A reader gave me a rule I haven't been able to stop thinking about. After losing money in private deals, they decided to stay out of that kind of deal until they recouped the losses. They wrote it in May:

“I will stay ‘on the sidelines’ while not investing any ‘new’ funds in this space until I recoup / reclaim those foreclosed losses.”

Three months later, in a survey about something else, the rule was still there:

“I need to recoup those funds. That is why I continue on the sidelines.”

Then came the line that stayed with me:

“In Retirement, I have to be more cautious, but don’t want to be stale.”

The caution makes sense. A loss is information. It says something about the deal, or the operator, or the timing, or your own judgment, and it’s usually not clear which at first. Slowing down while you sort that out is probably the most reasonable thing a person can do.

In retirement, a loss lands differently. The paycheck has stopped. Money that disappears into a bad deal can’t be quietly rebuilt from the next raise. This reader had described the transition as “feeling scary all at the same time.” I take that seriously. I’ve had losses of my own. I understand wanting to pull back.

This reader isn’t the only one carrying a loss like this. When I ask readers what they’re trying to figure out, a few have brought up money lost or stuck in private deals, without my asking about losses at all. One described having “lost a lot with alternative investments.” Another wrote about waiting “for previous investments to exit or return to expected performance.” Only one of them put a rule into words.

The part I keep turning over is the condition for starting again.

You’ve probably seen what happens when someone reacts to a loss by putting in more money, faster, trying to win it back. The last loss begins setting the size and speed of the next decision. Waiting can look completely different. It’s slower. Quieter. Often more careful.

The two reactions can share the same anchoring mechanism. In both, an old number makes the new decision.

The person chasing a loss lets it decide how much and how fast. The person waiting one out lets it decide when. Either way, the next move is tied to something that already happened, or to something still happening that’s out of their hands. From the outside, the second person looks responsible. That’s part of what makes it hard to see.

For this reader, getting back into that kind of deal depends on what happens to investments already made. The remaining deals have to close. They have to close well enough to recover what was lost. And they have to do it on a schedule the reader doesn’t control.

If all of that happens, the rule releases them. If it happens late, the wait gets longer.

If the money never fully comes back, what happens to the rule? Does it ever end? Or does it slowly turn into a permanent no that was never actually decided? That’s the part I would examine hardest.

I think I understand why the rule feels safe anyway. A number is clear. You know when you’ve hit it. It turns a hard, open question (should I invest again, and in what?) into a simpler one (am I back yet?). And while the answer is no, it can feel as if you can’t make another mistake. You aren’t deciding anything, so nothing new can go wrong.

But staying out is a decision too. It just doesn’t feel like one.

That may be the real comfort in the rule. A rule that keeps you out also keeps you from finding out whether you’d get it wrong again.

A loss can absolutely change the next decision. Maybe it changed how much risk you can afford. Maybe it exposed something you missed in due diligence. Maybe it showed you that you don’t want this kind of investment anymore.

Those are current reasons. A new deal can answer them. It can show you its own facts. You can look at them and decide whether this deal deserves your money.

“Until I’m back to even” asks for something else. It asks an old investment to resolve before a new one can even be considered.

And a new deal can’t answer that condition.

There’s another cost hidden inside “even.” The number can come back exactly. The years don’t.

If it takes three years for the remaining investments to close, you may get the dollars back and still arrive at the next decision three years older, with a different income, different needs, and a different appetite for risk.

There’s a quieter cost too. The rule doesn’t update. While you wait, your life keeps moving. Your income changes. Your plans change. Your family’s needs change. You learn things, partly because of the loss itself.

The rule was set right after the loss. Three years later, it may still be making decisions for a person who knows more and may want different things.

A reason can be revisited. A number just waits.

Waiting may still be the right call. The amount you lost is only one part of that decision.

I caught myself doing a version of this recently. I looked at a private deal that seemed very good on paper. There was little or no debt, and the operator said they owned most of the project.

When I looked closer, most of it belonged to the operator’s silent partner. The returns being shown were for the whole project, while the returns to investors looked much less attractive after fees.

I’d also lost money on an investment before this one. That experience was in the room with me. I remember thinking that I didn’t need this investment and didn’t want to make another mistake.

The offering was gone within about 24 hours. I still don’t know whether passing was the right decision.

What I can tell you is why I passed. I could name the things that bothered me. I could check them. A different deal could give me different answers. That matters to me.

If I say no because the ownership is unclear, a future deal can show me clear ownership. If I say no because the economics after fees are weak, another deal can show me better economics. The reason can change when the facts change.

An old loss follows different rules. A perfectly good new deal can’t make the old investment close sooner. It can’t return money that was lost somewhere else. So I keep coming back to one question.

If the money came back tomorrow, exactly what you put in, would you do the thing you’re waiting to do?

If your answer is yes, maybe the money really is the threshold. If the lost money was money you were counting on, wanting it back first is hard to argue with. Then I’d want to know what needs to be true before you start again, and whether “back to even” is the best way to measure it.

If your answer is no, or “I’m not sure,” then the waiting may be carrying another question. Maybe the loss changed what you trust. Maybe it changed what you’re willing to spend time understanding. Maybe private investments no longer fit the life you have now.

Sometimes the honest answer is that the loss made the whole category feel unsafe, and the number gave that feeling a date. Whatever the answer is, I’d rather name it than let an old number answer for me.

The reader who wrote to me may be exactly right to wait. The remaining deals may close well. Staying out may turn out to be the best decision for reasons I can’t see from here. I don’t know their full financial situation. But I think the question still holds.

If the money came back tomorrow, exactly what you put in, would you do the thing you’re waiting to do?

I’d really like to hear how you answered. Reply and tell me, even if the answer is only one line. No deal names or numbers needed. I’m more interested in what you discovered you were actually waiting for.

If someone came to mind while you were reading this, send it to them. That’s how most people find this letter.

This is not financial advice. This material is for educational purposes only and not financial, legal, or investment advice. Private investments may be risky. Do your own research and consult licensed professionals before acting on anything specific to your situation.

Until Monday.

Alina