The (Overdue) Collapse of Tech Bros, CEOs, Accountability and Smart People

Jobs are not what they used to be. The average time an employee spends with their company is now at the lowest level ever, and that's by design. We have gone from full-time to part-time to casual to gig work, lowering the expectation of a long-term professional relationship at every step of the way. If this didn't do enough, studies have shown that many workplaces are now intentionally promoting the fear of job losses in an attempt to motivate workers and keep costs down.

But this is usually a really dumb idea. The death of job security is bad for workers and bad for companies. But nobody cares anymore. So we have immediately seen, Andrew, layoffs. We have seen price increases.

So that's inflation. Teachers and staff at schools from coast to coast could soon be out of their jobs. Fifteen million new jobs in just three years—a record. Musk said the company would look to reduce headcount by around 10%.

The layoffs are already piling up this year, and we're just a few weeks into 2024. In three years, a record has been set. Mr. Musk said the company would look to reduce its headcount by around 10%. Up until the 1980s, it wasn't unusual for workers to spend their entire professional careers with just one company.

Company loyalty was highly valued by both employers and employees, and the threat of getting laid off or fired was incredibly low. If you ever watch old films and see someone getting fired as a major plot point, just remember it was actually a big deal back then. However, according to data from the Bureau of Labor Statistics, those days are long gone. The reality is that it was a significant issue back then, but now it has changed. "Third prize is you're fired."

But according to data from the Bureau of Labor Statistics, those days are long gone. The average tenure of young employees these days is less than a third of that of the baby boomers exiting the workforce. I don't want to sound too old here, but back in my day, people actually cared about losing their jobs. Today, getting fired or laid off from your company just makes for good content to post on TikTok. This is a bad trend for companies because it takes away their biggest leverage.

The fear of getting fired is always going to be a motivator in the workplace. There really is no way around that. If you don't do your job or cause too much trouble for the company, you are going to lose your job along with the pay and benefits that come with it. But as the great Peter Gibbons would say, that will only make someone work just hard enough to not get fired. The death of job security means that people now just expect to lose their jobs at some point in their careers these days.

But there are three big reasons why it was allowed to get this bad, and three reasons why nobody really cares anymore. The first reason is that companies give up on training their own staff. There was an old joke about company staffing that goes something like this: The CEO and head of HR are arguing about the cost to train staff. The CEO asks what would happen if we spent all this money and they quit, to which the head of HR responds, "What happens if we don't spend the money and they stay?" However, as more people move jobs more often, the CEO's argument is actually starting to make sense. Research conducted by Peter Cappelli, the director of the Wharton School's Center for Human Resources, found that the time and money spent on staff training within companies has fallen drastically. In 1979, the average worker received two and a half weeks of on-the-job training every single year.

By 2004, employees received only 11 hours of training, most of which was dedicated to safety rather than developing new skills. A more recent follow-up survey conducted by the same team in 2011 found that only one-fifth of workers received any on-the-job training at all within the last year. Companies are hesitant to invest in training because employees are leaving their jobs more frequently than they used to, so they are only willing to hire individuals who are already able to do the job. Standardized systems have made this hiring process significantly easier. If you are a professional office worker, it is almost a prerequisite to have basic proficiency in Microsoft Office, especially Excel. Each profession now has its own industry-standard productivity programs; for example, creatives use Adobe Suite, sales professionals use HubSpot or comparable customer relationship management (CRM) tools, and marketers need to navigate the advertising analytics backend of platforms like Google, Meta, and LinkedIn. Since these skills have become the standard for all employees, companies can hire people who are ready to work from day one. In the past, new hires would require lengthy training programs on the unique in-house systems of a particular company. However, standardized programs have also created an environment where individuals can find new jobs for which they are already qualified, lowering barriers to entry. This, in turn, leads to more frequent job switching, which means companies invest less in training employees they perceive as "unloyal." This cycle intensifies the need for industry-standard systems. The ultimate manifestation of this trend is platform-based gig work. The professional relationships for this kind of work last only as long as the app is running, and many workers often juggle multiple apps simultaneously to maximize earnings and minimize downtime. If you want to advance in a professional career these days, I’m sorry to say, but you will have to invest some of your own time and money into further training, even if it's just to tick a meaningless qualification box. Companies are not going to provide training as they once did, meaning if you quit or get laid off, it’s not as significant of an event for either party. However, the decline of on-the-job training is just one of the reasons job security is deteriorating. It’s essential to understand how money works, why job security is waning, why employers may no longer care, and what happens when no one stays in a job long enough to become proficient. The decline of job security poses challenges for companies, even if they contributed to its demise. The reality is that when you start a new job, you are unlikely to excel until you fully learn your new role. While standardized systems have made it easier to transfer basic competencies between companies, there are still minor but crucial details—such as who to contact for authorizing your expense reports, the names and faces of clients, or how the office printer operates—that can vary significantly and impact your performance.

They all take time for new people to learn. According to a study conducted by Gallup, a business analytics company, it takes the average employee 12 months before they reach their full performance potential in their new role. Other studies have suggested that new employees are not fully autonomous in their responsibilities for the first 18 months of their employment. If new entrants into the job market are only spending three years in their jobs on average, that means they are going to be spending a third of their career just getting up to speed in their new roles. This results in a loss of productivity for the companies they work for, right? Wrong. Worker productivity is actually at all-time highs. This begs the question: is this in spite of lower job security or because of it? The second reason that job security has been declining is that it serves as a great motivational tool. If the fear of losing your job is only enough to motivate you to do the bare minimum to avoid that tap on the shoulder, then you should know that companies have responded by moving those goalposts. A study conducted by economists at Manchester and Cardiff University looked at the motivating factor of what they called "manufactured job uncertainty."

In this report, researchers attempted to determine why fears of job security were increasing, even as the rates of people being fired from full-time positions remained stable. They did this by comparing companies in America and the UK, which are often willing to lay people off to appease shareholders, to companies in Japan, which have a strong culture of never firing employees. As a small tangent, Japanese businesses take the act of firing individuals so seriously that they have an alternative practice called "oidashi-beya," which loosely translates to "workers' purgatory." According to Japan Intercultural Consulting, a firm that advises businesses operating in the Japanese market, workers' purgatory occurs when an employee chronically underperforms in their role.

Instead of getting fired, employees are typically placed in a room, often windowless, where they have nothing to do. In many cases, their business cards are taken away, and they are either forced to do menial, mind-numbing tasks or given nothing to do at all. So yes, Japanese companies would rather put their workers in solitary confinement than fire them, making them quite a contrast to companies in America and the UK. What the economists found was that even when job tenure wasn't actually being reduced by layoffs or firings, changes to corporate control—especially company mergers or acquisitions—raised uncertainty. Companies noticed that by amplifying this uncertainty and making workers compete against each other to maintain their positions in the event of a potential downsizing, they could motivate their employees to work harder.

Companies that implement rank-and-yank strategies tend to rank the performance of their teams, compare them to one another, highlight staff errors, and downplay strong performers. This creates an environment where managers and their teams constantly feel that their jobs are at risk. Despite having shorter tenures for managers and operating with more autonomy, Japanese firms, thanks in part to a weaker overall economy, exhibit a higher sense of job security. This is primarily due to a culture that prioritizes protecting workers, even at the expense of shareholders. Interestingly, the study also found that this approach is not effective with younger employees. Decades of well-publicized layoffs have led younger managers to have little expectation of job security, and they do not fear losing their jobs as much as older managers, who come from a time when individuals could spend their entire careers with a single company. The rank-and-yank strategy may boost productivity temporarily, but if it creates an environment where everyone feels perpetually on edge about their jobs, even the best employees will seek better opportunities elsewhere. Younger workers have also recognized that changing jobs more frequently, especially early in their careers, is the best way to climb the corporate ladder and secure pay increases. I will emphasize this in every video: if you want to increase your earnings in your career, multiple studies suggest that the most effective strategy is to change jobs roughly every two years and always be on the lookout for better opportunities. Companies no longer value staff loyalty, and this shift is one of the key reasons why job security is diminishing. It costs businesses a significant amount of money to hire new employees and even more to pay them while they are getting acclimated to their roles. If they are hiring externally for a more senior position, they will also need to offer the new hire a higher salary compared to an internal promotion. So, if it makes no sense, why do companies keep doing this? The reason is that internal promotions are often easier to manage.

So, if it makes no sense, then why do companies keep doing this? Well, it's easier. An internal promotion means that someone else needs to be promoted to fill that person's position, and someone else needs to be promoted to fill theirs. Instead of your company having one employee in a new job, it has five hiring managers involved. They could either promote internally or hire an external candidate who already knows the systems, allowing them to get back to scrolling Reddit in their offices. Additionally, workers don't believe in job stability anymore; things like employee pension plans and career development are now seen as the responsibility of the employee. If they are accepting that responsibility, they also want the freedom that comes with it.

Some companies, like consulting, legal, and accounting firms, have built their entire workforce around limited-time employees. Overworked and underpaid graduates are willing to stick it out in entry-level roles because they know it looks good on their resumes when they apply for a "real" job in two years. Companies can attract high-performing workers by bragging about how secure they are, but even organizations once considered American institutions have fallen apart too many times for people to think their jobs are secure. Job security isn't a selling point worth taking a job for anymore, as people have learned not to care. So congratulations, Corporate America; you kind of played yourself. The average public CEO now makes nearly 400 times more than the average American, with their pay having increased by an average of 1,460% since 1978. You probably already know the old joke that no, they are not working 400 times harder than their employees. However, being a CEO is still a serious commitment that normally involves making lifelong sacrifices to climb the corporate ladder or start a successful business, all while being accountable to shareholders and a board of directors. The pay is good, but the work is hard. If you want to be a CEO, you need to be on call 24/7 to put out fires, or your time at the top will be very short-lived. That's the story, anyway.

So then what is behind the massive rise in CEOs who only work part-time, if they show up to work at all? There seems to be a maximum damage reduction strategy at play. This is a serious concern. I heard about someone being fired this morning after the company offered a private deal.

This is insane. This morning, after the company offered a private jet to its new CEO, Brian Niccol, instead of relocating to Starbucks headquarters in Seattle, the incoming CEO will be commuting from his home in Newport Beach. "I never wanted to be an engineer; I never wanted to be a programmer; I never wanted to start a company. I had an idea, and I wanted to build it, and I did whatever it took to build it." Elon Musk is a controversial figure, but love him or hate him, the one thing that nobody has been able to take away from him is that he works incredibly hard. That was until recently when people started to notice that the man has been playing an awful lot of Diablo 4. According to other players, he would have had to spend as much as 17 hours a day playing the game to reach the levels he has shown off in various live streams. Now, it is possible that the world's richest man could have paid someone else to play video games for him, but a potential Diablo addiction aside, it did raise questions about how any mortal man could possibly be an effective chief executive at SpaceX and Tesla when he also has a full-time role at four other major companies. Even seasoned executives have to dedicate enormous amounts of their time to running just one company. The reality is that Elon Musk is far from the worst offender among major company CEOs showing up to their job less than others do. Brian Niccol is the newly appointed CEO of Starbucks. To join the company, he was offered a sign-on bonus that could be worth as much as $113 million within his first year. Some of that bonus was to compensate him for the stock options he will be giving up by leaving his previous job as the CEO of Chipotle. But it's still a record-breaking package, which is especially generous when you consider that the man won't even be moving to the same state as his new company's headquarters. Instead, he will be permitted to work remotely from his current home in Newport Beach and will be allowed to commute using the company's private jet when he has to be in the office. Oh yeah, and in case you were wondering, yes, Starbucks and its remote CEO did introduce a return-to-office mandate for all of its lesser office staff.

Jack Dorsey, the former CEO of Twitter, rarely showed up to the company's offices, allegedly spending most of his time at his other company, Block. Just last month, it was announced that the new CEO of Victoria's Secret would also be allowed to work remotely, so that they didn't have to move to the company's headquarters in Columbus, Ohio. Interestingly, Victoria's Secret has also made it mandatory for everyone else to work from the office. There are tens of thousands of highly qualified candidates who would be eager to be the CEO of one of these companies, meaning the hiring board can afford to be selective in their choices. So, why are these top employees allowed to work from home and dedicate their time to second or third jobs when doing the same thing would get anyone else fired? Well, there are actually three reasons, and they are each more disappointing than the last. The first is that CEOs have become little more than cheerleaders for their companies. Brian Niccol's offer to join Starbucks may sound outrageous, but to the board of directors and current shareholders, it has actually proven to be a prudent investment. Since his announcement, the company's value has increased by over $20 billion, which means investors believe his substantial pay package has justified itself many times over. The new investors buying in also recognize that, no matter how brilliant Niccol might be as the chief executive, he is not going to single-handedly turn the company around or add $20 billion in valuation by himself. The actual reason so many new investors bought in upon the announcement of the new CEO is what he represents. Niccol has built a reputation as a hardliner against unionization efforts and is known for effectively reinvigorating brand image. He is also a master of public relations; if you google his name along with "union," the only results are identical articles from about 20 different outlets, all reporting on his announcement that he is willing to engage with workers—whatever that means. For investors, declining brand appeal and union efforts are the pressing issues facing the company. Therefore, appointing someone infamous for addressing these challenges is a clear indication that the company is taking these issues seriously.

