Exploring the Tangibility of Money in Finance
When I was a teller at a bank, money was undoubtedly on my mind. I was responsible for a large sum of cash daily, ensuring that every penny was accounted for, and making sure my customers and I didn't suffer any financial losses. This experience taught me a valuable lesson: handling money daily can, paradoxically, make its value rather elusive. As I will explain, there is a certain tangibility to money that even the most sophisticated financial deals can't quite replicate.
Handling Money as a Teller: A Daily Reality
As a teller, my role was to ensure the bank's financial transactions went smoothly. I was responsible for managing cash, making sure it was accurately counted, and dealt with every transaction with utmost precision. If a small sum went missing, it wasn't the end of the world; we knew we might be short by a few dollars, and it would be covered by our petty cash. However, if the discrepancy was significant—say, a shortfall of a thousand dollars—it was a serious issue. Such errors could cost me a job or, worse, damage the bank's reputation.
The Role of Routine in Emphasizing Money’s Tangibility
Working daily next to money, in a high-stakes environment, can have a unique effect on human psychology. Over time, the money itself can start to lose its value as a tangible object. Instead, it becomes just fancy paper, a symbol of wealth rather than a source of personal gain. This realization isn't just a pleasant side-effect of the job; it's a hard-earned lesson in understanding the different forms of value that money can take.
From Bank Teller to Financial Manager: A Shift in Perspective
Transitioning from a bank teller to a financial manager further solidified my perspective on money. In 2008, I was involved in a deal to manage liquidity for a large hedge fund, worth a staggering 2 billion US Treasuries. The banker who brought me to the deal had initially proposed an investment of between 500 million and 1 billion. After several meetings and negotiations, the trader agreed to invest 2 billion. To the banker, this was a massive deal. However, to me, it was just another transaction on our balance sheet—a large number with no personal significance.
I remember the banker's reaction as we left the office. She was visibly moved, hugging me and giving me a kiss on the cheek, expressing her amazement at my nonchalance. "How can you respond so casually to a 2 billion opportunity?" she asked. I simply replied, "It wasn’t our 2 billion; it was just zeros on a balance sheet, disconnected from us personally."
Monopoly Money: A Metaphor for Abstract Wealth
The banker’s question took on a new meaning when I started thinking about it. I realized that the deal could be compared to a game of Monopoly. In Monopoly, the high stacks of cash are symbols of wealth, but they don’t actually represent real value. Similarly, the transactions I dealt with in finance were just abstract numbers, often disconnected from the material world.
My firm’s reluctance to reward me for these transactions is a perfect example. The large sums were just numbers on a balance sheet, and as a result, they didn't have the same personal significance as the smaller, more tangible sums I had handled in my earlier job as a teller.
Conclusion: Understanding the Duality of Money
Working in finance teaches us that money can have both tangible and intangible forms. The daily dealings with cash can make its value clear and real. However, as we scale up, the same sums take on a different significance, becoming abstract representations of value rather than tangible assets. This duality is a crucial aspect of my personal and professional understanding of money. It's a lesson that I continue to draw upon in my career, reminding myself that the numbers on a balance sheet are just that—numbers—regardless of their size.