What Is Your Money Superpower?

Money Superpower

Note: This post was first published in December 2020 and updated in July 2022

The absence of role models has long been one of the biggest obstacles to building wealth.

After all, the easiest way to become successful is to find someone who is already successful – and replicate what they have done.

However, money isn’t like fitness or learning a trade.

In fact, most people don’t like talking about it in the first place. And those who flaunt their wealth tend to be some of the worst role models out there.

The Internet has been a massive game-changer here. Not only it’s a fantastic way to spread information, but it also allows for a degree of anonymity, leading to more transparent advice.

These days, the challenge isn’t the information itself, it’s filtering that information.

At times, reading yet another “key traits of rich people” post can feel like working your way through War and Peace.

Are you on page 582 yet?

If you’re into that sort of thing, good stuff.

For everyone else, the good news is that you don’t have to spend the rest of your life in a relentless cycle of self-improvement.

More likely than not, it is just a handful of what I call “money superpowers” that will account for 80% of your wealth-building success.

Let’s start with the biggest superpower of them all.

Money Superpower #1: Time

As demonstrated by the chart below, the “price of admission” to the millionaire club goes up exponentially over time.

Total investment required for $1m

Put another way, compound interest is a wonderful ally, while lack of time is a ruthless enemy on your journey.

The good news is that everyone gets a (relatively) equal amount of time at the outset. The challenge is making the most of it, and it’s not a trivial one.

Whether it’s lack of personal finance knowledge, soul-crushing student loans, health issues, divorce,  or just plain old bad money decisions, all of these factors can combine to absolutely eviscerate your time superpower.

If that is you, don’t despair just yet.

Everyone makes mistakes and they are (usually) not fatal. There are plenty of solid strategies for building wealth later in life.

But if you’ve managed to avoid the pitfalls above and have decades and decades of investing runway ahead of you, don’t underestimate your advantage.

Pat yourself on the back – and don’t waste another day.

Money Superpower #2: Risk Tolerance

Whenever I evaluate investing strategies on this blog, I often assume 8% as the long-term return on the stock market.

Almost immediately, I get the following rebuttals in the comments section or over email:

“What are you talking about? The 8% cannot be guaranteed”

“But the stock market is so volatile!”

“Why are you so confident the stock market will keep going up? I think it’s a bubble!”

The funny thing is that all of the comments above are spot on.

No, returns are certainly not guaranteed.

As we’ve seen over the past 9 months, stock market investing can sure feel like riding a monster rollercoaster. And we’ve certainly had our share of bubbles before, like the dot-com one.

Unfortunately, these are just table stakes in the investing game. If you cannot tolerate the risks above, you simply won’t get the returns below:

Annual investment in the S&P 500

Here’s another way of looking at it.

These days, I often try to nip out for a 30-minute lunchtime walk through our neighbourhood.

Strolling through the leafy streets of South Kensington, I reflect on the people who own those Victorian mansions worth tens of millions of pounds.

I happen to know some of these people, whether professionally or socially.

Some of them have inherited money. They are in the minority.

Most folks in that group have sold up and moved away a long time ago, taking advantage of the influx of money into London and cashing in their family home.

Others can be broadly divided into two categories: wildly successful entrepreneurs or emerging market oligarchs.

Drastically different – yet unified by their appetite (and ability) to take on a quantum of risk the population at large simply wouldn’t live with.

This isn’t to say you should go beyond your comfort level on the risk-reward spectrum.

I am certainly not encouraging you to pour your life’s savings into a start-up or try to play the wild west capitalism of the emerging markets.

Generally, however, the more (calculated) risks you take in life, the further ahead you end up.

Take your cue.

Money Superpower #3: Audacity

Back in the old country, a former classmate of mine would always claim he will become president one day.

To say his statements were met with gentle skepticism would be an understatement. A son of a policeman in a small city, with no privilege to speak of. Good luck.

Years passed. My family emigrated, yet we stayed in touch, first by snail mail, then email, then WhatsApp.

A few years after we emigrated, he came for a visit. He was now at law school and participated in some sort of a democracy-building exchange program that brought him abroad.

Upon graduation, he landed a scholarship to pursue a Master of Laws at a relatively prestigious international university.

Cue in a partnership-track position at one of the leading law firms back home. It also had a history of being a good feeder into the government ranks. And no, it wasn’t an accident.

A few years later, yet another senior member of the firm made the switch to government. This time, my classmate followed, landing a job in the executive branch.

Then, as it often happens in developing countries, there was a sudden period of disruption which resulted in the old guard being rapidly cleared out.

Practically overnight, the lack of privilege became an asset, not a liability.

And so, on the cusp of 40, my former classmate was put in charge of one of the most powerful ministries in the country.

Will he ever become president? I doubt it – but your guess is as good as mine.

But even if he doesn’t, setting an audacious goal has already propelled him far ahead of where he would have landed otherwise.

The same concept applies to money.

The beauty of stretch goals, like multiplying your FIRE number by 10, is that it forces you to abandon incremental improvements and focus on step changes instead.

Don’t underestimate how powerful that can be.

