I’m a big fan of Michael Lewis. He’s the guy behind “Moneyball“, “The Blind Side“, “Liar’s Poker“, and “The Big Short“, among others. If you haven’t read any of his stuff I highly recommend that you do so.
A few years ago I was browsing through a brochure of the upcoming events at the University of California – Santa Barbara. Prominent among the list was an interview/conversation with Michael Lewis. I told my wife we HAD to go. She was very dubious, as she’s not especially interested in either sports or financial markets, and that pretty much eliminates anything Michael Lewis has every written. However, I persisted and she relented.
It was fantastic.
Michael Lewis was on stage for about 2 hours. He spent the first 90 minutes getting interviewed. One of the first questions the interview asked was why Michael Lewis wrote in two fields that appeared to be comely different – sports and finance.
Michael explained that although the sports and economics appear to be very different fields, they are in fact connected by one fundamental idea – inefficient markets.
Michael is fascinated by markets that don’t function properly. “Moneyball” was about inefficiencies in the market for baseball talent. Some statistics (like batting average) were priced too highly by the market and some attributes (like bases on balls) were priced too low by the market.
By finding and exploiting these inefficiencies Billy Beane was able to position the Oakland A’s to field a competitive team every year despite one of the lowest payrolls in baseball.
“The Big Short” was about inefficiencies in the housing market. Risk was not being priced correctly. Lenders made too many loans to people who couldn’t pay back the loans and didn’t charge a high enough interest rate to compensate for the high risk. These lenders went bankrupt in the global financial crisis of 2008-2009.
But here’s the crazy thing – Michael Lewis was an art history major in college. How did an art history major at Princeton end up writing about markets and becoming a successful financial journalist?
Help from his dad
Michael made it very clear that he knew, even at the time, that majoring in Art History was a career limiting decision. He never wanted to be a professor or get into academia, which meant that he would have zero job prospects when he graduated.
So why did he do it? Because he took an Art History class and loved it. After that class he took another, then another, and ended up deciding to major in the subject.
But here’s the critical thing that enabled him to make his decision – a ridiculously supportive father. And I don’t mean that his father just offered the usual advice of “follow your dream” or “do what you love and you’ll never work a day in your life”. Michael’s dad went a big step further.
His dad said that he would essentially support Michael for 2 years after he graduated. Michael was free to work any job he wanted. Michael could spend the 2 years traveling, or painting, or sitting in his underwear watching cartoons. His dad would pay his rent and ensure that Michael didn’t starve so he could do anything he wanted to do.
This convinced Michael to major in a subject he loved despite little to no job prospects in the field. It allowed Michael to take a low paying job working for an art dealer after he graduated (a job he said he loved, by the way).
When the 2 years were up Michael decided to go on to get his MA in Economics from the London School of Economics. He then went to work for Salomon Brothers. His experiences at Salomon Brothers served as the basis for “Liar’s Poker”, which launched his writing career.
When put into context the years after graduation and before starting his MA in Economics seem unimportant, but Michael Lewis didn’t feel that way. When asked about how he became the writer and person he is today Michael Lewis said that time, and the support from his father, was absolutely pivotal.
Michael Lewis’ advice
The whole story behind his dad’s support and majoring in art history came up because, during the Q&A session, a college kid asked Michael Lewis for advice on what a college kid should do.
The advice was twofold:
- Do what you love. You’ll be able work harder at it and be more dedicated to it than to something you don’t care about. This means you’ll get better at it and eventually be more successful. He left a very lucrative job as a bond trader to become a starving writer because that was his passion, and he was emboldened to do this because he had both had a job doing something he loved (working for an art dealer) and a job he just did for the money (being a bond trader). He knew how much happier he was when he was doing something he loved.
- Put yourself in a financial position so that in the future you can do for your kids what his father did for him
The more I think about it the more I love this advice.
The implications
The first piece of advice is interesting because Michael Lewis was making the point that he wanted to do what he loved because he’d previously had a chance to do something he loved.
I think that’s the thing holding so many of us back from making career changes or retiring early or whatever. We don’t have a frame of reference for if/how life will be different when we aren’t working for money but instead having money be a pleasant side effect of work we enjoy. I certainly don’t have any experience like that. I’ve been working for 19 years, and while I certainly don’t hate my job, I certainly wouldn’t say I love it.
I’ve put a lot of thought into switching careers (and becoming a financial planner), but I don’t really have an idea what it would be like to do something I like. Part of me is convinced that it’s impossible to love something you get paid to do. Another part of me is concerned that I won’t actually like financial planning any more than I like my current job.
But really, it’s fear of the unknown because I’ve been working for the same company for 19 years dong more or less the same thing. It’s what I know. I don’t know what life is like on the other side, so it’s hard to make the jump.
And the second piece of advice is as good a reason as any other to build wealth. Why not build enough wealth to not only send your kids to school, but allow them some time to find their passion? And if this enables them to become independent and self-sufficient sooner, so much the better.
What do you think?
Great share! I think I need to read a few more of his books, since the only one I have read is the Big Short.
He is essentially saying to follow your passion and the money will follow. I have tended to believe it is better to follow the money and then use that money to fund your passion.
But I do agree that if you can find an overlap between three things: Your Passions, What your Good At, and What the Market Is willing to pay for…then you are pretty much set in loving what you do.
BTW, like the new comment plugin 🙂
The first book I read was The Blind Side. I’m a big football fan and I’ve always been interested in Economics (I almost majored in it in college), so that book was a perfect intersection between the two. Moneyball was the next step, and from there I just devoured the rest of his books. They are all great.
I tend to agree re: the order of things. I’ve concentrated on following the money and I’m (hopefully) going to soon be at the point where I can follow my passions. It’s worked out for me, but only because I’ve been fortunate to find a high-paying career. I might feel differently if I needed to work another 10-15 years before I could follow my passions.
Sounds like a fantastic interview. I’m going to have to keep closer tabs on the local college and who they have in to speak.
There’s a line here that needs to be tread. On one hand it’s great that Michael took advantage of his father’s offer, but I could just as easily see most of my friends spending a year staring at Netflix reruns or plunging into a job they hate to do nothing but increase their standard of living (if only for those 2 years before crashing back to earth).
Thanks again for these thoughts. Really enjoy reading the blog.
The moral hazard of funding somebody to literally do nothing for 2 years is clearly the biggest risk/downside of the plan. Of course, you’d presumably know your own children well enough to know the effect the plan would have on them.
BTW, I just found out that Michael Lewis just released a new book, so it’s entirely likely that he’ll be doing another speaking tour in the near future. I checked his website and there’s nothing on there now, but keep your eyes open.
And definitely keep tabs on what your local college/arts program has going on. We’ve enjoyed listening to lots of different speakers over the years. Our favorite, hands down, is David Sedaris. Absolutely fantastic.