How junk learning messed up my career...

I am not bragging here.

I have multiple MBA in Finance from prestigious institutions in the country and have been implementing Financials applications for the last 20 years or so. But I still get confused about the idea of money.

Early in my career I remember my project manager asking me while we were on the way to a customer meeting, 'What would you expect from work, achievement or money?'

I was very pompous and stupid. I replied 'I will take achievement over money any time. Achievement will lead to money'. I felt very self important.

In his article in Medium.com, the author Michael Simmons talks about 'Junk Learning'. These are learning that you think are correct but end up in you making wrong decisions and wrong choices. The question 'Achievement or Money' was one such. 

For over ten years I carried this idea in my mind that I am an 'Achievement' person and not a 'Money' person. I took career decisions based on that ridiculous idea. I threw away 20000 shares that I received as ESOP and left my employer before the vesting period of options. was over At current price, those shares are worth 7,000,000. Seven Fucking Millions! It is almost 100000 USD at the current exchange rate.

That is a lot of money.

I moved from company to company in search of achievement, without ever negotiating a good salary package. Most of my lateral moves were at the same salary, with hardly a hike. And in one situation where I was offered a salary hike to stay in the company, I spurned it in the interest of 'achievement'.

I am an achievement guy. Who cares about money, right?

After ten or eleven years, I understood the fallacy of that position. You see the fallacy there don't you? The question itself if wrong. It equates achievement and money as to sides of one coin. The word 'or' in that question misdirects. It creates a binary where none exists. You cannot compare achievement with money. They are two different fruits one starting with 'a' and the other with 'o'. 

'Achievement' relates to the work done, it relates to the quality of your output. If you are an achievement guy, you deliver quality output consistently. Money is a measure of the value of that output. 'Achiever or Money' construct assumes that those who are achievers do not make money and those who make money are not achievers. 

It is nonsense. 

The right question might have been 'Given an opportunity between a job that offers high level of achievement but a lesser pay than a boring job that offers higher salary, which one would you prefer?'. My answer might not have changed. I would still prefer a job that pays less but with potential for high quality work. 

I don't know. But I know that with that paradigm, my decision making approach in later years would have been significantly different. 

Over the last four or five years, as I enter into the world of stock market I am faced with another challenge. I struggle to handle market falls.

In the year 2018, from the peak in January 2018, my portfolio value fell by about 20%. This is where my second challenge started. 

You see, I have been investing from 1996, when I purchased my first share. Since then it has been a topsy turvy of a ride. Over the last couple of years, my idea of money underwent a subtle shift. I kept telling everyone that money is a notional concept, it is an abstract concept. So what my portfolio value fell by 20%, my shares still remained with me, the businesses were intact. So I have not lost any money. This is just a notional loss and once the market rebounds, I am going to get this and more.

Then two things happened to change my view. I heard an interview with Mr.Ramdeo Agarwal of Motilal Oswal. Here he spoke about temporary loss of value due to market forces and permanent loss of value due to the factors intrinsic to the company. He told that the loss of your wealth is notional if the loss of value is due to factors external to the company like bear market. In this case the loss of your wealth is notional, it will rebound with the market rebound. However, if you lose money in stocks due to factors intrinsic to the company (you bought 'shitty stocks') then your loss will be permanent and you should exit the stock. 

I will detail this in more detail in another blog post that explains my Investment Learning.

Finally, the other day, I and my mother went to the ATM to withdraw money. She has a joint account with my brother. Since my brother's KYC was not updated, the account was blocked. The amount was about 10000 rupees. This is anyway a notional money, I told myself. 

"I was planning to buy something for that money", said my mother, "now I have to either forgo the purchase or find 10000 from somewhere else"

Then it stuck me. I had money all wrong. It is not a notional concept. It is real purchasing power. 

Money is purchasing power. That is why a loss in the market hurts.