Burnout’s Cure
It isn’t working less or finding your passion.
I was coming off a year of running the #1 fund mutual in the world, but I still felt first-day jitters as I walked into the office at my new job in the elusive high-risk, high-reward world of hedge funds…
The woman who had this job before me had been summarily fired. Her voicemail, which I inherited, wasn’t turned off, and it still had a lingering love message from Bill Gates. She was married and so was he.
The guy who had this job before her was fired after 3 months.
I had finally broken into one of the best-performing hedge funds in the world. It was my dream job. This was the job I’d never even dared to dream of. It was my opportunity to work with and learn from the smartest minds in finance.
My biggest question: would I be fired too?
I remember sitting on the dusty floor of my empty, dark apartment on the Upper West Side of Manhattan. I had no furniture, no utensils, nothing. I sat on that cold floor, eating takeout while I spoke with my boss and co-workers from the landline phone, which was also on the floor. I feared that by the time my furniture arrived, I would have to high tail it back to where I came from.
My first job managing money was at Farmer’s Insurance.
They had a buzzer that went off at 9am to start work, BUZZ at noon to take lunch, BUZZ at 1pm to start work, and BUZZ at 5pm to stop working. The sound was so loud, it vibrated through our bodies. We held our ears. I ignored the buzzing, as lunch breaks and 9 to 5 workdays were meant for non-investment people.
We were like Marines who had infiltrated a stodgy insurance company.
Like a Marine, I would work all weekend, sleeping under my desk on Saturday nights. I would arrive around 9am on Saturday and depart at 6pm on Sunday. My square cubicle had an L-shaped desk which made it easy to hide a sleeping bag and pillow underneath it.
On weekends, we were required to manually sign in on a paper security log.
My boss would see the security log and call me in for my weekly “this is a marathon, not a sprint” lecture. I retorted that if he didn’t let me research potential investments to my heart’s content, I would stress out that I hadn’t done enough.
I told my boss that the stress of not being allowed to do my job the way I thought it should be done, and to the best of my ability, would lead to real burnout!
I worked at Farmers for 3 years, and spent nearly every Saturday sleeping under my desk, with my pillow wedged against the power cords, with the foot of my sleeping bag sticking out from under a desk like someone had dragged a dead body into my cubicle.
I did all this without a single day of burnout.
Burnout’s cause isn’t what we think it is. According to Merriam-Webster, burnout is “A state of physical or emotional exhaustion that results from prolonged stress or frustration. It can also be defined as a complete depletion of energy or strength.”
What I told my boss at Farmer’s Insurance, and what you’ll see through the rest of my career in the highest of high stress environments, is that burnout, that feeling of hopelessness, is not caused by overwork or stress. Even at my highest-visibility job, running the #1 fund in the world, I wasn’t burned out.
After Farmer’s Insurance, I joined Nicholas | Applegate.
I ran large research projects, was the technology analyst for a $4 billion fund, all while I ran the #1 tech fund globally. If that’s not enough, at nights I managed all the Asia technology investments because the Asia team left suddenly for another firm. I felt energized by my free rein to try and accomplish the seemingly unsurmountable challenge of doing all this work.
My biggest obstacle? Only having one telephone.
If I was on an earnings call during market hours, I needed to hear what was being said as it was impacting stock prices real-time. If I saw a CEO returning my call, I had to take a bet: was what he was going to tell me more important to our performance than what might be revealed on the live earnings call? Was the broker calling in with a winning idea the call to take, or would the idea be a dud, and the earnings call the place to stay?
Like a racehorse, chomping at the bit, stuck in the starting gate, I was so frustrated looking at all those missed chances to perform better, act quicker and beat the market!
When I entered the office on my first day at the hedge fund, I tentatively approached my desk.
Then I saw it. Nirvana. Two phones side by side! I felt right at home. Like a conductor leading a perfect symphony, for the next 3 years, I would use both phones plus my cell phone plus instant messaging.
How did this symphony perform?
I would have two live earnings calls playing at the same time during market hours. I would increase the volume on the one where they were revealing critical information. Then I would message out this information in real-time to our team who could trade right then. And since I followed 300 companies, I had calls and texts coming into my cell phone (or was making calls), all day long. I finally had the tools to do my best work.
The dark side of working 80-100 hour weeks for years at a time is that my body started to give out.
I was hospitalized several times, mostly from the secondary impacts of exhaustion. One time, I went to lunch in California where I ate some bad chicken and hopped on a redeye. Once I was in NYC, I was so sick and dehydrated that I started to lose my eyesight. I checked into a hospital, they put me on IV fluids, and 9 hours later I could see again! As soon as they agreed to check me out, I hightailed it straight to the office for an important meeting.
