I once met a guy who retired in his early 30s with well north of $20m in the bag.
His last job before retirement was that of a portfolio manager in an event-driven hedge fund.
A well-chosen career, combined with a few knockout trades and a well-negotiated remuneration package, and he was set for life – in a way that most people can only dream about.
It’s true that luck played an important role in his success. He certainly characterized it that way.
The real explanation, of course, lay elsewhere – because luck alone doesn’t explain a full ride at Harvard for a non-legacy, foreign applicant.
It also doesn’t explain an 800 score on the GMAT.
And luck certainly doesn’t correlate with the desire to take courses like introduction to stochastic processes and advanced methods in quantum field theory, especially if they aren’t on a pre-requisite list.
I mean, I know plenty of lucky people, but none of them have courses like these on their transcripts.
The more proverbial explanation is that, in addition to being incredibly intelligent, the future hedge fund manager also put in the reps. He just happens to have started all the way back in middle school.
Clearly, not all of us can be as foresightful.
But in order to reach any level of success, all of us will have to put in the reps.
Below are a couple of guiding principles that are worth keeping in mind along the way.
#1: It will take a long time, probably far longer than you expect.
Humans have an inherent bias for optimism – and an overwhelming desire for a shortcut.
Which, by the way, isn’t a bad thing. If it wasn’t for these qualities, we’d all still be living in caves and eating raw meat.
But progress takes time. As Morgan Housel once said, there are lots of overnight tragedies – but no overnight miracles.
It can take years and decades for your efforts to start bearing fruit. Thus, while it’s important that you stay patient, it’s even more important that you choose well.
Life is too short to spend it pursuing someone else’s dream or living up to other people’s expectations.
In other words, put in the reps – but make sure they are your reps.
#2: Enjoying the process is critical to the outcome.
Michael Phelps is the most decorated Olympic swimmer of all time, with 28 medals to his name.
In aggregate, over his entire swimming career, he spent about three hours on the Olympic podium.
But to get there, he spent an equivalent of three full years in the pool – roughly 30,000 hours of training.
Imagine jumping in the pool today – and not emerging until August 2024.
In terms of the reward-to-effort ratio, that’s one of the least productive endeavors ever.
There isn’t a human being in the world with the requisite willpower to go through that kind of punishment for the (uncertain) sake of basking in the limelight for a few minutes.
Unless, of course, you enjoy the process.
Enjoying the process shifts the reward from distant to immediate, from uncertain to guaranteed.
It’s the most powerful lifehack you will ever come across.
#3: What you think you want and what you really want are often different things.
You think you want a chiseled body, but what you really want are high energy levels and good self-esteem.
You think you want to be a top performer at work but in reality, you are just looking for third-party validation of your efforts.
You think you want to be rich, but what you really want is the freedom to do what you want, when you want, how you want it.
Sometimes, it doesn’t matter. I know many people who got into fitness for superficial reasons – but stayed for the right ones.
But in many other situations, not having a complete grasp of your desires leads to catastrophic decisions and leaves you at risk of being manipulated by others.
What Rajat Gupta thought he wanted was as much money as the hedge fund titans he was hanging out with.
But what he really wanted was to be accepted.
To do that, he risked one of the most illustrious careers in the history of business – and lost it all.
In other words, he was trying to use money to fix a non-monetary problem. A smart man like him should have known it was never going to work.
#4: There are many other things worth putting in the reps for.
Your intellectual growth.
#5: But what makes money is unique is its ability to compound.
Sure, other things compound as well.
Maintaining healthy eating habits or consistently getting eight hours of sleep a night makes an immeasurable difference when stacked up over years and decades.
But money is the only thing that will continue working for you even if you put zero incremental effort in.
Everything else in life – your skills, your fitness levels, your network, even your reputation – all of these things will eventually degrade if you happen to take your foot off the gas.
But not money. You can put money on autopilot, leave it to its own devices, forget about it for years and decades.
And instead of withering and dying, your money will flourish beyond your wildest imagination.
Thank you for reading – and good luck with those reps!
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.
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