Seeing the Opportunity in Adversity

“When one door closes,another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” – Alexander Graham Bell

When you are on the path to Financial Independence, Retire Early (FIRE) you need to be looking for every edge.  This way of thinking allows FIRE seekers to uncover opportunities for savings and growth in everyday activities.  Whether it be house or travel hacking, biking over driving, or making delicious home-cooked meals for pennies on the dollar, the FIRE lifestyle is centered around creative thinking for everyday issues.  Housing, transportation and food are predictable everyday facts of life.

However, one facet of everyday life is not so predictable:

Adversity

How can FIRE thinking take advantage of that?

Adversity rears its ugly head at the worst possible moment.  Kicking you when you are down, stealing your thunder, and taking the wind out of your sails.  Even worse, adversity can induce your fight or flight mechanism which can dull your thinking or close your mind off.  Basically, when you need your brain the most, it’s unavailable since it’s preoccupied with emotions.  Bad decisions made at bad times often ensue.  Productivity drops, money is lost, and relationships can suffer.

The thing is, adversity often times brings with it opportunity!

As an example, an acquaintance of ours found out their employer was going under.  But it wasn’t going under that day.  During the long process of winding up, this person received a substantial “stay bonus” (a monetary bonus for hanging in there up to the end).  During this time, they were free to research job opportunities and try to line up new employment.  Additionally, the stay bonus could have allowed them to simply not work for an extended period.  Now that doesn’t sound so bad after all, does it?

So how can we counteract Adversity’s sting and embrace its opportunities?

By applying the FIRE mentality and taking a page or two from Stoicism, we can hope to find a better way.  A recent brush with adversity (admittedly very minor) in our household is that we recently had a large pin oak tree die in our backyard.  I would like to walk through the issue here to demonstrate the process of thinking.

Plan Before Adversity Strikes

Think about your daily life, your possessions, and concerns.  What could happen that would bring adversity into your life.  A job loss?  Car accident? Act of God? I am not trying to be morbid here, rather, visualizing these possibilities offers you the chance to mentally prepare for these events.  Additionally, this allows you the opportunity to take steps to reduce the impacts when adversity comes trotting along.

For instance, if you are in a area that is prone to flooding you could relocate or purchase flood insurance, or move belongings to higher ground, etc.  If your car has very high mileage, you would realize that mechanical issues and perhaps replacement are likely in your near future.  This reminds you to budget for repairs or purchase of a replacement car.  If you have a job, you can certainly lose it.  Building an emergency fund can take care of your needs should your income dry up.

Example:  Our yard had a couple large mature trees.  It was one of the features that drew us to the neighborhood.   Therefore, it made sense that eventually we would likely have to deal with removal of one of more of these trees.

S&*T Happens.  Now What?

Step 1. Regain Emotional Control

If our brain is stuck in a cycle of self-pity then how can we focus our actions and hope to see any upsides?  First, realize that whatever happened… happened… and unless you are Marty McFly or Doc Brown, you can’t change it.

via GIPHY

The past is outside your control as much as the weather.  Do you worry about the weather?  So, if you can’t change it, then why worry about it?

Example: At first the loss of our tree was a real bummer, because the tree provided much needed shade, and contributed to the “grown in” vibe of the house and neighborhood.  On top of that there was the immediate safety concern that the tree or branches would fall on us or our house.  The icing on the cake was that its removal was costly.  But in the end, was there anything we could do to save it?  Not really.  If I couldn’t have helped, then why should I beat myself up over it?  Once I realized that, the stress started to melt away.

Step 2. Address whatever is within your control

Now that you’ve freed yourself from the emotional shackles of the incident (whatever happened), you can control what comes next.  You choose how you respond.  Do you fold up tent and quit, or do you keep plugging away?  Take stock of what actions you can take to mitigate the damage (the answer could well be nothing). Focus your efforts there.  If you lose your job, focus on your resume and checking in with contacts for job opportunities.  If your basement floods, focus on getting the soggy junk out of your house and start drying things off.  If your car is totaled, get the insurance claim going and start researching a replacement if you need one.

Example: While I was no longer upset at the loss of the tree, I was still faced with the prospect of paying for it.  I reached out to get several bids and ultimately got the tree removed by a solid contractor for 33-50+% less than the going rate.

Step 3. Search for the Silver Lining

With the negative emotions negated and those items within your control managed you are now on top of the situation.  This allows you to act in a proactive manner, rather than being reactive.  Now you can calmly take stock of the entirety of the situation and discover any positive outcomes or possibilities.

Example: In the case of our dead tree we now have much more usable space in our backyard.  Our girls have more room to kick the soccer ball around.  Heck, the added sunlight will likely help our garden grow better and it gives us room to expand if we want.  Bigger better garden = fresh veggies and lower grocery costs!.  One silver lining I didn’t expect: The stars!  With the tree gone we now have an obstructed view of the sky at night.  In a subdivision with a lot of mature trees, this is a rarity.

Here are some examples of situations that can seem spooky at first but could present lucrative opportunities.

• Loss of your vehicle (due to wreck, breakdown, theft, etc.) – Take time to evaluate whether you really need another vehicle.  Maybe you could commute by walking or a bike?  If you do need a vehicle, maybe you can replace the old ride with a more efficient and reliable vehicle, which can save you significantly year after year.
• Moved, but have a hard time selling the old house? – This one hits close to home (we still rent our old house).  You can gain valuable rental real estate experience by renting out your home.  We’ve benefited from the connections we’ve developed through our property manager during the time we’ve rented the home, including finding a cost effective tree trimmer to address our big dead tree.
• Stock Market Decline – If you are invested in the market the odds of a significant decline are approximately 100%.  It’s a lead pipe lock.  Remember, you haven’t lost money until you sell.  So hold on, and realize that any additional investments can be purchased as discounted prices.  It’s a stock market sale!
• Job loss – you could use the free time to evaluate what really matters to you allowing you to seek out employment that is a better fit for you.  In the short term you could devote time to a passion project or take a trip you’ve never had time for (assuming you followed the advice above and funded your emergency account of course!).  If your 401k or similar plan is saddled with high fees and bad fund choices you can use this opportunity to move to lower fee index funds, which could save yourself a boat load in cash when you ultimately retire.

So next time adversity strikes, try thinking a bit differently about it and you could find a valuable silver lining!