7/6/12

Anyone who's followed my posts knows that the dollar isn't the primary motivator for me in my career, it's always been about winning. Some people won't agree with that, others will... and I was having this conversation last night with some buddies about the legendary "walk-away number," the amount you'd need to have today to just quit working forever.

One said $10M, another said $50M, I think I even heard a $200M in there... but problem was, I could never give a legitimate answer. I'd still want to work if I got handed a check for a billion dollars tomorrow. I don't know what I'd do with myself all day if I wasn't working... it doesn't make sense to me to sit around and play golf all day, go on vacations, sit at the club, etc. That sentiment might change in 15 years, but probably not any sooner.

So monkeys - do you actually have a walk-away number? Or has it never been about the money? Hoping I'm not the only one who just loves playing the game.

Comments (114)

Best Response
7/1/12

Really people? I would expect the answer to be obvious. It's not about a singular number, it's about cash flow! Cultivating a reliable source of cash flow every month rather then having this childish notion of a "magic" number is how you break out of indentured servitude. You could quit this industry with only about 500k saved up as long as you turn that into a source of income.

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7/1/12
7/1/12

For me it is not so much a fixed number as much as the fulfillment of a particular set of conditions:

Once you make to be the senior partner of a HF or PE firm with considerable AUM and manage to do well for a few years, then you can gradually phase out your role at the firm and delegate most of the day to day operations of the firm to others. Your considerable carried interests/ownership stake at the firm will assure that you will continue to make very good money even after you stopped working for the firm full time.

A classic example would be the case of Candidate Romney. By his own admission, for the last 4 + years Romney has been basically "unemployed" as he was running for president the whole time. Still he managed to make 20mm+ last year thanks in the most part to his ownership stake and carried interests at Bain. This situation will continue so long as Romney holds on to his carry and Bain continues to do well, which it has been.

So to answer your question, no, for me a walk away number does not exists. I am not all that concerned about having a certain number of golden eggs in my storage bunker. For me it is all about making sure that others are taking good care of the goose to make sure that it stays alive and well and continues to lay more golden eggs for me year after year, ad infinitum...

Too late for second-guessing Too late to go back to sleep.

In reply to brandon st randy
7/1/12
brandon st randy:

goose is alive

Nah. Goose died. Maverick cried.

7/1/12

50 million for me. - But thats not a stop working number, that's just a number where I'll just slow down and look into other interests in my life.

7/1/12

If you do what you love, which is the key that walk away number just really becomes when you get fed up with commute or get up with company. Because doing what you love eliminates the number. I think 10 million for a good fixed income off of bonds(keeps increasing dollar amount due to interest rates). Then I need another 10 million to just blow it on whatever so 20 million and fed up at work. Hence I can see myself working for a lot longer

7/1/12
7/1/12

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

In reply to Sandhurst
7/1/12
Sandhurst:

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

How old are you now? And where are you at? (don't try and pussy out and say that's private). No one knows who you are so it's still private in the grand scheme of things. P.S. - Don't b.s. - no matter what your number is its not going to impress me, or make me think more poorly of you. Just curious.

In reply to Sandhurst
7/1/12
Sandhurst:

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

This is hysterical...

I hate victims who respect their executioners

7/1/12

You guys must think you'll head major hedge funds in the future. Most of you won't.

In reply to Eurodealer
7/1/12
Eurodealer:

You guys must think you'll head major hedge funds in the future. Most of you won't.

Which is why most of us wont be walking away

7/1/12

Unless that amount will let me start my own company, or a fund, or something, I don't think there's a walk-away number. You're not the only one, man.

In reply to Bearearns
7/1/12
JoshFi7:
Eurodealer:

You guys must think you'll head major hedge funds in the future. Most of you won't.

Which is why most of us wont be walking away

Bingo.

7/1/12

Yes, but the number is constantly changing based on our understanding of the economy and our financial needs.

My walkaway number started at $500K. It's grown. And we also have soft numbers. When you get $X in the bank, you get less hungry. In general, if you have $3X in the bank, you're less willing to pull 100 hour weeks for $X.

Think about what you really need to be happy. Happiness tends to be maximized at $70K/year for most people (ok, maybe $250K/year in Manhattan.) After that, free time is what makes you happy.

I echo ANT's quote that "what other people think doesn't buy a Ferrari", but the most pathetic thing in the world is a miserable Ferrari owner. Don't be that guy. Have a plan for when you'll be content.

Right now, my plan is whatever will pay for that 60 acre farm on Lake Michigan with a '66 Ford Mustang GT Convertible (Red).

7/1/12

More. It's about the game, and the money makes the game much more interesting.

7/1/12
In reply to Abdel
7/1/12
Abdel:

$1.2 million

Jesus man, are you going to live in Missouri for the rest of your life?

7/1/12

20mm. Doesn't mean I'd stop working. But it would certainly change how I go about it.

7/1/12

$100MM would do it for me... I don't need a $30MM jet, 50MM yacht, and 10 homes. Just a nice house in Southampton, an apartment in NYC, and some nice cars.

7/1/12

8 mil * # of my immediate family + 1 mil * # of my extended family

In reply to hot1590
7/1/12
hot1590:

8 mil * # of my immediate family + 1 mil * # of my extended family

That would put me just south of $100M

I hate victims who respect their executioners

In reply to Sandhurst
7/1/12
Sandhurst:

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

lol how close to that are you?

7/1/12

$75 million

I would buy one really nice house with a whole lot of land and some great cars. Probably have a nice condo in NYC and Miami.

