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Sell Your Options Dearly
 

Edmundo Braverman's picture
ST
(Human, 14,318
 
Points)
 on 6/26/12 at 8:00am
hands-bar_op_800x585.jpg

mod (Andy) note): "Best of Eddie" - while Eddie is on vacation we're throwing up some of his classic posts from the past. This one from June 2010 was the first in a series of 3 of "Sell Your Options". More to come later this week & next. If there's an old post from Eddie you'd like to see up again shoot me a message.

I'm going to take some crap for this series of posts. It's something I've put off writing for a long time for a number of reasons, not the least of which is the fact that it will be ignored by those who need it the most. Be that as it may, it's important advice and will go a long way toward maximizing the ROI on the time and money you've devoted to your career thus far. For those curious, the impetus for me to finally write this was this post.

I could have just as easily entitled this How To Screw Up Your Life, but in reality it's not just about avoiding these largely unavoidable mistakes as much as it is managing the timing involved in making them. In the end, this advice is all about lifestyle design and getting the most bang for your buck out of your education and hard work. I've personally ignored each and every bit of the advice I'm about to dispense, to my financial and emotional detriment over the years, and therefore had to learn the hard way. If I can save even one of you from these traps, it'll be worth the inevitable hate mail I'll get for writing this.

We spend the first two decades of our lives focused on one thing: expanding the options we have available to us in life. Every decision we make or that is made for us when we are kids is made with that end in mind. We're encouraged to do well in school, because that will give us more options later. Many of us work our asses off at entry-level banking, often for free, just to have better options later. The first 20 years of your life is spent on that one quest; the quest for the most and best options.

Then, inexplicably, after having spent more than two decades expanding our options, we begin a systematic process of limiting them. Your options in life are the most valuable thing you will ever have, especially when you're young. For some reason, there is immense societal pressure to stay on the well-worn path, to settle down, to acquire wasting assets through leverage, to work a job you might hate. From the age of about 22 on, it seems almost every decision you make is designed to constrain you in some way, rather than to free you.

There are many traps a young professional can fall into that have the potential to ruin his life (for awhile, anyway), but I'm going to cover the four biggest threats over the course of this week. The good news? They're easily avoidable. The bad news? It might already be too late for some of you.

If you're in your 20's, the four things you should avoid like an Ebola victim bleeding out in Times Square are: Debt, Marriage, Children (big caveat on this one, however), and Wasting Assets (aka Crap). Those are the Four Horsemen of the Apocalypse when it comes to your freedom, and the minute you let your guard down they'll turn your life into a life sentence.

Look around you. You can easily spot the guy who's trapped. He looks like he's 28 going on 60. Dead eyes, rarely smiles. Wracked up a bunch of student loans to get a high paying job he hates, and one day little Suzy Rottencrotch convinced him he'd never do any better so he married her and she pushed out a bunch of hateful kids, and now the only thing in life he actually enjoys are the long hours he works because they keep him out of the over-mortgaged suburban nightmare he calls home. That's a guy with no options.

Don't be that guy.

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Comments

CNB90's picture

Amen, keep them coming.

IB
(Orangutan, 367
 
Points)
 on 6/14/10 at 5:30am

Amen, keep them coming.

m2's picture

Thanks Edmundo. More of this

VC
 
Points)
 on 6/14/10 at 5:31am

Thanks Edmundo. More of this pls.

BashPolley's picture

Well written. Unfortunately,

 
Points)
 on 6/14/10 at 5:46am

Well written. Unfortunately, it's easier to get caught up in the whole day-to-day conundrums instead of focusing on the big picture.

ElijahPrice's picture

Edmundo Braverman wrote: If

IB
(Orangutan, 282
 
Points)
 on 6/14/10 at 7:10am
Edmundo Braverman:

If you're in your 20's, the four things you should avoid like an Ebola victim bleeding out in Times Square are: Debt, Marriage, Children (big caveat on this one, however), and Wasting Assets (aka Crap). Those are the Four Horsemen of the Apocalypse when it comes to your freedom, and the minute you let your guard down they'll turn your life into a life sentence.

What is Wasting Assets?

levelworm's picture

Occansionaly, I might believe

O
(Orangutan, 285
 
Points)
 on 6/14/10 at 7:03am

Occansionaly, I might believe that being unattractive could be somekind of blessing...

Jimbo's picture

Wasting assets: "Reply to:

(Neanderthal, 2,598
 
Points)
 on 6/14/10 at 7:10am

Wasting assets:

"Reply to: [email protected]
Date: 2007-10-04, 1:57PM EDT

What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy. I’m not from New York. I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.

Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 – 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?

Here are my questions specifically:

- Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms

- What are you looking for in a mate? Be honest guys, you won’t hurt my feelings

- Is there an age range I should be targeting (I’m 25)?

- Why are some of the women living lavish lifestyles on the upper east side so plain? I’ve seen really ‘plain jane’ boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the east village. What’s the story there?

- Jobs I should look out for? Everyone knows – lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?

