Principles of success part II: ‘Don’t chase the money’
This can be followed up by another truth – ‘The money alone won’t make you happy’.
In this, the second of our Insights series on ‘Principles of success’, we reflect on the relevance of money. We all need it, we all want it, but should we give up our values, integrity or passions to have it? We think not.
“People are chasing cash, not happiness. When you chase money, you’re going to lose. You’re just going to. Even if you get the money, you’re not going to be happy” Gary Vaynerchuck
“If money could buy us happiness then some of the richest people on earth would be more than one million times more happier!” Avijeet Das
“Chase your passions and money will come. Chase money and you may never find your passions.” Colin wright
Osho, in his book ‘What the Buddha says’, takes the view that there are more unhappy rich people than poor. While I can’t testify to this, it can create real unhappiness and pain if money alone is seen or measured as a source of happiness.
Our ability to desire more and more is unlimited and enough will never be enough.
A good example of this was Adolf Merckle, a billionaire industrialist that committed suicide in 2009. It was speculated that it was due to the potential loss of control of his business empire which he had spent his whole life building. He had all the money, but still felt like a failure.
Nobody though, would suggest that poverty is a better route. Far from it. We all need to make enough money to pay the bills and put a roof over our heads, but beyond a certain point money doesn’t lead to greater happiness.
Work and effort are essential to human development and a common trait of ‘happy people’ is that they are active, working on something that generates long term value.
Take a look at some of the most significant and successful money managers around today. From Buffet, Tudor Jones, Ray Dalio, Howard Marks, Seth Klarman, Druckenmiller, Larry Robbins and Tom Claugus just to mention a few. These are some of the best money managers out there and are all billionaires. And they are all still working flat out. Money was never the primary driver, nor is it keeping a scorecard. There is always somebody richer or younger.
They just love doing what it is they do best – allocating and compounding capital. And having met a few of them, they are on average extremely humble and grateful for the abilities they have. Most, if not all the above names are large philanthropists.
Chasing the money, for its own sake, will likely not be fulfilling.
Worse yet, it can lead to a major loss of integrity where making money, for the bank or company, becomes more important than ‘doing the right thing’. We see this everywhere and in every industry, from business frauds, to false and misleading marketing, to hidden costs and inappropriate product. The system in its current form is rigged, with regulators everywhere taking a back seat to corporate will.
Revolving doors between the big pharma and the FDA is a great example of this.
We also see it in banks, with relationship managers being required to reach their monthly revenue targets. This inevitably pushes them towards getting clients to trade more often than they should, buy structures and products that charge high initial and hidden fees or leverage up. It’s all about making that month’s or quarter’s target.
We see this all the time and it’s the reason the founders established MWCM. To provide unbiased, holistic and value-added advice. We don’t have revenue targets. Rather, we have performance targets for the clients we manage. It’s this, the challenge of beating the market and benchmarks that keeps us engaged and often up at night.
Not ‘chasing the money’ not only makes good business sense, but it’s also a vital mindset to have as an investor or trader. Either your risk tolerances will hold you from adding to good bets, thus limiting returns; or you will find yourself fearing to realise losses, in the hope that the trade may turnaround. The latter can perhaps be the costliest mistake as the one rule of trading to limit drawdowns.
“Don’t focus on making money; focus on protecting what you have”
Paul Tudor Jones
Many very successful managers close their funds to new capital so that they can focus on generating high performance, rather than becoming so large they become index trackers. For them it’s about beating the market that drives them on.
The last quote sums up this Insights well –
“Money is just something you need in case you do not die tomorrow. Let this is a reminder for you not to obsess over profits and losses. In whatever you do, strive for enjoyment, focus, contentment, humility, openness… Paradoxically (and as an unintended consequence) your trading performance will improve significantly.”
Yvan Byeajee,
Thanks to 401kcalculator.com for the front shot.
Disclaimer:
This material is mean for accredited clients only. Nothing in this document should be perceived in any way as a recommendation or solicitation to buy or sell any security or fund. The securities highlighted have been selected to illustrate MW Capital Management Pte Ltd investment approach and are not intended to indicate how any MW Capital Management Pte Ltd fund or account has performed or will perform in the future. The securities discussed herein in do not represent any entire portfolio or account managed or advised by MW Capital Management Pte Ltd and may not be suitable for all or any readers. Any views, forward looking statements, projections and current investments are based on assumptions and judgements. Because of the significant uncertainty inherent in any assumption and judgements we make, you should place no reliance on such forward-looking statements or views – they may not prove to be accurate and actual results may differ materially. Furthermore, they will change over time and should not be relied on in any way. There is no obligation for MW Capital Management Pte Ltd, and the company expressly disclaims any obligation, to update or alter the statements, predictions or any other information contained herein. This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to adopt any investment strategy. The views expressed may change without notice. Certain economic and market information contained herein has been obtained from published sources prepared by others. MW Capital Management Pte Ltd assumes no responsibility for the accuracy of such information. All investments involve risk, including the potential loss of principal.