I want to preface this post by noting that money is not the be-all-end-all of life, and maximising earning power is not always the best way to find fulfilment and happiness.
However, since money represents an IOU from society and reflects, to some degree, the value you contribute to the system as a whole, it's often used as a proxy for success.
Seek Wealth, Not Money or Status
This subtitle is from a tweetstorm posted by Naval Ravikant, a prolific entrepreneur and investor, and co-founder of AngelList.
The basic premise is that 'wealth is freedom'. It is the ability to make money while you sleep. Money is simply an IOU that we use to transfer wealth, and status is the devil. Status is the zero-sum chase for success at the expense of others. It is your rank in the social hierarchy we're all a part of.
'People creating wealth will always be attacked by people playing status games.' The objective is to find and work with people who you can trust to play the wealth game with you.
I find these tweets inspiring for several reasons. Firstly, it has become apparent to me recently that we seek competition to our own detriment. It is so easy to view society as a social hierarchy that we have to climb in order to be successful. The idea that our own success must come at another person's expense.
In high school, we feel like we're competing to be the smartest and highest achieving student in the grade. At university, we fight for our position on an imaginary bell curve, and spend our years trying to position ourselves for the best position on a corporate ladder. The cycle continues.
Building wealth is not a zero sum game. There is so much wealth and opportunity in the world that we can be individually successful without bringing other people down. This is how I now view my university education, and similarly how I view success in the working world. Collaboration and trust is positive-sum. Grow the pie, don't steal others' pieces of it. To quote a popular Tik Tok, there are never 'too many slices'.
Scraping the Barrel
University students are stereotypically described as having a wide world of opportunities, but no money to spend pursuing them. I am very fortunate to be attending university in a country which is financially supportive of its students, and offers tertiary education at a reasonable price. Five years of university and two undergraduate degrees will cost me only $55,000. What's more, I am even more fortunate to have received accommodation scholarships to live in a vibrant, social and inspiring residential community at little-to-no cost with three meals a day. I am by no means scraping the barrel as a university student, and I don't know if I'll ever be able to grasp how lucky I am.
Being in this fortunate position, I have spent my time thinking hard about wealth creation and how to position myself for a successful financial future. My university education in Commerce made financial markets an obvious starting point on my journey to building wealth.
This is a screenshot of my first 'portfolio' spreadsheet in May 2018
Westpac Bank. An Aussie staple. For anyone wondering, I sold out of this position a little while ago. Lost money on it, and that's okay.
If there's one thing I've learned in the last four years at university, it's the power of compounding and building streams of income. Putting yourself in the best position to succeed. A piece of advice from my parents that has always stuck with me is to take whichever path opens the most doors. Pursue your passions, of course, but take every opportunity to develop a broad, multidisciplinary and transferable skillset.
Make your own luck
Malcolm Gladwell's book Outliers is one of my all time favourites. Or maybe it was one of my all time favourites. My key takeaway from the book was that super successful people get lucky. Intellect, paired with being in the right place at the right time, makes a person successful. With my optimist hat on, and my parents' advice in mind, I always interpreted this as 'do everything in your power to put yourself in a position where luck can find you'.
I think Naval would echo this sentiment.
A lot of people think making money is about luck. It’s not. It’s about becoming the kind of person that makes money.
There are four kinds of luck:
- Blind Luck - events completely out of your control
- Luck from hustling - creating your own opportunities, and allowing luck to find you
- Luck from preparation - becoming good at spotting luck. Being the most skilled and knowledgeable in a field so that you can spot opportunities first
- Luck from your unique character - building a unique character, brand, and mindset, so that luck finds you.
The fourth kind of luck is the luck we're looking for, and my interpretation of Gladwell's bestseller. Naval gives a great example:
For example, let’s say that you’re the best person in the world at deep sea underwater diving. You’re known to take on deep sea underwater dives that nobody else will even attempt to dare.
Then, by sheer luck, somebody finds a sunken treasure ship off the coast. They can’t get it. Well, their luck just became your luck, because they’re going to come to you to get that treasure. You’re going to get paid for it.
Now, that’s an extreme example. The person who got lucky by finding the treasure chest, that was blind luck. But them coming to you and asking you to extract it and having to give you half, that’s not luck.
It's like the high school blazers at Australian high schools. Everybody starts with the same one, and continues adding pins for their achievements. At graduation, nobody has the same blazer anymore.
It is extremely difficult to become the best in the world at something. It's easier to be in the top 100 at five different things. This combined skillset is equally (if not more) valuable than the single skillset.
Don't just be the best in the world at deep sea underwater diving. Luck is more likely to find you.