Month: April 2021

I’ve seen a lot of posts recently extolling the virtues of grit. Usually, they are associated with Angela Duckworth’s popular book.  I get why the philosophy appeals to people.  It is a very fair way to look at the world, because we aren’t all smart, beautiful, fast, strong, artistic or charismatic.  Some of us are just average, or less, in most areas.  Saying grit is the important thing is a great equalizer.  Because your DNA will determine if you are NBA material, and if you are not there is nothing in the world that can get you a starting spot on the New York Knicks.  But anyone can work hard, can hang in there, and if grit is linked to success, then there is hope for almost everyone.

I do not know the particulars of Ms. Duckworth’s research and I’m not about to confront it from a psychological standpoint.  It may well be grit has a lot of value in a lot of situations.  But I do have my own personal three decades plus career in the corporate world and I can tell you what my experience is regarding grit. 

I’d rank grit very low in terms of aiding success in the business world.  I have worked with a lot of extremely successful people and I, not so humbly, include myself in those ranks as well.  And I have never seen a single person rise above a mediocre middle management job by relying on hard work and perseverance.   The people that rose into the middle and upper six figure compensation ranks, and higher, did indeed work hard.   But they were never motivated by grit.  They were motivated by ambition. They were motivated by goals.  They were motivated by power. They were motivated by fame.    They were motivated by money.  They were motivated by a successful track record of beating out their rivals.  There was zero of the idea that you just work hard regardless of results and it will be OK.  Life is far too short to waste it that way, in the minds of the fast movers. 

I can think of one of my classmates who also came to work at the same company I did just a few months after our graduation from college. We had similar grade points, the same chemical engineering major but we were very different people.  Glenn was full of grit.  He was a great athlete, ruggedly handsome with a deep booming voice and an infectious smile.  I was smaller, a good tennis player and had a degree of charm.  But there were stark differences.  Glenn studied like a maniac in college, I barely studied at all.  He attended every class, I skipped every class I could get away with, although you could not skip classes in your major, so I went to all of those.  But when we got to our jobs at the chemical complex, I  saw what happens when grit takes talent on.  Glenn out worked me by ten hours a week but I outproduced him by 100%.  I literally could finish a project in less than half the time and produce much better results.  That happened because I knew I was gifted and I viewed it as a fun game I could win.  Glenn viewed it as a hard and deep ditch to dig.  When I retired early, Glenn was still working in a middle management job, long hours, decent pay but not what I made. He was and is a great guy and we remain friends, but he relied on grit and I relied on gamifying work and finding ways to make it feel like fun. Fun wins! Grit is basically the opposite of fun, it loses.

Later in my career the big boss called me and my chief frenemy and rival, Roger, into his office to tell us something very unusual.  He said the family that owned our company, and many other companies, had decided that one of us would run the company and the other would take a staff position in the corporate office in another state.  Both were great promotions but both of us wanted to run our company site as our next job.  We had a year of time to prove who was the better choice.  Well, that played directly into my wheelhouse.  I loved competition and had more than my share of confidence.  The other guy was close to equally talented but not nearly as sure of himself, and I think Roger approached things with some fear.  In any event there is no question he was grittier than me, but the race was never close.  He went to the corporate job and had a great career but he never got that job he wanted, the job I got.  Again, I was far out gritted by him, but I had an edge in people skills, trustworthiness and problem solving.  And I was clearly having fun at work.  When the decision makers are looking to put someone in charge of the business, they aren’t looking for someone who will put their nose to the grindstone, they want someone who can make it rain.  Grit is all grindstone and no rain.

