People are amazed at the kind of money some financiers, like the Oracle of Omaha – Warren Buffet, make in finance, and endlessly curious how.
In financial businesses, success and failure are quite like running a roller coaster. It takes tenacity to stay the course and grow a fortune from such humble beginnings. Many can’t figure out how I ended up with my current fortune after declining to follow in the footsteps of my father and enter medicine, in yesteryears seen as a lucrative career option. Strangely, perhaps, even though my dad was a doctor in the UK, we lived in a humble one-bedroom flat. That may have been a reason why I never quite associated wealth with doctors.
Anyway, to get back to how one makes money in the finance industry my view is that it comes down to two fundamental things – a good understanding of numbers and people – and a bunch of minor things you can learn or even sidestep.
You must be a wizard with numbers. Without it, you are not in the game at all. You must equally love numbers. You must be able to play with them in your mind at all times. Cut and dice them in your sleep, as easily as when you are awake. Otherwise, you will get called out on the trading desk, the rich motherlode in the world of finance.
But why people?
No matter how much we work with numbers, never forget that business is about people and done by people. It matters more in finance than you would think. This is because finance is an incredibly speedy business. Deals are done at the blink of an eye. While people can and do put a lot of faith in numbers, when investing, they seek more – equal faith in people, for example. Trust is a huge thing. Without that, people will not invest thousands and millions of dollars into a trade. So you need to be able to build long term relationships with people interested in these kind of markets.
Nobody should apologize for being ambitious. Early on, I had my sights on a bigger goal. I realised, to get where what I wanted to be, I would need to make friends and gain mentors on the trading desk. When you are able to do that, your clients and customers choose to be your friends. And then you can take it one more step and socialise with your clients so that your work life becomes your social life as well. Then you enjoy going dining with business associates, or playing golf. It feels less and less like business, and more and more like a day out with friends. And that’s how you build a good old boys’ network, the value of which to your success is immeasurable.
That said, you might ask: how does one get to the trading desk in the first place?
I think you need, most of all, a burning desire to get there, and a certain apetite for risk. The trading desk is the holy grail. It’s easy to get buried in other departments. To reach my goal and become a trader, I had to be strategic and quit successful jobs at large American banks such as Merrill Lynch and Morgan Stanley in my quest to get a seat on the trading desk. I had to go to a much smaller bank, Donaldson Lufkin & Jenrette (DLJ), to get that coveted spot. And even there, I had to climb my way up from the position of a trading desk assistant.
Hard work brings good luck and later in my career, I earned a share of it. When Credit Suisse acquired DLJ, almost everybody lost their jobs. I survived because I had accumulated knowledge that was useful for the future success of the bank. Six months on, I got confirmed on the much larger desk of Credit Suisse, and that’s the story of how I earned my trading spurs.
I went on to work for ING and Rabobank before the proverbial entrepreneurial bug bit me. It was 2008, when the global financial crisis caused a huge meltdown in finance. Most banks were hit by scandals, not to mention financial crisis and sharp downsizing. In that environment, there were few jobs available to anyone. So much so, many traders left the City of London altogether, seeking other careers.
That is when I set up my own shop – starting Solo Capital, a securities brokerage. It has paid off handsomely. As it turned out, the business was hitting the eight-figure mark in its second year. It has not only changed my life and the lives of my family, but also of our extended family and all the good causes we are now able to support. So I can honestly say that breaking the mould, not living up to my father’s expectations and forging my own destiny was the best decision I made.