do purely for the paycheck. The wagie acid test: would you quit in a heartbeat the second your living expenses were covered?
I’m grateful for the path I was put on from that loss. It led me to new opportunities and the brilliant people I get to surround myself with. It’s provided seminal life experiences, and is responsible for the writings and thoughts you see on this blog and on Twitter (@BackTheBunny).
Getting financially BTFO’d motivated me. I would have never found this inspiration had I not gone through that devastating loss. Putting out these essays and this new work has been way, way more gratifying and edifying than what I was doing being listlessly “retired”. I honestly can't imagine going back to that.
Thought Experiment #2
Would I rather have:
The money I previously had
The experiences, relationships, and skillsets I’ve cultivated since working in crypto
I choose the second option, and it’s not even close.
Being a key part of building and growing a business are highly transferable skillsets. What I’ve developed both personally and professionally will be applicable to other things I do. This has been time well spent on multiple fronts.
The lessons and relationships I’ve amassed as a result of that painful wipeout are worth more to me than what I once had. So how bad was that financial loss really? It’s placed me on a better trajectory than my previous one, it just reallllly didn’t feel like it at the time.
This is why you must view tragic experiences holistically. This means framing new opportunities you’ll encounter as something to look forward to, not something to dread. You must find uplifting energy in the wreckage of the loss; if you can’t find it, you’re not looking hard enough. Again, we’re not talking about the deaths of loved ones; this essay is regarding material wipeouts.
View this new path is as an invigorating disruption to what either was or would have become a stale status quo. The hedonic treadmill spins for every man eventually. Happiness has a substantially genetic component to it, and no matter what the situation, we eventually return to our satisfaction baselines. You may be sad now, but you will revert to your happiness mean, eventually. This is a biological statement as much as it is an inspiring one.
What happened to me was necessary. I would not have learned some hard truths otherwise. It’s a positive for someone’s personal development to experience a moment of true bleakness. You learn more about yourself and what you’re really capable of. Some lessons must be experienced.
Closing
In bear markets, stocks (and crypto) return to their rightful owners. I was not their rightful owner; I am now better equipped to be that owner next time. I’m also far more emotionally resilient now. If I get hit again, I doubt it will impact me as badly.
I had some dark thoughts during these times. When you’re in the depths of a life liquidation event, it feels like it’s the end. But you’re only truly liquidated if you liquidate yourself. There is no life margin call, it’s internally issued. Don’t issue a call on yourself.
The new path I’ve been put on as a result of losing that money is worth more to me than the money itself. There is a victory there. Approach it like a trade: I traded a large sum of money for a life situation I value more than the money. Not a bad trade.
Zoom out and see your victories in addition to your losses. You must contextualize. Give yourself credit for your wins, most people don’t do this enough. Be hard on yourself, but don't be a tyrant.
Don’t only see the shitty decisions you make, see the good stuff too. Not doing so is like only looking at one side of a balance sheet; you don’t know if you’re solvent by just looking at your liabilities. There are some assets there too, don’t overlook them.
If you get obliterated, see it as an opportunity to find a situation that was better than what you had before. A way to break the inertia you were experiencing. To get out in front of the hedonic treadmill. You can transcend a major loss. Maybe you’ll find something you like more in the process. Be optimistic. What other choice do you have?
The journey itself is often the most valuable and beautiful part of a process, not the end result. We have a penchant for underestimating qualitative value that can’t be measured in favor of quantitative metrics that an Excel spreadsheet understands. Don’t only see life through the lens of a spreadsheet; you have personal assets that exist outside of a calculator’s interpretation of them.
Skills, Connections, Experiences > Money
Remember what you get to keep, even in the midst of a loss. And look forward to how your life can change in a productive way.
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