Letter To a Young College Student – 10 Things I Wish I Had Known When I Was Younger

Three weeks ago, Dylan sent me a message and asked the following (see below).  This is my response.

I’ve been meaning for a long time to ask what you specifically think someone in my position- a young person just leaving high school and entering college- should do to end up in a position similar to yours at a similar age (I believe you’re about ten years my senior). I’m currently in a special program for mathematics and economics at an elite university, and I’ve been told many times that my opportunities in this position are enviable. However, a lot of the advice I’ve read from you has surpassed the more common notions on many subjects, and I suspect that what you may have to say would be more helpful to me than the very conventional advice I’ve received thus far.

Dear Dylan,

As a general rule, there are countless ways to success in life, just as there are too many ways to count for someone leaving from New York to get to California – back roads, highways, planes, trains, buses, detours … so how you get where you want to go not even you know at this point.  Life happens.  But if I were writing to myself at your age, these are the ten things I wish I had known then that would have been useful and that could have helped me.

1. Remember That Independence Is Control Over Your Time

The biggest luxury you will ever earn in your life is control over your time.  That means you can do what you want, when you want, and how you want and still earn enough to afford the lifestyle you desire.

For some people, the price of this independence is lower than it is for others because they truly don’t care if they drive a Ford or Bentley.  For other men, the cost of admission is much higher because they get pleasure and utility out of diamond tipped pens and gold-rimmed china.  No one can answer this question but you.  Furthermore, there is no right or wrong answer.

The practical implication of this knowledge is that every decision you make in your career should involve weighing the monetary trade-offs with the lifestyle trade-offs.  Too many men make the tragic mistake of believing that their goal is to die with the highest net worth possible.  It’s not.  A better goal is to die with the highest net worth possible consistent with the lifestyle you wanted to lead doing the things you loved with your time.

In my own case, I would be much happier with a $50 million net worth, reading books by the fireplace of my office in a skyscraper, putting money to work in projects that excited me, and answering to no one than I would be with a $1 billion net worth working as a trial lawyer that chased ambulances or suing pharmaceutical companies for a living.  If the great passion of my life ever became “work” where I dreaded turning on the light switch in the morning, I’d shut down everything, sell it off to the highest bidder, and start with a fresh canvas upon which to paint.

2. Focus On What You Really Want, Not What You Think You Should Want

There is a day, at some point in the future, when you will put on your favorite shirt for the final time, listen to your favorite song for the final time, see your loved ones for the final time, and take your last breath.  No matter what we achieve in life, both you and I will die.  Nothing can change that.  It is an inescapable reality that is as natural as our birth.

When you realize that every second between this moment and that final breath is one that we did nothing to earn and that you can never get back once spent, it becomes crystal clear that you shouldn’t waste the precious currency of your life on people, jobs, or situations that don’t matter or add to your personal happiness.  (Today is a gift, that is why it is called “the present”.)

This hearkens  back to an old saying:

When you are twenty, you are worried about what everyone thinks of you.  When you are forty, you don’t care what anyone thinks of you.  When you are sixty, you realize no one was thinking about you at all.

Trying to live for other peoples’ happiness isn’t “responsible” or “duty”.  If their happiness requires your sacrifice, they don’t really love you at all because they are demanding that you pay the price for their contentment.

That means you should find the great spark that illuminates your innermost soul.  For me, it is creating excellence.  Money just happens to be the method through which I accomplish it.  When I sit down to my grand piano and compose, I am doing the same thing as when I make an investment or expand a company – I’m working to leave something excellent in the world.  That is what motivates me.  Profit and applause are merely symbols of the achievement.  Alone, they would be worthless and bring me no pleasure.

One of the reasons I am successful is because I understand this about myself.  When I was in high school, some friends decided to pool their cash and buy a Powerball Lottery Ticket for a chance to win the $100+ million jackpot.  Finally giving in to peer pressure, I kicked in a few dollars.  As we walked to the parking lot one afternoon, I lamented out loud, “What are we going to do if we win?” almost as a moan.  They looked at me puzzled.  Only Aaron understood me.  Had I won in some remarkable stroke of luck, it would have denied me that which I most wanted since childhood: The chance to build a great fortune and then give it all away to my foundation.  Far from enriching me, it would have robbed me. (Aaron’s solution was simple: He’d establish a family office and pay me a percentage of profits to manage the cash so I didn’t have to feel guilty.  These were the conversations we were having; I realize we were weird teenagers.)

