Credentials + Zip Code = Money
We have a caste system in the United States: higher education. In addition, economic growth is increasingly clustering around a handful of supercities.5, 6 Two-thirds of economic growth over the next fifty years will be in supercities. Opportunity is a function of density. Get to a place that’s crowded with success. Big cities are Wimbledon—even if you aren’t Rafael Nadal, your game will improve by being on the court with him. And you’ll either get in better shape or learn you shouldn’t be at Wimbledon.
This is the peanut butter and chocolate of economic velocity. Tell me your degree (level and institution) and zip code, and I can estimate, with decent accuracy, how much money you’ll make over the next decade. Advice here is simple. While you’re young, get credentialed and get to a city. Both get difficult, if not impossible, as you get older. There will always be great stories about Steve Jobs, Bill Gates, and other college dropouts. Again, assume you’re not that person.
What Makes You Happy
There is a correlation between how much money you have and how happy you are. Money can buy happiness, to a point. But once you reach a certain level of economic security, the correlation flattens.7 More money won’t make you less happy, either (also a myth). I made the mistake of spending all my time, for most of my life, trying to figure out how to make more money, instead of taking a pause and asking myself what makes me happy. So, yes, work your ass off and get some semblance of economic stability. But take notes on the things that give you joy and satisfaction, and start investing in those things. Pay special attention to things that bring you joy that don’t involve mind-altering substances or a lot of money. Whether it’s cooking, capoeira, the guitar, or mountain biking, interests and hobbies add texture to your personality. Being “in the zone” is happiness.8 You lose the sense of time, forget yourself, and feel part of something larger.
I found writing only several years ago, and it’s now one of the most rewarding parts of my life. Writing is my therapy. It’s a way for this shit banging around in my head to find an escape route. It’s a chance to immortalize how much I love my kids, miss my mom, and love Chipotle. Writing has reconnected me with people I care about and introduced me to new, interesting people. I hope that, after I’m gone, my kids will read this stuff and feel they know me better. I wish I’d started writing thirty years ago.
Invest Early, and Often
There’s an old saying that compound interest is the most powerful force in the universe. The notion of putting money away is most important to the cohort that least understand it—young people—as “long term” is not a concept they’ve grasped. Many talented young people assume they’re so awesome that they’ll make a shit-ton of money. Okay, maybe … but just in case it doesn’t rain Benjamins, start putting away money early and often.9 Don’t think of it as saving—think of it as magic. Put $1,000 into a magic box, and when you’re ready for it in forty years, presto: that thousand dollars is now $10,000 to $25,000. If you could have this magic box, how much would you put in it?
Most of us understand how compound interest works with money, but don’t recognize its power in other parts of our lives. The app 1 Second Everyday reminds you to take a second of video each day, a small daily nuisance/investment.10 At the end of the year, I sit down with my kids and watch the six minutes that was our year. We watch it over and over, guessing where I was, laughing when they see themselves, remembering what a great time we had at the Wizarding World of Harry Potter.
Nothing matches the mother-child bond. It’s not just instinct, but the small investments she made in you, every day, from the beginning. This can be applied to all relationships. Take a ton of pictures, text your friends stupid things, check in with old friends as often as possible, express admiration to coworkers, and every day, tell as many people as you can that you love them. A couple of minutes every day—the payoff is small at first, and then it’s immense.
Find Your Gorilla
Feeling masculine is hugely rewarding. (I realize how strange that sounds, and that I can’t really speak to the rewards of femininity.) My inner Tarzan swings on vines, and I’m happy. But the vines have changed. As a younger man, I felt masculine by impressing my friends, having sex with strange women, and being ripped. As I’ve gotten older, other vines have emerged. Being a loving and responsible head of household who provides for my family makes me feel “strong like bull,” as does being relevant, in the classroom or at work.
Male monkeys have higher ranks and more mating success if they have more social bonds, rather than being bigger or stronger.11 Increasingly, being a good citizen—being a good neighbor, respecting institutions, remembering where I come from, helping people I’ll never meet, taking an interest in a child who isn’t mine, and voting, all stuff I never thought about when I was younger—makes me feel like beating my chest. Coming to grips with your shortcomings and making an effort to repair your deficits. In sum, being a man, and not a boy in a man’s body. Masculinity now means relevance, good citizenship, and being a loving father.
