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The Great Strategic Game of Life (1/2)
 

SenhorFinance's picture
HF
(Orangutan, 372
 
Points)
 on 10/30/12 at 8:30pm
Strategy

Discussions that center upon issues such as “which b-school is better”, “M&A, ECM or DCM” and “which desk within S&T” usually make me uneasy. Don’t get me wrong, I am not a madman, and I realize the importance of getting as many right choices as possible. In select cases I will even stand up for your right to an opinion (unless you’re a douche).

My point here is that putting too much effort in issues that are tactical in nature will drain precious time that you could be employing in learning how to be better at something that I will call, for the lack of a better name, the great strategic game of life. Let me share a little framework that I use when I get to fate-changing professional bifurcations and follow up with a few stories.

Let’s kick off by depicting three young fellows: #1 joins public service making $20-30/hr. #2 breaks into IB at the same pay, but aspires to make ten times that within the decade, by then #1 will have at best doubled his pay in real terms. But #2’s riches will come at a hefty lifestyle expense. #3 is starting a business. His hourly “wage” is likely to range from ($25-50) - yes, negative - to extremes of $1k-10k. Variance is not only #3’s circumstance, it’s his friend. Chances are that he will go broke at some point throughout his career. These guys look familiar to you, no doubt.

So what? It’s simple. The ownership and accountability structure of university OCRs, HR departments, corporations and other institutions impacts their incentives: its agents are rewarded for short term results. But unless you’re the heir of a multibillion dollar company, the duration of your life’s balance sheet LHS is much higher than that of those entities. Procedures they follow, plans they draft and speeches they give, all have a hidden yet powerful underlying assumption: that your career choices are mutually exclusive and irreversible, so you better get it right. But are they? Does the set [#1, #2, #3] exhaust the option space of paths for your life? Probably not, right?

Right. Now for the $50 questions. Is IB riskier than Management Consulting? Is MC riskier than F500? Is F500 riskier than public service? Yes, yes, yes. Those answers come quite naturally: we have an innate ability to sense risk, hard-coded in our DNA since our hunter-gatherer ancestors learned the hard way when to run from lions and when to lay camp. Of course this sense can be refined by taking decision theory courses. But I digress.

Now, join me for the coolest part of this nice woolgathering exercise. I will need you to enter into a sort of hypnotic trance, which requires you to:

  • Forget about your next year’s compensation
  • Forget about rent
  • Forget about tuition
  • Forget that $5 lattes mean $1,250 by yearend, shut down any trace of the miserly and penny-saving mindset that modern advertising subliminally injected you with
  • Forget about the IRR/direct/indirect/opportunity costs/payback/NPV of stuff like MBAs, CFA, certifications, sabbaticals, vacation, and the like
  • Forget about the whole “which b-school should I apply to in order to land an offer in [insert job/firm/both here]” argument; forget school rankings, glassdoor.com, etc.
  • Forget about “is it better to be a BB MD in NYC, a pimp in Singapore or a paper tycoon in Zimbabwe”-type discussions, which are worthless even when only thought of

Does that change where you want to be in 20 years? No. Why? Because all of this is noise. Eventually you will realize that every single item in this list is worth less than cigarette money. Most importantly, realizing it now will save you a lot of time and from unnecessary anxiety. To me, when at a crossroads, it all boils down to three questions:

  1. Do I have what it takes to succeed in [insert here the potential paths you see], including a legitimate passion for it?
  2. Will I hold my head high if I fail, despite having what it takes?
  3. Will I and my immediate dependents be fine with the circumstances of a post-failure life?

We have been brainwashed to perform well at interviews, to network with the BSD in the office next door, and we only think about questions like these when memorizing sample answers for BB behavioral interviews. But once in a while, think about it: did you ever feel like many of your most troublesome/stressful decisions were quite irrelevant, and you could have focused your energy on working longer, harder, smarter; potentially finding and seizing awesome opportunities?

See you in a while.

SenhorFinance

P.S.: My next post will feature 3 life stories and reexamine them through these questions. We’re talking (1) a sales trader who recurrently earns 7 digits since she was 26, (2) a recently-promoted C-level officer who took a $10M mortgage for self-motivation purposes a few days after he was fired and (3) a stuck-in-the-middle classmate, who is probably brighter than (1) and (2) combined, but is postponing her wedding because she cannot afford festivities.

Part 2: http://www.wallstreetoasis.com/blog/the-great-stra...

See my other WSO blog posts

Comments

roberto424's picture

Wow, what a great writeup.

(Chimp, 12
 
Points)
 on 9/7/12 at 12:47pm

Wow, what a great writeup. Thank you good sir.

happypantsmcgee's picture

I don't know how I feel about

O
(Almost Human, 9,627
 
Points)
 on 9/7/12 at 12:48pm

I don't know how I feel about most of this but I will hopefully have a pretty huge career decision coming up so I'll save this and see if I find it useful.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

WallStreetOasis.com's picture

...looking forward to this

EN
(Human, 12,195
 
Points)
 on 9/7/12 at 1:31pm

...looking forward to this series. Thanks

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TheKid1's picture

I feel most of these

IB
 
Points)
 on 9/7/12 at 2:16pm

I feel most of these perspective comes to you when your older. A lot of WSO people are young and hungry and wan't the 7 figure salary. However I am 22 and this is my first time never been in school, have I realized how important time is and that working long hours might not even be worth it in the long the run- too early for me to decide off course. Though it seems like my friends who are trying become cops, firefighters work for the city seem a lot less stress and happier given they have more time.

