November 17, 2012 - Buenos Aires, Argentina

What no one told you about how to make progress in life

I was getting home from University and I saw my step dad looking at the computer somehow surprised. Not the good surprised type, he was thunderstruck, he couldn’t believe his eyes. It was an email sent by a friend. The email was an open letter, it was sent to almost everyone we know.

In the letter this friend said some bad things about my parents and about another guy. The friend was wrong, and everyone who received the letter knew it. Not because the email gave no good arguments, but because they knew my parents.

In life we always try to get the best deals. We don’t have much, but we believe that we can be whatever we want if we just make the right deals. Well, I have news for you. That’s completely true. If you just buy the right thing at a very low price and then sell it again at a much higher price, you’ve just made a good deal. But how many good deals do you have to make to get to where you want to be?

Probably a lot, if it was easy you would already be there. But the good thing is that there is still time . And the bad thing is that you may not get where you want at all.

Wow, that’s harsh. But is the pure and simple truth, not everyone achieve their goals. And I would dare to say that the majority of them don’t. If you noticed there are 7 trillion people in the world, and this number is increasing right now. They are all people just like you. And even if you are a racist and you think not every human being is equal, there is enough people of your race, and that live in your country, and that have similar financial conditions to make you just another head in the multitude. You can think you are different from everyone else, but guess what… everyone thinks they are snowflakes too.

I didn’t want to be rude, but what I was trying to say is that if you really want to be different you have got to act differently. You have to do what no one else does. And try harder than the ones who couldn’t make it to the finish line of their goals. And there is a secret to going farther than anyone else, and it is something no one tells you, at least not completely:

Don’t ever lose.

Wait! Calm down. Don’t crucify me, allow me some words more and you will be gobsmacked.

First of all, I know that failure is a part of life. I aim to be an Entrepreneur, and the main qualities of the successful Entrepreneur are resistance to failure and perseverance. A bundle of perseverance can make you accomplish much more than a spark of brilliance. In life, no one can get it all. “If you never try you’ll never know”. You learn by trying and failing, and then trying again and failing again; until you get good at it.

So, if failure is inevitable, why is “Don’t ever lose” the phrase that will change your life? This “loss” that is said here has nothing to do with failure. It has to do with something called Political Capital. Political Capital is basically how much steem your peers have for you.

Don’t limit the idea. It’s not only your peers and its not only steem. Political Capital is how much people trust you, or how much they can rely on you, or how much they like you. Capital refers to value, something accountable; Politic to relationship with people. So, you can think of Political Capital as your value to someone else.

The sentence “Don’t ever lose” is not complete, the correct sentence is: “Don’t ever lose political capital”.

For every single thing you do in your life you will need someone. If you are working, you need someone to pay you. If you are in love, you need someone to kiss you. If you are in love with your boss, you need this person even more. If you want to get somewhere you will need people to help you getting there. And if these people are happy to give you a ride your path can be a lot easier. You are always promoted by someone who is above you. No one beneath you can ever give you a promotion.

You are in a journey, at the side of the street asking for a ride and trying to show the drivers that you are the perfect hitchhiker to be picked up. In life we make a lot of effort to achieve things, and we do that counting that the effort will be rewarded. What I want you to pay to pay attention to is that someone will give you this reward. You depend on people, it doesn’t matter how good you are. When you make progress in life it is because someone acknowledged your worth.

Given than your dependence on people is beyond your will, the more people like you the better. When people like you, you are promoted faster. They push you forward. Doors are opened more easily. That happens because they have no problem recognizing the worth of someone they like. It would be a lot harder for people to promote you, or open doors to you — even if you are qualified for it — if they think you are a moron.

But, does that mean I have to please everybody?

