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That's FijiAirways.com. From here to happy. Flying direct with Fiji Airways. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less.

My name is Joshua. I am your host. And today I want to share with you some ideas to help you to embrace your financial mistakes as part of your learning. If you want the one-sentence synopsis of this show, it's simply this. Sometimes you win and sometimes you learn. But only if you're actually paying attention.

First, a couple of questions for you on the topic of learning. One of the major errors I see us making in modern life is we neglect the topic of how to learn. I ask you this question. During the course of your formal education, were you ever given a course or a lecture even, a single lecture, on how to learn or perhaps how to study?

Were you ever given tools of learning that you could apply throughout your entire lifetime? Did a professor share those secrets with you? For most of us, the answer is no. And that's for a number of reasons. First, of course, the entirety of the way that formal academic instruction is conducted assumes the need for an expert.

So most of the time when you are presented with a problem, you might very easily revert back to the idea of school. I need to go and find an expert. I need to go and find a teacher to teach me and to show me these things from the front of the room.

Now, there's a place for teachers. There's a place for experts. I make my living as an expert teacher. But I want to equip you to go beyond me. I want to equip you to go beyond almost any teacher with some ideas on learning for yourself. Although there are times at which you need a teacher, some of the most valuable learning can be done without a specific teacher, especially in the types of things that we discuss here on Radical Personal Finance, especially in your own pursuit of a rich life and financial freedom.

One of the most important tools of learning that you have is your own personal experience. There are many things in your own life that you would count as wins, and there are things in your own life that you would count as failures. But when looking to the future, if you will analyze the data from your own history of wins and failures, if you'll analyze that data, you can do a better job in the future.

And you can turn those experiences of failure into valuable lessons for the future. In fact, those experiences of failure, because they are probably very emotionally charged for you, will give you the lessons that will keep you out of the ditch in the future. Personally, I have a long series of these financial failures, things in my own life that have been very painful, big mistakes.

I've shared a few of them here and there, but some of those mistakes are things that I'm embarrassed to even speak out loud. Foolish, foolish decisions. Sometimes I do things and only in hindsight do I realize how foolish a certain action was. But once I make that mistake, as long as I study it, process it, and learn from it, there's a good chance I won't repeat it in the future.

I'll share one humorous anecdote to give an example of how deep these lessons go. When I was in high school, I worked each summer at a summer job, and I had the task of saving money from that summer job to cover some of my expenses over the course of the year.

Most of that money was allocated towards personal spending without any direction from my parents, but some of that money was allocated toward my school expenses. My father and I had a deal when I was in high school that I could go to a private school if I would contribute $100 a month towards my own education.

That was $100 a month during the course of the school year. That came out to $700-$900 a year. Not a big bill, but it was not insignificant. And generally over the course of the summer, I was earning somewhere between $10-$13 an hour if memory serves. And so over the course of the summer, I could earn about $3,000 if I worked a full-time job for most of the summer.

One summer, it came time for me to pay my dad my first monthly bill for my school tuition, and I didn't have very much money in my bank account. And this was quite a surprise to me because I was used to, at the end of the summer, coming to a place where I had plenty of money.

I had several thousand dollars in the bank. But this particular end of the summer, I didn't have much money, and I had not paid any attention to my money. Well, this was, of course, quite embarrassing because I had a deal. I was behind on money. I didn't have the money to pay my bills.

And so my dad forced me to go and do, in essence, a forensic audit of my finances. And what I learned was very sobering. In short, what had happened was I had spent all of my money at the local convenience store, at a gas station that was near my summer job.

And I was pretty bored at this particular summer job, so I would go to that gas station quite frequently. I would generally, I found out afterward, go there two or three times a day. I would go in the morning and get some coffee, sometimes get something to eat. I might go at lunchtime, and this particular gas station had some of that yummy hot fried food.

I think they had some delicious chicken wings. And I would often buy some wings or some other food and perhaps a drink or a bag of chips or whatever the thing was. And then sometimes in the afternoon, on my afternoon break, I would go by, or on my way home I would go by.

And what I found was, by the end of the summer, I had blown perhaps half of my earnings at that stupid convenience store. I was broke for that entire school year, and it was not fun being broke. It was a huge, huge deal. That lesson sank in very deeply to the point that today I'm generally allergic to convenience stores.