A better example might be someone like Musk. He now has as much money as he could desire and a significant brand presence through the companies he leads. Much of his businesses' actual success may have been achieved by the engineers and level-headed executives working behind the scenes, but he is at least partially responsible for employing those people in the first place. As a result, he has garnered a reputation as a serial entrepreneur who builds the businesses of the future—a very appealing pitch to investors. Even Jack Dorsey of Twitter, who apparently disliked his job as CEO, presented an image that aligned with the company's investment pitch as an alternative communications channel that, in a way, democratized information. This is all a relatively new phenomenon; even 20 years ago, people didn't know the CEOs of big companies unless they were extremely high-profile founders. Do you know who the CEO of Johnson & Johnson, Eli Lilly, or ExxonMobil is? Unless you are an industry insider or a highly informed investor, probably not. However, thanks to social media, new marketing techniques, and a growing cultural interest in business and finance, CEOs—especially those of modern consumer-facing companies—are as much influencers for their businesses as they are individuals performing executive functions day to day. Do you know who the CEOs of Apple, Berkshire Hathaway, Facebook, Nvidia, or Tesla are? Even if you don't care about business all that much, you probably do. This is because these individuals have become just as important to their companies' marketing strategies as celebrity endorsements and advertising campaigns. While some of these men still work incredibly hard in addition to being spokespersons for their companies, for others, it has become possible to offload the mundane tasks onto other employees and spend the rest of their time pursuing other interests.

And for a lot of companies, that may very well be for the best. The role of the CEO has changed so much that even an otherwise competent business leader like Mark Zuckerberg has had to rethink his image as a technically proficient lizard person into something at least resembling a human. Now, it's possible that he is having a midlife crisis, but as several outlets have pointed out, it's probably much more likely that someone in his company has told him that human beings like human beings. Therefore, his business would probably be doing a lot better if he played the part. Now, getting CEOs out of the office and into the public eye as a branding tool might win over some users, investors, and potentially even some regulators. But unsurprisingly, there is one group that isn't as easy to win over. A survey conducted by the research firm International Workplace Group found that 93% of the 500 CEOs surveyed do not go into the office full-time and instead have adopted a hybrid or exclusively work-from-home arrangement. This is compared to 64% of workers who earn less than $38,000 a year and prefer to be in the office full-time. This study was conducted in the UK, and no concrete numbers like this could be found in America. Unfortunately, the attitudes are very similar on both sides of the pond. Unsurprisingly, this has caused a bit of a morale problem because people are being told to go back into the office or start filing for unemployment while simultaneously watching the very public antics of their CEO. Even if they are going on podcasts, building custom Porsche minivans, traveling to remote seminars, or putting in hours at a completely different business exclusively for the good of their company's brand image, it can be hard for someone filling out TPS reports to accept the hypocrisy of having to be in the office. Now, according to the survey, company CEOs are aware of this frustration; they just don't care. It's no secret that return-to-work mandates have been used by companies as a sneaky way to conduct layoffs without having to publicly announce them, which could impact their stock price.

Unfortunately for them, that's not really working. As people have seen the news, they are trying to hold on to their jobs, even if it means going back into the office. From a business management point of view, this can also be fine-tuned for other staff as well. High-performing staff on uncompetitive salaries can be given the option to work from home, while average or below-average employees—those who were hired at higher wages—can be told that office attendance is mandatory for them. Just this week, KPMG announced official layoffs, and they weren't even hiding it anymore when they admitted it was because not enough people were voluntarily resigning. To an absent CEO, staff frustration over the clear double standards is a feature, not a bug. Another reason that CEOs can get away with not showing up to work is that they are only answerable to the board of directors. If the company is doing well, most boards simply don't care. In many companies, the boards are packed with people friendly to the CEO, so unless they really mess up, they are free to offload whatever work they want. Nobody wants to be responsible for a big change for no reason, and that's probably the biggest reason why absentee CEOs have become so popular so quickly. According to data from Standard & Poor's, outside of the lead-up to the dot-com bubble in 2001, the world's biggest companies are now, on average, younger than they have ever been. A large share of the world's largest businesses, especially in America, were only founded a few decades ago. Significant venture capital financing has made scaling certain companies faster than ever, but that means that most of the time, these businesses reach their current positions with their founders still in leadership roles. The problem is that being the founder of a rapidly scaling startup and being the CEO of a large company are two completely different jobs.

The skills and experience to do either job are rare. Having the skills to do both is almost unheard of. The problem is that most founders want to maintain control of their company for as long as possible, even if there are more qualified people to run it once it reaches a certain scale. In my own experience working on mergers and acquisitions deals, one of the biggest sticking points is the role of the founders if their company is acquired or once they lose majority control of the company in financing rounds. Getting rid of a CEO founder is difficult and often unpopular, so instead, investors and often the founders themselves will appoint people to handle the managerial work, while they remain as the face of the company, serving as the CEO in name only.

There is nothing necessarily wrong with this; however, having a company linked to the personal image of its founders can be risky, especially if they aren't in the office where an eye can be kept on them. Now, the more controversial bonus reason is that the role of a CEO is slowly becoming extinct with new corporate practices. Within the last six months, the CEOs of Nestlé, Boeing, Starbucks, Peloton, Paramount, Zillow, Amazon Web Services, Snowflake, HSBC, Grayscale, Under Armour, Papa John’s, and Discover have all stepped down, voluntarily or otherwise, from the top job. Collectively, these CEOs controlled companies with trillions of dollars in annual revenue, and now they are all gone. These were just the big names, too. CEO turnover in companies of all sizes is now higher than it has been since the start of the pandemic, which begs the question: Why is this happening, and why is it happening now? After two years of headcount reductions, YouTube Chief Susan Wojcicki has announced her decision to step down in a blog post, and Starbucks CEO Lakshmi Narasimhan is now stepping down as CEO and Director effective immediately. The company has named Chipotle’s CEO. Chief executives and other C-suite executives are just employees like any other, which means eventually they either quit, get fired, or die in their jobs.

