How Comparison Steals Joy From Self-Achievement

How Comparison Steals Joy From Self-Achievement

Sean: One of the questions that rang in my head, and I’m sure a lot of listeners might be interested to know this is when you mentioned you were squirreling away funds to be able to retire or resign by around 40. You don’t need to tell us the number, but how many months of your personal expense would that be before you finally threw in the towel?

Dave: Yeah, it’s a little different than that. The way I do things is I and I advocate this actually for people that are looking for yield and chasing opportunities, investment opportunities. I think that fundamentally when you chase investment opportunity, I think you’re actually missing the boat. I think you’re fundamentally potentially making the ultimate sin, which is trying to keep up with the Joneses. And I think trying to keep up with the Joneses is the most insidious thing you can do in your life. It’s the thing that frankly contributes to, I think, the most unhappiness, because then it results in situations where no matter how much money or how much power or how much prestige you have, you’re always worrying about what the Joneses are up to. You’re always worried about, do they have more money than me? Are they more powerful than me? Are they more famous than me? Do they have more followers than me? And I think that fundamentally becomes a root of unhappiness.

Dave: And I think that a lot of people, particularly on the investing side, get caught up in, ‘hey, my buddy at the country club made 10x money or 100x money on some bitcoin investment. I should be doing the same thing.’ Or ‘my neighbor down the street was telling me about some stock he bought and that really chops me because like I should about that stock.’ Right? So the way I think about the amount that you really need to retire and walk away is your personal cost of capital. And everyone’s personal cost of capital is different. I happen to be in a situation where I actually grew up in poverty and I know what it’s like to make $3.35 an hour cleaning toilets because that’s what I did. I worked at Safeway and I was a bagger and I was a janitor making $3.35 an hour.

Dave: And so I always thought about, okay, how much money do I need, Dave Liu, how much money do I need to live and what rate of return do I need to generate in order to hit my personal cost capital? And the reality is, for me, even though I was this big managing director and co-head of an industry group, I lived and continue to live a very modest life. I remember when many of my other managing directors were driving, you know, seven series, BMW, Mercedes, Ferraris, high-speed sports cars. I was driving around in a $20,000 Honda S2000, and many of my partners were making fun of me. Like, dude, like, what are you doing? Like, why don’t you go buy a Lamborghini or a Ferrari? And I said, No, I don’t want to. Because at some point I want to be able to walk away from this place and I want to make sure that I have a certain lifestyle that I can finance through a modest rate of return on my portfolio without having to work, without having to deal with the rat race.

Dave: And so for me, the number really related to how much money would I need to put away in my bank account and generate a reasonable rate of return without taking a huge amount of risk? So say 5 to 6% against my portfolio, such that the 5 to 6% a year is sufficient to finance my lifestyle to cover my personal cost of capital. And when I turned 40, I hit that number. I hit that number that was sufficient so that I wouldn’t need to work for the rest of my life as long as I kept my costs within check, as long as I didn’t make crazy investments and put my portfolio in Bitcoin or Ethereum. I was able to walk away. And so I advocate that for everyone that I mentor. I asked them to think deeply about what is your personal cost of capital and then what is a reasonable rate of return where you’re not taking an excessive amount of risk, and then you can compute how much money you need to walk away.

Dave: And one of the things that I think is really insidious, going full circle on our conversation about keeping up with the Joneses, is that if you’re so fixated on keeping up with the Joneses, then you become a victim of what I call lifestyle creep. One day, you know, the Honda is no good. I need to upgrade to the BMW and then one day the BMW is no good. I need to upgrade to the Lamborghini. Or, you know, at some point, you know, the one-bedroom was fine, but then I need the four-bedroom and then I need the four bedrooms in the really fancy neighborhood. And I need the private schools and I need the country club membership. Right. So before you know it, your lifestyle creeps up where your personal cost of capital is out of control. And therefore, you got to keep working for the rest of your life, potentially the job you don’t want. And so I always reminded myself and I remind these people that work for me and I mentor, like don’t get. End up in that because that’s a losing proposition and ultimately is the path to ruin and the path to unhappiness. Hopefully, I answered your question the way I thought about the number and the timing around 40 was I need to hit a certain number and that would be my corpus, that would be my nest egg, and I would generate a sufficient amount of return from that to cover my personal cost of capital.

Sean: And just to be clear, when you say you generate revenue from that, that is through investments, not by working.

Dave: That’s correct. So, you know, as I said, I put my retirement in a portfolio that generates anywhere from 5 to 6%. So nothing Herculean, nothing crazy. And that’s more than sufficient for me to live the life that I want. Does that mean that I can fly around in a G-5 around the world constantly? No, I fly commercial. But, you know, from time to time I’ll splurge on business class and once in a while, my family and I will take a really nice vacation somewhere. But we try to keep things real. We try to keep things pretty modest because like I said, I know what it’s like to have no money. I know what it’s like to live in poverty, and I don’t want that. What that also means, is I don’t need a lot to be happy. And so I just encourage people to think deeply about that before they get caught up and chase yield in trying to invest their money in rates of return that are frankly beyond the amount of risk they really need to take.

Sean: These terms, this lifestyle creep. Was this in the book that you wrote?

Dave: Yeah. So my book I wrote this book and here’s a picture of it. It was called The Way of the Wall Street Warrior Conquer the Corporate Game Using Tips, Tricks, and Smart Cuts. Actually, the way this book came about was that I realized that I was one of the few Asian Americans that broke through the bamboo ceiling and got to senior levels on Wall Street. And I was privileged enough to go to two of the top business schools in the world. I went to Harvard and I went to Wharton, I also have had hundreds of hours of leadership training, H.R. training, etc. and I’ve also run multiple companies.

