The Four Biggest Mistakes People Make
Eighteen years of Wall Street taught me a lot about mistakes.
Some mistakes make you better, others just kill you.
Let me tell you about the biggest ones:
1. Forgetting What You Are Trying To Do
It is a curious fact that people are never so trivial as when they take themselves seriously.
- Oscar Wilde
Stop rushing it.
I loved to rush. I wanted instant gratification.
When I first started on Wall Street, I needed to win every day. I wanted my boss to tell me I had done a great job every day.
I would rush into a project, try to finish it as soon as possible, and take it to him to get a pat on the back.
About three months into my first job, he asked me to put a deal model together for a client call. He gave me the day to do it.
I was pretty nervous. I read through the documents, the presentations, and started putting it together. Three hours later, I thought I had something good. I checked it and emailed it to him, feeling quite smug. Why did he think this would take me the day??
This was as easy 3 hour job, maybe 4 hour at best. I went to lunch, talked to some friends. I received an email reply from him saying ‘wow you are so fast’. I was feeling pretty satisfied. I got the affirmation I needed. I was just coasting now till the 5 pm call. I got the print outs ready. Here we go, my first client call.
We start the call, my boss looks at my model. Flips a few sheets in. Starts looking at the numbers. Damn. This makes no sense. The client is on the call, asking us why the numbers look so strange.
Turns out I had totally screwed it up.
I had totally misunderstood what was needed.
Luckily my boss said ‘Hey Jim, let us go check on a few things and we’ll come back to you’. The call got rolled to the next day.
This happened almost eighteen years ago, and I still remember that feeling like it was yesterday.
It was probably one of the most embarrassing events in my career. The thing is this happens to all of us all the time.
We are rushing to get somewhere. Rushing to get rich, rushing to win, rushing to show that we made it.
But in the rush we forget what we are really trying to achieve. I had forgotten that it wasn’t about how quickly I got there, but whether I even got there at all. The goal wasn’t to rush to the end, the goal was to go through the process so it made me better.
In our rush to get the pat on the back from our bosses, friends, lovers we often fall for the stupidity the German philosopher Nietzsche spoke about:
The most common form of human stupidity is forgetting what one is trying to do.
- Nietzsche
Step back daily and ask yourself: What are you trying to do and why ?
2. Hiding Behind Your Weakness
The more you seek the uncomfortable, the more comfortable you will become
- Conor McGregor
I started out an introverted geek — awfully shy and withdrawn.
Wall Street can be a high energy, loud place and I wasn’t sure if I had what it took to fit in. I hadn’t played any sports, didn’t go to an Ivy league university, and spoke with a thick accent.
In the beginning, I convinced myself that the way to move forward was to be a cubicle slave. Work long hours, be chained to the desk, out work the competition.
In hindsight, I was just being a coward
It was an easy way out for me. It was just more convenient for me to not be social, not to interact with my peers or anyone else for that matter.
I was just refusing to do what made me uncomfortable.
That was a mistake.
My peers were building relationships, getting to know each other and more senior people, and I thought I could just outwork them.
It doesn’t work like that.
You have to get to know people, you have to build relationships, and you have to build trust.
Who you know is more powerful than what you know. If you know the right people you can always get the right information and get whatever you want done. People give you more leverage than any amount of physical work or information.
It took me till I was 30 to get that fact down.
I still see this with a lot of my friends, they convince themselves that meritocracy means that it’s just about the best spread sheet, the best analysis.
Don’t get me wrong, that stuff is important, but it’s just a part of the whole.
I have found that the more something makes you uncomfortable, the more you should do it.
Your brain is clearly telling you it’s afraid of your weakness, and you need to go fix that weakness.
Step back daily and ask yourself what you are afraid of doing. Then go do it. Don’t hide behind your weakness. Whatever it is.
3. Not Playing The Long Game
Victory is reserved for those willing to pay its price.
