The call was intriguing, though not entirely unexpected.
On the other end of the line, a well-regarded headhunter didn’t take long to make his case.
Post the perfunctory introductions (“leading firm”, “senior professionals”, differentiated mandates”), he outlined the parameters of the latest role he was looking to fill.
A fast-growing asset manager, with a very specific sector focus. One that happens to be right up my alley, hence the call.
Significant capital to deploy. An executive-level position. And a comp package to fit the job description, including significant carry.
We danced around the last topic for a while, trying to narrow things down without showing our cards too early. Then again, both of us have been around the block.
The headhunter clearly had a good grasp on banker comp, and I’ve got enough good friends in private equity to be able to size up his end of the bargain.
Eight to ten years of intense work. On the other end of the rainbow, an eight-figure sum. Big enough to make the interim salary payments look inconsequential, provided the investments perform well.
I couldn’t argue. It was a differentiated mandate indeed.
It’s also one mightily at odds with my own plans for the next decade.
And yet, I’d be lying if I told you I dismissed it without hesitation.
Money can be a funny thing.
In the personal finance community, you often hear people say they are fed up with exchanging their time for money. Stop the madness, I’m retiring!
But what they really mean is they are fed up with exchanging their time for a specific amount of money.
Someone who is making $100k a year and retiring at 45 is making a very specific trade-off:
The next 15 years are worth more than $1.5m, which is what that person would have made if he or she stayed in the workplace.
But what if you were to ask this person a slightly different question:
Are those 15 years worth more than $15m?
How about $150m?
And what about $1.5bn?
I can assure you that few (if any) would stay the course without at least taking a pause.
At best, giving up the opportunity to make so much money might feel irresponsible.
At worst, it can become destructive – to you and your relationships. Causing you to feel egotistical. Driving your family and friends to behave in ways that no longer have your best interests at heart.
Remember when everyone was falling head over heels over Squid Game, what with the symbolism about excessive debt and its impact on people and their motivations?
Well, look around you, and you will see a different type of game playing out. One where people aren’t necessarily facing soul-crushing levels of debt. As a matter of fact, they are more than comfortable.
Instead, it’s the pursuit of ever–greater amounts of money that drives them to put their families, health, and happiness on the line.
In one of the biggest ironies of the post-industrial world, we now live in a society where rich people have less leisure time than the poor.
It makes total sense – because the more money you make, the more expensive leisure becomes.
The classic tragedy of personal finance is when people put off investing because retirement seems too far away.
But there’s another, equally tragic scenario – which is when people put off living because death seems too far away.
Don’t get me wrong, money does eliminate SOME discomforts.
But past a certain level, money (and by corollary, work) can also become a convenient excuse.
“I need to work to make more money” can be a great cop-out for so many things we ought to be doing, but don’t.
For not spending enough time with your family.
For not leading a healthy lifestyle. For not starting that business you’ve been dreaming of. For not giving back.
As it happens, a high FIRE number can also masquerade a lot of financial insecurities.
I mean, there’s ALWAYS something to worry about.
Future stock market returns. Inflation. Asset bubbles.
Catastrophic health issues. Tax rises. Getting your kids on the property ladder.
It’s great to be prudent. Equally, there’s a fine line between being prudent and trying to account for every unfortunate eventuality in the world.
One of the biggest challenges with money is it has the ability to give you a definitive answer.
“If only I had $[x]m more, it would all be different”
“Once I hit $[x]m in net worth, things will be sorted”
Then, you spend years and decades chasing [x]. And once you get there, you realize that all the money in the world can’t provide an answer.
Only you can.
Thank you for reading.
About Banker On Fire
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Banker On FIRE is a London-based M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.
Find out more about me and this blog here.
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