That’s how I saw money: freedom.

On my road trip, I am free as long as I can pay for gas, food, repairs, and a place to stay. Had I not saved up while working in finance, my options would be much more limited. Even so, I rarely eat out and stay in small towns, far away from the well-heeled crowd of tourists. And of course you could move relatively freely with very little money.

On the road from Boise, Idaho, to Eugene, Oregon, I met a drifter. “Dancing bear” Paul was walking along the highway, pushing a cart with his belongings. It spent the better part of the day driving across eastern Oregon’s high desert and this man was just walking (and aimed to make it to New Mexico eventually)! I passed him a cold Gatorade and listened to his story.

Paul had followed the Grateful Dead for some two decades. He knew where to find free hot springs and how to charm cops and rangers. His Robin Williams impression was immaculate (but, he noted sadly, he couldn’t perform in Vegas because he lacked permission by the comedian’s estate). I’ve rarely met such a free spirit! And yet, his movement on the material plane was limited. The body was free but also looking for free food. Free without a place to shower. Not the freedom I was looking for.

The freedom I longed for was captured in a viral video clip I posted years ago. It’s from the movie The Gambler. Poker addict Mark Wahlberg needs to borrow money and gets a lecture from John Goodman who explains that “a wise man's life is based in fuck you.” → Watch the clip.

 You get up two and a half million dollars, any asshole in the world knows what to do. You get a house with a 25-year roof, an indestructible Jap economy shitbox. You put the rest into the system at three to five percent to pay your taxes and that’s your base, get me?

That’s your fortress of fucking solitude. That puts you for the rest of your life at a level of fuck you. Somebody wants you to do something, fuck you. Boss pisses you off, fuck you.

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That’s what I wanted. Freedom of movement, time, and choice. Freedom to roam, to flourish, and freedom to say no. Naively, I thought that more money necessarily meant more freedom. Like so:

But notice that the quote was all about the number and ignored the mindset. If I taught you how to earn, say, five million dollars in the next five years, would you be free? It depends. What if you moved along another rather depressing path?

How could this happen?

Hedonic treadmill: oldest trap in the book. Expenses grow faster than income and you never reach the promised land of ‘fuck you.’ The finance version of this is Kevin Spacey as a middle-aged trader in Margin Call. (Not to be confused with consciously trading some freedom for meaning by providing for others/raising a family.)

The inverse would be delayed gratification taken to an extreme: Marshmallow Mind, or the mistaken belief that the rewards “compound forever. They don’t. Eventually, they turn into a trap whose escape requires a radical break with our old identity.”

Lack of clarity is another killer. If you don’t know how much money you need, the goal post keeps moving (great chart via Hampton Founder; it’s always at least double of what you have . . .). “Most of the problems in my life have to do with my confusing what I want and what I need,” as David Foster Wallace once said.

And how much do we need? I love how Vivid Void put it:

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That’s why we do the inner work: so we don’t try to use money to satisfy our existential yearnings.

Easier said than done. We know that making money is not the purpose of life. Of course, money won’t fill our inner void. But what will? A thorny question (and potential dark night of the soul). If you are very good at making money, if it feels satisfying, it is easier to keep doing that than to stop and step into the unknown.

I think of it like sitting on the couch and eating potato chips. As long as you keep eating, you don’t have to face the mess, the crumbs, the reality of what you just put into your body. Yes, eventually, the bag will be empty. But not yet. Just one more delicious, escapist crunch.

Finally, the better you are at making money, the more you leave on the table when you exit the game. The greater your future earning potential, the higher the price of your freedom. Without clarity on what we value, any amount of money can be a prison.

A “wise man’s life” is based not only on ‘fuck you money’ but on the willingness to use it when it matters.

— Frederik

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Money is a million things, a screen for our projections. We see in it what we value and desire, but also what we judge and reject. Without a bit of “money shadow work,” it is very easy to get in our way.

We look for a solution outside when the solution is to engage with our inner tension and integrate the polarity.

• Without clarity on what we value, any amount of money can be a prison. — Money is Freedom

• Money is a continuous interrogation: what kind of world we want to live? What we are willing to sacrifice? — Money is a Test (What Money Means)

• Our relationship to money is unconscious and steers our life.

• Money can create isolation — Lessons from the Ultra-Wealthy. It can also create connection. The most gratifying investments are in people. How Eighty-One Dollars Made Lyndon Johnson. Money is possibility.

• Money can be freedom, but mixed with guilt it feels like a weight and creates an unconscious effort to lose it. Al Pacino and the Weight of Wealth

• Money work is inner work. Why Fortunes Are Lost (Why Money Work is Inner Work)

• Don’t make money your life’s experiment. Don't be the Bryan Johnson of money

• Easy money makes spending seem inconsequential. Even the father of value investing confused wants and needs. — Ben Graham's Duplex

• Money challenges us in different ways, depending on the money reality we live in. What Money Asks Of Us (The Three Money Realities)

• Good investing is mostly ‘boring’ working with brief moments of excitement. You can learn from any great investor, but often not what you expect. — 11 Things I Learned About Investing

• Money shadow work is crucial. But also: the need for money can be a powerful creative motivator. Leonard Cohen's Blessings in Disguise

• Careful making money your passion (Life is like a jar of marbles)

Posts on money and investing:

Money.