7/1/12

The average Harvard MBA grad makes $3MM in his/her life time. Anything in the range of $5-10MM would be more than adequate. I would retire immediately and enjoy the remainder of my life with family, friends, and etc. Life is short and if I was fortunate enough to be able to walk away, I would take full advantage of it. What good is more money and winning? They are worth nothing once you're dead.

In reply to orangejulius
7/1/12
orangejulius:

The average Harvard MBA grad makes $3MM in his/her life time.

I would seriously, SERIOUSLY contest this number. Let's assume the average HBS alum is 29 at graduation. That gives them at least 30 years of working time post graduation. The median HBS salary at graduating was 120K in 2011. With career progression, bonus, and investments I can pretty much guarantee the average Harvard MBA makes much, much more than $3mm in a lifetime.

7/1/12
BlackHat:

So monkeys - do you actually have a walk-away number? Or has it never been about the money? Hoping I'm not the only one who just loves playing the game.

See, here's the thing -- you're doing what you're doing (and hopefully doing pretty well) because you love playing the game, not because you're in it for the money. I won't say that everyone who goes into high finance just for the money won't last, but I don't think I'm too far off the mark if I say a substantial amount of people in IB and S&T who only have dollar signs in their eyes will burn out before they're 30. Thus, I think the whole notion of the walkaway number is just irrelevant to the demographic of this forum (or at least the people who want to do this long-term and not just to make some quick money and jump ship). Walkaway numbers are for people who work mundane, 9-to-5 jobs looking to get their kids through college and hopefully have enough left over to die someplace warm.

In reply to orangejulius
7/1/12
orangejulius:

What good is more money and winning? They are worth nothing once you're dead.

It might sound wrong, but think about it - what is your free time and spending time with your family worth when you're dead? Unless we want to turn this into a religious debate, it's about the same.

I hate victims who respect their executioners

In reply to Boothorbust
7/1/12
Boothorbust:
orangejulius:

The average Harvard MBA grad makes $3MM in his/her life time.

I would seriously, SERIOUSLY contest this number. Let's assume the average HBS alum is 29 at graduation. That gives them at least 30 years of working time post graduation. The median HBS salary at graduating was 120K in 2011. With career progression, bonus, and investments I can pretty much guarantee the average Harvard MBA makes much, much more than $3mm in a lifetime.

I suspect the number is right, but it's an historical rather than forward looking figure, and not inflation adjusted. Also strongly suspect it is a median rather than average.

In reply to awqtfq
7/1/12
BVMadden:

More. It's about the game, and the money makes the game much more interesting.

You sound real cool with that line. Too bad it's not yours. Don't pretend like you are the only one who has ever seen Wall Street 2: Money Never Dies. Especially amongst finance people, you just sound like a tool.

In reply to orangejulius
7/1/12
orangejulius:

Anything in the range of $5-10MM would be more than adequate. I would retire immediately and enjoy the remainder of my life with family, friends, and etc. Life is short and if I was fortunate enough to be able to walk away, I would take full advantage of it. What good is more money and winning? They are worth nothing once you're dead.

Agree with this, though I wouldn't necessarily stop working, but pursue things just for fun. Like trying to be a chef or write screenplays.

Sometimes I go about in pity for myself, and all the while a great wind carries me across the sky
7/1/12
7/1/12

$50 Million..

throw it into a tax-exempt muni fund, that doesn't pay ordinary dividends. and just rolls the money over and pays tax-exempt interest..

Considering the general MMD curve and municpal pricings are based on a 5% coupon.. thats $2.5 million a year tax free. I could definitely survive on that

In reply to drexelalum11
7/1/12
drexelalum11:
Boothorbust:
orangejulius:

The average Harvard MBA grad makes $3MM in his/her life time.

I would seriously, SERIOUSLY contest this number. Let's assume the average HBS alum is 29 at graduation. That gives them at least 30 years of working time post graduation. The median HBS salary at graduating was 120K in 2011. With career progression, bonus, and investments I can pretty much guarantee the average Harvard MBA makes much, much more than $3mm in a lifetime.

I suspect the number is right, but it's an historical rather than forward looking figure, and not inflation adjusted. Also strongly suspect it is a median rather than average.

According to this, the median net worth of the Harvard MBA Class of 1986 is $6M: http://poetsandquants.com/2012/06/15/25-years-late... (see page 2)

In reply to dest149
7/1/12
dest149:
BVMadden:

More. It's about the game, and the money makes the game much more interesting.

You sound real cool with that line. Too bad it's not yours. Don't pretend like you are the only one who has ever seen Wall Street 2: Money Never Dies. Especially amongst finance people, you just sound like a tool.

I'm not going to say that I didn't quote Breton James on purpose, but is there really another way to say that "more" is your number? Also the second part of my statement was basically a Gekko quote. I'm really cool now right?

In reply to Sandhurst
7/1/12
Sandhurst:

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

I thought I was the only one....

Before anyone asks I'm 27,10k in the hole, and I've met 2 people who hit $100mm before 35. The first is a legit genius who made close to half a billion at 26 when he sold his software company, and the second is a Columbia MBA who cashed in his chips before the last tech bubble burst.

I won't be hitting my goal.

In reply to BTbanker
7/1/12
Connor:

$100MM would do it for me... I don't need a $30MM jet, 50MM yacht, and 10 homes. Just a nice house in Southampton, an apartment in NYC, and some nice cars.

Hmmm, well with 100 MM, you could do a 15MM Yacht, 30 MM Jet ( you could get something along the lines of a G4 or a G5), and 15-20MM in realestate, and a 5 MM helicopter. This would still leabe you with 30-35MM in contingency/liquidity. Play with these numbers up and down until you feel you have an appropriate amount of liquidity, but I don't see why you can't just have it all.

