25 Lessons From 25 Years in Finance
- By Bilal Hafeez
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- 6 min read
I’m not one for anniversaries, but this is my 25th year in finance. My adventure began as an intern at JP Morgan in 1997. I spent the summer building models to try to predict which market would blow up next during the Asian financial crisis. In fact, most of my memories use crises as their hooks – from the LTCM catastrophe during the Russia devaluation in 1998 to the Enron accounting scandal in 2002, the global financial crisis in 2008 and COVID in 2020.
During my career, I’ve been the nervous junior, the ambitious upstart, and the senior managing director. I’ve been part of divisions that were expanding rapidly and ones that were collapsing. I’ve worked in London and Singapore, travelled to all corners of the world, and been stopped too many times at airport security (you can guess why).
Throughout all of this, I’ve picked up invaluable lessons on finance, business and life. Here are 25 that stand out:
The nature of finance (#1 to #5)
1. Money is everything, money is nothing
You can’t escape money in the financial industry – it’s the product. The sums you transact each day can be vast. And unless you’re careful, that rubs off on you all too easily. This can have odd effects, from thinking money is the main criteria for assessing others to linking your personal self-esteem to your income. To overcome this, try heeding the advice of the 13th-century mystic Rumi: ‘you know the value of every article of merchandise, but if you don’t know the value of your own soul, it’s all foolishness.’ So recognise the allure of money, and take steps to delink your self-worth from it.
2. Markets will destroy you
You can be a star trader making millions, lauded by everyone, but boom – you suffer a huge loss that came out of nowhere. I’ve seen this so many times, it is almost a law of markets – no one can always beat them. This doesn’t just apply to traders but all facets of finance. In some ways, markets are the ultimate ego destroyers. Better to respect markets than fool yourself into failing big. Or as the 18th century priest William Law said, ‘Ego starts with pride and ends with humility.’
3. Banks are communist
Financiers love to talk about free markets. Many admire Ayn Rand’s Atlas Shrugged. Yet investment banks are run for the benefit of their workers (and their bonuses) and shareholders (the capitalists). And when times get tough and they suffer, the government bails them out. Karl Marx would be happy, and so would any trade unionist.
4. Don’t let past performance seduce you
We see the disclaimer everywhere: ‘past performance is not a guide to future performance’. Yet nobody ever listens. A company has recently delivered large profits, a hedge fund delivers strong returns, a trading model has a great back-test – all these make people flock to them, even the most sophisticated people. Yet, half the time, the strong performance was luck, and the other half was market beta. Rarely is there true alpha. In the end, everything falls back to earth, and you look back and wonder how it ever seduced you.
5. Check facts yourself, or the market will
The world is full of opinions, whether in the financial news or on social media or coming from fellow workers and clients. But in the end, you need a system to verify facts yourself – the buck stops with you. Luckily, markets themselves are useful adjudicators between fact and fiction. The news can be full of doom and gloom, yet markets may barely react – this can reveal the news is just presenting stories rather than facts that impact the world.
The politics of work (#6 to #10)
6. Your word is your worth
In an industry where money is everywhere and everything, it’s easy to forget the importance of your word. Break it, and you lose the one thing you can’t buy: people’s trust. If people trust you, they are more likely to work with you, send business your way, and help you when you are down. I wouldn’t have been able to help build Macro Hive if people didn’t trust me.
7. Get people to talk about you
Marketing yourself may sound cheesy, but everyone has a brand – whether they created it or not. You may be known as the quiet, hard-working one, or the wild trader or the slick banker. But why let others determine how you should be seen? You need to take control and become your own best promoter. Let the world know what you are doing and what you have to offer. But even if you don’t promote yourself, don’t feel bad if others talk about you. In the wise words of Oscar Wilde, ‘there is only one thing in life worse than being talked about, and that is not being talked about.’
8. Understand the dark arts of office politics
Large financial institutions are full of politics. You can pretend you don’t engage in it or that it isn’t happening, but it is. At the very least, you need to understand it. This means understanding how people take credit for the work of others, manage up really well, sow seeds of doubt about internal competitors, and latch on to the top dog. If you don’t know a game is being played, then you are being played.
9. Don’t be fooled by job titles
The finance industry loves title inflation – vice president, managing director, head of this, global head of that – I’ve had them all. But most have no real meaning and are attained more by shrewd political behaviour than innate talent. So rather than be starry-eyed about someone’s job title, assess them by what they actually do. You’ll save a lot of time.
10. Work for managers who let their underlings succeed
It’s tempting to want to work for the star banker or trader – surely this would be your ticket to success. But look at how they manage their team. Do the team members succeed or burn out? Because that will be your future under them. Ask around for what happened to people who worked for the manager. If they have done well, then that’s someone to work for.
Personal growth (#11 to #15)
11. Read one book a week
I know, I know. That sounds like too much, but it is possible. My technique is to get a kindle, which is very portable, and use every spare moment to read a few pages. This could be on the train journey into work, your lunch break and, most importantly, during all those times you want to scroll through social media. The rewards are immense. A book contains someone’s life experience. You can learn a huge amount about the world – and from fiction as much as non-fiction. This can become a massive multiplier to your knowledge base. Want some books to read? You can start with the Macro Hive reading list.
12. Failure is the best way to level up
It’s hard to change if everything is going well. But when you fail or have a setback, you are much more open to new ways of doing things. Therefore, embrace failure as the catalyst for personal growth. I’ve had my biggest career breakthroughs when things were going wrong – when I was too junior to be listened to, I built trading models that got me noticed, when I thought my industry would disappear in 2008, I made the most contrarian call of my career (that the Japanese yen would rally hard). And when my sell-side career was flagging, I left to start building Macro Hive.