What it’s like to work for billionaire families. — JAB and the Family Office Conundrum

No matter your net worth, unless you explore your feelings and beliefs around money, they will unconsciously steer your life. — Lessons from the Ultra-Wealthy

We think we work hard and save money for ourselves. But our most gratifying investments are in people. — How Eighty-One Dollars Made Lyndon Johnson

Money can trigger feelings of guilt and an unconscious effort to lose it again. — Al Pacino and the Weight of Wealth

Careful what life experiments you run. — Don't be the Bryan Johnson of money

When money comes easily, potential mistakes seem inconsequential. Even the father of value investing confused his wants and his needs. — Ben Graham's Duplex

Life with money is like a continuous test. It asks what kind of world we want to live in and what we are willing to sacrifice. — Money is a Test (What Money Means)

Depending on the money reality we live in — lack, affluence, abundance — money challenges us in different ways. — What Money Asks Of Us (The Three Money Realities)

The real money work is inner work. — Why Fortunes Are Lost (Why Money Work is Inner Work)

Investing.

Good investing is mostly ‘boring’ working with brief moments of excitement. You can learn from any great investor, but often not what you expect. — 11 Things I Learned About Investing

When I got divorced, I was in a bad state of denial. I pretended it didn’t hurt. … I pulled back into a shell. Unable to find a happy path myself, I had a hard time watching others succeed. Their achievements seemed like an indictment of my own failures. — Divorce, Denial, Dissonance Reduction

“The speculator's chief enemies are always boring from within.” — Mistakes Were Made (I did a dumb thing)

Investing and creative work require mastering the ‘funnel problem’, the process leading from ideas to action, from input to output. — Filtering The Idea Funnel

We learn by studying history and our own mistakes and actions. But if we hold on to our memories too tightly, we close ourselves off from the present. — The Market Has No Memory. Should We?

What is a shared trait among successful investors? They think deeply about the game they play and where to look for opportunities. — What creates opportunities in markets

Professional investing is not a game for the lazy, but it is for those who manage their energy and attention best. — Between Rest and Overdrive: Are Great Investors Lazy?

Highly concentrated bets rest on invisible layers of conviction. — Soros’s Layers of Conviction

• Zooming in on History

• Betting on Change

The goal was a large amount of money. That, I figured, was success. It seemed ambitious but, frankly, the number didn’t mean anything. It disappeared from my mind as soon as I closed the spreadsheet. Its most important quality, its only important quality was that it could be measured.

“In our society, money is like health,” someone told me over dinner last week. When you have it, you don’t think about it much. But when you don’t, it’s hard to focus on anything else.

But wait: here is a counterexample: Bryan Johnson who turned his life into an anti-aging experiment.

At first, Johnson aged like the rest of us. Then he decided not to die. Now he tracks lots of biomarkers and despite being in pretty much perfect health, he is completely preoccupied with it.

There is another man working to “push the man upstairs back” as far as possible — 92-year-old former market wizard Ed Thorp (my profile: Survival of the Fittest Mind). Compared to Johnson, what Thorp does is … boring. He uses a trader’s framework: control downside, capture upside, no crazy experiments, limit complexity. Exercise, regular checkups, basic supplements, some drugs, thinking through risks independently. (He recommends Outlive by Peter Attia).

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It is a book about dealing with change and suffering, about war, the gulag, and an unexpected revolution. But a level below that I found people wrestling with the rapid and profound change brought about by money. Practically overnight, the formerly communist citizens had to make sense of it. “We had to relearn how to live from scratch,” one woman explained. “Before, I had hated money, I didn’t know what it was. My family never talked about it—it was considered shameful. We grew up in a country where money essentially did not exist.”

Money transformed lives, altered values, and turned hierarchies upside down. One communist party secretary recalled meeting her former driver who she barely recognized in his “buzz cut, leather jacket, and tracksuit.” The man had joined the new elite of entrepreneurs, hustlers, and gangsters. While the party was going out of business, he was making a fortune with jeans.

“He bragged about making more money in one day than the first secretary of the district Party committee made in a month,” the woman recalled. “These jeans-mongers will be the ones running our government,” she realized in horror. “They’ll build their factories up from the basements.” And that, she reminisced years later, was exactly what happened.

Yuval Harari called money the “most successful story ever” and “the most universal and most efficient system of mutual trust ever devised.” For Soviet citizens, it was a new story. “The discovery of money hit us like an atom bomb,” one of them explained.

There are many ways of looking at money: its function, its qualities, who owns it, where it flows, who controls its supply, and who sets its price. Elon Musk views money as information, a “database for resource allocation across time and space.” Brett Scott framed it as a network, a nervous system. A story, a promise, a system of trust, a way to transact, a network, a representation of our productive and creative capacity — money is all of these analogies and many more.

