How to overcome financial loss (2024)

I met a 95-year-old doctor, who moved somewhat reluctantly into assisted living. He asked me what I did. I told him I had sold off my business and retired from a job I had enjoyed for over 35 years. He disapproved. “I was working till last year,” he said. Then he asked me what I did. Apart from the garden, kitchen and my interest in food sciences, I wrote this column, I told him. “Ah, money, the nothingness of it all,” he exclaimed. The irony seemed stark to me.

In order to know that money does not matter to the really joyous things in life, one should have earned a lot and experienced the hollowness of it all. Or, one should be so close to death and end of life to be able to look back and see that money did not mean much. Or, one should have experienced financial grief of a severe nature and recovered from the shock of losing money. For all others, money matters, I would assume and, hence, these weekly conversations about money.

Losing wealth is tough. My grandfather lost everything he should have rightfully inherited, to the unfair property division after his father passed away unexpectedly. He was a married teenager at that time and moved to the nearest town to work for the Railways. I have seen how he and my grandmother struggled with their financial grief. They did not achieve closure, even if they put up a brave face of acceptance. The emotions of denial, remorse, yearning, blame turning to anger came up from time to time. Financial grief is quite unlike other forms of loss.

A friend of mine, who is an avid stock market day trader, typically goes underground when his investments take a downturn. He is so overcome by shame and disbelief that he completely withdraws socially. He comes back when the bull run returns, regaling us with stories of his gains and generously passing out tips and names to anyone caring to listen to him. His wife would tell me how anxious and lonely he would be after the losses, but he would never broach that phase.

When someone loses money, there is always the judgement that they could have somehow avoided it. The society dissects the story of failure with the huge benefit of hindsight and points out what should have been done instead. Failed businessmen bear that burden and are constantly reminded of the mistakes they made while managing their now-failed enterprises. The prince-to-pauper transition is painful in many ways.

There is a change in lifestyle and comfort; there are dreams and aspirations that have to be shelved; there is a loss of status in the social circle; there are duties towards immediate family (children’s higher education, for example) that go unfulfilled, making it tougher to manage relationships and expectations; and there is a certain loss of identity that one was proud of. Unlike other forms of grief, financial grief does not have many sympathisers. Nor do we have rituals of closure that enable one to come to terms with it.

One of my friends took voluntary retirement from bank. Unfortunately, she lost her entire savings to a ponzi deposit scheme, lured by the high returns. This loss took away all her dreams about a relaxed retired life. She could not go back to work, given her age and basic educational qualification. She began a home catering business and struggled over the years to bring financial stability to her life. Her efforts hold some lessons for dealing with a sudden and significant loss of wealth.

Accepting the situation is the first step. Denial is easy, but unhelpful. Without remorse, regret and eagerness to go back in time to rearrange events, accepting what has happened in its true form is important for recovery.

However painful, it is an essential step to be able to move on. Second, seeing the loss as a personal failure and devaluing oneself is not helpful. Playing the victim may not even get empathy after a point. To see it as an event of the past and to know that the next steps are what will matter is important. Ruminating over what has happened, ascribing various reasons, trying to pin blame, or playing out various ‘what if’ situations in mind, are all efforts to somehow rework and modify what has happened. Firmly staying in the present is an essential third step.

Surrounding oneself with good quality support—parents, siblings, relatives, friends—is critical to recovery. Simply discussing emotions, feelings and thoughts around recovery, without delving into intricate detail, can be healing and constructive. We all need that safe circle of support where we can be vulnerable and truthful. We need to be that support for people we care about. To feel powerful enough to take action, it is important to let go and move on, instead of allowing one event to dominate the rest of our lives.

It may seem philosophical, but adversities impart skills, attitudes and lessons that remain invaluable throughout our lives. We are able to discover ourselves in ways we never knew existed. My friend discovered that her interest in cooking helped her create a home catering business. For someone who refused promotions at work, fearing long hours and managerial responsibilities, she now knows that she is a good business strategist, leader and manager. The appreciation she received in her new role enabled her to erase the shame of losing money and return with confidence.

There are venture capitalists who look for businesses that have failed. They want to engage the owner in projects that would benefit from his experiences. Failures can be made into lessons for others if those who fail do not sulk, but are willing to shine the light on it and feel powerful again.

My 95-year-old doctor friend put it together for me. Life is full of good things and they always involve others— family, friends, community and the world. You live your life understanding the many gifts that you can give without pain, and the many gifts that you receive even without asking. Where is money in this equation, he asked me. It lies somewhere in the background. When we lose it all, we see the real gifts that matter. Go on and write your kitchen and garden stories, he told me. I began without question.

The Author IS CHAIRPERSON, CENTRE FOR INVESTMENT EDUCATION AND LEARNING