Embrace adversity as learning opportunities
In the New York Times bestseller Grit: The Power of Passion & Perseverance, psychologist Angela Duckworth wrote that the hallmark of a successful person is their ability to deal with setbacks and treat them as learning opportunities.
Adversity and failure is often unavoidable, even for the most talented athletes, entrepreneurs, and investors. What counts is their ability to get back up and stay motivated to succeed.
This lesson is particularly useful for investors, because the market can be so volatile.
According to research by Blackrock, the S&P 500 has seen a correction of 10% or more in 20 of the last 35 years. The average drawdown during that period was 14%.
Giving up during any of these drawdowns would have prevented an investor from enjoying the full benefits of the market’s long-term rally over that period.
Just like Brady, it pays to stay in the game for as long as possible.
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Learn MoreResist the temptation of easy wins
Giving up on something at the first hint of failure is the “sh-ttiest lesson we could actually teach somebody,” Brady said. He believes seeking out easy wins can cause long-term development issues because it doesn’t allow you to step outside of your “comfort zone” and learn something new.
Similarly, investors might find it easier to accumulate cash when they fear a market correction.
This “comfort zone” can be detrimental to your long-term performance as you miss out on market gains and expose yourself to the steady erosion of purchasing power through inflation.
For instance, in 2022, Bloomberg Economics forecasted a 100% chance of recession in the year ahead.
Instead, the U.S. economy avoided a recession and the S&P 500 delivered a 26.29% return over the course of 2023.
Investors who were spooked by the forecast and decided to stay in the comfort of cash missed out on this double-digit rally.
Look beyond the money
It’s easy to assume your career and investment journey is only about accumulating wealth.
However, it helps to take a step back and analyze what your real priorities are. Brady said he was so motivated by his love of football that he took less money to enhance his team’s chances of winning.
Similarly, 51% of American workers surveyed by Ford Motor Co. said they would be willing to take a pay cut of up to 20% if it meant improving overall life satisfaction.
In addition, 33% of retirees have said financial concerns have impacted their health and 26% said it had caused them to lose sleep, according to the Schroders 2024 US Retirement Survey.
The message is clear: if taking on a new job, extra income, more debt, or investing in a volatile asset is keeping you up at night, the money may not be worth it.
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