Status Update – 6/13/19

Its been over two months since my last post. In April, I had just closed the building products deal and I was fairly exhausted, yet very satisfied with the outcome. After spending a couple weeks getting re-calibrated with daily unemployed life, I left on a long trip with my family. We went to Chicago > LA > Hawaii > back to LA > back to Chicago and finally back home. It was a fantastic adventure and we all had the time of our lives.

Replenished and healthy in mind, spirit and body, I walked through the door of our 800 sq ft apartment in New York City and immediately said to myself “time to get the f’ outta here. Time to make some big changes”.  Suffice to say, I did not feel happy to be back here. Within hours, we were packing up. For the first time in a long time, I took the strong initiative to begin changing everything that was no longer working in my life. We stopped procrastinating and made a check-list of items that needed to immediately change. For the past few weeks, my wife and I have been busy as beavers checking off the boxes one by one. I feel very free for the first time in a long time.

The big changes > over the past few weeks, my wife and I have found a rental apartment in the suburbs of Chicago and have moved half our our possessions to storage in Chicago.  My wife has agreed to search for a new full-time job once we get to Chicago and put her current entrepreneurship on ice, at least for awhile. This will help eliminate the insane $2,500 a month COBRA health insurance bill we are paying. We’ll be purchasing a three year old used car this week, my first car in 12 years. Next Wednesday, we will officially be moving out of New York City and will be residents of IL, closer to my folks. The change feels like a giant relief already. There have been plenty of naysayers and disappointed people asking us both “what are you doing!?!?” We’re ignoring them all. If they are not supportive, F’m.

NYC

Thoughts about leaving NYC

When I first moved to NYC in August 2007, I was 50% scared out of my mind and 50% excited to finally be here. In many ways, I felt that I had “won” and that I was on the golden path to success that I always fought for. After a few months of working 18 – 20 hour days, seven days a week, the shine quickly wore off. The fear embedded in living here never wore off. I always felt this was not a permanent situation and I never felt anything was sustainable.

My observations about the difference between working / living in the Midwest vs. NYC:

