My First Million - Emergency Podcast - I Just Lost $500k This Morning: Here's a Framework for Dealing With a Crisis

Episode Date: May 19, 2021

Shaan (@shaanvp) talks about dealing with a crisis. He lost half a million in one day -- here's his mindset and how he dealt with it. --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. ---------

Good morning, Sean here. I woke up this morning and I checked my portfolio, as I do in the mornings. First thing, one eye open, swipe, see how the stock market's doing, see how crypto is doing, see how sales are going. And I woke up today and I was down over half a million dollars. And, you know, that's the, you know the phrase everybody wants, you want to make money while you sleep. Well, this was, you lose money while you sleep. The stock market is bleeding. Crypto is crashing. And I had a moment in the morning where I had to decide, how's today going to go? How am I going to interpret this? How am I going to put a meaning on this? So I want to share with you something I've learned that really helps me. And it's about crises.

So it is very easy to get information, panic, and make a move. So in the stock market, you might panic sell. panic trade. And even if you're not going to take an action like panic selling, it is very easy for me, I'll speak for me, it's very easy for me to get some news. An email pops into my inbox from my boss or a stock price goes crashing where I have a big position. And it's easy to not just lose the money, but also lose the day. Meaning I get the information and it can tank my day if I'm not careful. And, you know, a while back I had this teacher. I did an audio series. So, like you would listen to one of these little five-minute audio clips a day. And he's kind of like

a life philosophy mindset guy. I'm into that kind of thing. So he had this section called Grandpa Wisdom. And I loved it. And there was a Grandpa Wisdom about crises that I want to share with you. And he says, when a crisis happens, ask the question. Is this a crisis? Or is this a crisis or is this an event? And the grandpa wisdom was, a crisis is nothing more than an event that reveals the state of crisis within. I'll say that again. A crisis is nothing more than an event that reveals the state of crisis within.

Okay, so let's apply that to today. I'm a, some of you know, I have a big crypto position. I'm a big believer in Bitcoin and Ethereum. Today, Bitcoin is down, you know, or 20% or something like that. Same with Ethereum. And if I was to panic today, it would have nothing to do with Bitcoin and Ethereum being down 20%, just like I should not be overjoyed when they're up 20%. The grandpa wisdom is that if I feel a crisis when I look at that number, it reveals the state of crisis within,

which is that I don't believe, I don't have full conviction in my investment. Because when I invested, when I buy, I don't think about it like, this is going to go up. I need this to go up every day. No, I know it's going to go down. It's not even that I need it to be up this month. Does it have to be up in the month of May? No, May 2021 doesn't even matter. I'm buying this for the long term.

I believe that in the long term, the prices are going to be much, much higher. I believe Bitcoin is going to be over half a million dollars per. And so if I was to panic today, what that would reveal would be that there's a state of crisis within. There is a conflict within me that says, I don't know. Is this going to happen or is this not? And if this doesn't happen, you know, then what? Then what happens to me? Then am I wrong? Am I dumb? Am I poor? Your brain, I should say my. My brain can go to some crazy places if I let it. And so, so, you know, that's where you have to ask, is this the slice of the pie, right? If this was a pizza, a slice is just an event.

It's just part of a whole, a whole story. And you would never overreact to a slice versus a pie. If the pie is wrong, that's the whole pizza. And so I try to be very, very careful what I allow to be a crisis in my life. And this is not just about money, right? This can be anything. You're really excited about a date and you get to the bar. and you're waiting, and you're sipping your drink awkwardly,

and you're sort of checking your phone compulsively, and then you get that text. They're not coming, right? They flaked out on you. This is a crisis or an event, right? Does that ruin the rest of your night? Or do you identify it as just an event that happened in the moment? Do you take this to mean that she doesn't like you

and that you're always going to be single? Well, now you've made it a crisis. You've hit it a personal crisis. You have revealed the state of crisis within it. It could be that your teacher send you, you know, the teacher of your children sends you a note, an email saying your kid is falling behind in class, they're not paying attention, they're acting up. When that email hits your inbox, you might be driving, you just see the subject line, you just see the first line, the preview, and you know something's up. Is it a crisis or is this an event?

You know, I, in college, I've told this story before, but one of the major turning points of my life was in college I took a class called Getting Rich. It was my senior year. I was a pre-med student, so I was planning to go to med school, took the MCATs, had finished all my medical requirements, and so I wanted to take the easiest class available on Duke campus. So I went to this website where it would give ratings for classes, and I saw that the highest rated class of the highest easiness, the nicest teacher, was a class called Getting Rich. So I enrolled.

I enrolled with my two best buddies. We had never taken a class before together at school. And this teacher was an ex-student. And what she told us was, I'm back here teaching. I think she was probably early 30s, 31, 32, 33, something like that. She said, I'm back teaching. I graduated from college. I didn't know what I was going to do.

I had a degree in Mandarin because that's what was interesting to me. And all my friends joked, like, good luck with that Chinese degree. What are you going to do with that? Good luck. Where are you going to get a job? And she said, well, I could probably get a job in China. So she goes to China, uses her Mandarin skills to actually make a killing what she does is she partners with Chinese companies that want to do business with the West.

And she's a translator. She's the middleman because she understands business. She understands both languages. And she was good with people. So she makes money. She invested in the stock market during the dot-com boom because she's very interested in the Internet and technology stocks. She starts investing.

And here comes the stock market crash, the, you know, the, you know, the, the, you know, the, bubble burst. So it's 2000 or whatever. Stock market crashes. Technology stocks are plunging. Internet stocks are plunging. Amazon is plunging to, I think the stock goes down to less than a dollar or something like that. And she had to decide in that moment. Some of the money she had saved, about 30, 40% of the money she had saved, was now worth almost nothing. And maybe she was wrong about this technology thing. Maybe she was wrong about this internet thing. So not only is she losing money. Now she's losing confidence. But she decided, she said, the meaning I give this is going to be what it is to me. Right. If I say this is, if I panic, if I give this the meaning that this is the end,

that I messed up, well, then that's the experience I'm going to have. So instead, she saw it differently. She saw it as an event. She saw it as better than an event. She saw it as an opportunity. She said, hey, everything's half off. Everything's 80% off. This is Black Friday. And she started buying up as much as she could. So the reason she was able to be a teacher by, you know, early 30s was because she made a killing in the stock market when the stocks recovered because she had bought everything at such a premium discount. When everybody else was fearful, she was greedy, the old Warren Buffett quote. And so that's kind of what I'm reminded of today. You've got to ask yourself, is this a crisis or an event? And when you ask yourself that question, it's a powerful question.

It's the first question you should ask before you react. Before you react, you want to respond. Respond to the question. You want to let the blood pressure go down. You want to stop checking your phone compulsively. You want to keep calm and carry on because the worst consequence you could have is you see an event. You label it as a crisis and then you throw away today. And that sounds like nothing, right?

Throw away today. What's the big deal? Well, it's just a Tuesday, right? It's just a Wednesday. Well, it's no big deal until you realize that today is all you got. and throwing away time is throwing away your most precious asset. And ruining your mood is ruining your fortune, right? Your mood is your fortune.

And so that's all I got for you today. Remember, ask, is this a crisis or is this an event? And even better, is this a crisis or is this an opportunity? If you like this, think about sharing this with somebody else in your life who might benefit from hearing this today. A lot of people might need to hear this. Feel for you to forward this. Share it with a friend.

And if you like these little mini episodes, these little nuggets, let me know. I'm at Sean VP on Twitter. Tell me if these are good. And we may do some more of these in the future. All right. Time to make breakfast.