Practically, this is the same lesson a friend shared with me during those same years: Follow your bliss.  Do you like grilled cheese sandwiches better than filet mignon?  Then order it instead, no matter how nice the restaurant or how odd the stares.  Do you secretly hate baseball even though you come from a long line of baseball legends?  Give it up and do what you want.  You cannot be held hostage by the expectations of your family, friends or society.  Chains forged by love and affection are even more evil than those made of iron and steel because they hold you by the gun point of your own goodwill toward those about whom you care.

3. Choose Your Friendships and Romances Carefully

There is perhaps no more powerful influence on the trajectory of your life than the man or woman you marry. He or she can act as an ocean current, helping you achieve your life goals more quickly or slowing your journey.  That is, if you want a huge estate and fame in your field, but your spouse wants you home every night watching movies instead of following your passion, you have unnecessarily restrained yourself like a race horse that has willingly yolked itself to a tortoise.  You will never be truly free to enjoy, experience or achieve.

The same is true of friendships.  You will eventually become the people with whom you associate.  This is due, in part, to the incomprehensible power of social proof.  Studies have even gone so far as to show that the greatest indicator of whether someone is fat or thin is whether their friends are in shape; it is the social pressure of remaining “part of the group” that exercises relentlessly on the human mind, subconsciously guiding your every action and step.

I’ve long held the theory that you instinctively know who your friends are by the degree to which you have to censor yourself in their presence.  The saying is true: It’s better to be hated for what you are than loved for what you’re not.

4. Choose Experiences Over Material Things

When you look back over your life, what brings the most joy?  The greatest happiness?  The most fondness?  If you are like 99.99% of humanity, specific experiences and memories are what you treasure most.  Study after study has shown that money spent on experiences generates lasting lifetime happiness whereas money spent on material goods doesn’t do anything for your psyche after the joy of ownership has passed.

Once you are financially stable, if the choice comes down to going to Disney World with your kids or adding a few hundred more shares of Procter & Gamble to your portfolio, take the trip.  There is a limit to the utility money has but there is a virtually limitless capacity for enjoyment of great experiences.

This ties in closely with something that is extremely important.  Never forget this, in your personal relationships or in your business dealings:

People won’t remember whether you were right or wrong.  They will remember how you made them feel.

5. Collect Cash Generating Assets, Avoid Liabilities

Some people collect baseball cards, others model trains.  If you go through life collecting assets that throw off cash and avoiding liabilities, over time, you will end up rich.  You can be a school teacher, an artist, an author, a composer, or a lawyer and it will still work for you as long as you avoid getting involved in things that you don’t understand.

No matter how high the return, if you don’t understand how the cash is generated, what the risks are, and / or you can’t afford the loss if it turns out to be a complete wipe-out, just walk away from the deal.  In order to compound your money you must have money to compound.

6. Don’t Take Yourself Too Seriously

The biggest deal of your career?  The most important exam you’ve ever taken?  The bottom line is if you looked up in the sky and realized the Earth was going to be wiped out by an asteroid in 24 hours, it is probably the last thing you’d have on your mind.

Losing a loved one to death, especially a child, is the ultimate tragedy.  Other than that, everything else really isn’t that big of a deal.  Never forget that in almost all cases, you are always free to get up and walk out the door if you don’t like what is happening. Don’t let the power of inertia convince you that circumstances have gone beyond your control.

7. Don’t Allow Mistakes In Other Peoples’ Judgments to Influence Your Sense of Self-Worth or Identity

I know of a man who is roughly the same age I am.  He came only one or two spots away from getting into the most prestigious drama school in the entire world.  When he wasn’t accepted, this brilliant, funny, intelligent, promising guy melted down and failed to achieve anything because his entire identity was wrapped up in getting into this one university.

He had stood before some of the most talented teachers in the world and they had decided “he wasn’t good enough” to get into the school.  So he just gave up.  You will probably never know his name – and I’m convinced he could have been a name brand in the entertainment field.  He allowed other people to determine his self-worth.

Elton John was turned down by every single record label in New York before getting paired up with Bernie Taupin, the lyricist who is responsible for penning the words to virtually all of the famous piano players’ hits.  The A&R folks didn’t think he was good enough.  J.K. Rowling saw every major publishing house turn down Harry Potter before it made her a billionaire and changed the entertainment industry forever.  The literary agents didn’t think her work was anything special.