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7/1/12

http://www.forbes.com/sites/shawnoconnor/2012/04/0...

^ An article about the lifetime earnings topic and I was wrong the number is ~$8-10MM rather than $3. Boothorbust I hear you the number will indeed vary, I just wanted to point out that you can really retire comfortably with a lot less.

Blackhat - I agree there is no right or wrong way to spend your life. Just saying me personally I'd rather spend it with loved ones and get as much out of life I can golfing whatever it is than working with/for ppl that wouldn't give a rats ass if I died.

7/1/12

The number doesn't actually exist - it's psychologically impossible. I know someone who used to run the mortgage desk for a top BB during the 90s until 2007. He quit at the top because he hit his number. (I have a feeling he revised his number a couple times on the way up - that kind of opportunity comes along with running one of the most profitable desks in recent memory from its infacy to peak.) By that time he had acquired a massive house in Garden City and a seafront vacation house in Long Beach; he regularly rented out a house in the Hamptons, was a member of 3 of the most insanely expensive country clubs on Long Island, had purchased 2 luxury SUVs and 2 coupes for a family of 5. He was sitting on enough to write the Ivy League tuition checks for the full 4 years for his 3 children without batting an eye. His house is the nicest I've ever stepped foot in - it looked as if half the furniture was from Monticello and the rest was from the New York Yacht Club.

He had it all, and after 2 years he got bored. Having hit his number no longer meant anything to him. Now he runs mortgages at a MM investment bank. One of his biggest regrets is leaving the bank he had loved for so long, where he had made his name and his fortune.

7/1/12

What if one doesn't have a number, is that pure greed?

The Four E's of investment
"The greatest Enemies of the Equity investor are Expenses and Emotions."- Warren Buffet

In reply to gammaovertheta
7/1/12
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible. I know someone who used to run the mortgage desk for a top BB during the 90s until 2007. He quit at the top because he hit his number. (I have a feeling he revised his number a couple times on the way up - that kind of opportunity comes along with running one of the most profitable desks in recent memory from its infacy to peak.) By that time he had acquired a massive house in Garden City and a seafront vacation house in Long Beach; he regularly rented out a house in the Hamptons, was a member of 3 of the most insanely expensive country clubs on Long Island, had purchased 2 luxury SUVs and 2 coupes for a family of 5. He was sitting on enough to write the Ivy League tuition checks for the full 4 years for his 3 children without batting an eye. His house is the nicest I've ever stepped foot in - it looked as if half the furniture was from Monticello and the rest was from the New York Yacht Club.

He had it all, and after 2 years he got bored. Having hit his number no longer meant anything to him. Now he runs mortgages at a MM investment bank. One of his biggest regrets is leaving the bank he had loved for so long, where he had made his name and his fortune.

Did this gentleman you described used to work at Bear Stearns? Did he attend NYU but didn't finish--got expelled for fighting? From your description it seems just like someone I know.

Too late for second-guessing Too late to go back to sleep.

In reply to brandon st randy
7/1/12
brandon st randy:
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible. I know someone who used to run the mortgage desk for a top BB during the 90s until 2007. He quit at the top because he hit his number. (I have a feeling he revised his number a couple times on the way up - that kind of opportunity comes along with running one of the most profitable desks in recent memory from its infacy to peak.) By that time he had acquired a massive house in Garden City and a seafront vacation house in Long Beach; he regularly rented out a house in the Hamptons, was a member of 3 of the most insanely expensive country clubs on Long Island, had purchased 2 luxury SUVs and 2 coupes for a family of 5. He was sitting on enough to write the Ivy League tuition checks for the full 4 years for his 3 children without batting an eye. His house is the nicest I've ever stepped foot in - it looked as if half the furniture was from Monticello and the rest was from the New York Yacht Club.

He had it all, and after 2 years he got bored. Having hit his number no longer meant anything to him. Now he runs mortgages at a MM investment bank. One of his biggest regrets is leaving the bank he had loved for so long, where he had made his name and his fortune.

Did this gentleman you described used to work at Bear Stearns? Did he attend NYU but didn't finish--got expelled for fighting? From your description it seems just like someone I know.

Nope, Salomon legacy

In reply to gammaovertheta
7/1/12
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible.

Do you have any research to back this up or just anecdotal evidence?

I have no idea how much money I'd need to have to walk away. I have no clue how having even 100k feels like.

If your dreams don't scare you, then they are not big enough.

"There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

7/1/12

Enough to run a hedge fund from my kitchen in my underwear.

I refuse to meet with clients, and more importantly, I will never wear pants.

Competition is a sin.

-John D. Rockefeller

In reply to wolverine19x89
7/1/12
wolverine19x89:
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible.

Do you have any research to back this up or just anecdotal evidence?

I have no idea how much money I'd need to have to walk away. I have no clue how having even 100k feels like.

My judgment is based on very limited face-to-face experience with a very small sample. However, the strength of feeling (especially, from the case above, regret for leaving his long-term bank) from just these few have convinced me that it would be almost impossible. These guys are fucking killers by training - absolute animals - and I totally understand how they can get antsy after being off the desk for 2 years and spending all their time at country clubs and exotic destinations. Sounds great, but it can't compare to the rush of crushing it on the desk.

In reply to kmess024
7/1/12
kmess024:

What if one doesn't have a number, is that pure greed?

Not necessarily, it could just mean you haven't given the far future enough thought to think about a time where you wouldn't be working full time in the industry and what your finances/lifestyle would be like.

