Today I was fortunate enough to spend some time one-on-one with one of Asia’s richest men – think Warren Buffet of the East. Throughout our conversation he made several references to the importance of endurance in business and that from a personal career perspective, the way to build an empire is to consistently and pragmatically win. Again, this might seem a little obvious, but like my other posts I prefer to draw attention to some of the simple things that people get wrong.
I have a lot of peers in hedge funds and investment banks operating under the mantra that they will do this for a few years, ‘Make it Big’ then find something else to do. I presume they base this career trajectory on that of others who've been spat out of the financial system after a few years with a thick wallet. By factoring some healthy survivorship bias, you've made the financial world equivalent of stating that ‘all actors are rich’. Most are actually waiters.
So, although I certainly advocate living big and have some lofty aspirations of my own, I want to lay down some suggestions to keep you future monkeys in the game:
1. Cash is king – Do it tough for your first six months and save enough cash that you’re not living from week to week. It can be difficult in cities like New York, London, Hong Kong and Singapore, I know, but if you can dodge the boozy nights and fancy dinners it will go a long way. Having three months’ salary in the bank and knowing you don’t need your job is fucking liberating and it will allow you to make all-round better career decisions.
2. Avoid debt – This is just the same cake as above but with different ingredients. Debt is for fools. Save it for your first LBO where it will make you money.
3. Control your fixed costs – You don’t want to have a whole lot of operating leverage in your personal finances. While the top-line isn’t entirely in your control, you have a lot more say in how much makes it through to the bottom. Give your career and lifestyle some resilience by living well within your means.
4. Building your network – is something that is top-of-mind when you’re looking for a job. You’ll be able to build a build a much bigger and stronger network when people don’t feel like their being leveraged. Keep in mind that although these people are just friends now, you may eventually need them to refer you for a job. So, make sure you’re always professional and convey the appearance of someone they would vouch for.
5. Try to be the best and make sure you’re not the worst – I’ll give this piece of advice tentatively as it may be misleading. I always advocate that you should be the best at what you do, so NOT being the worst should be a no brainer. However, if you break into a top-firm it’s highly competitive and it’s easy to become complacent. While you’re striving to be the best, make sure you know where ‘the line’ is, and stay the hell above it.
Nice post.
Good post. All seems intuitive, but I'm sure it's easy to get lost along the way.
This is key.
This seems more like your life experience and knowledge.Not really universal.
Seems mostly right. I would disagree a bit with keeping debt out period. Building up equity over time while using your free cash flow for investing is ok too. For example, say you've saved a bit, and you need a new car. You could write a $45k check (or more) for that new 328i. Or you could take out a loan for a couple or 3-4 years and over that time, invest that money that you would have used, earn, say, a few percent, and maybe even come out ahead vs. your loan if your credit is good enough. Of course this isn't for everyone. But, debt can be used intelligently. It doesn't have to hang around your neck like dead weight. Only if you let it.
I agree. Debt without cash to back it = bad, but debt at a lower interest rate than the ROI you can get on the cash = okay
Yeah exactly right.
The last thing you, as a young professional, would like to do is paying interest on a depreciated asset.
I'm not saying me personally. I'm saying someone that can afford it. Sure, cars depreciate. But again, if you're able to invest your money, you can surely beat the low interest rates that auto loans carry these days. Also, my example is not perfect because I'm fairly biased...I love cars, and am quite a gear head. To me, having a car that I enjoy driving is important. To others, maybe not so much.
"However, if you break into a top-firm it’s highly competitive and it’s easy to become complacent."
This is so true. A lot of people go into FT thinking they're home free.
Et ut amet consequatur. Corporis sequi ut eum veniam. Voluptate sunt molestiae sed mollitia aut. Aut cum voluptatem et. Ipsum nostrum voluptatum vitae dolorem omnis enim. Odit blanditiis itaque mollitia laudantium repellat vel perspiciatis.
Ab ea consequatur sed totam in. Itaque cum nemo quam velit. Aliquam unde voluptas quis dolorum quis a maxime. Repellendus aut enim porro dolores ducimus dolores rem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...