After surviving on 3-4 hours of sleep a night for years, I ended up with an infection in my face. By the time I waited 2 hours to see the dermatologist, and 4 hours to see the plastic surgeon, I was out of time. The plastic surgeon said he would need anesthesia. I told him I had no more time, no more chances to return. Those 80-100 hours of work still needed to get done. So he operated on me, right then and there, with nothing but my high pain tolerance as a weapon.
I wasn’t the only one. The other analyst in our office was hospitalized with a collapsed lung. Yet, we would both describe this as the best job we ever had.
This job should have been the textbook example of work that causes burnout, yet I was having the time of my life, hospitalizations notwithstanding!
“Were you burnt out?” Friends ask, when I tell them my war stories.
Never. Not for one minute.
I had the best boss. He paid me. He recognized me. He gave me autonomy. That job was heaven on earth.
I joined in November, and my boss agreed to cover my last company’s bonus. When bonus payout season rolled around, he sent me a message: “I forgot what that bonus number was.” My heart sank. I reminded him what the number we agreed to was. He said “oops, I paid you 50% more than that!”
Another time, I made the biggest trade of my lifetime, betting against the market, and making my boss hundreds of millions. I took a rare three-day weekend to watch a horse show in California. When I checked my checking account, there were extra zeros. I called the bank. No mistake. I called my boss and said there might have been a mistake. “I was just letting you know you are doing a good job” was all he said. That money came straight out of his pocket.
When he hired me, he said: “You’ve been right on semiconductors alot. Your predecessor was not. I hired you to get the semiconductor cycle right.” I knew my mission.
For the first 9 months, I treaded water. It wasn’t yet time to make the big bet that he had hired me for. I kept him abreast of news and recommended some smaller trades. The timing for the big trade wasn’t here yet, but these smaller trades built trust between us.
I was listening to an earnings call recording at 2am one night, and heard the CFO indicate that they were going to spend more than they would make. I did a victory lap around the empty office, so excited for what I had just heard. I knew they were going to start missing numbers.
But I didn’t need to tell my boss that. I just read him the quote from the CFO and he started shorting the stock. We made a 25X return on that one trade. It felt like he was completing my sentences. I would start to say something and he would execute the trade as I was speaking.
Then the big day arrived in June 2000. All the signs I looked for when semiconductors peak hit.
In normal cycles, 2-3 of the 5 signals would hit, and that was enough to sell at the top. This time 5 of 5 signals hit in 3 days. I got on our daily morning call that day, and after 9 months of recommending small trades and reporting small bits of information I had gathered, I shocked everyone, even our badass trader.
I said all my signals hit at once. I had never seen this.
We need to sell all of our semiconductor stocks and short them. That was more than 30% of our entire fund. It was a $2 billion swing in our exposure. My boss liked to hold high-quality names. I stated that in this instance, those too would decline by 80%, but he was welcome to keep anything he liked, as long as he was fine with the 80% declines.
Everyone on the call was silent.
After the call, our head trader sent me a quick message: “Bold move. I’m proud of you.” But that would be the last positive call.
The two other analysts on our fund called me up yelling: “You are going to ruin our fund. You have to take back what you said. I don’t know why, but he’s listening to you. You are going to destroy everything we’ve built!”
And they were right, at least initially. The market was moving in the wrong direction.
My trade recommendation looked like suicide. I was holding my breath as positive news came out against our trade. I wanted to hide under my desk as companies announced strong earnings. But in the end, our timing of that trade was just early enough to get in. It made my boss over $100 million personally, and gave me an incredible sense of accomplishment and belonging at the highest echelons of finance.
A month later, the trade started working, and my boss added zeros to my account when I took that three-day weekend.
After my boss made his fortune, he was done with regulations and clients. He sold our positions, packed up his things, and became a farmer in the mountains. But I didn’t want to work for anyone else.
I didn't want to continue in the chaos of a hedge fund career without my boss’ leadership. So I moved to a less demanding job. My search for work/life balance backfired… into burnout.
I tried to exercise my way out of burnout, and that backfired too. I would start the day at the gym, running at high speed on the treadmill, attempting to sweat out anticipatory frustration. By lunchtime, I needed another dose of treadmill running time. And by 4pm, I was back on that treadmill. All I needed was for a buzzer to go off, and I would be completely remade into those buzzer-controlled employees at Farmers Insurance!
All those years of 80-100 hour weeks where I prided myself in never being burned out, and here I was working barely 30 hours a week and full of burnout!
Burnout felt like hitting my head against the wall repeatedly. My boss would tell me to do things that would directly harm our firm and performance. He said things that even a first-year analyst would know are wrong. He kept telling me things that were akin to 2+2=5. Back to the treadmill!