7/1/12

Now to say stop working forever?

To quit a "career" I would need between $5-15M. Then buy some cash producing real estate and businesses(car washes/franchises/rentals/etc.) Maybe run a fishing charter out of the Bahamas and just chill working 20 hours a week having fun.

My number to "never" work again? Well, I would need so much as to never think I could burn through it. Let's say between $150-350M.

7/1/12

20 MM will do it for me.

7/1/12

I actually got asked what my number was in a job interview. I thought I messed up because I didn't have a firm number.

In reply to gammaovertheta
7/1/12
gammaovertheta:
wolverine19x89:
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible.

Do you have any research to back this up or just anecdotal evidence?

I have no idea how much money I'd need to have to walk away. I have no clue how having even 100k feels like.

My judgment is based on very limited face-to-face experience with a very small sample. However, the strength of feeling (especially, from the case above, regret for leaving his long-term bank) from just these few have convinced me that it would be almost impossible. These guys are fucking killers by training - absolute animals - and I totally understand how they can get antsy after being off the desk for 2 years and spending all their time at country clubs and exotic destinations. Sounds great, but it can't compare to the rush of crushing it on the desk.

The thing is, if you truly enjoy what you did for a living, then it becomes more than just a job, a source of income. It becomes a calling, a sense of fulfillment that defines you and gives meaning to your life. Furthermore, once you retire and give up on your vocation that then you are left with a big void. That is why many people age very quickly after leaving their career. The boredom and void literally kill them until they find something else to keep themselves occupied. Just look at Bill Clinton 2 months after leaving the WH compared to what he looked like before.

A billionaire hedge fund manager once said that he never worked a single day in his life. And he is right. if you are doing something you enjoy and working for yourself, then it feels like not working at all.

Too late for second-guessing Too late to go back to sleep.

7/2/12

A billion, but I'd give everything in excess of 5-10M to charity.

7/2/12

It's all about the game. Why work so hard if you don't enjoy it?

More
http://www.youtube.com/watch?v=Humfsis-QLI

There is life and death. I'm going to bust my ass to make an impact 'til the latter comes.

7/2/12
7/2/12
In reply to dest149
7/2/12
dest149:
Sandhurst:

Ever since I was in middle school, it has been $100mm by 35, and then $10bn long term.

How old are you now? And where are you at? (don't try and pussy out and say that's private). No one knows who you are so it's still private in the grand scheme of things. P.S. - Don't b.s. - no matter what your number is its not going to impress me, or make me think more poorly of you. Just curious.

I'm doing alright. Through a couple of years on the job, I've pulled down decent numbers and managed it pretty well (granted, with some luck). But getting there is going to basically require that I be managing my own credit fund in 3-5 years if I want to damp up hit the AUMs I'm going to need (assuming good performance throughout). This is the real crunch, but I have a degree of faith in myself, insofar as my "odds" of hitting my first target are more realistic than I used to think. Developong your career is like disciplined investing. Know what you're looking for, evaluate every opportunity, and if everything lines up, trust yourself and pull the trigger. If you can't trust and act on your own judgement, go be a consultant.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

7/2/12

are people seriously saying 100mm? who the hell do you guys think you are?

I eat success for breakfast...with skim milk

In reply to TonyPerkis
7/2/12
TonyPerkis:

are people seriously saying 100mm? who the hell do you guys think you are?

I'm the head of the motherfuckin' state.

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

In reply to bfin
7/2/12
bfin:
TonyPerkis:

are people seriously saying 100mm? who the hell do you guys think you are?

I'm the head of the motherfuckin' state.

We know that Barkley..head of Monstar Island..you're just lucky that MJ saved you from the Monstars

I eat success for breakfast...with skim milk

In reply to TonyPerkis
7/2/12
TonyPerkis:
bfin:
TonyPerkis:

are people seriously saying 100mm? who the hell do you guys think you are?

I'm the head of the motherfuckin' state.

We know that Barkley..head of Monstar Island..you're just lucky that MJ saved you from the Monstars

How is your intern Tony Montana

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

In reply to bfin
7/2/12
bfin:
TonyPerkis:
bfin:
TonyPerkis:

are people seriously saying 100mm? who the hell do you guys think you are?

I'm the head of the motherfuckin' state.

We know that Barkley..head of Monstar Island..you're just lucky that MJ saved you from the Monstars

How is your intern Tony Montana

Still tryin ta give me hand jibbers in the elevator...good thing i cant hold a load and it looks like i have an acorn glued to my midsection

I eat success for breakfast...with skim milk

7/2/12

15million and not live crazy out of my means. Also I think i'd volunteer at the local Y, does that count as working?

Eventus stultorum magister.

In reply to bearing
7/2/12
bearing:

Really people? I would expect the answer to be obvious. It's not about a singular number, it's about cash flow! Cultivating a reliable source of cash flow every month rather then having this childish notion of a "magic" number is how you break out of indentured servitude. You could quit this industry with only about 500k saved up as long as you turn that into a source of income.

Bingo. But I think that a more conservative approach is $1 million yielding 4% dividends plus a house.

7/2/12
7/2/12

I don't know if I ever want to stop being productive. I think I'd just get too bored.

7/2/12

Hearing the answers from people in college cracks me up. I probably said that kind of shit back then, too.

In reply to awqtfq
7/2/12
BVMadden:

More. It's about the game, and the money makes the game much more interesting.

