In July 2019 the Australian National University was kind enough to bestow on me the award of an Honorary Doctorate. The award was presented at a graduation ceremony for the College of Business and Economics, presided over by the Pro Chancellor of the University, Naomi Flutter, the Vice Chancellor, Nobel Laureate Professor Brian Schmidt and the Dean of the College, Professor Steven Roberts. As part of the ceremony, I had the opportunity to provide the address to the graduating students. It was 38 years since my own graduation ceremony and the challenge was to share with them some aspects of my journey and learnings that may have had broader relevance for them, recognising their diversity. It also provided me with a chance to acknowledge the many people who supported me in my life’s journey. My speech drew from the notes below.
With Professor Steven Roberts, Dean of College of Business and Economics at the ANU
Ladies and Gentlemen, to be honoured like this by the ANU is an extraordinary thing and I can only thank the Dean for his support and the University for this honour. I would like to acknowledge and dedicate this honour to the many people who have been involved in whatever I have achieved.
First have been my parents, who if they were still alive would have been thrilled to have seen their undying love and commitment to me, being recognised in this fashion. Second, has been my immediate and extended family and close friends who are an ever-present source of support and inspiration – especially the ability of many of them to succeed in the face of considerable hardship. And I am delighted to have my partner and three of our children here today, as well as one of our closest friends.
Third has been the great teams that I have had the benefit of working with in my professional and philanthropic work. And last but not least has been the ANU, the source of so much learning, knowledge and inspiration. I stand here feeling that it is I who should be honouring the ANU, rather than the other way around.
Let me add my congratulations to all of you who are graduating today and to your rightly very proud parents. About 38 years ago, I sat where you are sitting, waiting to get my degree. I had many happy years on the campus, but was looking forward to excellent job prospects, with Economics and Arts degrees from the ANU. I hope that in listening to the Vice Chancellor’s very generous introduction to me, it has convinced you that the degree that you have earned has opened to you a world of great opportunities. I want to share with you five ingredients that I found helpful in making the most of those opportunities.
I call these ingredients the Five Powers: The Power to Join the Dots, The Power of Possibility, The Power of Making a Difference, The Power of Money and The Power of Privilege.
Your degree is valuable in terms of knowledge, but above all in terms of the ability to think analytically. The next step is to develop the Power to Join the Dots. My first job was as a research assistant at the ANU in the early 1980s. It was a time of tremendous change in the world and Australia saw the election of the Hawke-Keating government. I observed three key things:
• A revolution in investment opportunities domestically and globally, thanks to the government ushering in an era of financial and economic deregulation.
• Second, ANU demographers were predicting that we were going to live much longer, meaning that it was increasingly important for Australians to make their savings work harder by learning the skills of investment, to fund longer retirements.
• Third, the investment industry, which was dominated by parochial stockbrokers and insurance agents who focused on transactions based commissions, was not well suited to this new world. People now needed comprehensive advice to design and implement investment plans, based on rigorous research and a global mindset.
I joined these dots to come up with the idea of pioneering a modern, research based financial advice and wealth management firm, geared for this new world.
It’s one thing to see an opportunity, but it’s another thing to be willing to take the risks to grasp it. This is where the Power of Possibility comes in. I have a question for you: imagine that I approached you when I was 24, with some wild ideas about building a business, competing with the giants in financial services. Would you have joined me?
I had no experience in the industry, all of 3 years work experience, mostly in Indonesian Economic Development and no business background of any sort. Oh, and by the way, I was asking you to invest your life savings and work fulltime in the business and not receive any salary for a year. Most people I spoke to very sensibly said no. But I did find four other similarly naïve, idealistic lunatics willing to join forces with me and we pooled our life savings, which amounted to around $20,000 each. Yes we were naïve. But somehow we also managed over time to attract a team. A great team that also shared the Power of Possibility.
But now imagine our challenge. How could our team of young people in their early 20s with no money, experience nor a big brand behind us, get older, wealthy people, to trust us with their money?
This is where, the third element, the Power of Making a Difference played an important role. When we launched our financial advice business, we all loved what we were doing and we were strongly motivated by wanting to make a difference. Don’t get me wrong, we were all poor and money was important. But our starting point was to better understand the needs of our clients and to guide them well, through the maze of financial markets and global economics.
In both the ipac business then and the Walsh Bay Partners business today, we wanted to make a positive difference to the lives of our clients.