I must confess that from time to time I do buy a cup of coffee, but I cannot remember the time, the last time, that I've purchased anything other than a cup of coffee at a gas station or convenience store. But because I'm so sensitive to this, I have watched many people who don't have very much money spend a lot of money at a convenience store.

Now I point that out to you. If you're looking for where your money may be going, take a look at the convenience store. But I point it out to you as an example of a lesson that has served me very well that I learned the hard way. But I only learned it when somebody came along and forced me to pay attention.

I don't think I would have had the awareness of my finances to actually figure out what had happened if my dad hadn't forced me to go back and do a forensic accounting and try to figure out where all of the money that I earned went. That was the exercise.

I had to go back and figure out how much money I had earned, and then I had to figure out where it went. Now of course there was a lot of money missing in that analysis. I wasn't a good record keeper in those days. But I did figure out that that convenience store was the primary culprit.

Now that's just a simple and hopefully mildly humorous example of a high school student's financial stupidity. But there have been a lot of other lessons that I have learned. And I'm wiser today because I've paid attention to those lessons. The problem is those are my lessons. Those are the lessons from my own actions and activities.

And my lessons can't be your lessons. I can share them with you, but you have your own lessons. And you need to learn how to pay attention to your own lessons of life and let them help you to become wiser. And I think this is a major problem that we face in our world today.

I already pointed out one of the errors. Most of us have not learned how to learn. It seems silly if I point it out, and humbling because it's true. But very rarely have we ever learned how to learn. I've frequently referenced one of my most useful books, Mortimer Adler's How to Read a Book.

Very rarely, once we've learned the basic mechanics of reading, very rarely were we ever taught how to read. Or another example would be how to study. Have you ever taken a course on how to study effectively? One of the things that I find amazing is the amount of time in academic studies that we spend taking tests and studying, and yet very rarely have any of us actually taken a course or a seminar or read a book on how to study.

What about how to speak or how to listen? Mortimer Adler has another book, How to Speak and How to Listen. It's quite good about how to actually speak effectively, how to listen effectively. And then learning, how to actually learn. As I've grown older and I've observed this deficiency that I didn't really know how to learn and I didn't really know how I learned, I started studying the topic.

I've gained immense valuable information by learning how to learn, learning the techniques of learning and also the techniques of how I particularly learn my own personal learning style. And I'll share with you a few simple suggestions that I hope will help you to learn from your own financial experiences and the experiences of others so that you can make wise decisions.

Because your ability to live a rich life and to build financial freedom will be dependent on your ability to make wise decisions and to follow through on the actions associated with those decisions. Number one, pay attention to life. Pay attention to your own life and the lives of others.

First your own life. Notice what's happening in your own life. Observe the things that are happening in your own life. Observe the state of your bank account. Pay attention to your net worth. Pay attention to your spending habits. See what's happening with your job. Pay attention to how you do your job and how effective you are at it.

Pay attention to your life. Pay attention to the relationships in your life. Pay attention to the stresses and the triggers in your life. When you find yourself earning a lot of money, pay attention to why. When you find yourself not earning a lot of money, pay attention to why.

It's not an accident. You can notice and figure out and discern why these things are happening. When you wind up with significant expenses, pay attention to why. What's happening? If you'll just pay attention, then you can figure out plans and ideas for how to minimize those expenses. Pay attention to the lives of others.

Take an interest in others. Take an interest in speaking to other people and learning from their experiences. Yes, it's valuable to learn from your own experience, but if you can avoid some mistakes by learning from the experiences of others, it's a very wise way to approach life. But very rarely do we take the time to ask other people how they came to be where they are.

So observe the behavior of other people if you don't want to ask them. Observe the behavior of the person who is popular. Observe the behavior of the person who is rich. Observe the behavior of the person who is an outcast. Observe the behavior of the person who is poor.

Try to identify those things that you can see that might possibly be contributing to their social status or to their financial position. Now, that's only a hypothesis, but you can test your hypothesis with other people, with other circumstances, and try to see if your hypothesis proves true. Pay attention to life.

Two, make time for contemplation and consider carefully the situations of life. What's happening and why is it happening? In our very busy, very frenetic, very loud world, it seems more and more challenging to make time for contemplation and consideration. We're all guilty of it. When's the last time you heard somebody say, "I'm bored"?

It's almost impossible to be bored in our modern era, because we fill our lives at every moment with activity, and we have no shortage of ways to amuse ourselves. And yet, in our busyness and in our access to information, our ability to use the circumstances of our lives and generate wisdom seems to be increasingly limited.