::blows brains out::

In reply to gammaovertheta
7/2/12
gammaovertheta:
brandon st randy:
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible. I know someone who used to run the mortgage desk for a top BB during the 90s until 2007. He quit at the top because he hit his number. (I have a feeling he revised his number a couple times on the way up - that kind of opportunity comes along with running one of the most profitable desks in recent memory from its infacy to peak.) By that time he had acquired a massive house in Garden City and a seafront vacation house in Long Beach; he regularly rented out a house in the Hamptons, was a member of 3 of the most insanely expensive country clubs on Long Island, had purchased 2 luxury SUVs and 2 coupes for a family of 5. He was sitting on enough to write the Ivy League tuition checks for the full 4 years for his 3 children without batting an eye. His house is the nicest I've ever stepped foot in - it looked as if half the furniture was from Monticello and the rest was from the New York Yacht Club.

He had it all, and after 2 years he got bored. Having hit his number no longer meant anything to him. Now he runs mortgages at a MM investment bank. One of his biggest regrets is leaving the bank he had loved for so long, where he had made his name and his fortune.

Did this gentleman you described used to work at Bear Stearns? Did he attend NYU but didn't finish--got expelled for fighting? From your description it seems just like someone I know.

Nope, Salomon legacy

Cantor just hired a new head of Mortgages that I think may fit the bill...

7/2/12

My dream is to own a sports team, so enough money to do that.

Realistically, 5M

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

7/2/12

$5M and I'd be out for sure. I'm from Florida so that amount of money obviously goes much farther than in NYC or LA.

In reply to dest149
7/2/12
dest149:
BVMadden:

More. It's about the game, and the money makes the game much more interesting.

You sound real cool with that line. Too bad it's not yours. Don't pretend like you are the only one who has ever seen Wall Street 2: Money Never Dies. Especially amongst finance people, you just sound like a tool.

Exactly what I thought.

7/2/12

Whatever happened to "Be content with what you have and keep yourself free from the love of money"?

7/2/12

If you aren't doing it for money- which the guys at the top really aren't- then there is no walk-away number. In an alternate universe, if people working in finance lived the 'starving artist' stereotype, these guys would still do it. A number means nothing to them; it would be like asking you - "How much can I pay you to stop participating in your favorite hobby?"

Bene qui latuit, bene vixit- Ovid

7/2/12

Side note - Wall Street 2 is a bottom three movie of all time. Just horrible on every conceivable level.

In reply to TheKing
7/2/12
TheKing:

Side note - Wall Street 2 is a bottom three movie of all time. Just horrible on every conceivable level.

ha no surprise we got another Shia hater in the house, jelly his success cause hes a rish actor and obviously would rule Wall Street IF he wanted but he got better things 2 do like get fame get money crush bishes

In reply to TheKing
7/2/12
TheKing:

Side note - Wall Street 2 is a bottom three movie of all time. Just horrible on every conceivable level.

I saw the "more" comment and it reminded me of WS 2, which in turn ruined my entire day. You're not alone. Literally right down there with Gigli in terms of worst movie of all time, and arguably the worst sequel since American Psycho 2. Definitely the sequel that most effectively ruined the original's awesomeness. And made me wish death upon the director.

I hate victims who respect their executioners

In reply to BlackHat
7/2/12
BlackHat:
TheKing:

Side note - Wall Street 2 is a bottom three movie of all time. Just horrible on every conceivable level.

I saw the "more" comment and it reminded me of WS 2, which in turn ruined my entire day. You're not alone. Literally right down there with Gigli in terms of worst movie of all time, and arguably the worst sequel since American Psycho 2. Definitely the sequel that most effectively ruined the original's awesomeness. And made me wish death upon the director.

But, but, if Oliver Stone died we wouldn't be able to get the masterpiece that is coming out soon called Savages, featuring beautiful tits Blake Lively, gaylord John Travolta, and even more beautiful tits Salma Hayek?

But yea WS2 is a POS. to this day I still am pissed that 5 mins of my life was wasted on the motorcycle scene. Ugh

7/2/12

Not only is WS2 horrible story wise, it is also based on pseudoscience--I mean come on! Cold fusion??? They just ripped the whole concept from The Saint. Except Val Kilmer and Elizabeth Shue are much better actors and better looking than Shia Labouf and that plain looking girl in WS.

I only watched WS2 because it happens to be showing on the movie channel in the hotel I was staying at.

Too late for second-guessing Too late to go back to sleep.

In reply to rls
7/2/12
rls:

If you aren't doing it for money- which the guys at the top really aren't- then there is no walk-away number. In an alternate universe, if people working in finance lived the 'starving artist' stereotype, these guys would still do it. A number means nothing to them; it would be like asking you - "How much can I pay you to stop participating in your favorite hobby?"

Poor analogy. You could definitely pay me enough to quit my favorite hobby. I might regret the decision, but there's a number somewhere that I would initially say yes to. Hitting your number isn't binding.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

In reply to Sandhurst
7/2/12
Sandhurst:
rls:

If you aren't doing it for money- which the guys at the top really aren't- then there is no walk-away number. In an alternate universe, if people working in finance lived the 'starving artist' stereotype, these guys would still do it. A number means nothing to them; it would be like asking you - "How much can I pay you to stop participating in your favorite hobby?"

Poor analogy. You could definitely pay me enough to quit my favorite hobby. I might regret the decision, but there's a number somewhere that I would initially say yes to. Hitting your number isn't binding.

You're missing the point. Sure, from the perspective of an asset-poor person, there is likely some amount I could pay you to stop doing some activity. But, this question concerns people who have enough assets to stop working forever. If a man had 100 million dollars, would he accept $1 million to stop doing some activity that you wanted to do every day? It is rather unlikely that a person who has enough assets to do whatever he or she likes would give up one of their favorite activities for more money. The question of a walk-away number isn't legally binding, but for this theoretical debate to work, it has to imagined as such.