We take money for granted. It is a base layer of our world, like electricity. Similarly to electricity, we notice its absence immediately. During a power outage, steaks melt in the freezer. Without money, the affluent society’s goods are painfully out of reach. But unlike the power grid, money is inherently social and our relationship with it is emotional.

I find money to be one of the ‘stickiest’ substances I can think of. Being trained as an investor did not make me “good” with money. My relationship with it remained ambivalent and anchored in my past. I discovered that my knowledge about it was overshadowed by my unconscious attitude toward it. And where did that come from? I began to investigate my family’s contradictory attitudes to money.

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Pacino grew up poor in the Bronx. Life before making it as an actor was rough. “I tried it as a busboy and I didn’t make it,” he remembers. “They caught me eating off the leftovers from the tables. That’s how hungry I was.”

With that kind of childhood, I would have expected him to be extremely cautious and conservative with his money. I would have assumed he would avoid losing his money at all costs. Instead, he went broke twice.

The second time he was 70 years old, and the comeback was difficult. That’s when he joined Adam Sandler to make Jack and Jill which has a 3.3 score on IMDB. That must have been a difficult movie to make for an actor who adores Shakespeare and calls Chekhov his savior. “I never got into doing acting for money,” Pacino writes. “Except when I went broke. Then I got into it.”

“My life was costing me a fortune,” he writes, “my staff was getting bigger, and I was taking care of two homes, my apartments, and an office, and supporting the households of my children. I was spending three or four hundred thousand dollars a month…”

So what, you may ask? We know that’s not smart. Well, even he knew that. And yet he did it, twice. What he did is not as interesting as why he may have done it.

Pacino made it to the third money reality, abundance, and his memoir is filled with ambivalence about it. At times, I wondered if his wealth felt like a weight, whether a part of him rejected it.

“I've known very bright people that do not have money minds,” Warren Buffett once said, “and they can make very unintelligent decisions.” We don’t get to choose what kind of “money mind” we have. I used to think education was key. The more you learn, the more you wire your mind for success. But people like Pacino and Leonard Cohen had access to the best resources and advice, yet they went full circle.

I believe we all carry a collection of unconscious ‘money baggage,’ like a boulder. This weight makes the journey more difficult. It may block our sight or get in the way. It could even, as happened to Pacino, overwhelm us at a time of weakness and drag us back down in a tragic act of self-defeat.

Of course, this is an exercise in speculation. I don’t know what really went on in Al Pacino’s head. I suspect he doesn’t know either. The mind is too complex and memory plays tricks on us. Even so, his book offers a unique glimpse at how issues of mindset, identity, insecurity, and guilt can shape the relationship to money.

Let’s start with Pacino’s tone of helplessness. “Somehow I had managed to go broke,” he writes. “I could say I got taken advantage of. I could blame my accountants. I could blame Marty Bregman, who had put me into some sort of tax shelter that went south. I could blame myself, but then I’d have to take responsibility for my own actions.”

That’s a theme throughout the book. He reflects on bad money behavior with a kind of shrug. The first time he went broke, Diane Keaton confronted his lawyer.

She was practically grabbing him by the lapels: “No, tell me who he is.” He started to speak, but Diane jumped in again: “Yeah, you’re going to tell me, ‘Oh, he’s an artist.’ No. He. Is. An idiot.”

I just stood there. What could I say?

Diane went on: “He’s an ignoramus. When it comes to this, you’ve got to take care of him.”

And he just… agreed. “She was right. I didn’t understand how money worked, any more than I understood how a career worked. It was a language I just didn’t speak.”

When it came to business, he needed to be taken care of (Fredo in The Godfather comes to mind…). I think this defeatist mindset was formed in the poverty of his childhood:

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I’m not talking about the uncomfortable truth that America’s ports are awfully inefficient, particularly compared to Chinese ones. I’m talking about the glimpse behind the curtain of our culture. For a few days, it felt like we were revealed to be characters in René Girard’s Theater of Envy.

It all started because union boss Harold Daggett apparently never read Peter Thiel’s Zero to One.

Daggett lives in a very nice house and the members of his union get paid very well. In fact, many get paid not to work thanks to a previous effort to block innovation in the form of shipping containers. But nobody cared until Daggett violated the first rule of rent-seeking: you do not talk about the racket.

“All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.” — Zero to One.

“Every great business,” Thiel wrote, “is built around a secret.” That secret is a way of avoiding competition and it is in the company’s best interest to carefully conceal it from competitors and regulators. Daggett did the opposite. “I’ll cripple ya,” he told the nation. “And you have no idea what that means.”

It was like that scene in Goodfellas when after the Lufthansa heist, gangsters buy fur coats and Cadillacs. Jimmy Conway loses his mind when he realizes that his crew will attract attention. Soon after, people show up in body bags.