Half the time, rejection turns out to be useful in the long-run.  In what is probably the worst college rejection in history, Warren Buffett didn’t get into Harvard Business School.  Instead, he went to Columbia, where he met Ben Graham, the father of value investing.  Graham helped Buffett create a disciplined approach to allocating capital and helped him get contacts in the money management industry, which was still relatively nascent in those days.

If you don’t fundamentally believe that you, yourself, are worth something, how can you expect others to have faith in you or your ideas?

8. Know The Difference Between Intelligence, Knowledge, Wisdom, Discretion and Temperament

It is absolutely vital that you understand the distinctions between intelligence, knowledge, wisdom, discretion and temperament.

9. View The World Through “Mental Models”

Approach the world through a rational framework of mental models.  It will open your eyes.  When I first studied this approach my senior year of college, I casually waived off Charlie Munger’s commentary that once you start down this road, you will realize how blind you have been your entire life and attempting to function without it would be like “cutting off your hands”.

I had no idea how right he was. The entire premise of mental models is that there are 100 or so “big ideas” in psychology, biology, chemistry, math, sociology, etc., that determine how the world works.  By understanding them, you begin to see ideas as tools that can be used for your advantage of disadvantage.  You start to understand the motivations of other men and women.  You see the world for the first time.

The best place to start is the speech Munger gave called The Psychology of Human Misjudgment.

But let me warn you: A rational mental model approach means you have to be willing to destroy your own “best ideas”.  It is the opposite of confirmation bias.  If you grew up with any sort of strong dogma or theology, you might find it challenging because it requires that all ideas must stand or fall on their own.

Consider there were millions of people – good, honest Christian men and women – who believed that blacks were inferior and that it was God’s will for them to be in slavery.  The Bible clearly supports slavery and anyone who insists otherwise is, at best, naive or at the very least intellectually dishonest.  We wonder how they could believe that nonsense but they simply accepted it as truth because “the Bible says, ‘Slaves, willingly submit to your masters'” and provides countless examples of treatment, rules, and regulations regarding the slave industry.

Today we reject that interpretation.  We just throw it out as garbage because there is no rational excuse for believing that.  Science has thoroughly debunked the notion that one race is superior to another and found that differences in outcome are, in fact, often due to social behavior, such as the family climate in Asian families that stress good educations, performance, and high paying jobs.

Yet, we do the same thing to gay people today.  There are no – absolutely zero – rational objections to homosexuality; all of them are based upon indoctrination no different than children in the 19th century being taught that Africans were meant to serve in the cotton fields.

Despite my intelligence, and my rational understanding of this, it took me years to fully accept it because I worried about “moral relativism” … that was, until I realized that morality must be based upon rationality.  It is rational to oppose theft, or murder or cheating because people are harmed.  It is irrational to punish two citizens who wish to willingly enter into an arrangement whereby they wish to share their lives and assume responsibility for one another and that, furthermore, affects no one else.  If the only reason you have to justify a belief is “because the Bible says so” or “because that is how it has always been,” you are awash in the sea of irrationality.  It is a sickness of the mind to go through life like that.

A mental model approach can set you free but the cognitive dissonance might be too much for those who were brought up in strict fundamentalist households of any religion.  After all, if you are taught your entire life that God will kill you if you eat a tomato, and then you find out the entire world has been eating tomatoes, the odds are you are likely to become more convinced that you are correct despite all of the evidence to the contrary.  This is the result of a common error in human psychology.  If you know the big mental models, you’ll know which one I’m talking about … bonus points if you discover the answer.

10. You Are Responsible for Making Your Own Dreams Come True.  No One Else Will Hand Them To You or Care As Much About Them.

That was the wise advice my father gave me when he and my mom dropped me off at college my Freshman year almost a decade ago.  I can still see him saying it as he stood by the car door.  Realize that the cavalry isn’t coming.  If you want something in life, you have to go get it yourself.  Fairy godmothers only exist in the world of Cinderella and Sleeping Beauty.  You have to slay your own dragons and build your own kingdom.  Too many lives have been wasted waiting in vain for someone to come in and fix the maladies.  Always ask the question: “If not you then who?” and “If not now then when?

P.S. Charlie Munger’s Answer

When a young man asked Charlie Munger the same question you posed to me, he responded:

Don’t do cocaine, don’t race trains and avoid AIDs situations.

His version was shorter.  You could always just go with it.  =)