One day the entire senior management team called me into a conference room. One of our investments, Broadcom, was on the front page of the Wall Street Journal being accused of something called stock options backdating. That was Broadcom’s issue, not ours. But my boss told me to call the company and ask them if they were guilty of stock options backdating. He insisted I start recording every one of my conversations in email, so that future analysts could learn from my email notes.
Never have I joined a firm and read past analysts’ emails! I join and figure out what is happening now and in the future. Like many other of his requests this made no sense and worse yet…
This request from my boss had the DOJ and FBI searching for me in California when I was on vacation in Europe. The DOJ had decided to make an example of the Chief Financial Officer of Broadcom, and wanted to use me as a witness given all the emails I had written on the topic! I wasn’t even working for the company anymore, yet I was still trying to recover from my boss’ terrible directives, and my inability to push back.
In the job I thought would give me more balance, I ended up living life on autopilot. Like a defeated robot, I went from treadmill to work to treadmill, to work, back home to lounge around. I had no energy even though I was only working 30 hours a week. I had less life balance because I didn’t want to do anything.
Burnout isn’t about the hours I spend. Burnout is my soul’s cry for help. Now I use it as a signal for change.
What kind of change? Not vacations or more balance. Clearly less work wasn’t the answer. Neither was exercise. Not less stress or avoiding general frustration, as the common definition of burnout would suggest. Instead, I look for the root cause of burnout, not the symptoms.
My root cause of burnout was lack of personal power. When I was paid, recognized and had autonomy, I felt empowered, even when working 100-hour weeks. I felt zero personal power when I was told do meaningless tasks where I had little input.
If personal power is the antidote for burnout, how did I achieve personal power, and how can you?
My sense of personal power comes from having a plan, my own plan. I know where I’m going, my destination, and I know where I am on the path to that destination. This has taken situations that individually might have caused me frustration and burnout, and turned them into stepping stones to my destination. You can follow these same steps to your personal power.
In your career, where are you now along the 3Bs?
Too often, people feel burnout because they have broken into their industry, but are stuck in that stage. Stay in the Breaking-In phase as long as necessary, but as short as possible. Ideally, just long enough to build skills and stack accomplishments, such that people will pay you in quality equity for your next role.
The time you need to spend in the Breaking-In phase of your career is often far shorter than you imagine. I stayed in this phase years longer, actually an entire decade longer than I needed to, which is why I am passionate about sharing how to move into the Building Equity phase.
One of the great antidotes of burnout, personal power, comes from standing in your value. How can you stand in your own value? One way is to stop trading your time for money. Move from a salary mindset to an equity mindset.
After your Breaking-In phase, you will move to building equity. The next question is: what kind of equity?
To best answer that, pause to design your destination: your Money Flywheel.
Most companies that will pay you a significant chunk of your pay in equity are private companies, so lets focus on that space.
Building your money flywheel will allow you to experience the kind of luck that seems to happen
regularly in Silicon Valley.
With a money flywheel, you will increase your surface area of opportunity in three ways:
1. You operate in three realms, Build, Invest, Advise, so naturally you’ll have more chances at step-function increases in wealth, and thus personal power without burnout.
2. You meet more impressive people while working in Build, Invest, Advise rather than one job, which leads to more future opportunities, fun and less burnout.
3. Most importantly, your money flywheel has network effects. “Network Effect” generally means value increases as more people use it. For your money flywheel, networking with people who also have money flywheels means you cross pollinate opportunities and luck. For instance, you’ll benefit from the interactions of Build, Invest, Advise where investors may recommend you for a build role or an advisory role, your co-founder might introduce you to an investment opportunity, or your investor in one company may fund your next startup. The possibilities are nearly endless.
Three steps to design your money flywheel to map your path to personal power without burnout.
Pick a growing industry with active private market investors, where you also have skills. If you don’t have the skills you need for your desired industry, don’t compromise by going to a less promising industry. Instead, stay in the Breaking-In phase a bit longer. If you need to make a big switch, like from horse trainer to money manager, you can get an MBA to help switch industries, as I did…
Once you have selected an industry, pick a vintage. In each segment of your flywheel, you are networking with people who can get your positions in other segments, only if you are operating at similar vintages. For instance, if you like smaller companies, work, invest, and advise in early-stage companies so you network with investors, advisors, and builders who can find you additional opportunities in similar sized companies.
Network into your first equity position (not pure equity, but where equity is a meaningful part of your pay package). This is the hardest part, because once you are in, your money flywheel will start to work for you more and more. Getting in is hard, but worth it because you can build your own personal power, and you’ll build your own opportunities to work with fascinating people on interesting projects.
The personal power you build when you design and activate your Money Flywheel can serve as your lifelong antidote to burnout.