Burning your fingers (and why dad never invested in the share market)
This got me thinking about the things we never try again after we have failed at it or have been scarred by a very bad experience.
When I was very young, dad invested in the shares of a now defunct company after being prodded by a family member. His first brushes with stocks were very encouraging. The returns were more than he ever imagined. Encouraged by this, he reinvested all the money in shares of the same company.
Then everything went South.
The company ran into losses and the owner went into hiding. All the money evaporated into thin air. For my parents, who were never used to dealing with the share market, this was a massive setback. Given that they came from a middle class background and had two young children to support without the cushion of considerable savings, our financial situation was a little precarious for a few years after that debacle.
The good news, if you can call it that, was this — they got the money back. Just that it happened over a period of some 15 years and in minuscule amounts. The amount that he got also doubled as our pocket money.
Another thing happened after this experience — dad didn’t go within sniffing distance of the equity market. He didn’t even invest in mutual funds, which are relatively safer than the stock market. He made only conservative investments in debt instruments and is still distrustful of equities. To his credit, he left me to my own devices when I began to invest in Systematic Investment Plans but he never misses an opportunity to caution me on the perceived risks of anything that isn’t a debt instrument.
This got me thinking about the things we never try again after we have failed at it or have been scarred by a very bad experience.
Some of us don’t get up on stage and give a talk after stumbling in one of our efforts.
Some of us can get put off by leadership and management positions after a harrowing experience under a bad leader.
Some of us don’t apply for a job we really want because we have been rejected from it once and don’t want to experience dejection again.
Some of us an’t imagine working with a particular person or organisation after a particularly forgettable experience.
Actually, some of these reservations maybe valid. Some experiences can shape us and stop us from making the same mistake twice. At the same time, we may also have some misguided fears that stop us from trying again when in reality, another shot at it may have led to the success that we have been seeking.
Could dad have accumulated more money if he had invested in mutual funds? Sure. But he didn’t want it. If he so desired, he could have taken some advice and tried his hand at investing in stocks again. He was sure he didn’t want to burn his fingers again and risk his hard-earned money. Fixed Deposits, Post Office Savings and Pension Funds were good enough for him. There is no need to complain as my parents are very comfortable today. Sure, they could have had a few more lakhs in the bank but I doubt they lose any sleep over it.
If you have burned your hands, experienced abject failure or been let down, it is but natural to hide and never take a shot again. If you can live with it, it’s fine.
But if you’re not having another go at it because of a wrong story, or a misguided notion, or a false belief, you’re burning your fingers twice.