So, for you, fine- I cannot speak for you. But I know a fund manager who could stop working but doesn't because of the very reason I described. If you don't feel that strongly about something in life, then this argument will never make sense. And given the number of multimillionaire and billionaire hedge fund managers still grinding it out every day, the empirical observations support my thesis.

Bene qui latuit, bene vixit- Ovid

7/2/12

Declining marginal value of money, too. At $100 million, someone could offer you a billion to quit your favorite hobby and you'd say no. If they threatened to take away your $100 million, that's a different story, but the marginal value curve starts to flatten when you have a full-time driver, a live-in maid, and have the money to fly first class.

In reply to IlliniProgrammer
7/2/12
IlliniProgrammer:

Declining marginal value of money, too. At $100 million, someone could offer you a billion to quit your favorite hobby and you'd say no. If they threatened to take away your $100 million, that's a different story, but the marginal value curve starts to flatten when you have a full-time driver, a live-in maid, and have the money to fly first class.

heister, is this true?

In reply to IlliniProgrammer
7/2/12
IlliniProgrammer:

Declining marginal value of money, too. At $100 million, someone could offer you a billion to quit your favorite hobby and you'd say no. If they threatened to take away your $100 million, that's a different story, but the marginal value curve starts to flatten when you have a full-time driver, a live-in maid, and have the money to fly first class.

Marginal value of time as well. If you have a stellar year and pull down a ton of money in your prime, why would anyone stop there. Especially if you think the next year will be just as good. But then again you could decide you've made it past your prime or the industry is slowing down and you decide to get out before the money isn't worth the work anymore.

7/2/12

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

In reply to That_Aston
7/2/12
That_Aston:

This sums it up:
http://www.youtube.com/watch?v=Humfsis-QLI&feature...

BALLER

SHIA IS THE DAMN MANE

yall hate cause u jelli

7/2/12

Right now, I'd probably quit my job for somewhere between $1-2 million.

I don't think I could survive on it, but I'd definitely feel comfortable pursuing actual passions for that number. Honestly,my walk-away number has continued to decline as the years pass by. Now that I have a ton of "stuff," it is easy to realize that I don't need most of it. I've got a huge apartment I'm never in (and don't use half the rooms), with gadgets galore I rarely use, dreaming of the activities I would do if I actually had the free time. I don't begrudge people who want to earn a lot of money, but I certainly don't look up to them as something to aspire to.

CompBanker

7/2/12

10MM. Decent house in SF Bay and vacation home on a tropical island, nice car, and put a nice chunk in fixed income. Trade conservatively with about 1-2MM and should be set for life.

In reply to IronkidMS
7/2/12
IronkidMS:

10MM. Decent house in SF Bay and vacation home on a tropical island, nice car, and put a nice chunk in fixed income. Trade conservatively with about 1-2MM and should be set for life.

1 week time shares on Maui go for $10K + $1K/year in maintenance. Done.

7/2/12

right there with ya.. I have a couple$MM number but that'll probably just get me to try a less profitable / higher risk (risk in a different sense from finance) industry i wasn't able to afford to try

In reply to CatsLHP
7/3/12
CatsLHP:
gammaovertheta:
brandon st randy:
gammaovertheta:

The number doesn't actually exist - it's psychologically impossible. I know someone who used to run the mortgage desk for a top BB during the 90s until 2007. He quit at the top because he hit his number. (I have a feeling he revised his number a couple times on the way up - that kind of opportunity comes along with running one of the most profitable desks in recent memory from its infacy to peak.) By that time he had acquired a massive house in Garden City and a seafront vacation house in Long Beach; he regularly rented out a house in the Hamptons, was a member of 3 of the most insanely expensive country clubs on Long Island, had purchased 2 luxury SUVs and 2 coupes for a family of 5. He was sitting on enough to write the Ivy League tuition checks for the full 4 years for his 3 children without batting an eye. His house is the nicest I've ever stepped foot in - it looked as if half the furniture was from Monticello and the rest was from the New York Yacht Club.

He had it all, and after 2 years he got bored. Having hit his number no longer meant anything to him. Now he runs mortgages at a MM investment bank. One of his biggest regrets is leaving the bank he had loved for so long, where he had made his name and his fortune.

Did this gentleman you described used to work at Bear Stearns? Did he attend NYU but didn't finish--got expelled for fighting? From your description it seems just like someone I know.

Nope, Salomon legacy

Cantor just hired a new head of Mortgages that I think may fit the bill...

Still not it, but I am going to stop taking questions because you're getting closer

7/3/12

200K. I'd just be a rock climbing instructor in Thailand

Remember the 3 seconds in the paint rule though

In reply to IlliniProgrammer
7/4/12
IlliniProgrammer:
IronkidMS:

10MM. Decent house in SF Bay and vacation home on a tropical island, nice car, and put a nice chunk in fixed income. Trade conservatively with about 1-2MM and should be set for life.

1 week time shares on Maui go for $10K + $1K/year in maintenance. Done.

Just don't take the 18% loan they've gotten you "pre-approved" for. Actually, do -- my deal-sizes aren't quite where I'd like lately.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

7/4/12

$10K for what was originally a $50K timeshare on the secondary market in a private party sale.

As hokey as it sounds, timeshares are sooo much cheaper than owning and maintaining and using it for a month a year. You also tend to get better views and primer beach than any beachfront home since a $5 million home just can't compete with a $100 million timeshare development.

