Imagine a world in which Elon Musk is a professional video gamer rather than co-founder and chief executive of electric-car maker Tesla.
Or one in which Warren Buffett is a ukulele player instead of a revered investor and owner of holding company Berkshire Hathaway.
Finally, picture a scene in which Bill Gates plays bridge for a living rather than becoming the brains behind tech group Microsoft.
These worlds could have existed if the three billionaire business moguls had followed their passions rather than their talents — something Scott Galloway advises against.
In his new book, The Algebra of Wealth, the professor of marketing at NYU’s Stern School of Business, who served on the board of The New York Times, advises people to let go of their passions in order to get ahead financially.
“If someone tells you to follow your passion, it means they’re already rich,” writes Galloway, who grew up in Los Angeles and now lives in London. “And, typically, they made their fortune in some unglamorous industry like iron ore smelting. Your mission is to find something you’re good at and apply the thousands of hours of grit and sacrifice necessary to become great at it.”
Although his approach might fill some with horror, he says following your passions will probably lead you to careers where the supply of eager workers far exceeds the demand. He picks out sport, music, film and fashion as some of the worst offending industries.
Galloway, who has founded nine companies, explains that only 2 per cent of professional actors make a living from their craft and half of all visual artists obtain less than 10 per cent of their earnings from their art. Similarly, the top 3 per cent of YouTube channels receive 85 per cent of all views on the platform.
“A former client of mine, Chanel, is among the strongest brands in the world, commanding price points in the thousands at gross margins of 90 per cent,” he points out. “The family that owns Chanel are billionaires. And they had unpaid interns. Why did they do this? Because they could. ‘Follow your passion’ is Latin for ‘prepare to be exploited’.”
So how does Galloway define talent? Something that comes easily to you and is difficult for others, he writes. In contrast with passion, he continues, talent is observable and testable; it can be more readily converted to a high-earning career, and it gets better the more you exploit it.
“Passion for something might make you better at it — talent absolutely will,” he argues. “Doing what you’re good at creates a virtuous circle. Your accomplishments come faster, they reinforce your confidence, and encourage further focused effort. The entire experience is something more pleasurable than gruelling, making it easier to return to day after day, year after year,” he says.
He cites as an example one of the first people he hired at Prophet, a consultancy business he established in 1992. Her name is Connie Hallquist and, before joining the company she had been a French scholar, a professional tennis player, and a currency trader.
All of those career paths leveraged her distinct and obvious talents. But what she was truly good at, Galloway says, was managing people. “I’ve rarely seen anyone so skilled at putting a plan together, motivating a team, and driving everyone toward a common goal.”
Hallquist went on to found her own business and has since been recruited to a series of chief executive roles.
“Unlike tennis or trading, managing people is amorphous and hard to identify as a talent. But, when identified and cultivated, it’s arguably the most valuable one a person can have. People often assume if someone is smart and a good person, they are a good manager. That’s not true. It’s a distinct skill and trainable but, like most skills, it flowers best in those with a natural talent.”
What of the rest of the book? He says it is a practical guide for “optimising your life for wealth and success”. What it is not is a self-help book to get your finances in order by collecting supermarket coupons or turning down the temperature on your boiler. Galloway’s book is for those who might perhaps already be described as wealthy.
“This is not a typical personal finance book,” he admits. “There are no spreadsheets for you to fill out. I’m not going to tell you to cut up your credit cards or stick motivational quotes to your refrigerator,” he says.
In an unvarnished style, The Algebra of Wealth tries to explain what you need to know to improve your chances of achieving economic security. Galloway examines how to ride and optimise big economic waves; what small steps you can take that might pay big returns later, including diversification; and how stoicism can help minimise spending and develop better financial habits.
“How do you get economic security? There is an answer — that’s the good news. The bad news? The answer is . . . slowly,” he says.
The Algebra of Wealth: A Simple Formula for Financial Security by Scott Galloway (Torva, £22.00)
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment
