#205 What to Do If You Lose Money on an Investment ft. Dr. Peter Kim
In this episode, Dr. Peter Kim dives into a topic that hits all investors: losing money on investments. Learn how to deal with investment losses, what to do next, and how to offset them for tax considerations. Tune in to find out how to turn losses into lessons and future gains!
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Episode Highlights
Now, let’s look at what we discussed in this episode:
- Moving Towards Your Goals
- Doing Proper Due Diligence
- Having the Right Mindset
- Taking Correct Steps Financially
Here’s a breakdown of how this episode unfolds.
Episode Breakdown
Moving Towards Your Goals
To start, Peter dives into navigating financial losses in investing. He talks about the importance of learning from past mistakes to minimize risks and maximize future gains, strategies for avoiding losses, and staying positive when they occur. He shares key takeaways with strong encouragement to learn from his experiences to help you with your investment journey
Peter also goes beyond just losses. He shares the importance of setting and pursuing goals to keep life joyful, motivating, and exciting. He expresses the idea that the process of working towards a goal can be more fulfilling than achieving it, and that there is continuous learning and growth that comes with staying active in investing, even when losses are inevitable.
“It’s more about the process of getting towards that goal, than necessarily ‘that’ goal.” — Peter Kim, MD.
Doing Proper Due Diligence
Peter recounts two significant investment losses that shaped his investing journey.
One involved a strip mall office space where a large tenant moved out, resulting in a 30-35% capital loss. The other involved a real estate tech company that failed to go public, leading to a complete loss of a six-figure investment.
Through these setbacks, Peter emphasizes the importance of conducting thorough due diligence before investing. He learned from his failures and adapted his mindset to navigate the risks associated with investments more effectively.
“I remember in that process of learning, in the process of trying to discover what the loss was about, I learned so much about the due diligence process.” — Peter Kim, MD.
Having the Right Mindset
Aside from doing your due diligence, Peter also stresses the importance of having the right mindset when having investment losses.
He acknowledges that losses are an inevitable part of the investing journey, and the key is to accept them rather than dwell on them. Peter shares that it is better to focus on what can be controlled, have a long-term perspective, and receive continuous education. By constantly learning and surrounding yourself with knowledgeable people, Peter believes you can navigate risks more effectively and give you valuable lessons that help you grow as an investor.
“I had to focus on what I could control… it taught me a lot about risk and getting in that right mindset to move forward.” — Peter Kim, MD.
Taking Correct Steps Financially
In closing, Peter talks about the financial steps to take after experiencing an investment loss.
He stresses the importance of documenting your losses for tax purposes, highlighting how they can be used to offset future gains. Peter shares that these losses can be balanced by future wins, so staying invested is key. Peter also talks about the value of growing your financial knowledge by learning from your mistakes and surrounding yourself with a supportive community to refine your investment strategies.
Consider communities like Passive Income MD, Passive Real Estate Academy, and joining conferences like PIMDCON.
Lastly, he concludes by encouraging listeners to learn from the mistakes of others as well. He reasons that shared experiences are powerful tools for improving financial decision-making and achieving greater success in the future.
“The big tip is to try not to make all the mistakes yourself, try to learn from other people’s mistakes first.” — Peter Kim, MD.