Just buy up four red season two bedroom condo timeshares on the secondary market, spend $4000/year on the fees, and avoid $45K/year in property taxes, insurance, utilities, and maintenance.

In reply to IlliniProgrammer
7/5/12
IlliniProgrammer:

$10K for what was originally a $50K timeshare on the secondary market in a private party sale.

As hokey as it sounds, timeshares are sooo much cheaper than owning and maintaining and using it for a month a year. You also tend to get better views and primer beach than any beachfront home since a $5 million home just can't compete with a $100 million timeshare development.

Just buy up four red season two bedroom condo timeshares on the secondary market, spend $4000/year on the fees, and avoid $45K/year in property taxes, insurance, utilities, and maintenance.

I am not sure if buying timeshare, even at steep discount on the secondary is usually a good idea. You still need to pay maintenance charges which increase over time even as the property itself becomes older and less desirable---that is just how the timeshare business model works.

Renting is better than buying. You can find really good deals on timeshare rentals by renting from the unit owners directly. The owners have incentives to give you discounts over market room rates because it is still more worthwhile for them than to sell their timeshare at huge discount in the open market.

Too late for second-guessing Too late to go back to sleep.

In reply to brandon st randy
7/5/12
brandon st randy:

I am not sure if buying timeshare, even at steep discount on the secondary is usually a good idea. You still need to pay maintenance charges which increase over time even as the property itself becomes older and less desirable---that is just how the timeshare business model works.

My suggestion is actually to buy the 40-year-old stuff where the maintenance costs have finally leveled off relative to CPI and are well- known. It usually works out to about $1000-1200/week/year to replace all of the furniture every five years, replace the roof every thirty, etc etc. They also tend to have the most prime real estate and best views since these resorts were built first.

Try to find an owner-managed time share development.

Renting is better than buying. You can find really good deals on timeshare rentals by renting from the unit owners directly. The owners have incentives to give you discounts over market room rates because it is still more worthwhile for them than to sell their timeshare at huge discount in the open market.

Maybe right now, but I think that as oil prices stabilize and airfare prices come down, there's going to be some pent-up vacation demand. A well-run owner-managed timeshare is essentially an investment in a hotel REIT- just with a stronger degree of control and lower management expenses.

There are some owner-managed timeshare resorts in Hawaii that get some pretty rave reviews from Frommer's.

The US consumer has spent four years getting out of the ICU but is still in the hospital. But he'll be out in another five. When that happens, the vacation industry- and nightly rates at hotels- will blow through the roof.

7/5/12

Still don't think a timeshare is a compelling proposition, simply because it is locking you in to a single location. You should be able to find pretty nice options on airbnb or similar for $1000/wk, while preserving your optionality.

In reply to brandon st randy
7/5/12
brandon st randy:
IlliniProgrammer:

$10K for what was originally a $50K timeshare on the secondary market in a private party sale.

As hokey as it sounds, timeshares are sooo much cheaper than owning and maintaining and using it for a month a year. You also tend to get better views and primer beach than any beachfront home since a $5 million home just can't compete with a $100 million timeshare development.

Just buy up four red season two bedroom condo timeshares on the secondary market, spend $4000/year on the fees, and avoid $45K/year in property taxes, insurance, utilities, and maintenance.

I am not sure if buying timeshare, even at steep discount on the secondary is usually a good idea. You still need to pay maintenance charges which increase over time even as the property itself becomes older and less desirable---that is just how the timeshare business model works.

Renting is better than buying. You can find really good deals on timeshare rentals by renting from the unit owners directly. The owners have incentives to give you discounts over market room rates because it is still more worthwhile for them than to sell their timeshare at huge discount in the open market.

Unlike housing, which is a necessity, rental and purchase rates for timeshare move together. I.e., in a strong market, disposable income flows to both rentals and purchases, and in a weak market, both dry up, and both rental and purchase rates decline.

So I would say that the rent/buy question just comes down to your needs/desires. If I were going on a one-off vacation, then sure I'd rent a timeshare. But given my premarital status, relatively decent income, and the depreciated state of the housing market, I'd rather buy timeshare VOI in a decent network. I'd get a vacation every year to wherever I wanted, and on top of it, an eventual recovery will at the very least offset further depreciation going forward, if not turn a profit.

drexelalum11:

Still don't think a timeshare is a compelling proposition, simply because it is locking you in to a single location. You should be able to find pretty nice options on airbnb or similar for $1000/wk, while preserving your optionality.

It doesn't. The older timeshare developments were structured this way, but secondary markets to trade weeks at other timeshare properties (e.g. rci.com) have since developed and are pretty robust. In addition, newer developments (see Bluegreen, Wyndham, etc) sell Vacation Ownership Interests which can be redeemed across their networks (and also on secondary markets).

"There are three ways to make a living in this business: be first, be smarter, or cheat."

7/5/12

$700K. Going to live in NC for the rest of my life, maybe own a little real estate...rake in $40-50K per year off of properties and live cheaply. No reason to own a lot. I'd like a plot of land in the country and a peaceful seven days week in and week out.

"An intellectual is a man who takes more words than necessary to tell more than he knows."
- Dwight D. Eisenhower

Check out my blog!

7/5/12

So I would say that the rent/buy question just comes down to your needs/desires. If I were going on a one-off vacation, then sure I'd rent a timeshare. But given my premarital status, relatively decent income, and the depreciated state of the housing market, I'd rather buy timeshare VOI in a decent network. I'd get a vacation every year to wherever I wanted, and on top of it, an eventual recovery will at the very least offset further depreciation going forward, if not turn a profit.