Competition makes capitalism effective, yet successful capitalists avoid it. Investors are quite comfortable with this paradox. They recognize that finding moats is a profitable riddle (see for example a new paper by Michael Mauboussin). In other words, if Google lacks competition, add it to your portfolio. But if a union uses its power to extract a payoff, it sparks conflict (I read Daggett was shocked by the blowback and even received death threats).

I think there is more to it than the fact that they are on opposite sides of innovation. I think it is an issue of distance — what René Girard, leaning on Shakespeare, called a ‘Crisis of Degree’.

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I just finished the Cohen biography I’m Your Man and a heartwarming documentary about the origins of Hallelujah, his best-known song (famously covered by Jeff Buckley and many others).

I was struck by a particular aspect of Cohen’s story: his resilience.

You see, by ‘67 Cohen was already an award-winning poet and novelist. The free-spirited bohemian had moved from Montreal to the Greek island of Hydra. There was only one issue: money.

Hydra was cheap, but not cheap enough. “I couldn’t pay my grocery bill,” Cohen explained, “so I would come back to Canada, get various jobs, get that money together plus the boat fare, come back to Greece, and live for as long as that money lasted.”

At a time when people were still reading, Cohen still “couldn’t make a living as an author.” How easy would it have been for him to throw up his hands in resentment and abandon his art. Wasn’t the world telling him that what he did was not valuable enough? Instead, he picked up his guitar and turned poems into songs.

Now let’s fast forward about forty years…

When Cohen’s long-time manager passed away in the 1980s, his assistant Kelley Lynch took over management of Cohen’s affairs. Cohen and Kelly had a brief “casual sexual arrangement” but remained friends and Cohen kept her as his new manager. Artists, am I right? In any event, in the 1990s Cohen spent six years at a Zen monastery. He gave Lynch broad power of attorney over his financial affairs.

In 2004, Cohen’s daughter was warned about Lynch. When Cohen reviewed his accounts, he found that Lynch had been taking money. One of the first things he noticed was a personal American Express bill of $75,000 that Lynch had paid out of Cohen’s accounts. After months of work, his lawyer estimated that “between ten and thirteen million dollars had been improperly taken.”

Cohen was 70 years old. One day, as he put it, he “walked to the ATM” and his money was gone.

It seems to me there were two ways he could have responded.

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“I never cared about money,” Director Francis Ford Coppola said recently. “The money doesn’t matter. What’s important are friends because a friend will never let you down. Money may evaporate.”

First off, I respect his belief in friendship. No cynicism detected. Second, if you believe money can just evaporate, does the Law of Correspondence dictate that you will lose your fortune by spending it on Megalopolis?

Anyway, what a thing to say — money doesn’t matter. How out of touch must this sound to people working hard to pay their bills?

Well, Coppola lives in money reality number three — abundance. His statement reflects that money has already solved the problems that can be solved by money.

Because progress with money can be easily measured, it’s tempting to think it will improve our lives in a predictable way. This is not so.

Nick Maggiulli once summarized the conventional explanation of the relationship between money and happiness.

If you have a lower income, more income probably will make you happier.

If you have a high income and are unhappy, more income probably won’t make you happier.

The more money you make, the less effective it is in increasing your happiness. But I think there is more going on than declining marginal utility.

The way I see it, there are at least three ‘money realities’ — call them lack, affluence, and abundance — and at each level, the nature of money changes. At each level, money asks us a different question.

Ironically, at each level, people feel misunderstood.

Lack: They say the world is richer than ever, yet I don’t have enough money.

Affluence: It may look like I have a lot, yet somehow there is not enough.

Abundance: Because I am rich, people assume I am happy and have no problems. They look at me with envy and no longer see me as a human being worthy of empathy.

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Caro started out as an investigative journalist. The first time he sifted through public records all night by himself, he entered a flow state. He felt “at home” while making the files “them yield up their secrets.” To him “each discovery was a thrill.”

Why did those raw files affect him so much? “In part, perhaps, because they are closer to reality, to genuineness,” he reflected. “Not filtered, cleaned up, through press releases or, years later, in books.”

Caro discovered two truths: one about the story he was investigating, the other about himself. “I will never forget that night,” he wrote.

"The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka' but 'That's funny...'" — Isaac Asimov

Caro’s experience reminded me of what it was like to be an investor. Paradoxically, good investing is boring, yet discovering a great investment is exciting. It’s like the investor looks around, stops, squints, and goes “Oh, that’s weird.”

This is also what made great investors interesting to me. They spent their lives trying to find what others missed and their careers seemed like portfolios of surprising insights. I found the same curiosity in both Caro and Mr. Beast and it felt as inspiring as their passion.

I also recognized the thrill of discovery as a part of my journey to writing. Years ago, tired of working with numbers, I ventured to the library to skim old profiles and interviews. Among the dry record of economic history unfolding, I found the odd quote, a little gem of insight into markets or life.

