Is there a relationship between music and finance?

Article written by Viet Ha Tran and edited by Angela Ehrenzeller. With special collaboration from Dennis Lin and Eric Kohlmann Kupper. Published on IE Focus Magazine.

Over the years, in my role as an admissions officer who has worked with many thousands of CVs and interviewed thousands of candidates for the Finance Master programs at IE Business School, I´ve noticed a very interesting fact: a considerable number of them are musicians, especially pianists. This highly triggered my curiosity, hence I have asked many finance candidates during the admissions interviews (those who play musical instruments, obviously) about this. I also did a research on the relationship between music & finance, and below are my findings. 

At IE Business School, 10-15% of our Masters in Finance students tend to play the piano, and the rate of musicians is much higher if we include all musical instruments.

So is there a relationship between music and finance? Why are there a considerable number of finance professionals who are also professional musicians (I am talking about those who perform at a professional level, such as those who participate in the National Orchestra or city-level and national-level competitions). After having asked this question to many finance candidates, I managed to sum up the different opinions and withdrew some interesting conclusions that I will share at the end of this article.  

Eric Kohlmann Kupper and his piano performance "Chopin Nocturne"

(No. 20 in C Sharp Minor) at IE Business School Talent Show, September 2014

Eric Kohlmann Kupper (26, Brazil/German), 2014/2015 Master in Finance alumnus, who is currently Founding Partner and CEO at Trinnacle Capital Management (New York), says that "Playing an instrument well is the result of years of practice and dedication. It is nothing that comes easy but rather has to be acquired in very small steps sometimes so incremental that it is hard to see any real progress and many are giving up along the way. Seeing the result of this in a performance for example is therefore witnessing an expression of hard work and taste.  

"The same relentless effort and drive for perfection is a trait that can drive not only excellence in music but also in other subjects. It is therefore no coincidence that many great business professionals and also scientists were excellent musicians." 

Eric added: "As a little anecdote to this, Einstein was a superb violinist. His crown achievement, the special theory of relativity, was clearly the result of hard work (his wife Elsa used to bring him food to his study room, which he didn’t leave for days at times) but he was also seeking an elegant theory and this is likely to have led him as much to his ground-breaking results as the first. Both traits made him likewise a good musician and a good scientist and the same can be said of many finance professionals." 

Eric was a real example of this relentless effort and drive for perfection. Before doing the Master in Finance at IE Business School, he started his academic career at Eton College in the UK and went on to study physics at ETH Zurich and TU Munich (TUM Munich) where he successfully completed his bachelor thesis on the electrochemical properties of titanium oxy carbide nanotubes in 2011. Eric helped to launch a São-Paulo-based VC firm, Bolt Ventures, which operated as an incubator to develop and fund promising Brazilian startups. He was strongly involved in the fundraising process and investor relations, while also being actively involved in the growth management of startups from São Paulo. 

From Zurich, under the newly launched and family-held Kohlmann & Co AG, Eric invested in successful startups that have received follow-on investments from renowned international investors. After the Master in Finance at IE, together with an IE classmate and another friend, he set up a New-York-based hedge fund based on novel strategies, developed during his time at IE.  

Dennis Lin (32, Taiwan/Canada), 2014 IE Master in Advanced Finance graduate, who is Director of China Desk at Santander UK Corporate & Commercial (London), holds a Bachelor in Music in Classical Piano Performance from The University of British Columbia in Canada. Dennis shared his opinion about the impact of being a pianist on his professional life as a banker: 

“Musicians are result-driven. Unlike many professions where minor adjustments or corrections can be made during or after the product or service delivery, 

A pianist produces a product - the music, and is instantaneously consumed - watched and listened to by the audience. In a business sense, there is minimum room for error and adjustment.

Therefore, musicians are meticulously attentive to detail for their craft in order to produce the best performance. 

Dennis Lin performing Un Sospiro by Franz Liszt

Musicians are persevering. Unlike most business professions where skills are learned and reproduced solely with the human brain and with minimal muscle reflex, music is an intricate combination of mechanical muscle memory and intellectual calculation. As one can imagine, neuroplasticity has a much shorter learning curve compared to that of muscle memory. In other words, our brain learns faster than our muscles. Therefore, playing an instrument can be one of the most difficult activities; to perfect a piece of music, it may take months, if not years. Musicians tend to have traits of perseverance, patience, diligence, and a strong work ethic. 