CEO layoffs have spiked, but maybe that's not too surprising, considering layoffs in a lot of industries have also increased. However, this is not normally how it goes. If you ever find yourself in the top job at a major company, you should know that your position is simultaneously far more secure and far more fickle than that of the average rank-and-file employee working under you. As a CEO, your position is unique because there is no other employee at the company with the authority to fire you. The only people who can do that are the board of directors, who are themselves representatives of the shareholders. During periods of uncertainty, the last thing that companies want to do is change senior leadership unexpectedly, as this signals to the market that something is not right, which could tank the stock price. Since the board of directors represents shareholders, and individual directors are usually major shareholders themselves, they have an incentive to avoid doing anything that could hurt the stock price unnecessarily. For this reason, CEOs are rarely fired outright; instead, they are offered generous exit packages to step down amicably in a way that won't scare investors in the business. Outside of high-profile cases where the business has clearly been mismanaged, or instances where the CEO has made very unpopular decisions, it can be hard to tell if outgoing CEOs have been pushed out or are simply retiring. According to Fortune magazine, the average age of a Fortune 500 CEO is 57 years old, and the average compensation package is $16.3 million. If you are that old and have that much money, it’s not unthinkable that you would want to retire or pursue less intense roles more suited to your age, such as political office. But if CEO exits are treated so seriously and secretly, why has there been such a big spike all of a sudden? The first reason is that right now is a convenient time for a shake-up. Companies in their leadership don’t always have completely aligned incentives. A CEO wants to make as much money as possible while in the role, and the business wants to maximize returns for its shareholders. While these incentives can be aligned through bonus packages tied to stock performance, this has made many company leaders hyper-fixated on quarterly financials and the stock price on the day their bonus is calculated. Stocks in most large public companies have actually been trading relatively flat.

Total stock market performance has been massively bolstered by Microsoft, Google's parent company Alphabet, Nvidia, and Apple, to a lesser extent. Most other public companies have been trading relatively flat, which isn't a problem during uncertain times like the pandemic and its recovery. However, investors are now starting to expect more from their businesses, and specifically their CEOs, during a drawn-out period of slow growth. Former CEO of Starbucks, Laxman Narasimhan, was pushed out after spending just over a year in the top job. He officially stepped down when it was clear that the company's performance was poor, and he was forced out by the board after sluggish earnings reports were released. He was replaced by Brian Niccol, the CEO of Chipotle, a brand that, by comparison, has been doing extremely well. This one move replaced the CEOs of two companies, and the decision was largely pushed through by activist investors like Elliott Management, which, according to CNBC, purchased a large stake in the company in mid-July.

This firm and others like it buy up large stakes in companies that are not doing too well and try to enact changes to turn the company around. This can be as simple as suggestions like offering new products, but it's usually more focused on cutting unnecessary expenses and shaking up leadership to generate the highest possible return in the shortest possible time. This particular type of investing strategy is extremely attractive in stagnant markets, where it's harder to generate strong returns by just buying something and passively waiting for it to be worth more. This has already worked for Elliott Management. After the announcement of the new CEO, the company's stock jumped by a massive 24%, fully recovering its losses from its poor earnings report. If the investment firm cashed out on their position now, they would have already outperformed expected annual returns in a little over a month. Starbucks is a high-profile example, but activist investors across the country and the rest of the world are looking for similar opportunities. As a result, many CEOs in stagnant companies are taking it upon themselves to bow out before they are forced out. The CEOs that did well during a stable, upmarket are not the same kind of CEOs that businesses want when sales are flat. If businesses can't grow revenue, the only option they have left to increase their profit is to cut their expenses. Of course, they could be happy with consistent, predictable returns, but let's be real—that just makes them an even bigger target for activist investors looking for their next company to turn around. Now, this isn't always bad; established companies often pick up a lot of dead weight over the years, from underperforming product lines to bloated middle management. It's normally much easier to add something to the business than it is to take it away.

Activist investors may be a nightmare for existing CEOs, but they can genuinely help to save businesses that are collapsing under their own weight by putting a subjective set of eyes on the operations. The only problem is that if a new CEO is hired with the objective to cut costs, they will cut costs no matter what. That’s the second reason behind the current CEO purge. Brian Niccol, the new CEO of Starbucks, made investors so excited that the stock jumped 23% upon his announcement. He is clearly a competent company leader; Starbucks is paying him $130 million in his first year alone, according to Yahoo Finance and company filings. If the name of the game is to cut down on expenses wherever possible, that is an interesting starting point. The real reason investors are so excited about this new CEO is that he isn't meant to be in the top job for long. Niccol has a long history of being extremely heavy-handed with cost-cutting measures, which have admittedly included streamlining the operations at Chipotle, his last job. However, it also meant coming down hard on employee benefits, reducing staff, closing underperforming stores, and pushing back aggressively against unionization efforts from staff trying to collectively resist these cuts. Starbucks is currently dealing with its own unionization efforts, and a key part of this new CEO's job that the company won’t discuss in their press release is to shut this down, just as he did at Chipotle. The company isn't expecting to pay him hundreds of millions of dollars for more than a few years.

They are just hoping to pay him long enough to fix their problems before he moves on to another company that will pay him a huge signing bonus. Then Starbucks can replace him with a longer-term CEO who is only paid a modest salary measured in the mere tens of millions. These individuals are unofficially called turnaround CEOs because their job is to turn a company around and then exit as quickly as possible. Their bonus structures are normally designed to pay them a lot of money for quick results. Of course, the company will never publicly admit this plan, so that prediction is based on my experience with other companies employing turnaround management. Although, if for some reason you are watching this video five years after it's posted and Nickel is still the top dog at Starbucks, feel free to leave a comment telling me how stupid I am. Anyway, these short-term CEOs inherently increase turnover rates as they jump between companies providing their services. Turnaround CEOs are more popular with investors in markets where it's harder to find value. Now, the final reason that CEOs are quitting in record numbers is the simplest reason: they really don't need to work anymore. The average CEO is older now than ever before, and a lot of them just want to retire. During the pandemic, their companies tried to hold on to them to maintain corporate stability. According to the corporate law firm Challenger Gray, the first quarter of 2024 had the highest number of CEO resignations since they started keeping records. The number one reason that CEOs gave for leaving was to retire, given how much they were paid during the pandemic and the strong market returns of their investments over that period. The modern CEO is also expected to be more tech-savvy and public-facing, prompting many of the old guard to get out of the way.

To make an exit before their marketing team orders them to do a TikTok dance? Now, you might think I am joking, but this new wave of corporate culture has had a serious impact on the C-suite. Adam Neumann, the eccentric CEO of WeWork, presided over the bankruptcy of a company that was worth almost $47 billion. He was kicked out of the crumbling company he founded, but not before making $1.77 billion from a company that never figured out how to even make a single penny in profit. Dennis Muilenburg, the disgraced former CEO of Boeing, was fired from his position after his mishandling of the 737 MAX disaster that led to the death of 346 people. He walked away with a $62 million exit package, and he is now the CEO of a new aerospace investment company. Why does it seem like no matter how badly top executives mess up, they can only fail upwards? Moderna recently received a golden parachute of some $800 million. The former CEO could walk away from the company with $60 million. The former CEO of McDonald's could get a $70 million payout after he was fired for having a relationship with a colleague. Hines is in for a big golden parachute if the company gets sold and he gets the boot.