Investors and journalists “are in the same business,” Buffett once said. “I assign myself a story,” he explained. “The story always happens to be what is X worth, but that’s a story.” Buffett investigates valuation, but for his story to be valuable, it must reveal a gap between perception and reality, between his conclusion and the market. That distance contains his variant perception, the seed of an investment thesis.

“That’s my job,” Jerry Seinfeld once told Playboy Magazine. “To understand what’s going on in life, to figure it out. The news, books, magazines and films cover a certain portion of what’s going on. But there’s a lot of stuff that’s not touched on, and that’s my job.”

Journalists, writers, comedians, founders, and scientists are all in the business of sifting the world for nuggets of truth. They look for the gap that reveals a story, an investment idea, a punchline.

“I have a friend who’s not a comedian, he’s a computer analyst,” Seinfeld quipped. “He’s always going, “See, there’s something funny about this saltshaker, but I can’t see it. You could see it.” And it frustrates him. He’s looking at the saltshaker and I’m looking at the saltshaker, and he knows there’s a joke there. He can’t find it.”

That’s the truth sifter’s job: to find the ‘funny’ hiding in the saltshaker.

If that’s you — if you can’t help but look for the “endless number of human truths” as Svetlana Alexievich put it in Secondhand Time — you are both lucky but also face a significant challenge.

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“Mozart,” he says, “I want to write symphonies”.

And Mozart says, “How old are you?”

The man replies; “I’m 23.” And Mozart says, “You’re too young to write symphonies.”

The man replies: “But Mozart you were writing symphonies when you were 10 years old.”

“Yes, but I wasn’t asking other people how to do it.”

Unfortunately, the story misses the point (I wrote about it years ago in Thinking About the Next Warren Buffet). This was Munger’s answer to the question “How do I become a billionaire, like you, but faster?” That’s not asking for mentorship but for a shortcut.

And it wasn’t how Buffett and Munger answered a question about finding an investing mentor in 1998 (unfortunately, they didn’t get into it either).

More importantly, Mozart may have been a wunderkind, but the rest of us are not. Investing is at its heart an apprenticeship business (Kyle Harrison just wrote about that) and while it’s possible to hack your way in, as Michael Burry did, mentorship is a common thread among successful investors.

Druckenmiller was mentored by his first boss and later George Soros. Paul Tudor Jones was mentored by cotton trader Eli Tullis. Seth Klarman learned from Max Heine and Michael Price. Sam Zell and Ron Baron talked about Jay Pritzker.

Mark Leonard of Constellation Software began his career “very tech-oriented, very much into science” but recalled his “most important mentor” taught him to focus on business models and quality. Leonard revisited his venture firm’s deals and found a sweet spot in niche vertical software companies. (Sadly that interview has been taken down — the mentor was Steve Scotchmer.)

“If you're early on in your career and they give you a choice between a great mentor or higher pay,” Stanley Druckenmiller said, “take the mentor every time. It's not even close.”

Buffett understood the value of a great mentor as well as anybody. After studying under Ben Graham, he offered to work for his idol for free. He was rebuffed and moved back to Omaha yet kept trying. From The Snowball:

For two years, Warren had kept corresponding with Ben Graham. He suggested stock ideas like Greif Bros. Cooperage, a company he and his father had bought for their partnership. He traveled to New York periodically and dropped in on Graham-Newman.

“I would always try to see Mr. Graham.”

Surely it wasn’t typical for former students to hang about at Graham-Newman.

“No, well, I was persistent.”

By the time the local Republican Party slammed the door to the Senate nomination in his father’s face, Warren was already on his way to New York. “Ben wrote and said, ‘Come on back.’ His partner, Jerry Newman, explained it by saying, ‘You know, we just checked you out a little further.’ I felt I’d struck the mother lode.” Whether he would accept the position was never in question.

Warren was so excited about being hired that he arrived in New York on August 1, 1954, and showed up at his new job at Graham-Newman on August 2, a month before his official starting date.

He was so excited to work for Graham that he arrived at work a month early.

Having some kind of mentor or benefactor is one of the patterns identified by the authors of From Predators to Icons (see How Fortunes Are Made). The benefits include access to knowledge, capital, opportunities, and networks. Where would Bernard Arnault be without Antoine Bernheim of Lazard who opened doors and helped with capital for Arnault’s first takeover? Having a mentor is a personal competitive advantage.

Byron Wien observed two categories of mentors:

There are those you work with every day who are continuously guiding you to improved performance.

The second type of mentor is one whom you see intermittently. These individuals provide guidance because of who they are and what they do.

Some firms are all about selecting and developing talent. They create tightly-knit ‘mafia’ alumni networks — think Tiger, Goldman, McKinsey. If you’re not at a firm where mentorship is part of the culture, or if you’re trying to break into a different field, it’s only rational to look for the second kind.

But what about the mentor’s perspective? Why would they agree to invest their time and energy?

This seems to have been Spier’s concern. His answer was to “do the work. On your own. Like Mozart did. … And then show me some of your work: A stock write-up. A book review. Something else you have written. A video you made.”