I have often wondered why the world works this way.  You would think hard work would win more than it does.  I think maybe I know.  Grit, perseverance and endurance are all about fighting through who you are and keeping going anyway.  There are physical and mental health limits to how long you can do that.  I ran 15 marathons and 23,000 miles as an experiment in trying to develop some grit.  Decades later I remain grit free.  I still hate running but the experiment continues.   Mastery and genius on the other hand are fun, you get caught up in a sort of ecstasy when you are in the flow, in that deep work zone.  That activity requires zero grit, its like a drug and you don’t even want to stop to eat lunch or go home.  Its intoxicating.  I get that same thrill playing tennis, fishing and blogging now.  Playing to the pleasure centers of your brain absolutely destroys what you can get done by gutting something out.  And to me that’s what my CEO did, what the best people I worked with did and what my billionaire owner did.   They enjoyed their jobs, but they wouldn’t have lasted a week slogging it out in something that did not motivate them.  They were manic about work, in a good way. 

Do not get me wrong, grit is not a bad thing. Its very handy when you are required to do something that is not fun in the least, as we all are called upon to do.  But nobody is going to excel in life by doing things they hate.   Doing distasteful work longer and better than others is not the path to anywhere you want to go.  The secret is to be able to endure icky stuff just long enough to find a way to avoid it, and to find a path where you do not need so much grit. A path where you can be world class and be rewarded for it.

I suspect a lot of you will not agree with this, so feel free to let me have it. It is a sacred cow after all. My opinion is solely based on my experience and absolutely zero research. Do you think grit is overrated or is it a go to prerequisite for success? 

Have you seen anyone achieve great things in their career or financial lives purely through grit?

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My wife and I love to fish.  Freshwater, salt water, trout streams, farm ponds, every kind of fishing we’ve tried has turned out to be a lot of fun.  I also fish with some of my buddies both in my boat and in theirs.  One of my fishing friends has had all kinds of boat problems lately that culminated in him needing to have his outboard motor rebuilt.  Boats, to put it lightly, are high maintenance items.  

That probably sounds like a minor expense to you if you aren’t familiar with fishing boat economics.  While you could buy a $1,000 aluminum john boat and rig it out for another $500 and have a perfectly functional fishing boat, that’s not what most bass fishermen do.  They buy a boat already rigged out for bass fishing.  The “essential” equipment for that is a fairly large 16 to 21 foot boat with a large outboard engine, a couple of depth finders with color view screens, an electric foot controlled trolling motor for using while you move around silently casting for fish, a live well to keep the fish you catch(essentially an aquarium built into the boat), storage compartments under the floor and seats and a trailer to transport the boat to the lake.   And as crazy as it sounds these boats range in cost from about $20,000 on the low end to almost $100,000 for a top end rigged out bass boat.  That’s right, you can spend more for an open top fishing boat that only holds two people than you’d spend on a Porsche Cayenne turbo SUV!

I’m financially independent and retired and my  boat is on the cheap end of the spectrum.  I own a  16 foot aluminum bass boat with a 70 horsepower outboard motor and it cost me $20,000 when I bought it five years ago.  I could afford a much more expensive boat and a Porsche SUV to haul it too, but no way I’m spending that much on a boat or a car when I can spend a lot less and still have nearly the same experience.  My friend has fancier tastes and his boat is on the upper end of the scale, around $60,000 I’d estimate. 

That is a lot of background information in a story that isn’t really about fishing, but I’m known to ramble so forgive me, please.  Plus, if you aren’t a boat owner then you probably did not realize that most of those fishing boats you pass on the highway on their little trailers cost twice or maybe three times as much as the car you are driving.   The point is, my buddy’s outboard motor needs $7,000 worth of repairs which isn’t out of line for a major rebuild of an expensive fishing boat motor.

Now in a country where 40% of the population can’t handle a $400 expense, my friend fits right in, he’s distraught that the boat repair shop won’t touch his motor until he prepays the $7,000.  And from the way he said it I believe it is because he doesn’t have that much “float” in his finances.  He is waiting on an insurance check before he can get the repairs done, meanwhile the awesome spring fishing is going by without him.  

That brings to mind a lot of thoughts.  First, why would you buy such an expensive toy if you can’t afford to maintain it?  Second, I wonder how much that fish I have in the freezer costs me per pound, yikes!  And third, how different is my life from his because I don’t own anything that I can’t afford to repair or replace with cash on hand.   

