How do you build wealth in the face of adversity?
Do you know you can still build wealth even if you are starting out broke ?
Do you know that it’s not the adversity you face that will determine your future wealth?
Do you know that its your response to the financial adversity you face that matters most?
Yes. How you respond in the face of adversity is the greatest factor in achieving success
You need disciplined thought to build wealth
The difference between living a mediocre life and enjoying a life of wealth, happiness and health is : just a matter of doing things in a certain way
In his bestselling book Good to great, bestselling author Jim Collins did a study of Fortune 500 companies that made the leap from good to great performances.
Collin and his team found that the good to great companies made the leap to greatness because they developed certain traits.
The good-to-great companies according to Collins had 3 main traits: They had disciplined leadership, disciplined thought and took disciplined action
One of the findings in the study, which I found-interesting that relate to building wealth is-how the good to great companies, handled adversity.
The good to great companies in Collin’s study handled adversity with a dual attitude.
That is…
On one hand they faced the facts about their adversity with calmness.
On the other hand, they had unwavering faith in their plan to build a great company.
In order words these companies had courage in the face of adversity.
This dual psychological response to adversity Collin’s called the Stockdale paradox.
What is the Stockdale paradox?
This is a situation where an individual who face difficulties retains faith. That he will overcome them regardless of the difficulties.
And at the same time he confronts the brutal facts of his current experience whatever they might be
How does the Stockdale paradox apply to building wealth?
I feel the Stockdale paradox applies to wealth building because the process of building wealth has many ups and downs
You see, when you decide to build wealth you will face difficulties on the path of achieving your goals.
In order to succeed you must believe that you’ll prevail against all the obstacles you’ll face.
And at the same time, when you face obstacles on the path to your goals- you must face them and not shy from confronting the reality about the difficulties you face.
In order to succeed, when you face difficulties on your journey to financial independence, you must believe in yourself that: you will make it no matter the situation
Master wealth builders faced adversities but overcome them
Most successful wealth builders use the Stockdale paradox, even though they may not know about it
For example Donald Trump once faced the brink of financial ruin in the late 1980 and 90s. His company owed over $9 billion in corporate debt
Yet Donald Trump bounced back from near financial ruin.
I remember reading about his own account of his personal setback in of his book How to get rich
On reflecting on what Donald trump wrote about his redemption from financial: I could see the Stockdale paradox in his response
Here’s why:
- Trump acknowledged he was in financial difficulty and stood to lose all he had worked for. This made him to step back and look at the direction his company was heading
- Trump saw that his organization was heading in the right direction. He never looked back. Instead he affirmed his faith that he taking the right path for the trump organization.
- At the same time Donald trump reached out to his organization creditors to communicate his plan. He overcame his adverse situation by: meeting with all his creditors to renegotiate the terms of agreement they had signed
The result: Donald Trump emerged from the brink of adversity stronger. His organization is in a better position and it handled the last financial crisis better than most real estate companies
Let’s now come full circle to you…
Are you currently having difficulties in your plan to build wealth?
Do you believe you will overcome your present challenges?
If you answered yes to both questions …well done
However if you answered no to the second part of the question…
Here’s how you can overcome your challenges and come out stronger
- Confront the facts of the challenges you are facing and its implication for your future plan to build well
- Acknowledge these challenges for what are but work to overcome them
- At the same time don’t abandon your plans to build wealth
- Retain absolute faith that you will overcome your challenges and prevail in the end
That’s all you need when you face adversity on your journey to build wealth .