- Sun Tzu
I see a lot of people make this mistake — but the guys are the most guilty.
Guys on Wall Street were always in a rush to make big decisions, make big money. Their goal was to get rich quick.
Wall Street pays well, but you still have to invest for the long term and develop a career.
I remember being six years into my career, and one of my fellow VPs got a bid for 50% more money to go to a European bank.
He took it.
His view was it’s more money today, and yes it’s a weaker bank, and he’ll be new to the team and firm, but the money made it a good risk. My view was that, it was 2006 and it felt close to the top of the market, if he got laid off it was going to be harder to get back in the game from where he was.
Well as we rolled forward, 2008 happened.
His new team lost a few hundred million, and he left the Street forever.
I had another friend who left the bank in 2003. He had been a FX junior trader and was getting a shot to be a hedge fund equity trader. While the job was great initially, we both know he was losing a lot of optionality leaving the Street at 25.
In 2012, his hedge fund shut down. Jeff had been great as a trader, but he hadn’t spent enough time building a network and building skills outside of being a flow trader.
The hedge fund closed, and Jeff is still unemployed six years later.
I learnt a few lessons from this.
Firstly, decisions are critical.
You will have many job offers along the way, head hunters will dangle all sorts of things in front of you.
This doesn’t mean that every opportunity that comes your way is a good opportunity
In fact on Wall Street when someone dangles an opportunity in front of you, always ask what their incentives are.
Secondly, invest in ourselves.
You can have a great time just living in the here and now, you can skip the learning, the reading, evolving. It will catch up with you.
Choose and Invest wisely — be long term greedy.
A model I live by is 1% every day — just keep getting 1% better everyday at whatever you do.
“The man who does more than he is paid for will soon be paid for more than he does.”
- Napoleon Hill
4. Not Managing Your Ego:
In dwellings, live close to the ground. In thinking, keep to the simple. In conflict, be fair and generous. In governing, don’t try to control. In work, do what you enjoy. In family life, be completely present.
- Tao Te Ching
Ego is a killer.
I have a friend called Jason. Jason is a Vice President at a big bank, in fact he just got a guarantee to move from a European bank to a US bank a few weeks back. Jason is talented at what he does, but Jason also has a large problem.
He’s been working for eleven years, and he doesn’t have a single cent in savings, in fact he’s got $500,000 in gambling debt.
When Jason was 25 he decided he was going to live the New York banker lifestyle.
The parties, the alcohol, the weekend getaways began. Initially he was just spending his salary, but soon he used some of his bonus for parties, then he decided he wanted to bet on college basketball. A few bad bets, and he was in the hole for $500,000.
This is a capricious industry, bonuses go up and down, but interest on your debt only goes up. I tell you this story, because it will be easy when you go from making $100k, to $300k to $500k at a bank for you to start living a bigger life style.
You’ll soon wonder how you even lived on $100k when you started.
My advice don’t let your lifestyle grow with your income. If you let that happen, you will be forever trapped at the desk.
I’ll tell you the story of a Managing Director I used to know.
Frank was a great sales guy. He had been at the bank forever. Clients loved him and he would always deliver for them.
Frank worked so hard, that his last two wives had divorced him, the stress of making his budget on the desk and paying alimony and child support for his families caused him to smoke a pack of cigarette a day.
Whenever Frank wasn’t at the desk you would know where he was. Frank was so hooked to this lifestyle that he hardly took any time off. Not only did he need the cash, but his entire identity was defined by being who he was at the bank.
A few years back, the bank sent out an email to all employees letting them know how sad they were that Frank had passed away — while sitting at his desk at work.
You don’t want to go out like that.
Keep your ego and identity small. You are not your title, your job or who you work for. Don’t get stuck on the hedonic treadmill, because it doesn’t slow down.
It is a preoccupation with possessions more than anything else that stops men from living freely and nobly.
- Bertrand Russell
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