Recently, I was listening to an interview with writer, Pico Iyer, and it struck me like a lightning bolt: Iyer had managed to do what few people have, and that is to design the life that he wanted.
In his 20s, Iyer was living the high life, employed as a travel writer and venturing to all parts of the world, while also living in New York and having a wide and active social life. Yet, he realized that wasn’t the life that he wanted. He wished to be an independent writer that earned enough to get by, and he craved a quieter life outside the bubble of New York. He ended up marrying a Japanese woman and dividing his year between two homes, one in a small town in Kyoto and another in California.
Iyer largely organized his life around three things: his family, writing, and his quest for solitude. And he prioritised times of solitude because he believed they made him a better husband, father, and writer.
What stood out was the contentedness and wisdom that came from Iyer making these choices.
And it quickly dawned on me that I wasn’t living my life exactly the way that I wanted. Like a lot of people, I’d made conscious and unconscious decisions that had led me to living parts of my life that met others’ expectations, but not my own.
From a court through to Firstlinks
Regular readers would know that I mostly grew up on a tennis court. I was always an introvert so the sport suited me well. Yet, that didn’t prevent me from being a ratbag on the court. Think John McEnroe, and I’m not exaggerating. Tennis seemed to bring out an extreme level of competitiveness and perfectionism in me.
Those traits served me well, to a point, in tennis, and then later as I took education more seriously, and entered the workforce.
In my first job as a journalist, I was ambitious, and after a time when I didn’t rise up the ladder as quickly as I wanted, I switched into a growing interest of mine: finance.
My new field of work as an analyst at a stockbroker delivered competitiveness, on steroids. It was a few years before the 2008 GFC, when the finance industry was wild and bubbly.
The crisis changed all that, of course, and I soon switched into funds management, determined to carve out a high-flying career there.
I remember having an offsite with my equities fund team, and we were discussing what our goals should be – a mission statement. Everyone’s view was sought, and when it came to mine, I said, “To be the best fund manager in the industry”, or something similar. Then, a more senior team member had the floor and suggested, “To help our clients fulfill their financial goals.” It quickly dawned on me how inadequate my answer had been. The competitive beast from my tennis days hadn’t diminished.
Then, something life-changing happened: I got fired from my job. Though no fault of my own, it hurt and made me angry, and those emotions lingered for a long time.
Driven by the hurt, I tried various business ventures before eventually figuring it what I really wanted to do: have a job that enabled me to write about finance, with the flexibility to also be an active father to my two young children.
That’s how I ended up applying for a role at Firstlinks, and though I was a little unsure, my wife piped up and said, “You’re made for that role.” She knew me well.
Lesson learned
What I’ve slowly come to realise is that when taken too far, competitiveness has a dark side: it leads to choices which can help you climb the corporate or life ladder but may not suit you or your circumstances; it results in you not being the nicest person; and it’s deceptive because it makes you feel in control of your life, though what you’re really doing is trying to be better than other people, and being acknowledged as such in their eyes.
In other words, competitiveness can lead to a life where you’re trying to meet others’ expectations as much as your own.
Though this is my story, I don’t think I’m alone in living parts of my life to meet someone’s, or society’s, expectations. Often without knowing it, we are creatures of the environments in which we live – in its attitudes, mores and expectations.
I recognize now that though I have work that suits me and I’m an active father, there are other aspects of my life that should be prioritised. There’s a creativity that needs to be further nourished (I’d argue competitiveness can prevent you from seeing the beauty in things, including art) and, like Iyer, a yearning for moments of solitude to balance out the hecticness of family life.
Having a life plan before a financial plan
The lessons flow through to investing. For me, taming my competitiveness has meant lowering my expectations for portfolio returns. I no longer try to 'shoot the lights out' with my portfolio, aiming instead for above average returns, and am ok with even average returns.
I’ve now to come to think that extreme competitiveness can result in poor portfolio decisions. I’ve seen many hedge funds try for market-leading returns by taking on more risk through leverage, market concentration and other tools, only for them to blow themselves soon after. Of these funds, even the ones that do deliver great performance in one year seem to give that back and then some in the following years.
There’s a larger learning here too. And that is, you need to have a life plan before a financial plan. Having financial goals without having life goals is worthless.
You don’t have to take my word for it. The greatest of all investors, Warren Buffett, was working under his mentor and hero, Benjamin Graham, in the early to mid-1950s when he realized that he couldn’t be happy or be the best investor he could be while living in New York. He subsequently went back to his hometown of Omaha, set up a hedge fund at the tender age of 26, and the rest is history.
Buffett knew much earlier than I did that a life plan needs to come before a financial plan.
James Gruber is Editor at Firstlinks.