In high school I was weird and nerd (and, I must admit, rather obnoxious bragging about my results in math to the entire class). The “cool guys” didn’t like me. They were bigger, stronger, more athletic and much cooler than I was, and very often threatened to beat me. I didn’t like them at all. But at the end of our last year the whole class went to a big house in Petrópolis with a swimming pool and stuff. We spent the weekend there. I played the guitar incessantly the entire weekend and at some point a circle of people was formed. Three people had guitars in the circle and I was one of them. Everybody begun to ask for songs, we played and everyone sang along. The “cool group” were there and they too engaged on the music playing. As we sang and talked we had the chance, for the first time, to talk as civilized citizens.

At the end of the trip we were not friends, but we weren’t enemies either. We jumped from enemies to acquaintances. The kind that when you pass by on the street you don’t stop to talk but at least wave a little. How is that good? Now, some years later, I have no problem going to class reunions — that usually happen at the house of people who were more their friends than mine. I can see my real friends in an environment where I’m not uncomfortable because of the presence of anybody, and keep contact with people whom I was’t too attached but had a good relationship — you value that much more when you understand the importance of networking; you never know where you’ll need the next door to open.

So, no. You don’t have to please everybody. But, if possible, you should try not to displease anyone. There are people who don’t like you, and you are not obliged to like or please them. But if you can make them play with you and not against you, you will be much better off. And here is why.

When you do a favour to some friend, that can mean A LOT in the moment, but with the passing of the time it inevitably loses its significance. However, when you wrong, harm or hurt someone, the impact of that will grow with the passing of the years and create bitterness. And here is the thing, what will also grow with the passing of the years is the probability that you will need this same bitter person for something. So, keep the list of people who have any kind of unpleasantness with you as small as possible.

Well, now we know that a positive balance of Political Capital is what we aim for. But what’s the problem with losing some of it once in a while? Well, what happens with our reputation and our value to people is analogous to what happens to money in the Stock Market.

Two curves tarting at $10,000 and finishing at $25,000 after 18 years.
The first one loses 50% in the first year and has 10% growth every year after that.
The second one has 5% growth every year. from Benjamin Graham: “The Intelligent Investor”, 2007 edition with commentaries by Jason Zweig

The graph shows two investment situations, both starting year one with 10,000 dollars and finishing 17 years later at year 18 with about 22,950 dollars. The difference is that the first one had a steady growth of 5% over the whole period, and the second one lost half its value in the first year and had a 10% growth rate in the following years.

Notice, the first line didn’t do anything extraordinary. It had 5% growth, which is pretty reasonable and depending on which 17 years period we are talking about it is even bellow the Market’s average. On the other hand, the second line, after losing half its value in the first year, had to have a steady growth rate of 10% a year — which is something not easy to do — to catch up with the first line 16 years later.

Back to the analogy, once you lose a part of your capital you have to make an enormous effort to recover it; be it real money or Political Capital. It’s not even necessary to dive too deep into the 17 years of the example; looking just at the first year you can see that once you lost half your capital, you need to DOUBLE what you have JUST TO GO BACK TO THE STARTING POINT!! The second line took more than 7 years to get back to the 10,000 line again. 7 years paying the price of a mistake. Had it not invested at all in the first year and then started from the second one, it would have finished with 45,950 dollars.

That’s enough information for you to draw your own conclusions. But look, it is better for you to do NOTHING than do something that will make harm to someone, make the person like you less, because later it will be so hard to get this steem back. The best thing I learned is to shut my mouth when I’m angry. No ironic comments or posts on facebok, just shut up. Remember, you can always tell people to go to hell tomorrow.

Don’t be cynical, you have the right to be angry and God knows there are some people who deserve a kick in ass, but you won’t do it. Because else you would be like everyone else. If someone offends or irritates you, wait until you are calm, preferably wait until the next day. Then go to the person and empathically tell he or she what you think. Don’t be critical, be empathic. If you accuse the person, he or she will be defensive, but if you talk empathically I assure you things will go much better.

Remember, your pride can cost you a loong time and an open door when you need it the most.

My parents have a huge Political Capital account. In the end, the friend who sent the open letter apologised, and said he acted on impulse. My parents instantly accepted his apology. Everything is almost as it was before. Everything looks normal, but the truth is that it will take a long time for this friend to recover the reputation and trustworthiness he had before.