We can learn a lot from successful people. But there's much to learn from failure, too. Money site Impersonal Finance suggests you study the financial failure of others to make better decisions for yourself.
Impersonal Finance says you should become a "student of failure":
"Say you're planning on opening a department store. You would want to look not only at what Macy's and Nordstrom did right, you would also want to look at what Sears and JC Penney did wrong (although I guess technically Sears and JCP are still alive.)"
The post refers to survivorship bias, the "logical error of concentrating on the people or things that 'survived' some process and inadvertently overlooking those that did not because of their lack of visibility." In finance, failed companies are often excluded from performance studies. This survivorship bias causes the studies to be skewed. And valuable lessons in failure are lost.
How can this help your finances? It's easy and common to make bad money decisions. You probably know people with financial failures. If they're willing to share, be willing to learn.
"I have a feeling a lot of people would be willing to share their trials and tribulations, both their successes and failures...if you're only looking at what people did right, you won't be able to see what they did wrong."
Studying failure isn't a direct route to wealth. But it can help you make better decisions along the way.
Study failure as you do success | Impersonal Finance
Photo by Images_of_Money.