Hines stands to gain more than $55 million if he sells the struggling smartphone company. If it seems to you that once you hit a certain level in the corporate world, it's almost impossible to fall back down, you would be somewhat correct. There are countless stories about CEOs who have bankrupted their companies, only to be compensated with millions of dollars in exit packages before any of that money reaches investors, lenders, or even regular workers. The reason this happens so frequently is that it's designed to happen, and there are three reasons why, even after these failures, most senior executives only seem to fail upwards. The first reason is Corporate America's dangerous obsession with experience. You all know about companies demanding three years of experience for an entry-level job or ten years of experience coding in a language that has only been around for five years. While experience is an important metric for assessing someone's ability to perform their job effectively, it can become skewed. For instance, if you have been working as a welder for 30 years, you are likely to weld faster and cleaner than any apprentice with just a few months on the job. The same principle applies to everyone throughout the corporate hierarchy, although not to the same extent. The only way to gain experience as a welder is to actually work as a welder; similarly, the only way to gain experience as a CEO is to serve in that role.

But nobody is giving out those jobs. A report by the Harvard Business Review surveyed C-suite executives and hiring boards and found that their individual technical skills have become much less important than business acumen and soft leadership skills. These are not skills that regular people can acquire by climbing the corporate ladder the old-fashioned way, which is why more C-suite executives in Fortune 500 companies than ever come from backgrounds like private equity, investment banking, or corporate consulting. A survey by the workplace intelligence company On Deck compiled a list of CEOs of America's largest companies and found that most of them worked for management consulting firms before becoming CEOs, and very few worked their way up within the same firm. 7.1% of CEOs in the report had worked at McKinsey & Company before securing a position as a CEO in another company. Bain, BCG, Kearney, and Oliver Wyman, all management consulting firms, took second, third, fourth, and fifth place.

When CEOs are chosen from such a small pool of people who all know each other, even if they make significant mistakes, they are often still prioritized above most other candidates. It doesn't help that one of the most common tasks for management consulting firms is consulting on who should be the new CEO. A team of McKinsey consultants selecting a former McKinsey consultant to be the CEO of a company that hires McKinsey consultants happens all the time. This would be acceptable if these McKinsey alumni consistently made for the best CEOs. After all, a job should go to the most qualified candidate. However, a study conducted by the Harvard Business Review found the opposite. The research examined three metrics to rank the performance of CEOs: the total industry-adjusted shareholder returns produced, the total country-adjusted shareholder returns, and the total increase in market sales. The best CEOs were typically those with an engineering background and real skills in the field in which the company operated. Experience in general is often overvalued by companies because many valuable workplace skills have not been around long enough for experience to truly matter. This is why you have probably had to help your boss export a document as a PDF at least once in your career. Hiring a CEO is one of the most significant decisions a company will make. New CEO announcements can cause stock values to fluctuate by double digits, leading investors and boards to sometimes choose the safest option over the best option.

And that's just the first reason why underperformers with experience get opportunities that untested experts do not. If you make an honest mistake in your job, a good workplace shouldn't fire you immediately, especially if you have a track record of being a good employee. Sometimes this doesn't happen, and regular people are fired for trivial reasons. But it occurs even more at the very top of the corporate hierarchy. The turnover rate for Fortune 500 CEOs is about 10% every day.

Every year, according to Fortune magazine, that number is on the rise, with a 12.2% turnover rate in 2023. According to the Harvard Business Review, the number one reason why CEOs leave their positions is that they get fired, with over 70% of surveyed CEOs stepping down from the top job because they were told to by their board of directors. The same study found that the average tenure of a Fortune 500 CEO was less than five years, indicating that there is clearly a lot less room for these men and women to make any mistakes. Now, they earn a lot of money, so their performance expectations should be higher than those of a regular employee.

But another reason this happens so often is by design. The role of senior managers in a company is to set the overall direction and priorities of the organization. Adam Neumann of WeWork clearly wanted to make his company prioritize attracting young, alternative businesses that didn't ask silly questions like, "How is this going to make money?" Dennis Muilenburg of Boeing was famous among staff and investors for being the CEO who got projects off the drawing board and into the sky. When the strategies of these CEOs were not met with consequences, one of the clearest ways to signal to investors that a company is going to do things differently is to get rid of the person responsible for overseeing the way things are done.

The CEO of Boeing was not directly responsible for programming the fly-by-wire system of the 737 MAX, and if the issue had been caught in testing, he could still be the CEO of Boeing today. However, he was a clear figurehead that the board could use to signal a turnaround to the market. CEOs at this level know that they may eventually be blamed for a scandal over which they had no direct control. They also understand that their reputation can be extremely valuable to investors, allowing them to negotiate very hard. If you are a senior executive and have been offered the position of CEO at two different companies, both offering a base salary of $1 million and an options package of up to $5 million, which one would you choose? One job is at a safe, stable company, while the other is with a new company that has a thin balance sheet and operates in a risky business.

You should pick the safe company because you are more likely to keep your job long enough to make that bag. This creates an incentive for the most talented CEOs to only work in the safest companies, even though their skills would be better applied to the riskier companies that need effective leadership the most. So, if a risky company really needs you as their CEO, you can pre-negotiate an exit package before you agree to work for them. If you negotiate a $20 million exit package and you raise the company's market cap by $200 million, then that's a good deal for shareholders. And at the end of the day, it is their company. A golden parachute also protects CEOs in case their company gets acquired. If one company buys another company, then they won't need two CEOs. If a CEO is going to lose their job when an acquisition goes through, they would naturally resist it, which could result in investors missing out on a lucrative deal. If the CEO of Twitter didn't have a golden parachute, he could have made it really hard for Elon Musk to purchase the company to keep his own job. Instead, he made it difficult for Musk not to purchase Twitter because he was in line for a $42 million payday.

Musk reportedly overpaid for Twitter by around $19 billion, so that exit package for the CEO, who was doing a pretty bad job of running the company, was still money well spent by the shareholders. With so much security, this creates a bit of selection bias among disgraced former CEOs. Apart from those who end up in jail for criminal conspiracy or fraud, most of them have enough financial security to be very picky with their next job. If they don't get an amazing opportunity that looks like an upward trajectory, it doesn't matter. They have enough money that they will never need to work again, so they don't need to take a job that would be a step down.