- How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY

Please hold your insults – I’m putting myself out there in an honest way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them – in looks, culture, sophistication, and keeping a nice home and hearth.

________________________________________
[Posted Responses]

Advice for woman seeking $500k+ earning man

Dear Pers-4316xxxxx:

I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament. Firstly, I’m not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here’s how I see it.

Your offer, from the perspective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity…in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!

So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!

So in Wall Street terms, we would call you a trading position, not a buy and hold…hence the rub…marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn’t found you, if only for a tryout.

By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation.

With all that said, I must say you’re going about it the right way. Classic “pump and dump.” I hope this is helpful, and if you want to enter into some sort of lease, let me know."

HoboBanker's picture

I'm not sure just how valid

O
(Baboon, 155
 
Points)
 on 7/20/10 at 7:43am

I'm not sure just how valid this article is, but for those with a heck load of time to waste, give it a read. It's about the relationships of investment bankers' wives in New York. It was a pretty big eye-opener when I read it.*
http://nymag.com/nymetro/urban/family/features/2738/

HoboBanker's picture

I laughed my ass off when I

O
(Baboon, 155
 
Points)
 on 6/14/10 at 7:33am

I laughed my ass off when I saw that article and response. I wonder how owned she felt?

TNA's picture

The most ultimate post ever.

O
(Human, 13,467
 
Points)
 on 6/14/10 at 9:04am

The most ultimate post ever. So true!

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veritas14's picture

Marriage, children, family

ST
(Gorilla, 662
 
Points)
 on 6/14/10 at 9:12am

Marriage, children, family give meaning to life.

Self-actualization as the path to happiness is bunk 1970s psychology.

We become the fullest version of ourselves when we COMMIT. Bankers intuitively know this- they get off on sacrificing, on long hours, on no sleep. They COMMIT to their jobs, a noble decision in an increasingly lazy/complacent society. But this doesn't mean other meaningful choices should be avoided or delayed.

But I do agree with the avoidance of debt. It will kill you.

*********************************
“The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher.” - Oscar Wilde

ElijahPrice's picture

So wasting assets is

IB
(Orangutan, 282
 
Points)
 on 6/14/10 at 9:40am

So wasting assets is basically spending money on depreciating assets? (Aka everything except real estate and education)

Edmundo Braverman's picture

The argument can be put

ST
(Human, 14,318
 
Points)
 on 6/14/10 at 9:58am

The argument can be put forward (and will be by me in a later post this week) that even real estate can be a wasting asset.

Bottles and DCF Models's picture

Real estate could damn near

CF
 
Points)
 on 6/14/10 at 10:03am

Real estate could damn near be considered a wasting asset right now.

Even historically, only a smal percentage of people actually get more out of a house than they what they put in..

accountingbyday's picture

Edmundo, I believe you are

CF
 
Points)
 on 6/14/10 at 10:12am

Edmundo,

I believe you are 100% correct, while at the same time missing some of the point.

I'll use myself as an example.

I've really grown to wish I had done some work inernationally. I love London and would like the experience of working in more exotic places as well. I am finally at a company in a position to take rotations around the world. Actually, it would be encouraged for me to do so because I have been identified as potential future leadership.

It seems like the stars have aligned for me, but I won't be going abroad. I won't even be taking any positions out of northern Illinois. This is because I'm getting married in 6 days to a girl who doesn't want to leave.

My perspective is that I loose a lot of flexibility when it comes to my job. I can do whatever I want in the Chicago-area, but my options are very limited. However, I am marrying someone who truly makes me happy (more happy than a better job would), building a nice house near some of my best friends from high school, have every weekend free to golf/gamble/travel. For me, this is a huge win. I will likely never be very wealthy, but I will live very comfortably and with some luck may become wealthy. To me, this is happiness.

I'm not disputing anything you said. As a matter of fact, I wholeheartedly agree with your points. I've gotten to the point where I've learned what will make me most happy and was willing to limit my future choices. Also, I'm 28, which feels like a pretty good age for all of this. As I've eluded to in other posts recently, at 24 these choices wouldn't have been right for me.

I look forward to hearing more of your thoughts on this, especially the wasting assets part.

PecuniaryTutelage's picture

I agree with Edmundo

CF
(Monkey, 51
 
Points)
 on 6/14/10 at 10:58am

I agree with Edmundo whole-heartedly, but I would say that not everyone is meant to follow that path. I know that avoiding those things is better, both through experience and watching others struggle or fail. I also know that not everyone can do it; like a bell curve, there is a middle ground and I think those that ignore Edmunos' advice tend to fill the closest deviations around the mean. Those who hear or see and then follow this advice fall multiple deviations away from the mean. Else, why would people who hear of or see such things before perpetrating them personally, still fall victim to them? In anycase, all a round-about way of stating I agree with the intent, though the application is usually much different.

-N.

