Sometimes it is good to take a step back and realize who frequents this blog. It is primarily younger men in the band of 20-35 or so, the only reason the age band expanded is because of the long history we have here. That said, one of the key things we try to keep in mind is that the average reader is still “trying to make it”. So. We can put up a brief summary of what we’d do if we were starting all over again. Luckily a lot of the things have not changed.
Good Ole Career Stuff: While education will be disrupted long-term (VR class rooms etc.), we’re still several years away from full disruption based on what we’re seeing. People still view degrees from Ivy League schools and other top universities as valuable (status signaling mechanism). Therefore, the same strategy applies. Get into the best university you can without incurring debt (or any real amount of debt). You can then start working part time jobs while at school and obtain internships.
Most of you are past this stage so that leaves you with three options: M&A banking, Technology and Sales. At this point the clear winner is technology. If you can get any remote job in technology you’re in a great position. Tech is most likely to be “ok” with remote employees and they pay quite well. The second best option is likely M&A banking. This is close to sales but the reasoning is as follows: no travel. If you can play the politics game and work efficiently, you don’t need to work 80 to 100 hours a week. Better to work at a Tier 2 investment bank than a sweat shop like Moelis. The $30K difference doesn’t matter because you’re trying to start a second income stream. Finally, that leaves us with enterprise sales. This is practically equal in attractiveness in our opinion since the income is similar and work hours are much much lower.
So there you have it, much hasn’t changed from Efficiency, which gives you a deeper explanation of how to choose your skills and what industry you should go into.
Bleeding the Career Dry: One of the problems with high achievers is that they want to be the best. This is a death sentence for you in the corporate environment. The #1 performer gets slammed with extra work and makes maybe 5% more than the #2 guy at the junior level. Both guys end up getting promoted anyway so there is no need for this type of competitive craziness.
Your goal: do the bare minimum to get the promotion. This means you have to pretend to care about the industry (politics, sucking up to the few people who matter) and you have to do good enough work. That’s really it. If you know that 5/20 people get promoted you want to be #3/#4. If you’re exceptionally good at playing this game you can target #5 but the first go around… #3/#4 is safe.
Broadly, when someone likes you they don’t want to blow up your weekends as much. When someone likes you they will also give you a little bit more leeway when it comes to your work product as well. Again. The goal is to skate into the next slot without doing much work. The problem with being a bottom performer is that you will be forced to do even more work (they will treat you like garbage and make up things that don’t occur – hence why politics are so important). So better off playing the game “good enough” and moving on. Politics > performance and don’t let some boomer or 18 year old tell you differently. People have huge egos in these massive organizations with extreme amounts of bloat.
Once you’ve done this well, you can implement operational systems to appear busy. Good examples are time stamped emails that go out late at night. Automated products using software. Fake conference calls to free up time – point to headphone and say “sure 30-45 minutes”. So on and so forth. This frees up time for you to move to project #2!
The Second Form of Income: You don’t need much, you just need validation. Again. Most high achievers are risk averse due to massive amounts of social pressure. So you can start small if you’re really scared. Start reviewing resumes for people or doing some cheap consulting service. Once you realize that online income is possible you then move into affiliate marketing, consumer sales or otherwise. The goal is to build something that earns money 24/7/365. Even if it’s only $10 overnight. That is still better than $0 overnight. Then it’s just a scale game.
This sounds easy but it isn’t. Anyone selling you $200 courses on getting rich is scamming you. It’s not that easy. It is hard, difficult and grinding work. You have to figure it out and honestly some people never do. A bit of luck helps.
Once your second income is up and running you want to make sure it is stable. Stable by definition of this blog is around 2x what you make at your career/job (remember a career is where you’re paid by performance, job is anything hourly wage). Once you’ve successfully reached 2x your income you can quit… Or see the bleed it out part below.
Bleed the Career Out: Everyone has a different “success arc”. This means some people can make a killing in year one and make $1M online out of the gate. Other people struggle to make $5K a year and it takes them 10 years to figure it out. We’re not here to discourage either person. Eventually you do figure out a way to make a secondary form of income and it pushes you along your road to financial independence. The key is “when”.