Now, if you think CEOs and other C-suite executives have a powerful negotiating position when entering and exiting the top job, that's nothing compared to what they can do while they are CEO. Just last week, Elon Musk stunned investors by demanding that the board of Tesla give him shares worth more than $80 billion if it wants him to develop artificial intelligence within the company. These additional shares in Tesla would bring his total ownership in the company to 25%. Musk explained his demands in a post on Twitter, or X. He went on to clarify that unless his demands were met, he would prefer to develop AI programs outside of the company, which is something he already does with xAI, one of the six companies he heads. Musk's demands put Tesla's board and shareholders in a difficult position.

The New York Times reported on this issue, noting that the company's stock market valuation of almost $700 billion—more than twice as much as Toyota Motor, the world's largest automaker by annual car sales—is predicated in part on investors' belief that the company will lead the rest of the industry in developing cars that can drive from place to place without human intervention. Investors are also betting that advanced automation will allow Tesla to manufacture cars much more efficiently and profitably than its rivals. Therefore, if Musk publicly halts the development of AI at Tesla, the value of the company could plummet, as it would be the death knell for full self-driving and fully automated production. This situation presents investors with two other options.

The first option is to just give in. If the Tesla board does award Musk an additional 12% ownership stake in the company, that will dilute every other shareholder in the company by an equal 12%. That is detrimental for regular investors, but it could also be worse than just a 12% instant loss because future investors will be wary of buying stock in a company that could face dilution the next time the CEO throws a tantrum on Twitter. The second option is to fire Musk as CEO, which is possible since he is only a minority shareholder in the company. However, the value of Tesla is propped up just as much by Musk's cult of personality as it is by its technology.

So, if the board took the nuclear option, then shareholders could lose a lot more than 12% of their holdings. There's a decent chance that Musk will get what he wants because the power of an incumbent CEO makes them very hard to remove unless they are offered a nice exit package or a better opportunity in exchange for quietly and amicably stepping down. Musk has taken this power to the extreme, but even a regular CEO being dismissed instantly sends bad signals to the market. Now, if you think failing upwards is just a trick reserved for senior executives with market-moving leverage, you’d be wrong. Before the year 2000, if you wanted to make a lot of money in a predictable career, you needed a nice suit and an important-looking business card.

Your options were finance, medicine, law, or senior company management, if you were lucky. But just a few years later, around the same time that those people in fancy suits were causing the global economy to implode, a new breed of millionaire was entering the mainstream. They replaced their puffer vests and Bloomberg terminals with flip-flops and Vim terminals. Tech bros worked fewer hours, had better perks, and in many cases made more money than their peers in more traditional high-income roles. What's more is that people didn't hate them.

Executives, bankers, and their fancy lawyers were blamed for enriching themselves by leeching off a broken system that cost people their homes, their jobs, and their futures. Meanwhile, people loved the idea of hacky sack-playing nerds making millions by actually creating things that improved our lives. But now, 15 years later, the tech bros became everything they promised to destroy, and they kind of destroyed themselves in the process. New reporting indicates that Facebook is planning a new system to track users' data even as they leave the site.

With a revolutionary new product, what was your vision? Well, a computer on every desk and in every hall. Amazon is preparing to lay off up to 10,000 workers. There's Larry, CEO of Google.

You're here at this high point. At their peak, tech bros enjoyed endless career progression, opportunities, options packages that could make them multi-millionaires before they turned 30, a good work-life balance, and the promise that if they knew how to code, they would always be guaranteed a good job. Today, they are being forced back into the overpriced cities that don't want them there. They are being laid off en masse, and those who remain are being told to grind. They have apparently created programs so advanced that their CEOs are gleefully discussing a future where entry-level programmers are completely replaced by AI. Between the golden age and the dark ages of tech bros, there have been three major changes that caused both their massive rise and their current fall. The first problem was that they simply ran themselves out of business. On Friday, the 10th of March in the year 2000, the NASDAQ hit its then all-time peak. Investors were all in on companies ready to take advantage of the internet, and the speculative mania was so intense that just the mention of ".com" in their company filings was enough to send their stock price soaring.

Eventually, this all collapsed. Collapsed, and only a select few companies from that era have survived to this day. The reality was that the internet was an amazing technology that would go on to change our lives and facilitate some of the most valuable companies in history. However, simply putting a normal business on a website wasn't actually revolutionary. What came after was a genuine golden era of tech services.

The companies that survived the dot-com bubble were actually useful, and the cleansing of the market meant that more talent and investment could go towards supporting companies that provided good services. Early YouTube, MySpace, Facebook, Amazon, and online gaming were all novel and genuinely great services that, if you were as old as me, you probably remember finding absolutely amazing. There was still money flowing into them, and the tech sector weathered the global financial crisis better than most. The first iPhone was released in 2007, and even at the height of layoffs and corporate bankruptcies in 2008, people were still lined up around the block to buy the iPhone 3G. You were told that if you learned how to code, you would be sure of a good job.

And at the same time, companies like Apple and Google were being named as the most desirable places to work, thanks to their relaxed corporate attitudes, excellent work-life balance, amazing employee perks, and, surprisingly, competitive salaries. Most importantly, these companies were still not the establishment; they were scrappy startups making products that people actually enjoyed. After the dot-com crash, it took the Nasdaq over 15 years to recover from its previous peak. This meant that, thanks to employee stock options, these mid-2000s tech bros were making good money, but they would likely still be out-earned by their financial bro peers, assuming they weren't laid off in 2008. That slowly changed, though. As these companies grew, more money flowed into the industry, and with more money came more workers, bigger bonuses, and stock options. It went from an alternative industry filled with nerds making products that people enjoyed to an industry focused on securing funding from a growing pool of investors. They transitioned from the business of adding value through technology to extracting value through monopolies.

For a while, you could have a great degree of confidence in becoming filthy rich by putting in a few years at a major Silicon Valley tech company. However, this all relied on a stream of money that wasn't coming from nowhere; venture capital—the firms that actually invest in early-stage startups to develop their new technology—never again reached the level of funding it did during the dot-com bubble until something changed in 2021. As tech companies grew larger and more valuable, the rush to hire more talent heated up. By the mid-2010s, if you were a talented developer, you could easily out-earn any other career straight out of college by working for a company like Facebook, Apple, Amazon, Netflix, or Google—the so-called FANG companies. These businesses all had established platforms, but they still hired tens of thousands of developers and paid them very well for a few reasons. The first was that they were constantly trying to add new features to their core offerings. Even maintaining a platform like YouTube takes a lot of work to keep up to date with customer demands; the homepage of the site today looks very different from even five years ago. There was also an exuberance where newer companies like Uber, Airbnb, Twitch, Snapchat, Tinder, and even WeWork were scaling their operations so fast that they would hire developers before they even had a defined project for them to work on. Hiring when they actually needed staff would slow them down. This was part of a relatively new tech industry strategy called blitzscaling—a not-so-subtle reference to the blitzkrieg of World War II, which was all about capturing as much territory as possible, as quickly as possible, using new technology before the enemies could respond. Supply lines couldn't keep up, but the hope was that once a territory was captured, the German army could sort all of that out later.

