At times, I feel like my ego has gotten the better of me. But as I’ve learnt to understand it more, its lead to better work and financial outcomes for me.
I’m a competitive person plain and simple. Not necessarily motivated to beat others, but to extract the best that I can out of myself. While most times I think that’s strength sometimes it turns into a weakness. At times ego can drive you to decisions that ultimately doesn’t reflect your best interest.
Folks who come by here know that I went through something of a career crisis towards the middle of last year. I would compare myself with my peers and see many of them appear to be on an upswing in their careers with fancy titles reflecting that upward career mobility.
In fact many of my friends who graduated at similar times to me are now holding lofty titles and positions such as partner and senior vice president in many esteemed places around the world. I would look at my own career progression and lament that I haven’t been able to achieve such lofty heights. I would hear mention of a relative who was even able to achieve the lofty title of senior vice president and which would make me think about driving towards a more meaningful position that better suited my own sense of status.
So in spite of being completely happy with the nature of the work that I was doing, and the compensation that I was making, seeing peers of mine who appeared to be much higher positions made me feel somewhat insecure and created an innate desire to trying to achieve something that I didn’t really need but felt that I wanted.
I also looked at promotions being given out internally within my company and felt slighted because I thought that I was much more deserving of the people who are being pushed up the corporate ladder. Little did I realize that there’s a bunch of backroom politics going on behind the scenes that determine how those positions ultimately get rewarded.
Eventually I came to my senses and realized that what I was really chasing was something to satisfy my ego. I was going after something purely to prove to myself that I was more deserving,when in fact achieving that thing wouldn’t have made me any happier.
I ultimately came to the right realization and conclusion that driving towards these other positions and opportunities wouldn’t have made me any happier. I could’ve saved myself a lot of heartache and if it if I had just not listen to my ego in the first place.
Funnily enough I subsequently came to find out that the “senior vice president” with a lofty title carries a comparable salary to what I’m able to achieve. It just goes to show you why there are good reasons not to be too greedy and too envious.
Having a big ego can also raise its presence in an investment context as well. I recall on a number of occasions where I had thought a stock I owned had reached its potential. This was in my ignorant days, where I didn’t realize that buying and holding onto best of breed businesses for decades drives serious wealth creation.
I would sell out, out only to see the stock keep rising again. I quickly worked out that I was making a mistake. In times gone by ego listening to my ego has caused me to miss out on additional potential profits that could’ve been realized but just simply admitting it to myself that my decision to sell was wrong and to quickly correct it, and buy back.
MasterCard is probably one of the best examples of how costly ego can be. I sold out much of my position in early 2008 having seen the stock rise more than 3 times in value on my initial investment. As the stock kept rising I had convinced myself that the business had become overvalued and the business was in no way worth was what people were prepared to pay.
I came to realize that the decision to sell was wrong but my ego wouldn’t let me come back and repurchase the business because doing so would have meant admitting a mistake. So unfortunately I waited on the sidelines as MasterCard continued to shoot up more and more over the intervening years.
I eventually got back into the stock in 2011 but by then I had missed significant incremental returns. Having no ego is very important in an investing context in my opinion. We all make mistakes as investors but failing to admit that you’ve made a mistake doesn’t just cost you your pride, it costs you thousands of dollars.
And its not just failing to admit that you’ve sold to early. Hanging onto a dog is another one that most of us can probably relate to at one point or another. Admitting that you have made a mistake here and cutting a loser is the way to go. But most of us don’t do that. We just keep hanging onto to a dog, because its tough to admit that we’ve made a mistake, even though its just costing us financially. This leads to “misplaced hope” that things will get better.
I’ve often heard the expression pride is a sin. I don’t know about that, but pride can certainly be costly. It can cause you to make decisions that aren’t in your best interests, professionally and financially.