What do 10 times World Champion Kelly Slater and the GFC have in common?
Well, let me back up a little before I explain..
In it was a great piece on Innovation, mindset and staying at the top of your game.
“Asked on Monday if he felt like he was hitting his surfing peak, Slater replied: “If I’m not, then everyone else is going backwards, it’s pretty simple.
“I’m obviously surfing better than I ever have, I’m stronger, I know my equipment better, better choices, more experience.
“You have to have your mind there and you have to be going out and putting the surfing in – obviously that’s coming together pretty well, also.”
Slater is contemptuous of the idea that age should limit performance.
“People have a certain expectation you’re going to deteriorate, you’re vulnerable and your body is going to start falling apart and you’re going to gain weight and you’re going to get old and have kids,” he said.
“All this shit gets thrown into your brain when you’re growing up, it’s almost like it’s put in there to stop you.”
DON’ T YOU JUST LOVE THAT MINDSET?
‘All this shit gets thrown into your brain…’
It’s true, consciously and subconsciously, every day: other peoples beliefs, limitations, suggestions, expectations, paradigms, viewpoints, biases and distortions are being passed onto us.
We have a choice to let them in or not.
Growing up, sometimes, we don’t know or aren’t aware that its coming at us thick and fast.
Beliefs about money, sales, business, relationships, the opposite sex, what we can and cannot do are everywhere.
How much shit was put into your brain growing up?
How much was put there ‘almost like it’s put in there to stop you?
I know growing up in Eaglehawk, my Mom, Dad and the people around me did the best they could.
But at the same time, there was plenty of ‘shit’ put there that didn’t help that much..
(I know I’ve probably passed some of that shit onto my own darling children…Hopefully not too much..)
Many of us do..
So what’s that got to do with the GFC?
THE INSIDE JOB
Cath and I watched the movie today, ‘The Inside Job’.
It’s a powerful documentary on the before, during and after of the Global Financial Crisis.
It shows how Iceland, with a GDP of about $13 billion annually, ended up with a debt of over $100 billion.
And again, in the West Australian this week, there was a powerful graph showing the exponential growth of US Government debt over the past 20 years, and the exponential growth in the past 5 in particular.
US Federal Debt in 1996 was $5.18 Trillion. Today in 2011 it is $15.48 Trillion.
A quick look at Wikipedia outlines this detail further stating:
‘As of March 25, 2011, the Total Public Debt Outstanding of the United States of America was $14.26 trillion and was 97.3% of calendar year 2010’s annual gross domestic product (GDP) of $14.66 trillion. Using 2010 figures, the total debt (96.3% of GDP) ranked 12th highest against other nations.
That aside, the GFC calamity shows the problem when human intelligence (financial engineering: brilliant physicists, IT programmers and scientists put their minds together to create complex financial modelling and ‘innovative financial products’ such as ‘bundling debt and selling it as AAA rated investments’ with INCENTIVES – the more debt you can sell, the bigger the bonuses you make and GOVERNMENT DEREGULATION of the Financial Markets.
‘OK boys, it’s open slather… make as many loans as you can.. bundle up the debt and sell it onto other institutions..’ who then bundle it up and sell it onto investors who believe they are buying AAA Rated Investments.
The prevailing beliefs were:
‘this is going to go on forever…’
‘we are the smartest kids on the block… we’re creating debt then getting rid of it.. and making a fortune..’
‘once we get someone into a loan.. we don’t have to care about getting the money back.. we just pass the loan on..’
‘$30,000,000 a year salary package… that’s a fair deal..’
‘We can lose billions… get a Government bail out… then pay ourselves billions in bonuses… that’s fair…’
It just so happens that the people giving the AAA Ratings are also associates of the same people who are selling the investments..and they in turn are getting paid huge fees to give the AAA Rating rather than give it a BBB or ZZZZZ Rating..
Later on, when all the ‘sh..t’ has hit the fan, these same ratings agencies tell the Congressional Committees reviewing the debacle, ‘they were not investment ratings, they were only our opinions..’
In the minds of the unsuspecting investors, they were independent experts giving an objective, expert rating on what level of investment the products were.
WHAT IS THE LESSON FOR YOU AND ME?
1. Take care of the ‘sh..t’ you allow to go on in your brain. It’s either helping you, or hindering you. If it’s hindering you. Let it go..
Be like Kelly Slater. Be contemptuous of opinions of others that tell you it can’t be done. (especially if they have never done it before themselves..)
We set our own limitations..
Better we argue for our brilliance than our weakness.
2. Reward and measure the behaviours you want repeated.
Greed is a very powerful motivator.
More money and bonuses are very powerful motivators.
But if the motivators incentivise people to take more and more risks (and you are the one left holding the can) but they get away with no consequences for the risks they are taking…. that’s not a good game to play.
If someone is promising you ‘money for nothing’ and asking you to invest in a scheme where there is no risk for the ‘money for nothing’, it might just be too good to be true.
Both the Kelly Slater and the GFC stories highlight how we as humans can use our creativity, our innovation, our talents to create incredible greatness or incredible destruction.
HOW WE USE OUR GREED
Remember Gordon Gekko in the movie Wall Street way back in 1987; his famous speech.
“Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A.”
Whether we call it greed, or hunger, or desire, or ambition, how we harness it, and use it in our personal, sporting and business lives is a lifelong work in progress..
The GFC shows us there is much work to be done…and Kelly Slater shows us how great it can be when done well..
May you surf the waves of life like Kelly Slater..
Until next week.