Common Disasters of Mankind
Ego, Envy, Leverage, and its peers have ruined more lives than natural disasters
“You can see the results of not learning from others' mistakes by simply looking around you. How little originality there is in the common disasters of mankind.” - Charlie Munger
You have dreams and think about them, too, like we all do. This daily excursion on Mount Think More would make you look at every possible milestone/step you need to take to make those dreams into reality, e.g.
Hustle hard
Study CFA/GARP/CA
Get a good job
Get a job in a growing industry
Make friends in high places
Play Golf with the high rollers
Make the right moves diplomatically/politically
Suck it up even if you don’t like the company of some people or their habits
Do these, and your rise to the top is almost a given.
But then you meet people who haven't done any of these and still made it big, e.g., my friend Ritesh in Mumbai -
He only interned with Hindustan Lever but joined his father’s stuttering textile business
He risked all his money on a new business and lost it all
Somehow, he survived and scraped his way back up from the mess
He stuck to his principles and never compromised his integrity and conscience
He was always surrounded by his closest buddies and family as a support system
He is living the most simplistic life I have seen anyone live, inspite of the money he has amassed
And he is happy, just like a teen would be, full of zest and zeal for life
People like Ritesh make me doubt the hustle-hard culture that has become the accepted norm for making it to the top. It’s not the truth, even if it looks like it is for most people.
This resolves one thing for me: there are many paths to gold. And hence, I don’t want to pursue a path preferred by another since it may suit them but not me. I could create my own path, sticking to topics and interests that fascinate me, spending my free time creating content around human psychology and longevity while I pursue a career in Banking and Finance.
Though the reasons for success could be different for all, the reasons for failure almost always converge on a few basic stupidities that are often repeated across societies and cultures. Let me share a few common booby traps #
Ego
Envy
Casual
Leverage
Outworked
Concentration
Almost every failure I have seen around me, the reasons for their fall from grace, had something to do with 6 of the traps mentioned above.
Ego
Your ego/overconfidence makes you look down on others and think highly about your capabilities, which can steer you into saying more than you should have, pushing your luck until it runs out, or doing things you shouldn't have.
A lot of success in life is due to plain good luck, and a lot of failure is due to plain bad luck. Hence, taking 100% credit for all your success feeds into your ego, making you appear more skilled or talented than you actually are, and vice versa.
Envy
Your jealousy of someone else having more than you or having something you don't have or crave makes you enjoy less of what you have in the present. It makes you discount the beauty of your current success and tempts you to chase more.
The problem is that even if you reach that aspirational point, you still haven’t dealt with Envy. Hence, it will still make you feel miserable about the newly acquired milestone and steer your focus toward the next shiny thing. This habit could go on till you reach your grave.
Casual
This is the dumbest mistake I have encountered often, and it has many versions. Every time you gossip, use curse words, delay responding, assume things, stay silent when you should have spoken up, or take things lightly, these are signs of your casual demeanor despite the situation calling for the best version of you to play out.
This casualness makes you feel that it's not a big deal, but sometimes, the consequences are fatal, leading to losses that are difficult to recover from.
Leverage
I was surprised to learn yesterday that a friend of my colleague’s has his biggest position in a leveraged semiconductor ETF. I was shocked because he earns less than USD 100,000 a year and barely saves much due to his expenses in Dubai.
His situation has tempted him to go for the jackpot by buying high-risk trades to multiply his money faster instead of being okay with the snail's pace of accumulating wealth slowly but steadily. I haven’t seen these stories end well for many investors.
Every sad story of a failed business or career has leverage as the center stage of their struggle, making them carry the burden of this liability while dealing with the competitive forces to survive and thrive. Most can’t.
It’s like running a 100-meter race with a sack of rice on your shoulders. You will lose the race!
Outworked
In the professional world, where information is decentralized and tools and systems are democratized, i.e., available to all, there is hardly much difference between our peers' skill sets and knowledge base. Everyone reads the same stuff, knows the same things, and uses MS or Bloomberg. The only thing that can differentiate them would be their willingness to outwork the others, i.e., get things done, keep lines of communication open, not procrastinate because it's weekend, etc.
I am not suggesting working seven days a week, but if a meeting can happen only on the weekend or at 8 p.m., I am game for it. That willingness shows in how you go about your work, giving you an advantage over others for whom weeks are divided into weekdays and weekends or days are divided into working time and “me” time.
This is the most uncomplicated competitive advantage to build, but people often get blindsided into thinking they are being underpaid or taken advantage of. If you were playing the long-term game, you would know that your efforts would eventually be rewarded big time.
They almost always do !!!
Concentration
I come from a family of businessmen, and I have seen many horror stories wherein the central character was exposing his entire networth to his business, betting more and more on it, inspite of the business not producing much in return. Some were in textiles, some in corporate gifting, some in packaging, and the list is endless.
They needed to have diversified more or built a safety net to tap into when things got rough. And the ones with the safety net, when they did struggle, they used the entire safety net to plug it back into the business when it should have been used for buying time until they figured out an alternate way forward. Putting good money behind bad money never works!!
When all was lost, they couldn't fathom getting a job and restarting their journey from the bottom of the pit since they couldn't accept that they had lost the match. They lived in denial and disbelief that this could happen to them.
Ego and concentration are a ruinous combination, and the pattern repeats like a doomed loop in many lives.
This is the story of millions, and it need not be yours.
I invite you to go through a thought exercise. Take a pen and paper, write down five names that come to your mind, wherein their lives were riches to rags or fall from grace stories, either entrepreneurial or in the corporate world. And then try to explain the cause of their downfall.
Chances are high that these six traps had a role to play. And if the answer is yes, then do ask yourself a very important question -
How do I protect myself from these booby traps?
I’d love to hear about the tools and hacks you have created. Based on your feedback, I might write a follow-up piece on them.
Wishing you all a fantastic weekend ahead🥂
Sending you loads of love and luck🧿
Manish