And that’s a fair point. If you’re asking for mentorship, demonstrate that you’re a worthy long-term investment. Showcase curiosity and passion. Show up with your best thoughts and ideas. Better yet, share them online and earn the chance of attracting a mentor.

Even so, there may not be enough time to mentor someone outside the firm.

I used to think Twitter and Zoom made it easier to connect and develop such relationships, but the trade-off is that people are busier, more distracted, and wary of spam. It would be a shame if mentoring went out of fashion — for both mentees and mentors. Engaging with ambitious and curious young minds can be inspiring and a source of energy, not to mention insights into trends in technology and culture. Investing is a game of information, ideas, and access. If you play the game for the long haul, it pays to invest in the next generation.

But the real value of mentoring is the same as that of building any deep relationship: it’s a source of meaning and happiness.

“When your children are grown or if you have no children, always find someone younger to mentor,” Byron Wien wrote in his wonderful 20 Life Lessons. “It is very satisfying to help someone steer through life’s obstacles, and you’ll be surprised at how much you will learn in the process.”

If you’re looking for a mentor, don’t ask how to write symphonies. Instead, demonstrate enthusiasm and curiosity.

The best way to get a mentor is to deserve one. Real talent is always in short supply and a great mentor would be a fool to let it pass by.

— Frederik

👉For those of you early in your careers, I’d be curious what your experience with mentorship has been — have working from home and job hopping killed it? Drop a note in the comments.

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“You know, at one point I had a lot of money on paper,” he reminisced. “I’ve lost all my money. I’ve had to sell almost everything in my life.”

Before writing bestsellers, Frederick Forsyth was a journalist and covered crises like the 1960s Nigerian Civil War. His reports of the country’s terrible famine, he wrote in his memoirs The Outsider, contradicted the messaging by British officials. He was booted from his job. Forsyth became cynical and distrustful of Britain’s institutions and its “mandarins.” With his career taking hits, he processed his experiences into spy thrillers.

Years later, “on a bright, sunny morning in the spring of 1990,” he wrote, “I learned that financially I had been completely and utterly ruined.” His London-based financial advisor turned out to be a fraud.

David Milch’s traumatizing childhood created a genius for observing people and a brilliant ear for dialogue. Milch had to alchemize his experience and created TV shows like NYPD Blue, Deadwood, and Luck that earned him tens of millions of dollars. Late in life, he lost his money in a spree of gambling and spending.

There is a tragic irony to how these three lost their fortunes large and small. Beliefs and abilities that fueled their rise contained the seed of (financial) undoing. It is as if their unconscious proved a point: I can make you, and I sure as hell can break you.

As an entrepreneur, Foley needed conviction bordering on delusion to build his venture. His dreams were so big and vivid, they prevented him from taking chips off the table.

The man who embezzled Forsyth’s money got off easy. The Nigerian famine, Forsyth noted, “deprived me of any faith or trust in the senior mandarins of the Civil Service.” The trial “did the same for my belief in the legal system and the judiciary.” I couldn’t help but think the way he lost his money ‘proved’ what he already believed about the corruption of Britain’s establishment.

Milch was well aware that he carried what he called his father’s “demonic” aspect. He was driven to deep introspection, drug use, and the thrill of gambling whose excitement temporarily suspended the chorus of inner critical voices — until it sunk him.

“Practically everything dies in business,” Charlie Munger once said. “Once I understood that, I think it made me a better investor.” The risk of losing your hard-earned money lurks constantly and in infinite variety.

I used to think the answer — the key to financial success — was knowledge. Financial education is valuable, but these three people were smart and faced no lack of access to information or advice. Instead, knowledge played second fiddle to character traits, biases, and habits. Good behavior beats sophistication (essentially Morgan Housel’s argument in The Psychology of Money).

Now I believe that success with money also reflects our unconscious beliefs about the world, ourselves, and money. It’s like that scene in Mad Men.

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In The Path to Power, Robert Caro recounted how Johnson sat down to write a letter to his friend Ben Crider. As teenagers, the two had been a “two-man pick-and-shovel team” building a road in the dirt-poor Texas Hill Country. While Johnson enrolled at Southwest Texas State Teachers College at San Marcos, Crider moved to California and worked at a cement factory.

Johnson found ingenious ways to earn money on campus but struggled to live within his tight budget. He indulged in frequent haircuts, bought flamboyant clothes, and even a car. By 1927, he was ready to throw in the towel.

“I just can’t make it, and I’ve got to drop out,” he wrote Crider. College was supposed to be his ticket out of poverty, but he was “in debt forty-fifty dollars. And I got tuition time.” He had reached the end of his rope. “I want to come and get a job,” he pleaded. “Can you get me one?”

In California, Crider found himself with two letters: one from Johnson and a second one from Johnson’s mother who begged Crider “to encourage Lyndon to continue in school.”