Its funny, since I started working I don't really have anything to look forward like when I was in school, like December break, Jewish holidays off, Summer nights, Spring break thats all part of the past and not easy to relive unless your loaded. I don't know, my perspective on life and work has changed.

trailmix8's picture

I just came back from my

AM
 
Points)
 on 9/7/12 at 2:29pm

I just came back from my campus McKinsey presentation which got me all hyped up and sat down to read this. Thx for putting things back in perspective, because the presentation was pretty dam good.

prospie's picture

This seems pretty cool

(King Kong, 1,721
 
Points)
 on 9/7/12 at 3:00pm

This seems pretty cool

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chicandtoughness's picture

Excellently written; I can

CS
 
Points)
 on 9/7/12 at 3:20pm

Excellently written; I can definitely related to being blinded by worries and too much planning/not enough doing (it bit me in the ass in my undergraduate years). Looking forward to the rest of the series!

"Accept no one's definition of your life; define yourself."
Currently: PR/MarComm/IMC, semipro dancer, academiphile, Crafter of Stars

Unforseen's picture

Looking forward to this. I

(King Kong, 1,129
 
Points)
 on 9/7/12 at 4:01pm

Looking forward to this.

I like the simple approach to life. I always look back and regret not knowing that there were easier paths to get to where I want to be.

That being said, I consider myself very lucky and I'm happy where I am at this point in time, and like you said, I focus on those three questions (variations of it of course)

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fermion's picture

very interesting post.

O
(Baboon, 132
 
Points)
 on 9/7/12 at 10:05pm

very interesting post. looking forward to the follow-on.

JDimon's picture

Ehh personally I think this

(Orangutan, 258
 
Points)
 on 9/8/12 at 6:30pm

Ehh personally I think this post is getting over-hyped haha. I'm not exactly sure what OP is saying, but it basically sounds like "don't fret the small things" or something like that. But I mean the small things all add up, that's like how it works lol

There is already a book on you. That book is already being written. And if I talked to your friends, your teachers, your professionals, your family, I would know so much about you I wouldn't even have to meet you. You write the book the way you want to be

Independent Gestion's picture

+1. Excited to read more from

EN
(Gorilla, 653
 
Points)
 on 9/9/12 at 2:52am

+1. Excited to read more from you.

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

In reply to JDimon
frgna's picture

JDimon: Ehh personally I

O
(King Kong, 1,016
 
Points)
 on 9/10/12 at 10:50am
JDimon:

Ehh personally I think this post is getting over-hyped haha. I'm not exactly sure what OP is saying, but it basically sounds like "don't fret the small things" or something like that. But I mean the small things all add up, that's like how it works lol

If Senhor's profile is accurate, he's got a top MBA and is working for a hedge fund in Brazil.

(Virtually) unlimited funds, beautiful beaches, and wonderful women surrounding you tend to make these musings a bit easier...but on the whole I like the cut of his jib.

Senhor care to elaborate on your background?

if you like it then you shoulda put a banana on it

Davy ihorn's picture

True, but a nice chunk of

O
(Chimp, 1
 
Points)
 on 10/30/12 at 9:17pm

True, but a nice chunk of change in 20 years sure will make things easier to do what one actually wants to do...

animalz's picture

this is good, thanks man

 
Points)
 on 10/30/12 at 9:35pm

this is good, thanks man

Zevaka's picture

I do not really agree with

(Monkey, 60
 
Points)
 on 10/31/12 at 1:36am

I do not really agree with the statement in the topic.
You know, my favorite profitability measure was IRR. Which assumes that the earlier you get profits - the better (other things more or less equial).
Therefore getting tomorrow reasonable profits (hereinafter "profits" is composite indicator including hours, pay, job satisfaction, prestige, whatever you put in it) may be much better than sacrificing short-term goals in favor of long-term success.

Even if one wants to be CFO in F500 company in 20 years, one may still prefer IB/PE for nearest 5-10 years. Although it's probably not the best path to CFO (mgmt consulting or industry corpfin job is way better), I can easily understand such choice since it increases one's personal IRR.

So I am sure you must think of such miserable things as "next year compensation", 5$ lattes or "b-school in two years". It's all about maximizing your IRR.

atleastimnotabanker's picture

I disagree with you. At least

CO
(Baboon, 123
 
Points)
 on 10/31/12 at 7:51am
crasshopper's picture

You've picked the right

PE
(Chimp, 6
 
Points)
 on 11/5/12 at 5:38am
Astrogation's picture

Amazing, thank you for

 
Points)
 on 11/5/12 at 8:23pm

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