Not All Money Is Green

I use to be part of a team that sold emerging market bonds for a bank. We consistently made millions of dollars annually. Yet, in many ways, our team was not well respected. In fact, there were other traders and sales people who made less money, contributed less, and were paid more.

It always use to bother me that even though my efforts created more value for the bank other people were paid more. It was as if the money I made was not “green enough” for the bank. I came to learn that in corporate America, pay is not only dependent on technical skills but on political skill as well.  Given the clients I handled I had no political power.

The golden boys at my firm had gone to the best schools and were groomed by the bank to handle the biggest accounts. Their careers would typically start out having them act as back up traders for large accounts and, as they matured, take over those accounts and even larger ones. To their credit, those guys were super smart, worked super hard and did well for their accounts.  In turn, the firm loved them because they maintained a steady flow of income for the banks.

What they did was not particularly hard. They were given the keys to the kingdom. Their real job was simply to not mess up.

My colleagues talked and traded with PIMCO, Fidelity and Soros. They traveled to California and played on some of the best golf courses throughout the U.S.  Meanwhile, I was shlepping around the streets of Bogota, Colombia visiting local brokers trying to successfully close small trades.  The search for those deals had me traveling to some pretty remote places. My hunch had been that there were a lot more deals to be done with some of those financial institutions because they were not being properly engaged and serviced.

The compliance department, the traders and management hated me for bringing these accounts. It was simply outside their wheelhouse and comfort zone…not to mention lacking in the requisite social standing. I traded with family offices in Venezuela, pension funds in Jamaica and trust companies in Trinidad.  Then, after a few short years, I was doing some of the largest trades in my firm with, admittedly, the oddest account list. That’s when I got noticed. It took me years but the money I was earning suddenly became green.

My story is not unusual.

If you study the historical development of the Jewish community in both the legal system and on Wall Street, you see the same story play out. The reason there are so many Jewish lawyers working in mergers and acquisitions on Wall Street is due, in large part, to the fact that early on those positions were looked down upon. None of the banks, or golden boys, wanted to do the grunt work in the legal space. This resulted in that market not being served. Given that many Jews could not get into the top investment banks, they were left with covering the scraps of the “fine print” on deals. Guess what happened?  As that area became in high demand, the only firms that could service the deals were Jewish law firms. (If you want to find out more about this evolution, check out Malcolm Gladwell’s, David vs Goliath).

Even in my current business dealings, I witness firsthand how people are looked down upon when they are perceived to lack the right pedigree. Just recently, I was in a meeting with some pretty high powered people for a capital raise and, by far, the wealthiest man in the room was the most humble and least ostentatious. The manner in which he spoke and his attire suggested that he did not have the means to even be in that meeting. During a discussion round table following the capital presentation, a banker asked this unassuming attendee if he was familiar with a certain well-respected and high ranking bank in the city in which the humble man lived. His reply was, “I am that bank. I own it.”  You could have heard a pin drop as the room went silent. Suddenly, a man who had been previously humored for his questions and comments was the authority in the room…whose every word had the undivided attention of all those present.

After the meeting, I asked him what had driven him to own a bank. He proceeded to tell me that earlier in his career he had lost everything because the bank he used would not extend him credit on the real estate deals he had done. Their refusal   forced him into bankruptcy. He vowed it would not happen to him again. With whatever funds had survived bankruptcy, and what he was able to bring to the table, he bought one of the worst banks around for a fraction of its worth and grew it into what it is today: lucrative, well-respected and top rated. In a room full of lawyers, wall street financiers and tech whiz kids, this man was by far the most successful and least assuming. How had he done it? He saw potential, embraced what others judged as worthless, and then did the hard work.

The famed real estate developer Frank McKinney, who builds only million dollars homes on speculation, got his start buying apartments in the worst parts of Florida. The locations were dangerous and his margins small; but, over time, he grew and transitioned his talents to high end real estate. His success stemmed from the fact that he was willing to do the job no one else wanted to do. When he told his peers about his low end real estate deals he was looked down upon. I would characterize their reaction as “his money wasn’t green enough.” But the experience he gained doing jobs that others would not do propelled him to the heights of his profession.

These stories have a common thread and timeless moral.  Career capital was amassed from a series of unusual opportunities…opportunities shunned by most for their “appearance sake” yet ultimately the source of enviable value for those who could see past appearances and who were willing to do the heavy lifting.

Steve

sleeclark@gmail.com

 

The Inner Game of Money

He quit the game of tennis only to return as a Master.

Inner GameThe classic book by Timothy Gallwey called The Inner Game of Tennis is the true story about a tennis Pro who leaves the game he loves as he becomes increasingly frustrated with his performance. A top-tier player, he believes he has failed to reach the level of excellence he should have achieved given his talent for the sport.

Gallwey steps back and does a thorough examination of his game and ways to improve it. The journey leads him to the study of meditation and its application to his game.