Crider did what any good friend would do: he spoke to his supervisor and arranged a spot for Johnson. Then he sat down and wrote his reply:

Well, I can get you a job. Five dollars a day. I’ve talked to the superintendent, and he said I’ve got a job waiting for you.

“But,” he added, “I hope you won’t come.”

Crider had stopped by his bank and asked the teller how much money he had in his account — “the amount is recalled variously as $81 or $103 or $106,” Caro wrote. Whatever the figure, Crider withdrew it all ($81 would be about $1,464 today).

“They’re breathing this dust that goes into your lungs,” Crider continued in his letter, “and a lot of them are getting lung disease from it.”

I hope you don’t have a future like that, because it’s Hell out here. I’m sending you all the money I got in the bank, hoping that you’ll stay in college.

Those lines stunned me — and Johnson at the time.

“Eighty-one dollars!” Lyndon Johnson, reminiscing decades later, would recall. “I was the richest man on the campus! And I took that eighty-one dollars, and I paid all my debts, and I paid my next term’s bill.” — Path to Power

I pictured Crider returning to the cement plant, to a maze of pipes and conveyor belts and machines, to the noise and the sweat and the dust. I imagined him at the end of this shift, thinking of the money in his letter as it was crossing the country, hoping that his friend would do better.

Crider was one of many people who supported Johnson, yet this moment felt pivotal and unexpected. It seemed to reveal a truth about money.

Money with a capital ‘M’ — not currency, not coins — is a kind of social energy. It is like a current that only flows when people interact and exchange things of value. Until people use it, its energy lies dormant.

When we work hard and save money, we think we do it for ourselves. We worry about retirement, we plan to buy a house, we want to feel secure. But the most rewarding ways to use this energy will be opportunities that benefit others — the most gratifying investments will be the ones in people.

As Johnson’s example shows, even small amounts of money, shared with the right person at the right time, can change the course of history. If you doubt this, ask a working mom.

Years later, during the Great Depression, Johnson got Crider a job as an appraiser with the Federal Land Bank’s Houston office. “The best job I ever had,” Crider recounted.

The energy of Money is meant to be shared. You can’t predict what good can come out of it.

Frederik

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A few days ago, I was hiking around a Tyrolean lake. My eyes were scanning the sky. The day had begun dark and cloudy and I had left Mayrhofen hoping for better weather. I was lucky: for a few hours, the air around the lake was clear. But by the time I reached the end of the valley, the wind was picking up.

I watched dark clouds appear above me at the mountain ridge. Next to me, groups of climbers put on their rain capes and wrapped their backpacks in tarps. They proceed up the path with their hiking sticks and heavy weatherproof boots. By comparison, my outfit was that of a casual hiker. I had not prepared for a treacherous climb in the rain. As I looped back around the lake, I felt the first drops on my shoulders.

The experience reminded me of an anecdote from Into Thin Air, Jon Krakauer’s tale of the Mount Everest climbing disaster. Near the peak, Krakauer passed by Martin Adams, a “small, pugnacious Texan” and former bond trader. Krakauer was descending and noticed clouds filling the valleys below. They obscured “all but the highest peaks.” Unfortunately, he didn’t know what to make of his observation.

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At first, Franklin was disappointed, H.W. Brands recounted in The First American. There was a storm, yet the metal key “gave no indication of absorbing an electrical charge.” Then he noticed that loose threads on the rope were standing upright, “just as if they had been suspended on a common conductor.” He moved his hand toward the key and “perceived a very evident electric spark.”

Consider what was necessary for this moment to happen. I’m not talking about buying a kite but about time and choices.

My mental image of Franklin had long been that of a patron saint for self-made capitalists (with Charlie Munger as his most prominent disciple). I thought of his aphorisms and virtues like industriousness (“He that rises late must trot all day.”), thrift (“A penny saved is a penny earned.”), and prudence (“Rather go to bed without dinner than to rise in debt.”). These, Walter Isaacson wrote in Benjamin Franklin: An American Life, together with Franklin’s distaste for “hereditary privileges” and the “idle landowning leisure class,” shaped “the outlook of much of America’s middle class.”

But what stands out to me today is that Franklin retired at 42 — his life was basically an early example of FIRE (Financial Independence, Retire Early). A little thought experiment illustrates what I call money’s potato chip problem and why we need examples like Franklin to get us on the right path.

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It could have been about patience. This is one reason I meditate, to meet what happens with equanimity. But it could also have been a test of decisiveness. Once the delays start, do you reschedule or wait until the bitter end? Do you cut your losses or cling to hope? I left the airport at 1.30 in the morning, which tells you everything about my ability to exit a losing position.

I was reminded of Into Thin Air, Jon Krakauer’s account of the 1996 Mount Everest disaster during which eight climbers perished. Krakauer makes two astute observations about the nature of ambition and risk-taking. It may be easier to learn these lessons through stories in an analogous domain like mountaineering because the specifics don’t become a distraction (you don’t wonder if today’s market is like the one in 1996 when reading about people climbing rocks).