Now, clearly, tech companies are not rolling tanks through Belgium. But they are using the scalability of technology to capture market share in industries like food delivery, taxis, holiday rentals, and online dating as quickly as possible, and then sorting out what to do with all their staff later on. In an interview published by the Harvard Business Review, Reid Hoffman, a Silicon Valley venture capitalist and one of the founders of PayPal and LinkedIn, said that companies that are blitzscaling may need to get as many warm bodies through the door as quickly as possible. Another reason why tech professionals are being hired so rapidly is that bringing on a large number of staff is a great way to ensure they can't go to potential competitors, especially startups that could, and I really hate to say this, disrupt the industries of the big incumbent players. Acquiring competitor companies as they start to take market share could get companies in trouble with the FTC for anti-competitive practices. However, there were no rules against denying them the staff they would need to get their business going in the first place. A report by The Wall Street Journal interviewed tech workers who admitted to being hired to do nothing at all and that businesses were hoarding developers like Pokémon cards. It all worsened when high interest rates reduced market certainty, and lower customer demand for many tech products resulted in mass layoffs across the industry. Businesses that were blitzscaling either shut down or shifted gears to only hire workers they really needed. New feature development slowed down, and big established companies didn't need to worry about hoarding workers away from competitors anymore because nobody was hiring. Artificial intelligence is also already doing a lot of the grunt work that is typically given to new employees. Tech companies, by their nature, are more open to adopting these new technologies, and even replacing just a handful of entry-level developers can save companies millions of dollars every year. So, it really is an ideal environment for automation. This was the second major blow to the tech professionals; they traded in the promise of a very stable career for something that has become an incredibly risky game of survival. You can make a lot of money in technology, but your success is going to depend just as much on picking the right company or startup at the right time to invest in, as it is on your own personal skills development. An entry-level developer who started working with Intel five years ago had a good chance of being laid off last month, with stock options that are worth absolutely nothing. A similarly skilled developer who took a job with Nvidia at the same time, on the other hand, probably never needs to work again in their life.

The ones who got lucky go out, and the ones who were let go are sick of playing the stock market with their careers. If they wanted to do that, they would have become finance bros. Then there's the biggest problem of all: workers want to be close to job opportunities, and companies want to be close to workers. As a result, the whole industry has agglomerated in just a handful of locations. These cities have become incredibly expensive, and infrastructure has not been able to scale as fast as these companies, which means it's not unusual for tech workers making six figures to share a two-bedroom apartment with three other highly paid local workers. Ask me how I know. If you are a tech worker struggling to afford a place to live on a six-figure salary, then there is basically no hope for other workers in these cities, which are still essential to keep society functioning. As a result, big tech cities have not only become expensive places to live, but they have also become not particularly nice places to live. Remote work could have alleviated these issues by easing demand in these small markets, but the big tech companies now have a lot more negotiating power over workers who don't want to be another layoff statistic, and they are using that power to mandate a return to the office. Even Zoom, the company that generated a lot of money, is part of this trend.

Remote working solutions have pulled their teams back into the office, and these problems come with few upsides for locals. The big selling point is that these companies offer great jobs, but most of these roles go to individuals who are not local; they often move to the city only after securing a position. This leads to competition with locals for housing and other services. I personally moved to San Francisco from out of state after I got a job at an investment bank, so even though I was technically a finance professional, I was still very much a part of the problem. Other areas have shifted from welcoming tech companies opening operations in their cities to actively pushing back against them. This represents a trend that is much larger than just the gentrification of entire cities. People simply do not like the tech industry anymore. Whether it's pricing them out of their homes, collecting their data, providing declining services, making them urinate in bottles, or threatening their jobs with AI, most people no longer see this as progress.

And the tech bros have become just as unpopular as us finance bros. A study out of Sweden found that the top earners have lower intelligence than the people in England's income levels directly below them. The plateauing of cognitive ability among top earners drew on data from 59,000 men who had to take a compulsory military conscription aptitude test. It then tracked their earnings over their professional careers to find the relationship between intelligence and income. Wait, this is interesting. And before Tai Lopez gets any ideas for more questionable YouTube commercials, or the hustle bros learn how to read journal articles and use this to encourage people to drop out of college, I want you to know how this data really works.

The relationship between intelligence and income was strong. Smarter people earned more money, but only up to 670,000 Swedish Krona, or $64,000 per year. After that, intelligence didn't mean much anymore, and at the very top end of income earners, the 1%, less intelligent people actually did better. And he made all that today? Well, it was twice as much, but I had to bail out Cinnamon's kid.

Thanks, Mr. Peter. This guy's the best. So, is this a sign that watching TikTok and reality TV is actually better for your career than going to college? Well, maybe—actually for two important reasons. However, there are also two reasons why you should probably ignore this and keep studying hard if you want to get ahead financially. Reason number one why less educated individuals may be doing better than those with higher education is that highly educated people often fill high-prestige jobs that don’t necessarily come with high salaries. Academics and research scientists are some of the smartest people in the world, but they don’t get paid well. People like yourself...

Yeah, how come I can be successful? Okay, well, you could be a lot more successful if you had 30 points less IQ. Doctors, lawyers, and elite financiers also need to be very smart to get through demanding schooling and admission exams, and these professionals are typically compensated very competitively. However, most of them don't make it all the way to the top one percent in the USA. To be in the top one percent of income earners, an individual needs to make at least $597,000 before tax, and that's just the minimum to join the one percent club. The average member of the one percent earns $1.4 million before tax. Some senior executives, certain doctors, lawyers, and even bankers can earn this much money, but they are in the minority. Most people making this much money are business owners, and there is less of an intelligence barrier to becoming a business owner compared to the genius-level intellect a person needs to become a top surgeon. Business owners earning over half a million dollars a year in income still need to be smart, but they don't need to be as smart as the very few types of workers that an employer would be willing to pay that much. You do not have to be exceptionally smart to make money.

