- At a financial conference, billionaire Bill Ackman shared the life advice that he says got him through a tumultuous time in his life. Applying the principle of compounding interest to his personal life, he said he tried not to look back, because that will depress you, but instead tried to improve a little bit every day.
Billionaire hedge fund manager Bill Ackman is known for his activist approach to investments—and, lately, to politics.
His personal life has been just as dramatic. In the mid-2010s, Ackman went through an expensive divorce, saw his firm Pershing Square Capital Management lose billions of dollars, and nearly lost control of the company—all within the span of a few years.
Ackman shared the story on stage at the Forbes Iconoclast Summit in New York on Thursday.
“I was going through a divorce, which is great financial pressure. The fund was down 30-something percent,” he told Forbes Editor-in-Chief Steve Forbes.
“And then the industry, if you will, sort of ganged up on us,” he said, shorting stocks that Pershing Square owned and going long stocks the fund was shorting, most notably Herbalife.
Ackman unwound a position in Valeant by dumping Pershing’s stake, which ultimately lost the fund nearly $4 billion. But with the backing of a $300 million loan from JPMorgan Chase, he solidified control of his fund.
It was a particular mindset that helped him make it through those years, Ackman recalled. Applying the principle of compounding interest to his personal life, he said, “my method was just trying to make a little progress every day.”
He quipped, “If you make 0.1% progress every day, it doesn’t sound like a lot—but annualized!”
So that’s what Ackman reminded himself every day, he told Forbes. “I’m going to make progress. I’m not going to look back to where I was. If I look there, I’m going to get discouraged. I’m just going to focus on the next step, and then the next step, and the next step,” he said.
“You don’t notice any meaningful change for the first few weeks,” he added. “About 90 days in, you’re like, ‘Okay, I’m here … and I’m just going to keep compounding.’”
The curve of progress doesn’t look like much initially, Ackman said, but soon—thanks to compounding—it takes off.
While Ackman’s near-professional-death experience was particularly stark, he believes his approach to progress can benefit anyone.
“All of us are going to have a moment like this, unfortunately… It could be a health issue. It could be you’re fired from your job, your startup fails,” he said. “And it’s even harder when you’ve fallen from a high place to a low place.”
After several years in a low place, Ackman is today back on top. His net worth nearly doubled last year to an estimated $8 billion after a new valuation round for Pershing Square. And while his divorce from his first wife reportedly cost a nine-figure amount, Ackman is now happily remarried to designer Neri Oxman.
This story was originally featured on Fortune.com
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