Ego Kills Us

We are born as "animals" with instinctual drives, and it is our responsibility to cultivate discipline and foresight as we evolve into “humans.” As children, we lack long-term planning and are often driven by immediate needs. However, as we mature, we begin to recognize the detrimental effects of our primal impulses. Yet, one aspect that often remains unchanged is our ego—comprising pride, irrational self-belief, and the tendency to attribute our failures to external circumstances rather than internal flaws.

When a teacher asks, “Why didn’t you do your homework?” we can tell tales of power outages or injuries that confined us to bed, eliciting sympathy rather than reprimand. When a manager inquires, “Why are you late for the meeting?” we can blame traffic jams and are often met with forgiveness from understanding colleagues and managers. Even if one faces severe consequences like termination, we can spin stories about bad employers.

This mindset becomes perilous when applied to finance. Imagine shorting Bitcoin at $25,000 only to watch it climb to $27,000, edging your position towards liquidation. You’re faced with a choice:

1. Insist that your analysis is correct—that Bitcoin will plummet to $12,000 eventually—and pour more funds into your position to avoid liquidation.

2. Admit your error, close the position, conduct a fresh analysis without bias, and make a new investment decision.

I chose the first option. I persisted until Bitcoin soared from $25,000 to $31,000 over two stressful weeks before I finally chose the latter option and acknowledged my loss. My trading capital dwindled from $3,000 to $500. I consider myself fortunate that it didn’t drop to zero—that I didn’t keep believing in myself until liquidation.

We cling to losing positions, telling stories rather than facing reality. When Bitcoin quadruples from its bottom while the shitcoin you invested plummets to new lows each week, we tell stories about an impending altseason that will make us wealthy beyond measure. Instead of divesting from these failing assets and investing in growing assets like Bitcoin or Ethereum.

The market is an unforgiving arena where billions of indifferent participants neither know you nor care for your justifications. Each misstep is penalized; such penalties should prompt us to reassess our decisions, discard our ego, accept losses, and learn from them. If we persist with our egotistical ways in the market, even if we might profit in the short term, we are guaranteed doom in the long run.

Money represents time; these concepts are interchangeable. When we lose money, we lose time—and ultimately life itself. Ego leads us down this path of loss; it is indeed true that ego kills us. So let us combat our ego and aspire for longevity.

Economic theory suggests that wealth is generated by providing societal benefits—so why do people earn in markets? And why do people pay money in markets? The answer lies in our vices: markets serve as a mechanism for purging our ‘deadly sins.’ We part with our money due to pride, greed, wrath, envy, lust, gluttony, and sloth; losing money purges us of these sins while those who profit help liberate us from them.

I recall purchasing my first crypto asset in May 2022—two stressful years have passed since then. I lost too much money in trades with leverage, by holding onto losing assets, and in scams promising high returns. Yet reflecting on those years reveals how the market has honed me. I paid a steep price for my strong ego.

Conquering our ego does more than prevent financial loss—it transforms us into better individuals in all facets of life. Ego kills us; let’s embrace humility.