In a nutshell this is what he learned:

  • You have to practice a lot.
  • By doing this you will master the skill.
  • Once mastered, your body will know exactly how to do what and when.
  • Even at a high level of mastery, you will make mistakes in a game as we are human.
  • If you beat yourself up over the mistakes you make, you will make more mistakes.
  • Focus on the process regularly guiding your mind back to the task at hand.
  • Do not judge any result as good or bad; rather focus on the outcome you desire.

He states, “Every game is composed of two parts, an outer game and an inner game. The former is played against opponents and is filled with lots of contradictory advice; the latter is played not against but within the mind of the player and its principal obstacles are self-doubt and anxiety.” To really master any endeavor, the practice of extreme concentration is necessary to quiet the mind combined with the ability to forgive ourselves for the mistakes we make in order to improve our performance.

What I found so poignant in Gallwey’s teaching is his focus on forgiving ourselves in order to experience real breakthroughs. However, the act of forgiving oneself to achieve peak performance is related not only to sports but to money as well.

In James Altucher’s podcast with T. Harv Ecker, Ecker talked about how he used forgiveness as a way to attract money into his life. At the time, Ecker had lost all of his money and was being besieged by creditors demanding payment. On one occasion, his six-month-old baby was crying as he talked by phone with a creditor. As Ecker became more agitated with his son and the creditor, he screamed at his child to shut up. Startled by his own behavior, he hung up the phone. This sudden outburst became a pivot point in his life redirecting him and his priorities..

He hung up the phone and made three pledges to himself: 1) never to yell at his son, 2) forgive himself, and 3) be vigilant with what he thinks about. The last decision to be vigilant in his thinking was the turning point in his life and brought about the wealth he was subsequently able to amass.

Its always been fascinating for me to look at the lives of the wealthy and the successful. Over the years I have read hundreds of books on the subject of money and wealth creation. Yet the one commonality among all of them was the importance of thought and the huge role it plays in attracting money.

Even the atheist and eccentric multimillionaire Felix Dennis recognized the importance of thought and its ability to make money, calling money “the one addiction I can not shake.” His brilliant book on the mater “How to Get Rich” is a must read for any serious student on entrepreneurship. The book is brilliant because it is so honest. Its not about selling you an easy dream or illusion. Rather it gets you to think and ask yourself the question, “Do I really want to be rich?” Because if you want it you must be prepared to make extreme sacrifices and be able to go though the pain to get there. Dennis almost went bankrupt several times in his life. However, by focusing intensely on the problem at hand and with determination to solve the issue, he was able overcome many of his difficulties.

Another wealthy entrepreneur who discuses the role of thoughts in his success is real estate magnet, Frank McKinney, who was a high school dropout and tennis Pro before he started buying real estate in Florida. His first few years in business were a disaster. He admits he was nothing more than a glorified slumlord. Yet he knew the only way out of being a slumlord was to make money by building quality, expensive homes. So he proceeded to do so. He started building million dollar houses on spec with his own money. Today he builds multi-million dollar houses still on spec with resounding results.

McKinney only builds houses he would live in. Then he finds buyers for these houses after the build is complete. He attributes his successful money making to “stretching the money muscle.” The process was gradual. First he started borrowing small amounts to the point of discomfort. Once he got accustomed to managing small amounts of money he scaled up to borrowing more money. Each time the amount of money he needed for a project was a stretch for him. His first major hurdle in flexing his money muscle was borrowing one million dollars. He incurred the loan then was able to make money on the transaction. McKinney now builds single-family homes that sell for over twenty million dollars. He always builds houses that test his mental and financial limits since he’s learned it is the only way to grow.

The writer of the great blog StevePavlina.com, talks openly about the mindset he used to create wealth.

Completely broke at the time, Pavlina decided to train his mind to look for spare change. Walking around he was able to spot loose coins. Thereafter he was able to find enough coins to total a few dollars every day. He then moved to dollars as his main focus and, just as before, he was able to find dollar bills every day. He then adjusted his thinking to accumulating hundreds of dollars a day to thousands of dollars per day. Each time it worked.

The switch from coins to dollars was a bigger shift in consciousness but it became a new way of looking at opportunities. For example, to make hundreds of dollars a day might require the awareness that a small business that you frequent has a terrible web site and then brokering a deal where you could get paid for improving the site. His point was that there are “pain points” everywhere where you can make money but you have to train your mind to focus on these opportunities.

In every one of these stories about making money and being successful in life, the thought comes first… then the money. For Tim Galloway and T. Harv Ecker, it was about forgiveness and mindset. For Felix Dennis and Frank McKinney it was focus and stretching the mind to attract wealth. Finally with Steve Pavlina it was all about the focus on specific amounts of wealth and creating the mindset to attract wealth.

If you like this post, you will want to read the very practical and easy to apply ways you can begin today to attract money and success into your life. Take a look inside… then begin your journey to prosperity.

Money