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Why not work harder, the tourist prods the fisherman. Why would I do that, he responds. His life, he explains, is full: he sleeps in, goes fishing, plays with his children, takes a siesta, and spends the evenings in the village with his wife and friends. This the banker can’t accept. Hustle and buy more boats, she suggests. Build a business, upgrade your morning routine, listen to the Huberman podcast, and so on. Once wealthy, the fisherman would finally be free to rest and relax.

I used to like the story and its simple prompt to examine our lives and ambitions. I appreciated the warning not to project our values onto others. However, a few days on Martha’s Vineyard changed my mind. You see, the story pretends that the banker and the fisherman live in different worlds. It fails to consider that the banker has Instagram.

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First, could it be rational? The company can raise capital at an inflated valuation and acquire or create value assets. Could this turn into a rare example of George Soros’s theory of reflexivity at work? I doubt it. Soros observed reflexivity in markets as a self-reinforcing phenomenon. An “imperfect understanding” by market participants changes fundamentals which feeds back and further increases the disconnect between value and price. But in this case, there is no misperception. Nobody cares about the fundamentals.

No, it seemed like a classic case of greater fool theory. The individual trader hopes to get on and off the train profitably, but in the end, someone holds the bag. But what if a public figure, a confident communicator representing ‘Smart Money’, makes people feel they have permission to play?

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Dad did his best to help but I just wanted to hang up. I wanted to flee the gravity vortex that seemed to pull me into the pavement. And I kept thinking, wait, you asked for this! Later, I realized that I had been playing an unconscious game as described in the book The Games People Play, Eric Berne’s 1960s classic on transactional analysis.

According to Berne, people satisfy their hunger for stimulus and recognition by playing unconscious games “which form the most important aspect of social life all over the world.” The unhealthy ones lead to the therapist’s office or worse. His framework also made me reflect on the game of investing. A lack of awareness can wreck not just relationships but torpedo our success in markets.

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Like when I was getting divorced and struggling with my career”. The world felt dark and depressing. The next crash, I was sure, was around the corner. The result? I lost money shorting a bull market. A few years ago, I bought warrants in a SPAC. This was supposed to be my winning lottery ticket, my path to effortless financial freedom. I was destined to be another smiling meme stock millionaire. The SPAC didn’t do a deal, the warrants went to zero. There’s nothing wrong per se with buying an option on an asymmetric outcome, but I had made the position painfully large. I had been stupid and greedy and I remember the feeling (I felt like I’d watched myself as Stan in South Park’s immortal aaand it’s gone).

Losing money is painful which, paradoxically, makes it valuable. There is no other teacher like it.

Books can remind you of the importance of risk. Your advisor’s questionnaire can help you ponder it. they pale compared to the visceral experience of seeing your account balance decline. No, thinking is not enough. To understand the importance of risk, you have to feel it.

When Jack Schwager interviewed Paul Tudor Jones for Market Wizards, he asked the legend if any trades stood out in his memory. Yes, Jones exclaimed and recounted trading cotton futures early in his career. The market was trading in a range and Jones built a substantial position expecting a breakout to the upside. After a brief dip, Jones added with a “macho-type bid that I should never have made.”

When the price started falling, it took Jones valuable time to bail out of his much too-large position. His accounts were down “something like 60 to 70 percent.”

Why did this trade stick out among thousands? Jones called it a “cathartic experience” and the moment when he decided to “become very disciplined” and “learn money management,” trader jargon for risk management. “One learns the most from mistakes,” he reminisced, “not successes.’”1

What if a significant loss was the price to pay to grasp the importance of risk and ensure a focus on survival, the most important factor for long-term success?

Mistakes leave scars and the best in the game don’t hide them. They wear them with pride. People like Jim Simons grasped the value of a visceral memory to keep them humble, vigilant, and alive in markets.

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But then you ponder someone like Buffett — a singular obsession with business, a photographic memory, and ice in his veins when it comes to markets. The legendary players are outliers.

In the 1980s, two Chicago traders asked themselves the same question: nature or nurture? They made a bet, like in the classic Wall Street movie Trading Places. Could they teach a group of people their method and would they succeed?

Richard Dennis (profiled in Market Wizards) believed trading could be taught and that traders could be grown “like they grow turtles in Singapore” (hence the name of their students, ‘turtle traders’). His partner Bill Eckhardt thought you either had it in you or you didn’t.

“Trading was more teachable than I ever imagined,” Dennis reminisced. “It was teachable beyond my wildest imagination.” But that’s not the whole story. They were both right: despite approaching the market from the opposite perspective of someone like Buffett, the turtles shared key characteristics with him.

The story reveals a more important question than ‘nature vs. nurture’: the price of success in markets.

“I think it’s far more important to know what Freud thinks about death wishes than what Milton Friedman thinks about deficit spending.” — Richard Dennis

This piece is based on Michael Covel’s The Complete Turtle Trader, which I’d recommend to anyone actively investing because its lessons — the lessons of any good market story — are not about a specific strategy but human nature.

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