Which brings me to the most important point of all:

Money Superpower #4: Not Caring About Money

If you have ever played poker, you will know two things:

  • Your playing style changes dramatically once you start playing with real money
  • Your playing style changes yet again once the amount of money you are playing for becomes meaningful (vis-à-vis your net worth)

Over the years, I’ve worked on quite a few deals whereby successful entrepreneurs would sell or IPO their businesses.

Without exception, money was important to them. But the truly successful ones never allowed money to influence their decision making.

The ones who did would inevitably lose sight of the bigger picture.

More often than not, they would panic when things would get shaky, fearful they would never get their chance to cash out. And there’s nothing like fear to cloud your judgment and lead to a series of potentially catastrophic missteps.

It’s one thing to be focused on building wealth. But if you spend your entire life in loss preservation mode, you simply won’t get ahead.

And so, in a very counterintuitive way, not caring about money can actually make you a much better investor.

Final Cut

There are some very obvious – and highly intentional – omissions on the list above.

The biggest one is hard work.

In a world that glorifies “grinding”, “hustling”, and looks down on the nine-to-five, it’s easy to get carried away and think that as long as you work 24-7,  things will be a-okay.

Sadly, that’s not the case.

Jeff Bezos didn’t become a billionaire because he worked a million times harder than someone with just a thousand bucks to their name.

At the same time, there are millions of diligent, hard-working folks out there who will never get rich.

Hard work is important. But a superpower it’s not.

It’s also not about intelligence.

If it was, there would be a direct correlation between academia and wealth. And yet, you won’t find a life of opulence up in the ivory towers.

As a matter of fact, some people are too smart for their own good. They spend too much time thinking – and not nearly enough acting.

And it’s not about inheriting money, either.

At best, inheriting money will lead to a lifetime of self-doubt, questioning whether your success is really your own.

At worst, it becomes people’s Kryptonite, removing any incentive to put yourself out there, to fail and to try again until you finally succeed.

The good news is that at the end of the day, three of the four money superpowers are entirely within your control.

As for the first one, just remember: today may be the oldest you’ve ever been, but also the youngest you’ll ever be again.

In other words, it’s never too late to start again.  And given where the markets are today, it just might be the best time to get started.

Thank you for reading – and happy investing.

About Banker On Fire

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Banker On FIRE is an M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.

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16 thoughts on “What Is Your Money Superpower?”

  1. Nothing like a motivational blog for a gloomy British morning. Thanks, BoF!

    I’m curious – I’ve walked similar parts of London and my hometown, and wondered what people do to own / live in the vastly expensive parts of town. Excluding those fortunate to inherent, what exactly do they do? Can you provide some (more specific) examples of the enterprises that allowed such overwhelming wealth?

    If for no other reason, it’ll allow me to marvel at their success!

    1. If anything, the rainy weather is a good reminder of the advantages of working from home!

      Let me give you three examples based on folks I’ve come across:
      – Founder of an events company who grew it over a period of about 20 years before selling to a private equity shop for about £300m (enterprise value, actual proceeds to founder were much lower but still very meaningful)
      – Founder/majority shareholder of a cybersecurity software company that has been recently valued at well north of £3bn
      – Chairman of a digital media company who received stock options for a de minimis price when he took the role – and went on to cash them in for north of £20/share about 5 years later

  2. Hi am a late late starter and wondering if I have missed the boat with the uk stock market rising again including global etfs. What would you advise a newbie expecting to retire in 15 to 20 years to do? Thanks

  3. “In fact, most people don’t like talking about it in the first place” – this is certainly true, esp in the UK, where discussing money or one’s salary is almost a taboo subject. coupled with the lack of financial education in schools, the overwhelming majority simply switch off when it comes to personal finance. Martin Lewis (in the UK) is doing his best to redress the balance, but the general public at large remain suspicious of the stock market and its ability to build meaningful wealth.

    1. I think Martin Lewis is great and does a good job helping the general public along.

      Problem is that he is very focused on savings. It’s a good starting point when you want to get out of debt, but as we all know, you won’t build wealth on savings alone, especially in today’s zero-yield world.

  4. The last one rings so true, its about working smart not hard. The trick though (and this is where I do struggle a lot) is actually figuring out to work smart. Figuring this out is hard (and yes, pun intended).

    1. It’s much tougher than it seems, isn’t it?

      Many people (myself included) have been so strongly conditioned to solve for “inbox zero” that breaking away from that mentality can be almost physically uncomfortable.

      I’ve actually been toying around with the idea of doing a post on this very topic.

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  7. Invester in Japan

    In the chart lister under superpower #1, with the given amounts, it looks like one would reach $2M by age 65 instead of $1M?

  8. Good motivational post. Slightly off topic: I have been looking to transfer a small stakeholder pension (annual charge 1%); I don’t particularly want a SIPP as planning to put the money in a FTSE fund and forget about it for 20 years. However, Vanguard SIPP seems to be the lowest price offering out there. Not looking for financial advice, but would welcome a view re whether a SIPP would be a good home (in the absence of competitively priced stakeholder plans)?

    1. Banker On FIRE

      Cheers Donna

      I’ve never had a stakeholder pension.

      For what it’s worth, I’ve got two SIPPs. One with Vanguard and one with Hargreaves. Think both are great and very competitive (as long as you hold ETFs as you seem to be planning on)

      Hope this helps!

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