"You either die a hero or you live long enough to see yourself become the villain." - Harvey Dent, The Dark Knight
Nearly everyone I know who started out in banking or PE had the image of a five figure monthly salary in mind, being able to buy a home at an early age, take leisurely trips around the world, shopping at whim. It was the idea of a certain kind of financial freedom that caught us. No need for a billion dollars, just enough to live life on our terms.
If you extrapolate that income over a period of say 7 to 10 years, it is easy to see how that could be possible. When you are a twenty-something year-old looking at someone else in their late thirties or forties working in the same career as you, it can be extremely easy to be disillusioned into thinking you can do this forever.
But life is often never that straight.
Pulling the hours and all nighters for that long a time can be both mentally and physically exhausting. It comes with the sacrifice of personal time, family and friends. Most people are oblivious to how much you have to give up (and put up with) when you work almost 7-days a week, go home past midnight and never see your family and friends for extended periods of time - all for that juicy bonus at the end of every year.
Then there is also that temptation of starting a business, or a side gig, open a shop or something like that. After all what is the use of earning the big bucks when you can’t get to be your own boss one day?
Some of us would go on to invest a part of that income into either public equities or the private markets. Both pathways requires staking a significant portion of capital. The lucky ones got out alive and sometimes with a decent profit. But there are also those who unfortunately come out with losses on the other end.
Either way, statistically, it always seem to play out to the same result: We continue struggling to keep the lights on and do the jobs we do in order to justify our aspirations and lifestyles, whatever that may be.
If you are a smart guy, you’ll figure the right time to get out before the hamster wheel consumes you. After all, the whole point of why we got into the high paying jobs was because it was always more than just about amassing money, correct?
David Rubenstein, one of the co-founders of private equity firm, Carlyle, has his own talk show where it would seem that he is having a ball interviewing leaders and celebrities globally and from all walks of life. Both Steve Schwarzman (Blackstone) and Ray Dalio (Bridgewater) have turned to writing memoirs to share their collective experience and wisdom from doing business over the years. Andrew Ross Sorkin, no doubt a much younger chap and has a somewhat parallel career to Wall Street, has made his name both as a successful finance journalist and producer of TV show, Billions. Recently, one of my younger friends also highlighted to me that even the chief of Goldman Sachs, David Solomon, has apparently also started his own gig as a DJ.
While they are not the best examples (primarily because they are either in the celebrity realm or billionaires), it demonstrates that there is possibly an alternative life beyond Wall Street. And everyone who has made it in some way or another, finds self-fulfilment in doing something either unrelated or tangential to finance, publicly or in the private domain.
When you are in your twenties, you spend most years in the accumulation of cash. If you are the ambitious type, you might even set your sights on climbing the corporate or industry ladder. You work all-nighters and pump nitro just to get there.
By the time you reach the thirties and touching forty, and if you are lucky enough to have some credentials, you find yourself in a nice position whereby you can capitalise on the knowledge, experience and the resources. It is relatively easy to earn well from here on, but also just as easy to get caught up in workplace politics and corporate re-orgs. You are a high-cost resource treading on a thin line and might find yourself working twice as hard just to justify your existence.
It’s a never-ending cycle of work and more work.
Many years back, a friend sent me this article titled “Your Professional Decline is Coming Sooner Than You Think”. It talks about how high performance individuals often struggle personally for many years past their prime. And it is important that we start to think about what comes next when the music starts to slow down.
I have kept re-reading this article from time to time over the years, not because I’m not getting any younger, but more as a reminder of the fact that we are not invincible forever.
We have been taught to plan our careers upon graduation but no one ever mentions about how we should plan the second good half of our professional lives, and that, I think, is important.
The year was 2011. The government debt crisis in the EU had reached a stage that required the bailout of several countries long thought to be considered creditworthy and stable. I was a senior analyst then and the bank that I was working for wasn't spared from this contagion. The outlook was bleak and the bank's share price had taken quite a beating. As part of 'austerity measures', there were also talks of bonus and job cuts across the offices from Europe to Asia. The economic turbulence and uncertainty kept everyone on their toes.
On one afternoon that year, I was pulled into my CEO's room for a chat. A few words were said, the message wasn't direct, but in short, I had been given a "golden ticket". I was also being recommended for an overseas training trip to HQ. At that point of time, I had no idea what this meant. After more than a year into the job, I felt I didn't need the training and as a result, gave it up to another colleague whom I felt needed it more.