         Dennis Lin performing I'isle Joyeuse by Claude Debussy

Musicians are salesmen. Music is a field where the entry barrier is low - next to none; anyone can produce music either with an instrument or with his or her own vocal chords. Music is also an extremely fragmented market because there are no boundaries for human creation. These two aspects of music make it one of the most competitive fields because of the sheer number of competitors and undefined rules.  

To be successful in the music world, it takes more than talent, training, skill, and technique; ultimately, it takes the ability to sell oneself and one's music. Although it is difficult to quantify, in monetary terms for the salesmanship, it is in every successful musician's character to charismatically grasp their audience -- the customer.” (Dennis Lin) 

After five years in the business world, Dennis has observed that his career development has been fast-tracked due to his results-oriented nature, his reputation as a diligent businessman based on his strong work ethic, and the most important traits of salesmanship. To be able to convincingly represent a product and service, a business developer and financier is like a concert pianist who must execute with finesse and confidence and orchestrate all aspects with charisma and showmanship.  

So what is behind the myth? Below are some traits that I think both musicians and bankers/financiers have in common.

 - Patience: working for very long hours is no surprise for both musicians and bankers. It´s common for alumni who are at Goldman Sachs or JP Morgan to be working for 17 hours a day. 

- Concentration: no great result is ever acquired without a high level of dedication and maximum concentration. On stage there´s no space for making even the smallest errors during the performance and the same goes for performing job duties as a trader, a banker or financier: making mistakes with numbers is not an option. 

- Algorithmic rhythm: many candidates explained to me that they find they read musical notes and numbers in the same way. 

- Passion: sitting for very long hours practicing the same thing, whether for a piano performance or working on numbers requires a great deal of passion for what you do. 

- Ambition to excel and to be the best: being a musician or a banker means that you strive to be the best, and master what you do down to every single tiny detail. 

From a more technical perspective, we have the following observations: 

- Music theorists sometimes use mathematics to understand music due to the fact that the regularity found in music is also expressed in mathematics, 

- Ancient Greek scientists investigated the expression of musical scales in terms of numerical ratios, particularly the ratios of small integers. According to them, sounds which have frequencies in rational proportion are perceived as harmonious to the ear. That´s why our scales have 7 notes (recourse at the 8th, hence named "octaves".) A note and its octave have a 2:1 frequency ratio. Adding the 5 semitones, we have 12 notes per octave, which nearly satisfies the 3:2 and 4:3 ratios. Actually a 19-note comes closer to it. Some modern authors like Mandelbaum use it, but the greeks did not know it before. In fact, any number in the Fibonacci series is a good solution...2 5 7 12 19 31...the limit here is the finesse of our ear. The Pythagoreans thought that there´s a direct correspondence between music and physics, the same 2:1, 3:4, 4:3 ratios happened in the orbits of the observable stars. Hence, talking about the expression "music of the stars", they literally thought the planets produced music as they evolved through the sky. However, with more precise measurements in 1760, Daniel Titius discovered what came to be known as Bode´s Law: planets are distributed in orbital ratios, which are mathematically identical to the common intervals in musical theory. They are primarily variations on what we call the 7th chord: C, E, G, Bb. Hence, we like music because it is maths: it contains patterns, and pattern recognition is what makes us human and establishes order in a sea of chaos. 

- Consequently, music targets one specific area of the brain to stimulate the use of spatial-temporal reasoning, which is useful in mathematical thinking. Children who received preschool piano lessons performed 34% higher on tests measuring spatial-temporal ability than other preschoolers. 

- Music clearly helps to develop an ability in music enhances math skills, giving children an advantage in science, engineering, and other math-related subjects. 

So next time when you meet an extremely talented finance man/woman, mathematician, physicist, chemist, or an engineer, ask him/her if he/she is a musician, the answer, very probably, will be "Yes".