13. Start with what you fear
Knowing what you fear is very important. It’s easy to suppress fears, but you won’t be able to escape them. You could fear speaking to senior people in the industry, or making trading losses or even asking for a promotion. One way or another if you want to progress your career, you will end up facing your fears. Therefore, it is better to be on the front foot, identify your fear early on and act to alleviate it. The best way to do this is start each day with whatever task you fear the most. Before you know it, you’ll embrace your fears and see them as challenges.
14. Be effective, not efficient
When I started to manage teams, the book I found most useful was Peter Drucker’s The Effective Executive. He argued that too often people focus on doing something really well and efficiently but never ask whether it was the right focus in the first place. Think about if your aim was to travel to New York and you spent all your time working out the most efficient way to get to Hong Kong. Your efficiency is useless if you end up at the wrong destination.
15. Learn every day or quit
Financial markets are always changing, so you have no excuse not to learn. Yet many in finance, get into cruise control mode and luxuriate in the only things they know well. But that is a strategy to failure. When the markets turn or the industry takes a down-turn, you’ll be out of a job. So set yourself a task of learning something new every day. This could be learning a new product, new system or new market development. You could even learn to start coding as a hobby. If you find you aren’t learning anymore, it’s time to quit and find another job.
You are not alone (#16 to #20)
16. Get married
I use marriage as a short hand for any type of long-term relationship. Getting married may sound quaint – why does it matter for your career in finance? Well, markets have big highs and even bigger lows. Through this, you need an anchor that will help you stay balanced, and there is nothing better than marriage to achieve this. For one, your partner will be your confidante who you can lean on when times are tough. They are also a mirror to your faults. You can ignore the words of your co-worker or your boss, but not your partner. Finally, marriage (and children) can give you meaning in a way financial markets cannot. A large chunk of my character development has come through the ups-and-downs of marriage. Don’t underestimate it.
17. Listen to elders
The financial world can be very fad-driven, so it’s easy to dismiss older bankers and traders as not getting it. But human nature doesn’t change. So while the products may look different, you find people making the same mistakes. Therefore, learn from the seasoned financiers. You’ll be surprised how often the ‘new’ problem you’re trying to solve is just another version of something they did years ago. As Lao Tzu wrote, ‘The wise person doesn’t learn anything new, but rather reviews what others have passed through.’
18. Listen to juniors
On the flip side, it’s easy to ignore the newbies entering the industry. Surely, they don’t know anything! But their apparently naïve questions may reveal flaws in your actions that others were too afraid to point out. Moreover, when your career is on the descent, they will be the ones hiring you!
19. Have friends outside of finance
The bubble of finance can encompass your social life too. You end up only knowing people in finance. This affects your expectations of life and narrows your worldview. Much better, then, is to have friends from diverse backgrounds – whether non-finance schoolfriends, new friends from other industries or better still people from humbler backgrounds. They can offer a much-needed reality check when you’re whinging about missing that big bonus.
20. You are being watched
In the olden days when most people were religious, they believed God saw everything they did. You would behave well, even when alone. Today those values have faded. But ironically, technology is now the all-seeing deity. Everything we do is being electronically monitored in some way. This means it can be resurfaced years later and judged accordingly – as many jailed bankers can attest to. Therefore, we need to keep our private actions as respectable as our public ones.
The Little Big Things That Matter (#21 to #25)
21. You will be forgotten
One of the most disheartening aspects of my career is how quickly you get forgotten. I’ve worked for three banks, and at each, I felt cherished and adored by everyone (or at least some!). But when I left, it was remarkable how quickly I got forgotten. One moment you feel like you are part of the company furniture, the next the company won’t let you past the reception desk. And then when you think more broadly, how many financiers can you recall from the last fifty years? Not many, I bet, and even less if they weren’t jailed. So when you think you’re the master of the universe, know that to the universe you are an unimportant speck.
22. Travel destroys self-control
For some reason, there is a culture of travelling around a lot when you become more senior in the finance industry. It shows that you care about clients and that you are taking a global view. Or so you think. But the side effect of travelling is that you are constantly exhausted, which destroys your self-control. This means you end up eating badly, drinking too much, not exercising and, in many cases, sleeping poorly. Even worse, you may start to engage in activities that any respectable person would not do when home. Be warned.
23. Take public transport
This may sound trivial, but shouldn’t be underestimated. The financial industry can be a far cry from the real world. Live in it too long and you start to feel detached. One symptom of this is the never-ending cab journeys to and from everywhere, sealed in a bubble and talking to no one. My antidote is to take public transport – this forces you to interact with the rest of the world and the public sector. Do it when you travel as well; there’s no better way to immerse yourself in the local culture.
24. You have a body
Sitting in front of a computer all day, dealing with abstract concepts and overthinking – this is the life of bankers. It’s all mind, mind, mind. You would think the purpose of the body was just to carry the brain. But the body is important; it needs to stay healthy for you to be healthy. Feelings within the body can also reveal stress and worries that your mind may not be aware of yet. Keep your body healthy, not just your mind.
25. You will die
One of the best ways of prioritising what is important is to remember your mortality. Finance has a habit of making it seem like you and your area are the most important thing in the world. But if you remember that you will die, then suddenly your perspective changes. Should I miss my child’s school play because markets are moving or I have a client meeting? Should I have a manic travel schedule and not visit my elderly parents? What would I have regretted on my deathbed? As I become more experienced, I started to think in this way more and more. You should too.
Best wishes
Bilal