"It's about the game." - Gordon Gekko
"No matter how much money you make, you'll never be rich." - Jacob "Jake" Moore
"'Oh Africa Brave Africa'. It was... a laugh riot." - Patrick Bateman

blong131's picture

I think without an overall

ST
 
Points)
 on 6/14/10 at 11:22am

_________

John Tabacco's raw, unique market commentary based on real information from real short sellers:
http://www.TheDailyShortReport.com

ChildPlease's picture

I think that spending money

O
 
Points)
 on 6/14/10 at 11:28am
drexelalum11's picture

Appreciating assets

O
(Neanderthal, 3,635
 
Points)
 on 6/14/10 at 11:58am

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Edmundo Braverman's picture

CaliWowe wrote: I think that

ST
(Human, 14,318
 
Points)
 on 6/14/10 at 12:09pm

Matt the Tiger's picture

In the end were all dead.

PE
 
Points)
 on 6/14/10 at 1:21pm
whats-the-damage's picture

Edmundo Braverman wrote: If

IB
(Baboon, 136
 
Points)
 on 6/14/10 at 2:16pm
Edmundo Braverman's picture

Dude, I'm so glad you chimed

ST
(Human, 14,318
 
Points)
 on 6/14/10 at 2:38pm

whooop's picture

Edmundo, I tend to like some

IB
(Monkey, 60
 
Points)
 on 6/14/10 at 2:47pm
Brady4MVP's picture

Unless you REALLY want kids,

HF
(Neanderthal, 3,158
 
Points)
 on 6/14/10 at 3:42pm
lmb1234's picture

If they relaxed the far too

O
(Monkey, 40
 
Points)
 on 6/14/10 at 4:13pm
dagro's picture

misery O misery... if i

CF
(Gorilla, 508
 
Points)
 on 6/14/10 at 4:20pm

=========================================
"... then, lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in My sight, shall snuff it."

dagro's picture

@lmb1234 - had to kudo you on

CF
(Gorilla, 508
 
Points)
 on 6/14/10 at 4:27pm

=========================================
"... then, lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in My sight, shall snuff it."

bobbymac's picture

entertaining as usual. Keep

O
(Monkey, 44
 
Points)
 on 6/14/10 at 4:28pm

If if don't make dollars, it don't make sense.

LIBOR's picture

dagro wrote: misery O

EN
(Neanderthal, 2,156
 
Points)
 on 6/14/10 at 4:37pm

looking for that pick-me-up to power through an all-nighter?

Edmundo Braverman's picture

dagro wrote: anywho, as i

ST
(Human, 14,318
 
Points)
 on 6/14/10 at 5:29pm

Batrick Pateman's picture

jjc1122 wrote: Unless you

O
(Orangutan, 364
 
Points)
 on 6/14/10 at 8:53pm
Easy E's picture

dagro wrote: if you're

IB
 
Points)
 on 6/14/10 at 10:14pm
Zzyzx's picture

I feel like marriage is

IB
 
Points)
 on 6/15/10 at 2:50am
RE_Banker's picture

Great post. Are you a

PE
(Gorilla, 513
 
Points)
 on 6/15/10 at 2:54am
Edmundo Braverman's picture

RE_Banker wrote: With

ST
(Human, 14,318
 
Points)
 on 6/15/10 at 3:26am

streetn's picture

Zzyzx wrote: I feel like

IB
(Monkey, 50
 
Points)
 on 6/15/10 at 4:47am
HoboBanker's picture

I'll be awaiting the

O
(Baboon, 155
 
Points)
 on 6/15/10 at 7:11am
RE_Banker's picture

Anonymous Rep wrote: I'll be

PE
(Gorilla, 513
 
Points)
 on 6/16/10 at 3:00am
Uncle Rice's picture

HAHA! Great article. YOU HAVE

(Chimp, 2
 
Points)
 on 6/19/10 at 6:39am

GAIN THE WISDOM!
www.twitter.com/UncleRiceWisdom

veritas14's picture

Marriage and family serve to

ST
(Gorilla, 662
 
Points)
 on 6/25/10 at 11:31am

*********************************
“The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher.” - Oscar Wilde

TonyPerkis's picture

my intern's name is

AM
(King Kong, 1,571
 
Points)
 on 6/26/12 at 9:29am

I eat success for breakfast...with skim milk

rothyman's picture

Brady4MVP: Unless you REALLY

HF
(King Kong, 1,163
 
Points)
 on 6/26/12 at 11:01am
Relinquis's picture

Interesting thread... Debt is

RE
(Neanderthal, 2,186
 
Points)
 on 6/26/12 at 1:03pm

relinquis... Killing the GMAT this December; Over/Under set at: 725 GMATs.

qweretyq's picture

rothyman: Brady4MVP: Unless

ST
 
Points)
 on 6/26/12 at 1:47pm
drexelalum11's picture

qweretyq: rothyman: Brady

O
(Neanderthal, 3,635
 
Points)
 on 6/26/12 at 4:29pm

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Brady4MVP's picture

rothyman: Brady4MVP: Unless

HF
(Neanderthal, 3,158
 
Points)
 on 6/26/12 at 4:36pm
qweretyq's picture

drexelalum11: You can easily

ST
 
Points)
 on 6/26/12 at 10:18pm

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