  1. The pace in NYC is quicker and more intense. Lines move faster — its common practice to wait in line with cash in hand ready. Work-wise, the 45 minute Midwest lunches are replaced by a quick 10 minute run to street level to grab a $10 salad to gobble down while working on 10 things simultaneously The productivity of each hour seems 2x the Midwest (even though its really not). Everyone above, below and on the same level appears to be a work-a-holic with no balance in their lives.
  2. Its a fight for every breath. Everything in NYC seems more complicated. Finding shelter at a reasonable cost for a livable amount of space is difficult. Getting from point A to point B is a struggle. Approvals require 3x the questioning as everyone is paranoid of getting f’d. You become paranoid about getting f’d in every decision in your life. This is because, for some reason, you start to get f’d more often on random things. This begins making you an asshole. You wear brass knuckles at all times. After a few years, I woke up exhausted and went to sleep exhausted. It was very common for me to be standing on the crowded subway in the morning thinking to myself “man … how am I ever going to make it through today”
  3. The to-do list never stops growing.  The minute I moved here, it seemed like there was always way too many things on my priority list than I was humanly capable of. So much stuff got pushed onto Saturday’s and Sunday’s that these days seemed to become busier than Mondays. The treadmill just keep spinning quicker and quicker and I constantly felt like I just could not keep up. I watched my wife go through the same thing.
  4. You feel the pressure of 100 people waiting in line for your job.  If you are lucky enough to work at a prestigious job and/or rise the ranks, you feel this constant pressure that if you ease up just a little bit, you’ll be replaced. To remind you that this is not a fallacy, people around you often get “blown up” and replaced. As Portfolio Managers, we were often reminded about the volume of great resumes coming in weekly.
  5. Everything is about status. People here love to signal. People who grew up in or around NYC are especially big at signaling. Within minutes, they want to know where you live, where you work, where your kids school, where you summer, what brand suit / tie / dress you are wearing, where you are planning to travel next, what you own and, most importantly, how much you make. Everything … literally everything is a rat race competition. You are constantly sized up. Even the taxi drivers will size you up, as if its their own personal mental game to match your looks with where you live. Growing up anywhere outside NYC, its hard not to constantly think this is “silly” unless ala Carrie Bradshaw, you live life with the singular goal to fit into NY society.  I have found, eventually the Carrie Bradshaws get burnt and burnt out and eventually just throw in the towel. Usually this happens shortly after having children.
  6. Children = czech mate. As hard as you fight to stay a New Yorker, after having a child, you are knocked down for the count. NYC is not a good place to raise a child. I don’t give a shit who you are and what justification you give, I will repeat: raising children in this city is plain STUPID. Everything is substandard and costs 3x what it would cost anywhere else. When it comes to schooling, the public schools here are awful. The pass rates of the Regents math / english tests (required to graduate high school) average just 70% and 79% respectively and keep sliding lower despite the ineffective efforts of NY’s idiot mayor to improve these scores. Throughout the boroughs, these scores are pretty much level. This leaves residents to either (1) pay atrocious amounts of money to put their kids in private schools or (2) move to the suburbs and pay atrocious amounts of money in property taxes (which, by the way, are no longer fully deductible under Trump’s new tax plan). We live across the street from one of the five best private schools in the city. It cost $49,000 a year to send your child to this school. From my general observations of these students over the past five years, I think these parents are getting ripped off. Nothing special going on there. I’d estimate that, on average, it costs $300k – $600k to put a child through NYC private schools from grade 1 – 12. Comparably, it costs ~$300k to put children through suburban schools based on avg property taxes in the NYC suburbs (theoretically, you need to add the extra commuting expense into the city to produce a like-for-like comparison). This is 2x as much $ as the best suburban schools in Chicago which have almost identical college placement statistics, if not better. If I was to place the difference in the Chicago vs. NYC school costs into an investment account that achieves an average IRR of a mere 5% … at 65 years old, my son would have a retirement savings account of ~$2.3M (~$15k / year from grade 1 – 12 compounded at 5% / year until he is 65 years old). I’ll clearly chose the ‘Chicago’ option.
  7. Loud, cocksure, obnoxious people do best here.  When I began as an investment banker, one of my peers was the most obnoxious person I had ever encountered in my life (no exaggeration). He walked the halls with a blow-horn spewing his narcissistic nonsense all over the place. He didn’t know much about anything but he knew how to push and shove his way to success. He simply bullied his way towards whatever he wanted. No body could or would control him. Instead, he was praised, celebrated, showcased and used as an example for all others. I was brought out to lunch as an associate and told by a partner that I needed to develop a more “grab it from his hands” approach, just like this obnoxious ass, in order to ever survive on Wall Street. I’ve watched this person just rise higher and higher as a hedge fund manager despite terrible performance (his fund can be tracked on Bloomberg). This person is far more interested in telling everyone about his Hamptons home, BMW, boat and private plane than he is about achieving returns for his public pension LP’s that beat any index. Absolutely nobody cares though. Everyone romances this person and acts as if it’s a gift to be in his presence. I’ve found over time, this is very common in all industries in NYC. The loud obnoxious person just keeps rising. The quite, hardworking types subsidize this person’s limited knowledge and are eventually thrown out when their usefulness is depleted. The article below by Malcolm Gladwell does a fantastic job highlighting this aspect of the NYC culture. He pinpoints the ways that obnoxious Jimmy Cayne rose the ranks at Bear Stearns despite knowing very little and eventually destroyed an 85 year old institution employing 14,000 people. In NYC, these obnoxious assholes will always be in the way.
  8. https://www.newyorker.com/magazine/2009/07/27/cocksure

  9. On the good side — there are always new / interesting things to discover.  The aspect of NYC I’ll miss most is the ability to jump on the subway with my wife and just explore the city. There is so much to do and see that it takes years, if not a lifetime to take it all in. Each section of the city has interesting things to offer. It’s difficult to find anywhere else in the U.S. that could offer even a fraction of the spenders of diversity that NYC offers. Hopefully, my future weekend visits back here capture some of this.

