The Chicxulub asteroid had a diameter of possibly 50 miles, or maybe as little as seven. So, the equivalent distance of a nice day drive or morning jog. We will likely never know with certainty. What we do know is its impact on Mexico’s Yucatan peninsula was powerful enough to trigger the extinction of 75% of the species on Earth and alter life on the planet for millions of years.
Had Chicxulub arrived 66 million years later, in 2020, we would have probably thrown it a parade and an inauguration party.
In truth, we owe this cataclysmic asteroid a token of gratitude. From the human perspective, it was an ecological gift, as mammals came to rule a land now free of hungry dinosaurs. Had it not been for Chicxulub, we may not be here. Or, rather, I may be typing this with razor-sharp claws protruding from the scaly appendages of my reptilian body.
Out of the ashes, new life emerged. Which is to say good things can come from bad events. This is true in life and money. There are always lessons to learn and opportunities to realize. Recognizing them helps us create a better future.
The past 12 months may serve as a reminder of that lesson. 2020 has been a no good terrible year in many ways: as a health reckoning, a political reckoning, a social reckoning, and a financial reckoning. In America, more 17 million people have contracted Covid-19 and more than 300,000 have died. Almost 8 million Americans have fallen into poverty since the pandemic since May. More than 10 million are unemployed.
Unfortunate things happen, but they can shape us in unimaginable ways that would not happen otherwise. You can see flashes of it now with a vaccine developed in record time, creating a blueprint for all future viruses.
That is not to say we should be thankful for 2020. It has been heartbreaking and dispiriting, especially because much of it is a result of human incompetence. Still, the year is not without wisdom; to learn nothing would be equally tragic.
It brings to mind the profound words of Marcus Aurelius: “Accept everything which happens, even if it seems disagreeable, because it leads to this, the health of the universe.”
A study from Oregon State University suggests that how a person responds to a difficult life event, such as a death, divorce, health crisis or loss of a job, helps shape the development of their wisdom over time. Of 50 adults, ages 56-91, who experienced a difficult life event, most changed their outlook and actions afterward. Their “social environment helped to shape their responses to the difficult life event.” These interactions ranged from “unsolicited emotional support from family, friends or strangers” and “seeking out others with similar experiences” to “seeking expert advice” and “learning from society at large.”
The researchers concluded that “some of these social supports and interactions influenced a person’s development of wisdom. Those who received unsolicited emotional support, for example, developed wisdom around compassion and humility. Seeking others with similar experiences exposed some participants to new ideas and interactions, supporting deeper exploration of their new sense of self.”
Not always observable at the time, difficult life events lead us to the wisdom needed most to succeed. You have to wonder how different things would be if Michael Jordan had not been cut from the varsity high school team, or if Steve Jobs had not been fired from Apple to then flounder with NeXT. It is almost necessary. If we never felt pain, our wounds would most certainly kill us.
Therein lies financial wisdom, too. Every financial mistake and misfortune is cause for deeper personal exploration. Though an expectation for bad things to happen will serve you best. After all, the most important part of financial planning is not to achieve big, treasured future goals; it is to keep from getting knocked on your ass when things go wrong.
As an investor, you have to expect bad market days every few years, such as the 34% drop in March. Those who stay the course tend to have developed an admirably resolute attitude. Market downturns are viewed not only as normal but healthy, as a way to reset asset prices, create new opportunities and temper emotions.
When luck, chance, providence, God, whatever you want to call it, shakes the snow globe of your life, you can make something out of the pieces. For many people, 2020 has been that event to do some financial soul searching. It has revealed what it may take to live a happier, secure life: to question what matters most, to build a bigger emergency fund, to find a new career, to take some risk off the table, to meet with a financial adviser for the first time.
You don’t get to choose your obstacle, but you get to choose how you respond.
Charlie Munger suggested a Stoic response to life’s punches when he said: “Life will have terrible blows in it, horrible blows, unfair blows. It doesn’t matter. And some people recover and others don’t. And there I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something, and that your duty was not to be submerged in self-pity, but to utilize the terrible blow in constructive fashion. That is a very good idea.”
I know these words are no salve for those going through a terrible blow right now. But there is hope. There will be a day when the good that comes after is realized. And for the rest of us, as shown in the Oregon State study, it is a reminder that we can help those suffering to see that good.
For, we never know when the time may come for us.
In the short story “Chicxulub,” which inspired this post, author T.C. Boyle writes: “Flip a coin ten times and it could turn up heads ten times in a row—or not once. The rock is coming, the new Chicxulub, hurtling through the dark and the cold to remake our fate.”
Within only a few years, plants started to grow in the 93-mile wide crater left by the Chicxulub impactor. And in the jungles and grasses, under the gaseous haze of sulfur, furry creatures started to stir.