If you knock it out of the park on day one, you should just quit. It is clear that you’re an anomaly. If you’re in the second camp and it takes you 5-8 years to really figure things out, you should take a calmer approach to your decisions. If it took you 5-10 years to figure it out, there is no reason to leave your career if you haven’t taken your foot off the gas. If you’re a middle of the pack employee you’re actually important to a company. Anyone who is generating operating profits for the firm is an asset. You just want to find a way to improve your operating margins while reducing your time.
The best way to do this is with a slow fade approach. For example, if you work in sales you want to simply maintain your best clients and give up as it relates to finding new ones. There is no reason to get new clients since your goal is to drop your working hours. Once your revenue is stabilized (ideally the same amount every year), you can play less politics and drop your take home pay by 10-15%. You won’t get fired. You will be seen as someone who “hit a wall” and just stagnated. This is perfect for you since you only need to make the same amount of sales and spend the rest of your time on your own projects! Keep this in mind.
The only reason you should quit entirely is if you’ve knocked it out of the park or your career is hindering your side income. This is quite rare. If you’ve successfully built something over 5-10 years, is is much more likely that dedicating 2-3 more hours will lead to more income. So you’re already increasing your exposure to your side income without giving up the steady pay check.
If you want to visualize this, imagine two business lines with revenue streams. If you invest more R&D in the second one you might be able to keep the first business line flattish for the next few years without any time spent!
Another Level of Optimization: If you work in tech you can also attempt to outsource work that you’re supposed to do yourself. This is actually happening all over the place. Unfortunately, we were never able to do this.
If you work in tech, you can take 2-3 jobs and simply outsource them for a lower amount of money. Then you review it and turn it in to the 2-3 people you work for. This sounds “shady and questionable” however, this is happening all over the place. We know of a few people working three “tech jobs” and no one has noticed. Since the majority of the work can be done in 15-20 hours per week, if they outsource it and simply check… they are done with 35 hours a week or so. It’s insane that this much inefficiency exists in the market but COVID-19 and work from home really highlighted it.
For those that are not in tech you should continue to think like this. If you are able to get a second income stream up and running (even barely), you can then begin outsourcing your own work. If you’re in the 23-29 age band, there is a zero shot that all of your work is “necessary”. A lot of it is mindless which you can outsource. This frees up more time to scale your second income stream.
Pause and Zoom Out: People in highly competitive fields focus far too much on “prestige” when they should be more focused on productivity. Since we have a banking background we’ll give a concrete example. If you have the choice between a sweatshop like Moelis or a solid BB with less work, you should choose the solid BB. If you are in the industry for more than a year you will find which groups have easier hours and simply lateral over to that firm. Why? You’re not there for an extra $20K. That’s the dumb way to try to make it.
You’re there to be top bucket, be around 10-15% of the highest paid people and work 20 hours less. Those 20 hours will build up a second income stream so you don’t have to panic before your annual bonus hits. The standard move on wall street is to spend your base salary and save your bonus. This is why they end up becoming miserable as a 5 year career will have a terrible bonus year at least once given the secular decline of the industry.
What to Do With Your Money: Well we gave out highlights in our book triangle investing. It’s effectively the same except for a much more bearish outlook on real estate due to 1) evictions starting in April/May and 2) the likely tax target aspect since it’s easier to tax RE. There is no way we could have predicted a global pandemic and we certainly got lucky predicting a recession by 2021 in our book Spending for Maximum return.
That is neither here nor there. As usual we focus on the present. All that really happened is that triangle investing accelerated. Crypto is taking off, Tech is taking off, healthcare is taking off and we remain positive on the other markets we highlighted there. The only thing we would do is reduce real estate footprint if you have a lot of it. Since most of our readers are young we’d recommend the same: 1) rent to remain mobile or 2) if you found a place you love, it’s best to only have one spot and keep underneath 18btc (also known as $1M USD token).
The rest of your money is going to be put into your online income ventures . While everyone is absolutely hyped about the future of tech, we would like to remind everyone that having multiple forms of income is most important. Hence why we created this post here. Remember to play the game intelligently and all your free time will then be tossed into the investment angle highlighted in Triangle Investing.