What we discovered was that when people believe that you are smart, but more importantly that you genuinely care about them, they tend to go out of their way to help you. It began with a small, but important number of influential people who, despite our inexperience, were prepared to trust us and to give us a chance.
Over time, this allowed us, with continued hard work, resilience and some luck to build a very successful business, first in Australia, and then globally.
My main point is that working with a sense of soul for others can attract a surprising amount of supporters and in the long run more financial success, than if your focus is just about making money.
The fact that our company had a soul also prevented us from being sucked into the vortex of greed and fear that dominates too many firms. Notwithstanding the tremendous boom in financial services over the past 40 years, the majority of firms in fact have failed spectacularly.
Fundamentally I believe the weakness with all these firms is that they lost a focus on what mattered – helping to improve the lives of their clients. By lacking a soul and focusing only on quick money, they lost perspective and common-sense, despite being led by very smart people.
The way people react to money leads me to the Power of Money which really is about the role of money in life. In business and economics courses, we study the function of money and refer to it as a ‘means of exchange’ as if it as something that is emotionally neutral. The reality is that money is a great emotional force. Along with other great emotional forces such as sex, religion, power and children, it is something that has a major effect on people’s feelings and behaviour. It generates sufficiently strong passions of envy, greed, fear and hatred that will even cause some to kill.
The research we did for my latest book, How Much is Enough?’, co-authored with Andrew Ford, led to the conclusion that it requires considerable skill to use money wisely and that by and large these skills are different to the ones used to build careers and accumulate wealth. Understanding the psychology of money as well its financial functions will be of great benefit to each of you, complementing the technical skills that you have learned.
The opportunity that comes from wealth creation is the rare privilege of being able to use money to create enduring emotional and financial wellbeing for both your family and others. Yet too often we hear of these opportunities being squandered. The statistics suggest that within 3 generations both the opportunity for financial and emotional wellbeing is squandered in 90% of families. This is reflected in the popular parlance of all countries: ‘from shirt sleeves to shirt sleeves’ or from paddy fields to paddy fields in 3 generations’ are some examples.
One of the encouraging things is that there has been much recent research which draws on various disciplines, including evolutionary biology, neuro-science, positive psychology and behavioural finance, which provides deeper insights into how we make decisions. In ‘How Much is Enough?’ we draw on this research to help people make financial decisions which are more likely to improve enduring wellbeing. And in Walsh Bay Partners we translate this into practical strategies for our families and those of our clients.
This brings me to the final power, the Power of Privilege. Privilege exists when you have access to things that others don’t. Some people are born with it, but the beauty of this country is that it is possible to earn privilege. Graduating from the College of Business and Economics at the ANU means that you have already earned a certain amount of privilege – you have access to opportunities that others do not. As you develop your career, your privilege will grow, as a result of greater influence and wealth.
Privilege is often regarded with suspicion. But privilege can be a great thing, if you use it well. Perhaps the greatest thing you can do with privilege is to get involved in engaged philanthropy. This is not just giving away money, useful though that it is. It is about combining your time, treasure and talent to help those less fortunate.
Having grown up with no money, philanthropy was not something that I was naturally drawn to. But I was persuaded to try and help in areas in which I had an interest. What I found was that by drawing on my education and experience in these areas, I was able to work with teams to help deal with the root causes of problems. It allowed me to make a contribution to changing the system in areas that I had some understanding of. It is a power that you will increasingly have.
I now realise that the most powerful moments of my life actually came from my philanthropic work, rather than what I did for myself. In turn this has been invaluable in helping me to use money more wisely and by involving my children in this from a young age, it has had major benefits for them.
I hope this is something you discover for yourselves. A good way of starting, is to stay connected with the University and to support it in whatever ways that you can. This is an extraordinary institution filled with men and women dedicated to using their considerable talents to advance the cause of knowledge and to making the world a better place. I hope that like me, you may take some of their inspiration and sense of humanity with you.
But enough about my journey. Today is your day, a day for celebration. Congratulations again to the graduates and your parents. I hope my thoughts are of some value as you use your degrees to build lives that are enriching for you, for the community and for the world as a whole. There are many more dots to be joined, possibilities to be grasped and the world desperately needs people who want to make a positive difference. Combined with the wisdom to use money and privilege well, the opportunity for each of you to thrive has never been greater.
Thank you and my very best wishes for the future.