Equity = Wealth
It’s difficult to get to economic security with just your salary, as you will naturally raise or lower your lifestyle to match what you make. As soon as possible, buy property or stocks, and try to find a job that has forced savings through a retirement plan or, better yet, options on the firm’s equity. Always be in the stock market, because you aren’t smart enough to predict when to jump in and out on your own. Try not to have more than one-third of your assets in any one asset class when you’re younger than forty, and lower that to 15 percent when you’re older than forty.
The definition of “rich” is having passive income greater than your burn. My dad and his wife receive about $50,000 a year from dividends, pension, and Social Security, and spend $40,000 a year. They are rich. I have a number of friends who earn between $1 million and $3 million, with several children in Manhattan private schools, an ex-wife, a home in the Hamptons, and a lifestyle fitting of a master of the universe. They spend most, if not all, of it. They are poor. By the time you’re thirty, you should have a feel for what your burn is. Young people are 100 percent focused on their earnings. Adults also focus on their burn.
Drink Less
The Harvard Medical School Grant Study was the largest study on happiness, tracking three hundred nineteen-year-old men for seventy-five years and looking at what factors made them less or more happy.12 The presence of one thing in a man’s life predicted unhappiness better than any other factor: alcohol. It led to failed marriages, careers coming off the tracks, and bad health.
When I was just out of college, living in New York and working at Morgan Stanley, I’d go out every night and get shitty drunk at a very cool place with what appeared to be other successful people. It felt natural. I’m a better version of myself drunk. Drunk, I’m funny and optimistic. Sober, I’m intense and a bit boring. Also I found it near impossible to meet women unless I was fucked up (see above—swinging on vines). During the week, in the middle of the workday, I’d find myself looking for empty conference rooms so I could nurse my hangover via a thirty-minute nap under the table. Mornings were about Diet Cokes and greasy food so I could get to the afternoon when, for about an hour, I felt human again. I’d inevitably agree once more to meet a bunch of my friends from Salomon Investments and some models at the Tunnel or Limelight, where we’d order $1,200 worth of vodka, and fun Scott would show up.
Not going to class or learning much at UCLA made me a mediocre banker. However, alcohol made me a mediocre person. I’m lucky I don’t have a physical addiction (I think), and when I moved to the West Coast, I didn’t miss the sauce. Ask yourself, post-college, if substances are getting in the way of your relationships, professional trajectory, or life. If they are, address it.
Car < Lion
Studies show that people overestimate the amount of happiness things will bring them and underestimate the long-term positive effect of experiences.13 Invest in experiences over things. Drive a Hyundai, and take your wife to St. Barts.
Give Someone a Good Death
Other than my kids, the thing I am most proud of is giving my mom a good death. After my mom was diagnosed with terminal cancer, I spent seven months living with her in the Del Webb Active Adult Community in Summerlin, Nevada. During the day, I’d manage my mom’s healthcare and watch Frasier and Jeopardy! with her. At night, I’d venture to the Strip and get drunk with entrepreneurs who were starting cigar bars and restaurants, and strippers. It was a strange but meaningful time in my life. The instinctive rewards from nurturing people at the beginning of life—the joy of children—are well documented.14 However, providing comfort for someone you love at the end of their life is also deeply satisfying. If you’re in a position—and many aren’t—to make a loved one’s exit more graceful, do it—you’ll cherish the experience for the rest of your life.
Happiness = Family
On a balanced scorecard, the happiest people are those in monogamous relationships who have children. I didn’t want to get married or have children, and I still don’t believe you need children be happy. I can say, however, that being a decent dad and raising kids with someone I love and who’s competent has, for the first time, begun to address the question we all struggle with: Why am I here?
Resilience / Failure = Success
Everyone experiences failure and tragedy. You will get fired, lose people you love, and likely have periods of economic stress. The key to success is the ability to mourn and then move on. I’ve had a marriage fail, had businesses go bankrupt, and lost the only person who (at that point) I knew loved me, my mom … all before I was forty. But blessed with a great education, good friends, some talent, and the best zip code in the world (USA), these were obstacles for me, not barriers.
Nothing Is Ever As Bad or As Good As It Seems
As my friend Todd Benson says, market dynamics trump individual performance. Your successes and failures aren’t entirely your fault. The number one piece of advice seniors would give to their younger selves is that they wish they’d been less hard on themselves. Our competitive instincts lead us to anchor off the most successful people we know, and we’re disappointed when the person in the mirror doesn’t match those achievements. One of the keys to a healthy relationship is forgiveness, as you, and your partner, will at some point screw up.15 Your limited time here mandates that you hold yourself accountable. But also be ready to forgive yourself so you can get on with the important business of life.
