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How To Step Off The Hedonic Treadmill

Life lessons from hedge fund manager and family man, Ed Thorp.

May 08, 2023

I recently stumbled upon the fascinating story of Ed Thorp.

A mathematician who managed to beat the odds in casinos and on Wall Street.

What impressed me most wasn't his ability to make millions of dollars. It was knowing that he didn't need to make millions more.

Growing up in the Great Depression, Ed knew what it was like to have nothing. Living in a house with 14 people. His mom stealing the war bonds he was saving for college. It wasn't green pastures.

His curiosity led him to develop strategies for beating casinos and the stock market. All with the help of the first wearable computer and the founder of information theory.

Despite his tremendous success, Ed decided to leave his investment career at the top. Leaving billions of dollars on the table.

Why?

It wasn't fun anymore.

There is a quote from Alan Watts that I refer back to often:

What can we learn from Ed's journey?

  1. Follow Your Curiosity: Ed didn't set out to get rich. He loved learning. By following his passions, he was able to achieve financial success as a byproduct. Along the way befriending Warren Buffet, Ken Griffin and Richard Feynman. All because he didn't want to stop having fun.

  2. Keep Learning: From card games to investing, Ed never stopped gaining knowledge. His commitment to lifelong learning allowed him to see opportunities others couldn't. He now spends his time reading, traveling, socializing and learning.

  3. Focus On Health: Ed made exercise a priority. Knowing that "every hour I spend in the gym is one less day I'll spend in the hospital at the end of my life." Staying active and taking care of your body is a priceless investment in your future. It all started with a bet over a milkshake.

  4. Time > Money: Ed realized that gaining more wealth would only lead to more bureaucracy. Robbing him of the time he wanted to spend with his friends and family. Whether it was academia or investing, he left after the paperwork got too heavy.

  5. Be Inner Directed: Ed didn't follow the crowd. He thought for himself. In today’s society this becomes even more important. Knowing how to form your own opinions may now be a superpower.

As we navigate our own lives, it's essential to remember that success isn't about wealth. Fulfillment comes from knowing when enough is enough and focusing on the intangibles.

The Refinery

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