Before I lived in NYC, I was initially attracted to the hollywoodish Wall Street culture. I did find this. I experienced it as both an investment banker and as a hedge fund manager. The spine-shivering moments often reminded me that I was in the epicenter of financial power.  I think that anyone interested in capital markets will do well to experience this, even if it just for a few years. I’ll miss this aspect of NYC as I do believe that I will likely never experience much of this again. The downside to this exposure is that the puppet masters behind it live with a “what have you done for me lately” mentality. If you don’t seem like a miracle worker and constantly reassure that you’re the top shit, you no longer receive an invite to the party.  Over time though, the more I studied the great investors, the more I realized that I didn’t really want an invite to this party.

Am I glad I lived here and experienced Wall Street? From the outside looking in, you may think – the guy is in his mid-40’s with no job, no prospects and in a general free fall. He must have made poor choices to end up here. The truth, however, is that I’d never take any of it back. NYC turbo’d my skills to a level I had no idea I could reach. It organized my mental clutter and taught me valuable frameworks. I learned to think. I figured out to better assess downside risks in every decision I make. I was forced to identify my strengths and play towards them. I was surrounded by the best of the best and I adopted many of their approaches to life. I witnessed what works well. All-in-all, my knowledge and abilities were pushed to an optimal level. I leave NYC with these blessings. I journey on much better equipped to battle forward through easier terrains.

Like many things in life, whenever I begin to worry about my decision to move, I think about what Mr. Buffett would do, or in this case, did himself. Below is what he said to a group of students about deciding to no longer live in NYC:

I decided to live in Omaha because I like the city, the community and it’s where I call home. It’s all about what you really want to do. Living in Manhattan is expensive and you need to be rich. There is a lack of sense of community and life style, thus lack of the enjoyment of life.

You may need to do fifty things a day in New York, but I’d rather to do some reading in my office and do 1 to 2 things a day and do them well.

I didn’t have a real plan when I returned to Omaha, there was no master-plan when I left New York.

It is very important to find a balance between life and work as well. Follow your heart and do something you love.

In a nutshell, Buffett’s words perfectly capture how I feel at this point.

In regards to my latest career thoughts, I have sent out ~20 resumes over the past month to just test the market a bit, especially since I have some new origination experience on my resume which may make me slightly more attractive to advisory firms. Out of the 20 resumes, no response. No surprise.

The one important anecdote to note is that a close friend approached me a few weeks ago about a Treasury position at a new spin-off corporation in Chicago. He’s friends with the CFO which provided me with a direct “in” to get a first-round interview. I sent my resume through and did all the follow-up required. A week went by with no word back. Later, my friend read to me the back-and-forth text messages w/ the CFO about my candidacy. In a nutshell, despite some hard pushing to speak to me, the CFO had zero interest and did not hide how disinterested he was in speaking to me. Good data point to further demonstrate that I need to keep focused on employing myself rather than waste a bunch of precious time going after positions that I am not a direct fit for. In today’s society, anyone over 40 years old must be a round peg that fits perfectly in the round hole to get the interview.

Additionally noteworthy, when driving a van with our possessions from NYC to Chicago over the past week, I had 12 hours to listen to lectures from Mohnish Pabrai. Outside of Buffett, I have found Mohnish to be the single most influential person in improving my outlook on life. His book Dhandho Investor structurally changed my thinking. His lectures blew fresh air into my entrepreneurial thoughts. My next post will clarify my game plan moving forward. In advance, I’ll just say, I’m going to try my best to cloan the cloaner. I’d rather roll snowballs than spin wheels on a fruitless job search.

Talk soon my friends.

 

 

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