“I made $6million by 26 - and lost it all by 28”
I read an article recently about Dave Asprey, a Silicon Valley Investor & Tech Entrepreneur, with the headline “I made $6million by 26 - and lost it all by 28”.
Naturally I was intrigued to see how someone at the tender age of 26, could firstly get themselves in that fantastic position, but then lose it all in 24 months. My initial top three assumptions, in order of likelihood, were…
- One of our seven deadly sins muddied his view - greed! Often, where a financial loss is made, greed can be found. Holding on to something for too long on the chance of making more. Not knowing how much is already enough. Not ever being satisfied with your lot.
- He received bad advice or he received no advice (I am not confessing to know which of these is the lesser of two evils).
- He gave it all away for the greater good and although he is now skint, he lives a fulfilled and humble life, rebuilding schools in Nepal, knowing he has made lives of others better.
It transpires that I was largely right with my first two assumptions. Dave had a large shareholding in his Tech company, Exodus Communications, which did very well at the outset, before the share price dropped from $60 to $5 in a relatively short time frame.
In hindsight, Dave wished he had thought, “I have enough money. I can do whatever I want. I should just walk away today.” Instead, Dave actually thought “I can't do that. I might lose an additional $4 million in unvested equity or something.”
Furthermore, Dave also had a few hundred thousand dollars of his own personal money squirrelled away that he always knew would “at least be enough to take care of my basic expenses”. It transpires that the account was on a margin that he didn't even know about, because it wasn’t being managed correctly. Dave confesses to being “too stubborn and fearful to hire someone to help me manage it. The margin ended up consuming most of the account before I even noticed.”
Dave summarises his experience and advises others to “hire a professional to pay attention to the stuff that you're not paying attention to."
Whilst I would wholeheartedly agree with that, I would also reiterate the importance of taking stock of how much is truly enough for the life that you want, as I have alluded to within this previous blog. Do not risk it all when you already have everything you ever wanted.
Having a Financial Plan will ensure you know how much is enough and will give you clarity on how much you can afford to win or lose at any one time. It will fight back greed, and any other of the seven deadly sins that may derail you on your way to a fulfilled life.
Having a Financial Planner who understands your life plan and knows what “enough” means for you, will give you complete peace of mind that the areas requiring “attention to detail” will never leave you with detail that needed attending.
Alfie Mullan, January 2019
Want to hold a conversation that will quite literally change your life? Well drop me an email and we can get this new life on the road.