People who are highly intelligent and have a desire for a high income face a slight disadvantage compared to those who are only moderately intelligent and share the same desire. Highly intelligent individuals who follow well-compensated career paths are less likely to transition to business ownership because they often reach a level of income that satisfies them. As a result, they may be reluctant to take the risky step of leaving a well-paid job to start a business that might not succeed. Moderately intelligent individuals with aspirations for high incomes, on the other hand, typically have fewer opportunities to achieve incomes in the top percentiles unless they venture into business for themselves. Therefore, they are, on average, more willing to take risks because they are not giving up a career that was difficult to enter and equally challenging to return to. No, I am not going anywhere until you or one of your butlers or assistants writes me a check.

So, by looking at the data, if you want to be wealthy, the best thing you can do is to be moderately intelligent with a lot of ambition, right? Well, as the great Mark Twain said, there are three types of lies: normal lies, damn lies, and statistics. Let's say all you care about is making as much money as possible, and you want to give yourself the highest chance of achieving that goal. The first problem you will encounter if you try to plan your career around replicating the success of people in the top one percent is all of the statistical complications that come with inferring outcomes based on data like this. The ceiling effect is what occurs towards the extremities of data sets that are drawn on a scale like percentiles of wealth. For example, if a class of 10 students is given a 100-question surprise quiz and three students in the class receive perfect scores while the other seven students get a random mix of scores, a statistician might conclude that a perfect score was the easiest result to achieve because it is the result that occurred most often. However, no matter how intelligent the students taking this quiz are, they cannot score higher than a perfect score.

No matter how high someone's income is, the top 1% is the pinnacle of the scale. If two of the three students with perfect scores were the smartest people in the class, and the third student was average but simply cheated on the quiz by copying the top student, the average intelligence of the students with perfect scores would be lower than that of the student who answered 99 questions correctly. Most people earning in the top 1% are indeed very intelligent, but their average is brought down by individuals like the Kardashians. Dude, I am so disillusioned right now. Most people in the top 2% are also very smart, but they don't have outliers stuck to the ceiling dragging down their average.

Less intelligent people earning the most money out of a population also face issues related to survivorship bias. A person of average intelligence starting a business is statistically very likely to fail and end up in the lower end of the income range. At that point, they can either try to start another business or return to a regular job. However, a successful business does not need to grow very large before it can generate enough profit to place the owner in the top 1% of earners. A highly intelligent person starting a business will have slightly better odds of being successful, but statistically, their venture is still likely to fail.

Because there are fewer highly intelligent people than there are people of average intelligence, there will be more successful businesses run by average people than by intelligent people. Additionally, highly intelligent individuals who are already earning a good income in a stable position as employees are less likely to start their own businesses in the first place. They are even less likely to end up as successful or unsuccessful business owners. While there will also be many more business failures among people of average intelligence, only the businesses that survive are counted among the top 1% of income earners. This skews the perception that the best way to get rich is to be a business owner with average intelligence. The second problem with interpreting this study, as well as other studies you may hear about, is that the traits of wealthy people go well beyond mere statistics. To begin with, this study was conducted on men only.

Men have different career earnings and work in different vocations than women, so the results could be very different if the other half of the population were included. Does that make sense? Do you see the difference? Measuring intelligence is very difficult, and a military entrance exam is more likely to focus on the type of intelligence that helps individuals follow orders, such as comprehension, rather than free-thinking and creative intelligence that would provide a competitive advantage in the boardroom but not on the battlefield.

The study was also conducted in Sweden, and I know, thanks to the invasive power of Google's data collection, that only 0.9% of you watching are Swedish. Personal finance and careers in Sweden are different from those in the United States because they have stronger welfare and worker protections. They also pay lower salaries, on average, to top employees. Sweden is also surprisingly more entrepreneurial than the United States.

It has 20 startups per 1,000 people, while America only has 5. So what does this mean? Basically, this means that to get into the top 1%, as indicated by the study, you need to be a successful business owner. However, in most other places, there is a high chance that you can achieve this with one of the extremely well-paid jobs that are awarded to highly intelligent individuals. It's starting to look unfavorable for the college dropout hustle entrepreneurs, and that's before even considering other factors that can lead to a high income. Some individuals earn a high income not because of luck, intelligence, or hard work.

They get it because they are a "nepo baby" and have family connections that can land them a well-paying job. As unfair as it may be to someone without these advantages, giving rich kids with connections jobs can be worthwhile if they continue to use their connections to bring in more business. Some of these privileged individuals may be smart, while others may not be as intelligent, but they don’t need to be as brilliant as a top doctor to earn their money. This can lower the average of the percentile they occupy. So before you think that this whole investigation was just a waste of time and that it doesn't reveal the secret to becoming a member of the one percent, you should know that it actually does. Let me show you how there are factors that can place less intelligent individuals among the one percent, factors you can’t control. You do not get to choose whether you are born into a wealthy family that can secure you a prestigious job through a few favors. Additionally, you can only do so much to influence whether your business is highly successful, just breaking even, or a complete failure. A lot of it is simply luck.

But here is something else: you can't 100% control how intelligent you are either. You can practice certain skills and learn new things, but some people will be able to absorb and apply knowledge better than others. You can't copy traits and expect a similar outcome. You have to critically assess your strengths and weaknesses and choose a career path that suits you best.

Rich people eat a lot of caviar and fly first class, but flying first class and eating caviar won't make you rich, just like being of average intelligence won't make you a member of the 1% by itself. The first real step is to work out what you are good at and what you are bad at. This may involve admitting to yourself that you are not as smart as you think you are. It might hurt your ego, but being honest with yourself about your weaknesses will bring you much further than believing you're good at things that you're not. Highly competitive industries reward high performers, but they are also equally punishing to underperformers. Becoming a doctor will almost guarantee an upper-middle-class or upper-class income for the rest of your working life, but failing out of medical school will leave you with hundreds of thousands of dollars in student loans, putting you far behind people who are more realistic with their career ambitions. An electrician who does the best work in their area and has a good reputation with builders and businesses will make more money than a lawyer who is average or below average.

That doesn't mean you should drop out of college. It means you should be honest with yourself about what marketable field you could excel in and pursue that instead of trying to chase career paths that simply have a reputation for earning a lot of money. If you do chase these paths, you might end up like those who rush into tech jobs to secure big paychecks just before the largest companies in the industry announce record layoffs. You may find yourself questioning why tech companies, which are primarily running a website, need so many employees to begin with. Go and watch my video on why tech companies hire and fire so frequently. A special thanks again to The Daily Upside for making it possible for everyone to keep on learning how money works. Well, you made it, Peter. You're a big shot in charge of a whole bunch of people.