Understanding Setbacks

"Life is an unending series of complications, so it doesn't make any sense to be surprised by the arrival of the next one."

-Sam Harris

I can't believe we got a Nintendo. It’s the early 1990s, and the Super Nintendo is relatively new. We did get a Super Nintendo, but now right away. Regular Nintendos are now cheaper so we finally get one.


A favorite game for the Nintendo was Super Mario Brothers. Like almost every video game that's ever existed, challenges exist at each level. I have to maneuver around plants that want to eat me, and turtles and little brown mushrooms try to kill me. As soon as I finish one level, I would be able to advance to a new level. The new level is always harder. Clearing a newer, more challenging level was frustrating, but worth it because of the pride and joy that it brought to me.


Imagine a video game where there were no challenges. I can simply walk my player from one side of the level to the other with nothing in the way. That would get me to the next level of where it was equally easy. I propose this video game would not be worth playing. It wouldn't be fun, and it would be a complete waste of time.


Life is the same. Life without setbacks, challenges, problems, or struggles would be a boring existence. Not only would we be bored, but we would never be able to learn and better ourselves. We would never be able to overcome any struggles to come out the other side stronger and smarter.


Financial setbacks should not only be expected but also welcomed.



The Perfect Life?


If you ask many people about what life would look like in their perfect world, you might get some version of a world where life is effortless, and there’s no stress and no worries.


Even though it seems like paradise on the surface, this mythical world falls apart with just a little bit of thought. To demonstrate this, imagine a world where there were no problems. You might even imagine that feeling happy today is what you would feel like every day in this new world. But since humans adapt to their surroundings very quickly, something known as hedonic adaptation, being happy all the time would become our new normal. And if we're happy all the time and that's normal, then we would need to feel extra happy in order to feel a little bit of joy. And what we consider normal today would be sad in this new world.


Although you might consider it useful to shift everything up, in our day-to-day lives, it wouldn't feel that way because we would get used to it.



Setbacks Are Guaranteed


There will be challenges and setbacks in your financial life. There's an old Ben Franklin quote that the only guarantees in life are death and taxes. Although those two will definitely happen, Mr. Franklin missed one other guarantee; setbacks. Setbacks will happen, and pretending that they won't is a source of suffering. If you assume that there will be no setbacks, then you, almost by definition, will feel bad when the next setback comes. But since you should have known that setbacks will happen, feeling bad is effectively your choice.


This does not mean that we can predict the future. If we are talking about investments, we know with near certainty that there will be a severe down market at least once in the future. What we don't know is when it will happen, why it happened, or how long it will last. Those are the unknowns, but a severe down market will happen. Similarly, you will face unexpected expenses. You don't know how big that expense will be, when it's going to happen, or why it will have happened, but it’s a guarantee that there will be unexpected expenses in your future.


Other setbacks aren’t guaranteed, but definitely possible. For example, the company that you work for could get sold or acquire another company. The promotion that you would be perfect for might go to an outside hire. You could be fired. Your company could go out of business. The largest employer in your town might go bankrupt, leaving your city a ghost town. You can have a large fight with your partner about money. Your children might run into financial struggles and need money from you. Your parents might need financial help.


These are all possible. Many of them aren't very likely, but some of them are more likely than you think. Again, we don't know when they will happen, why there will happen, or how long they will last. However, we do know that they are possible.


Changing our mindset so that we expect some kind of setback will make us more resilient in the future.



Adversity is Necessary

It might be tempting to take a pessimistic view of the certainty of setbacks. After all, what's the point if bad things are just going to happen?


Before taking the nihilistic approach to life, however, it's important to understand that adversity is necessary for growth. If you've never had to solve a problem, then you have no skills to solve problems. Setbacks and adversity give us the tools that we need to handle and deal with the setbacks that we know will happen.



Invite Setbacks


Being resilient and finding creative solutions to problems is a skill. And like every skill, we can get better, but we need the practice. Instead of being upset when the next setback happens, we can reframe the setback as a learning opportunity. We can reframe setbacks as invitations to solve interesting problems. We can view setbacks in such a way that we look forward to coming out on the other side with our new skill set, knowledge, and ability.



Setbacks will happen to you. Pretending that they won't is not going to help you. Instead, we should reframe setbacks as opportunities for growth. If we can train ourselves to reframe a setback as soon as we're aware of it, it will prevent us from feeling angry about it. Not being angry about our setbacks is necessary to come up with the best solution we can for the setbacks that life throws our way.


Setbacks are not our enemy; they should be welcomed. It just takes a little bit of a mindset change.


You only have one life. Live intentionally.



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Related Money Health® Reading
References and Influences

Happiness Lab Podcast: Rising to a Challenge

William Irvine: Guide to the Good Life

William Irvine: The Stoic Challenge

Massimo Pigliucci, Skye Cleary, Daniel Kaufman: How to Live a Good Life

Waking Up Conversations: The Art of Living (subscription required)

Waking Up Conversations: The Science of Happiness (subscription required)


Note: Above is a list of references that I intentionally looked at or thought about while writing this article. It is not meant to be a definitive list of everything that influenced my thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.


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