I think it's important to make time for contemplation, quiet time, to consider what's going on. Make time for quiet conversation with the people who are in your life, who know you well, who can understand the circumstances of your life, and talk about important things. Number three, ask yourself questions.

A great question has a way of leading you to a solution. Frequently, we bumble past opportunities to ask ourselves questions, and we don't give our brains the opportunity to analyze the information and give us an answer. One of the most valuable suggestions I could make to you is simply this.

Ask yourself a question in writing on the top of a journal page, and then brainstorm some solutions to that question. Brainstorm solutions to your problem. Do this in writing if possible so that you can see your own thinking. But it can be very simple. If you're broke, ask yourself this, "Why am I broke?" If you're broke and you write down at the top of a page, "Why am I broke?" And then you sit there and you write down a dozen or two answers, I'll bet that you'll get 80 to 90% of the reasons why you're broke right on that piece of paper.

You don't need me to come along and identify why you're broke. You already know it. So write it down on a piece of paper, and then figure out the answers. Now of course you could take a more positive tack if you like. You could start with, "How can I make more money?" And if you write that at the top of a page, you'll program your brain to start looking for money-making opportunities.

Brainstorm as many answers as you can, and even if you only come up with two or three, you will radically transform how you see the world. Because for the rest of that day and the rest of that week, you'll look around and you'll be thinking about that question, "How can I make more money?" So ask yourself questions.

Brainstorm solutions to your problems and do it in writing. And four, be humble enough to admit when you're wrong and when you need to change. The reason we often don't want to write down those questions and answers is our pride. We frequently don't want to admit the mistakes that we've made.

The problem is you're only deluding yourself. Everyone else can see those mistakes that you've made. You're the last one to see it if you're too proud to face it honestly. I've been struck by this in looking at pictures or videos of myself. We all have an idea of how we're perceived, but in the stark light of a photo or a video camera, we can see how we actually look.

And we might have this perception of how we are, but our perception is not the truth. The truth is everyone sees you the way that you look on video. Everyone sees you the way that you look in a picture. That's the truth. The problem is not with what's actually true.

The problem is the difference in your inability or my inability to look at the actual facts. So the same thing with some of these questions. If you're wrong, be humble enough to admit when you're wrong and need to change. There's no problem. You'll be the last one to know.

But if you'll be humble and admit when you're wrong and a course of action and need to change, go for it. That can be as simple as recognizing something like this. Credit cards have never been a blessing for me. I'm going to stop using them. Well, you'd have to admit you were wrong to do that.

But yet if you do so, it can lead to a much brighter future. You can either experience a small moment of pain to admit the mistakes that you've made and humble yourself enough to accept them and then enjoy the long future ahead of you without making those mistakes. Or you can continue on in pride and reap the consistent error of your ways for a very long period of time.

So be humble enough to change course. If something's not working, just admit it. It's not working and I need to change. And if you'll continue that process of paying attention to life, making time for contemplation, asking yourself questions, brainstorming solutions, and then admitting when you need to change and actually doing it based upon some of those solutions you've found, you'll come up with good solutions, good things to try that will lead you closer and closer to the direction of your dreams, to the direction of the highest ideal.

In closing, I want to simply encourage you with this. Your mistakes, the failures are wonderful learning opportunities. They don't feel good when you're in the middle of them, but in time they provide you with the lessons that you need to live a successful life. When I think back over the course of my life, I'm grateful for the failures.

I'm grateful for the mistakes because those things have taught me some very valuable lessons. I don't want to repeat them, but I see the benefit. I'm able to do what I do in sharing with you about money largely because of the many mistakes that I've made. At the very least, it should give me a bit of humility in my tone that makes you willing to listen to me.

If I were an arrogant know-it-all and didn't share with you some of the errors, you'd never listen to me. So at the very least, they've done that, but in reality, it's far more. Those mistakes have given me compassion. Those mistakes have given me lessons. And by watching my own mistakes and the mistakes of others, I've learned enough to have something useful to share with you.

So embrace your mistakes. Sometimes you win, and sometimes you learn. It's a much better philosophy of life than trying to ignore them. Rain, I see you're running with the blues. You've done that thing you do to my parade. It's a sin. You got me swimming in regret. You keep finding ways to get me looking back.

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