I was discussing this with my wife at the kitchen table yesterday.  I pointed out how it seemed odd that my buddy couldn’t get his motor fixed due to the cost.  She pointed out that $7,000 was a lot of money and few people kept that much extra in savings.  And that got us to thinking about how lucky we were.  This month alone we will have spent $6,000 on a replacement HVAC unit for our home, $12,000 for shingles and skylights replacement on the roof and $39,000 in cash for her first new car in 15 years.  And none of that caused us to sell any investments.  And rather than seeing our financial position get worse from all that spending, our net worth actually went up due to the growth of our portfolio in the last few weeks.

When her new Baby Bronco showed up she put her 2006 Nissan Exterra out on the driveway with a for sale sign and listed it on Facebook.  The first caller really wanted it for the $5,100 price but after a few hours called back and dejectedly said she just could not come up with that much cash.  The second caller got the car.  Again, needing a car and not having the money, I’ve never been in that situation in my life.  Yet I know it is normal for a majority of people in this country.  And it might not just be a luxury item like a boat that they can’t afford to fix, it might be something critical like needed surgery or a car about to get repossessed.

After further reflection, it occurred to me that in 42 years of marriage I can’t remember a time when money was so tight we couldn’t have replaced anything we owned with cash on hand. And we started out with zero assets, but we were lucky that my wife’s school loans were only a few thousand bucks and I did not have any school debt.  Even when we bought our first and only house, we had enough in savings to pay it off after maybe five years.  I can’t imagine what it would be like to not have enough money to handle life’s inconveniences because I’ve never been in that situation.  We’ve never had a money fight or deferred any purchase because we didn’t have the money.  On the other hand we have deferred almost every sizable purchase we have ever made, because we do not buy things on impulse.  My wife spent three years trying to decide to buy a replacement car for her 2006 vehicle.  I never had a nice new fishing boat until I was a multimillionaire and still pull it with a used Toyota SUV that has 175,000 miles on it.  

Living a life where financial worries do not exist is not normal, I know that.   Part of it was I’ve always been a high earner, not mega but still way better than median for where I’ve lived.  But we were also a single income family with three kids so it wasn’t like we were rolling in money. Another part of it was we controlled the costs of the big three, housing, transportation and food.  And the biggest part of it was we maxed out every retirement account we qualified for every single year and invested 100% in mutual funds and index funds.  Plus we saved and invested on top of that in taxable accounts.  We lived in a smaller house, drove poorer cars and limited our toys to low priced used items that stayed broke a lot of the time. That, along with a good income, made us financially independent over time. 

Could we have done it on a more modest income? I think so, but we wouldn’t have as much or have gotten it as quickly. But I look at our parents, mine who handed down a significant inheritance to my brother and me.  And my wife’s who died debt free leaving a farm of hundreds of acres to their kids. Neither of them made large incomes but both sets of parents were frugal people who passed that lifestyle down to their kids, none of whom have any problems covering unexpected financial emergencies in life. 

I used to manage a place with lots of employees.  Part of being the big boss was being an unlicensed therapist to my coworkers when life turns on them.  As a result I’ve seen lots of people making far above median wages who were dead broke, getting their checks garnished over consumer debt.  And it is sad, but often those people lived in bigger and nicer houses and had better cars and trucks in the parking lot than I did.  When I would run into them fishing they would be in their top of the line boat and I’d be in my used POS fishing rig.  Other employees were better at money than I was, they had side businesses and were millionaires in their 30’s and 40’s.  They made the exact same union wages as the broke people but they lived differently and made different choices.  And that’s what it comes down to.  Assuming you are making more than a subsistence level living wage you can choose to live below your means and save and invest the difference.   That will lead you to a life where you will still have problems, but money problems won’t be among them.  

So, what do you think? Am I just rich guy who is clueless about how real life works, or is financial independence a matter of choice for the majority of us? 

Do you stand out among your circle of friends for having a less expensive lifestyle? Does that ever cause you to not fit in? 

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