Dave: And I will tell you is that I never learned any of the tactics that really helped me crack through the bamboo ceiling from school or from any of the training. And so I started to actually write down all the things that worked for me in my career in a manifesto for my two boys because I have two Chinese-American boys. And I realized that a big part of unhappiness among people is related to work, and they’re feeling that they are underappreciated and therefore under-compensated, under titled. And so being a good father, I wanted to make sure that my boys would be able to maximize their full potential so they wouldn’t lead a life of unhappiness.

Dave: And so I started to write down all these things that work for me, everything from how did I make an impression in a meeting? How did they learn the language of an industry? How did I negotiate my compensation? How did I get a promotion and I should write all this stuff down? And then fast forward, a friend of mine who is an author asked me to send him a copy of this scribbling, you know, a bunch of bullet points and whatnot. And he said to me, ‘Hey, you know, I think you should write this in your book because I think there’s a lot of people that can benefit from this, people that feel underrepresented. So not just Asian-Americans, but people of color, women, people that feel, frankly, that the system is rigged against them. And there’s a lot of good tips in here that are truly practical that can help people.’

Dave: So I started to write all this stuff down and I got a publishing deal with Wiley, and the book was published in November of 2021. And so it’s been out for a couple of months now, and I’ve been really pleased with the results. The book was ranked by Bloomberg as one of the best books of 2021. It’s a bestseller by Porchlight and on Amazon. And one of the things that ultimately convinced me to write the book is I made it 100% a philanthropic project. So I donate books to nonprofit organizations, particularly ones focused on Asian-Americans, and then all the proceeds from the book sales. I donate to charities, primarily Asian-American charities. So I’ve been spending a lot of time talking to young Asian-Americans. Everything from Asian-Americans at universities to Asian-American professional organizations like Mapp and Leap and some these other organizations. They help Asian-Americans with their career.

Dave: And I’ll tell you, like, the feedback I’ve been getting is amazing. You know, there isn’t a day that goes by where I don’t get an email from someone saying, Hey, you don’t know me, but I read your book and I use a couple of tactics and I got the job I wanted or I got the promotion I wanted, or I got the pay raise that I wanted. And that really warms my heart because that means that in some small way, like I’m helping a few people around the world, like breakthrough that bamboo ceiling. And so to answer your question, absolutely. My book is actually broken out into four parts. Part one is about how to get the job, get the project, know how to win the deal. The second part is about, okay, now that you’ve got the job. Like, what are the skills you need to work on? How do you make an impression in the media? How do you add value? How do you learn the lingua franca or the language of the industry? Right. And then the third part is about, you know, now you’re really close to the brass ring. Either the partner job, managing director or CEO job. How do you win the brass ring? How do you fundamentally beat out other people for that very coveted job? And part four is really about now that you’ve achieved all the economic success. What are some of the philosophical things you should be thinking about? Things about your legacy, your brand? Your family? Your purpose. Right.

Dave: And I really wrote this book so that my boys would have something for me when I’m long gone. And they can use it as a reference. They can say, ‘Oh, you know, I remember my dad told me about how to negotiate compensation, so I’ll go back and refresh my memory on that specific chapter’ or, you know, ‘my dad told me about, like purpose and the meaning of life. Right? Let me go. Let me go with that chapter in part four because he says a little bit about how he thought about it.’ And so that was really the genesis of it. And one last thing on this I’ll say is that I wrote a book that I wish my books at Harvard and Wharton were written the same way. So I’ve read hundreds of nonfiction business books. And I will tell you that one thing that really frustrated me was that, you know, they would typically be 2 to 300 or 400 pages. And after I’d be done with it, I would realize, okay, there’s only like one or two key takeaways from this whole book.

Dave: And the reason why I know this is true is that there are very successful Internet services like Get Abstract or Blinkist. And what they do is summarize bestselling books onto one page. And almost always, you can summarize a whole book in like three bullet points. So the way I wrote my book was very different. I broke my book into like I said, 4 parts, 30 chapters. So every chapter’s relatively short and every chapter actually begins with a cartoon and ends with key takeaways. And what I tell people is, this is how you should read my book, read the cartoon, and read the takeaways before you read the chapter. And that should take you at most 15 seconds, maybe half a – 30 seconds if you’re a little slow in reading cartoons.

Dave: And if you think there’s enough from the cartoon that begins a chapter and enough from the takeaways that you show, like, ‘Oh yeah, those are some interesting points.’ Then read the chapter, otherwise, skip it. And so I’ve had people that have said to me, like, Your book is amazing. I was able to read the whole book in 15 minutes. Right. I’m going to. Great. That’s awesome. The typical person might take 6 hours, but if you can get everything you need out of it in 15 minutes, that’s fantastic. And so I cover things like we just discussed in the book, and I try to dissect them in a very digestible, humorous way. I try to write it in a way that it’s not like some, you know, prophet from a mountain telling you how you should do things. I try to just tell you in my own irreverent, somewhat humorous voice, like, what did I do? And then perhaps you can learn a little bit from how I did it. It might not work for you, but like, I just want to tell you what worked for me. And I find that to be a very effective way to mentor and teach people the right tactics to navigate their careers.

Sean: That’s amazing.