Has it really been four years? Four years ago my life changed from semi-retirement to scrambling to survive. Survival may sound like hyperbole to some, but to anyone who realizes they may lose their house, may lose a way to feed themself, and may lose health, survival is reality. Millions of people had similar situations during the Great Recession, but my situation was different. The Great Recession started in 2008. My Triple Whammy hit in 2011. I’m recovering, but there’s a lot of recovery to go before I can relax and enjoy. This is less a lament and more of a reminder that bad luck can trump diversification, frugality, and optimism. And a reminder that good luck can happen, too.

If you’ve been reading this blog that long, then you may remember a brighter time when following conventional wisdom allowed me to retire at 38 as long as I led a frugal life. The Universe had fun with its brand of irony by having The Great Recession hit just as my book on personal finance was published (Dream. Invest. Live. published November 2008). That certainly didn’t help sales, and the recession made life tough for almost everyone. I lost a lot, but gained that and more back again thanks to diversification. AMSC and DNDN stood out and carried me almost all the way back to real retirement. Then, the summer of 2011 hit. AMSC lost a customer worth hundreds of millions in annual revenue – and then discovered that the customer had stolen AMSC’s intellectual property, cancelled their orders, and began competing against AMSC. Dendreon was successful in getting a radical cancer vaccine approved by the FDA, getting it to market, making hundreds of millions on the treatments, saving lives and money – and then being horrendously slammed for missing earnings. MicroVision was due to come to market with an innovative and disruptive display device – and then had their major supplier back off, throwing the company into financial machinations at the very time when money was tight. I called it my Triple Whammy.

Three stocks out of a portfolio of about a dozen positions, all impacted by influences out of their control, at a time when the rest of the economy was sicker than it had been in seventy years.

Ah, but I’m an engineer. I have backup plans.

• I had optimism in my portfolio because surely a patent theft would be resolved, a shortfall in earnings would be temporary, and a logistical hurdle would be navigated.
• I had a business that I could grow, or at least try to grow; and had encouraging words about my revenue potential as a consultant. Evidently, my blend of technical, managerial, entrepreneurial, and communication skills is in high demand and short supply. Besides, I also had books and art to sell.
• I could get a job for the same reasons that my business had great potential.
• I could sell my house, because I built in equity by making a large downpayment.
• I also believe in serendipity and the fact that good luck can happen, too.

Four years later, after almost losing my house, my finances are recovering but not to the extent that I can pay all of my bills.

• My portfolio hasn’t recovered. It doesn’t look like AMSC is going to win a patent fight in China’s courts. DNDN went bankrupt for reasons so bizarre that someone should make a movie about it as commentary on the dysfunctional influences in American finance. MVIS looks like it is finally recovering, and could do something incredibly positive any day, or I could be as wrong about that enthusiasm as I’ve been for the last four years. AMSC is down 93%. DNDN is down and out, a rare occurrence. MVIS is down 64%, the best of the three. As for the rest of my portfolio, the only rising star is GigOptix (GIG), that just had its first profitable quarter, but the market is uncertain about what its new valuation should be.
• My business has grown! Thank you clients and patrons. Please pass along the testimonials to people who can appreciate and benefit from what I can do for them. Another large project or a few long term small projects are all it would take to make it easier to pay the biggest remaining bill, taxes.
• Years of trying to get a job have resulted in only one interview for a full-time job. When I showed up, they told me that only wanted to meet someone with such an impressive and unbelievable resume. I was just there for their grins. But, at least they gave me an interview. I continue to try, but maybe there’s just something about being a mid-fifties guy that isn’t appealing.
• I tried selling my house, but over a year on the market didn’t produce an offer. Thanks to some excellent help, I was able to keep it and refinance at about half the original payment. Now, Zillow tells me the market value is back above what I paid.
• I continue to believe in serendipity and good luck, and know that they don’t work to schedule.

Four years later, I have a much better appreciation for the lives of many Americans. We have a culture that equates wealth with wisdom, even as we make fun of it. We have a culture that equates poverty with stupidity, even as the judgement is wrapped in advice or abstract compassion. The dysfunctions in our society are most visible when seen from inside the systems that are failed or flawed; and disillusioning to see the consequence of ideologies purposely undermining the systems at the expense of people.

In the last four years, I’ve studied numerous biographies to understand what helps some succeed. Education helps, and doesn’t require college. Perseverance helps, and is free for the cost of time and maybe health. A willingness to take risks is almost a necessity, because rewards usually require some vulnerability. Risk does not guarantee reward. Reward can happen without any risk. Risk relies at least somewhat on luck. People can break themselves free of bad situations by taking on some risk; but the success rate is less than 100%, and those who took on risk and failed are usually in a worse situation than before because they’ve spent scant resources and may have no more.

Key to almost every biography and success story has been at least one element of luck. Listen to the successful person talk, and usually there’s an event or two when they were in the right place, or acted at the right time, or knew the right people. They may not use the word luck, but there are always elements that we can’t control. It is within that lack of control that I find optimism. There is bad luck in the world, but there is good luck in the world, too. There are no guarantees, but what I can do, in addition to everything else I do, is to visit more than one place, be ready to act at almost any time, and be glad for the people I know.

The world is an uncertain place, and even more uncertain as change accelerates. My best response is to work hard, learn a lot, persevere, take some risks, and accept the fact that I am not in complete control of my world. That’s true for all of us, and with the right perspective, that’s powerful.