Much later on, I realised that it was in fact an all-expenses paid two-week trip to wine, dine, possibly stroll along the Champs-Élysées, and rub shoulders with our colleagues from all over the globe. The valuation training was simply a side show.
A few weeks later, I resigned to join a competitor bank for a no-brainer 60% increase in pay. The money came at a time where I had to fund several huge upcoming expenses including the downpayment on my new house.
But the news of my departure didn't go down too well. While everyone else was 'congratulating' me, my CEO refused to speak with me during my final days at the firm. Later in that year, I also discovered that the entire analyst/associate pool had basically been decimated, leaving only the VPs and one analyst. That was supposed to be my golden ticket. I was supposed to be the last man standing, for better or for worse. A couple of years later, the team that I jumped ship for was shut down as part of an internal cost cutting and re-organization exercise (talk about karma).
Decisions like these can be tough. Some might say it was foolish to trade goodwill for money. I was paid a handsome amount in the process and without that money otherwise, I probably would not have been able to fund the purchase of my house amongst other things.
Besides, goodwill (to be blatantly transactional) is only good if you can derive something tangible from it in the future. Don't get me wrong that we should do something only if it pays in the short-term. Many of the benefits and opportunities I enjoy today are the seeds of goodwill planted 10-20 years ago.
But being able to effectively gauge when to cut your losses and call it day, versus hanging around and sticking it out requires a certain amount of psychological conditioning, constant self-persuasion and perhaps a certain wisdom (some say craziness) - even more so if you have something seemingly more commercially lucrative on the table.
"Summertime soldiers" is the term that Marc Andreessen uses to describe people "who only joined [a company] in the first place because [it was] already successful and have no interest in really bearing down and applying themselves to a challenge". These people while hardworking, are also apparently not the type of people you want to retain and groom.
While it isn't technically wrong to jump ship for a better paying job, I think that the incident of 2011 gave me some wisdom in deciding whether I would become a summertime soldier in my future engagements. I never regretted what I did, but given the choice to re-write history, I probably would have went for that incentive trip, soldier on being the lone analyst within the firm and later on down the road, find a way to make back that 60% increase in pay.
For many, it is that time of the year again for festivities and holidays. However, it is also the time of the year for many companies to round up the hits and misses.
Simon Sinek says that "you can’t incentivize performance, you can only incentivize behavior". But what happens to an organization if you reward the right behaviour and fail to deliver on results? Embracing the philosophy of 'survival of the fittest' might be their best chance of staying afloat, should they continue to reward good behaviour at the expense of performance?
Goldman Sachs, has an annual 'culling' ritual whereby it shaves off the underperforming 5% of its workforce. This might sound brutal but that practice is probably one of the key reasons why the investment bank has successfully maintained its leading edge amongst the rest of its competitors.
In the book "Dream Big", Jim Collins also talks about private equity firm 3G Capital's corporate culture:
"The very best people crave meritocracy, and mediocre people fear it."
Generally, those who seek to cruise their way to a natural retirement should be eliminated for the greater commercial good of the company. Yet this is not always so.
Large companies often have blind spots and loopholes within their organisational hierarchy for underperforming people to hide away. Sometimes, it is also more costly to replace a long-serving employee who has been too familiar with keeping up with the firm's day to day operations.
But trimming the fat is a crucial aspect for staying alive. And in all of these scenarios, the firm pays the ultimate price in terms of profitability and efficiency.
It can be very easy to feel victimised when you don't get credited or rewarded (monetarily) for the efforts that you put into a particular project or for achieving a breakthrough for the company. It could also be a certain line manager or a higher up finding fault with you. And this could be anything from a missed deadline, falling short of KPIs, or even not trying hard enough.
Sometimes the way things work (or don’t work) within the company is not entirely your fault. The larger the company, the more complex and inter-connected the workings are.
The reality is everyone is entitled to their opinion. Just remember that the ones who have real skin in the game (those who have something to really lose when things go bad) have the absolute right to ask questions and demand for results - even if they sound unreasonable.
Don’t beat yourself up too much.
But remember, as an employee, also don't be too quick to give yourself more credit than you deserve for your achievements at the workplace.