No no no no. You don't want a network. You want a marketable property managed by a smart board of owners answerable to you. The timeshare management and interval transfer business is awful.

You want a community where the owners are all in on the same terms and have 100% say over how the property is managed.

In reply to swagon
7/6/12
swagon:
brandon st randy:

goose is alive

Nah. Goose died. Maverick cried.

Nah, goose is still alive and well. He got tired of Maverick and the awful, awful Meg Ryan and her fake orgasm so he faked his own death and is now enjoying the high life somewhere on an island in the Pacific with a bunch of bikini models...and they lived happily ever after.

Too late for second-guessing Too late to go back to sleep.

7/6/12

The guy who said it's not about the number but about cash flow is 100% right. I'd rather than $1mm per year coming in with no effort on my part than $100mm in the bank. For me, the walkaway number would be $500k per year.

In reply to Asatar
7/6/12
Asatar:

The guy who said it's not about the number but about cash flow is 100% right. I'd rather than $1mm per year coming in with no effort on my part than $100mm in the bank. For me, the walkaway number would be $500k per year.

1mm per year is a 1% perpetuity on 100mm?

In reply to Sandhurst
7/6/12
Sandhurst:
brandon st randy:
IlliniProgrammer:

$10K for what was originally a $50K timeshare on the secondary market in a private party sale.

As hokey as it sounds, timeshares are sooo much cheaper than owning and maintaining and using it for a month a year. You also tend to get better views and primer beach than any beachfront home since a $5 million home just can't compete with a $100 million timeshare development.

Just buy up four red season two bedroom condo timeshares on the secondary market, spend $4000/year on the fees, and avoid $45K/year in property taxes, insurance, utilities, and maintenance.

I am not sure if buying timeshare, even at steep discount on the secondary is usually a good idea. You still need to pay maintenance charges which increase over time even as the property itself becomes older and less desirable---that is just how the timeshare business model works.

Renting is better than buying. You can find really good deals on timeshare rentals by renting from the unit owners directly. The owners have incentives to give you discounts over market room rates because it is still more worthwhile for them than to sell their timeshare at huge discount in the open market.

Unlike housing, which is a necessity, rental and purchase rates for timeshare move together. I.e., in a strong market, disposable income flows to both rentals and purchases, and in a weak market, both dry up, and both rental and purchase rates decline.

So I would say that the rent/buy question just comes down to your needs/desires. If I were going on a one-off vacation, then sure I'd rent a timeshare. But given my premarital status, relatively decent income, and the depreciated state of the housing market, I'd rather buy timeshare VOI in a decent network. I'd get a vacation every year to wherever I wanted, and on top of it, an eventual recovery will at the very least offset further depreciation going forward, if not turn a profit.

drexelalum11:

Still don't think a timeshare is a compelling proposition, simply because it is locking you in to a single location. You should be able to find pretty nice options on airbnb or similar for $1000/wk, while preserving your optionality.

It doesn't. The older timeshare developments were structured this way, but secondary markets to trade weeks at other timeshare properties (e.g. rci.com) have since developed and are pretty robust. In addition, newer developments (see Bluegreen, Wyndham, etc) sell Vacation Ownership Interests which can be redeemed across their networks (and also on secondary markets).

my rents did one in cancun...it was 40K upfront, but you got 40 weeks to use....you have to use it within 40 years

I eat success for breakfast...with skim milk

In reply to IlliniProgrammer
7/6/12
IlliniProgrammer:

So I would say that the rent/buy question just comes down to your needs/desires. If I were going on a one-off vacation, then sure I'd rent a timeshare. But given my premarital status, relatively decent income, and the depreciated state of the housing market, I'd rather buy timeshare VOI in a decent network. I'd get a vacation every year to wherever I wanted, and on top of it, an eventual recovery will at the very least offset further depreciation going forward, if not turn a profit.

No no no no. You don't want a network. You want a marketable property managed by a smart board of owners answerable to you. The timeshare management and interval transfer business is awful.

You want a community where the owners are all in on the same terms and have 100% say over how the property is managed.

That may be, but I wouldn't be a rational capitalist if I suggested anyone buy something that I can't make a fee from.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

7/6/12

For the people giving hard numbers- Are you taking into consideration inflation? Consider what $500,000 could do 30 years ago and consider what it could do now. Now, project that decline out for the next 30 years.

Bene qui latuit, bene vixit- Ovid

In reply to IlliniProgrammer
7/6/12
IlliniProgrammer:
bearing:

Really people? I would expect the answer to be obvious. It's not about a singular number, it's about cash flow! Cultivating a reliable source of cash flow every month rather then having this childish notion of a "magic" number is how you break out of indentured servitude. You could quit this industry with only about 500k saved up as long as you turn that into a source of income.

Bingo. But I think that a more conservative approach is $1 million yielding 4% dividends plus a house.

IP - this seems a bit low. You actually think $40k is going to be enough to cover the RE taxes on your 60 acre farm on Lake Michigan, the costs for you to tinker with your old mustang and all your other costs? By the way, definitely don't limit yourself to being on Lake Michigan. That much property will be tough to come by on any lake, but there are some great smaller lakes in Michigan.

I think of my walkaway number in terms of covering my future housing, discretionary and healthcare costs. If healthcare wasn't such a wildcard I think this number is much lower than I would've thought 5 years ago.

In reply to accountingbyday
7/6/12
accountingbyday:

IP - this seems a bit low. You actually think $40k is going to be enough to cover the RE taxes on your 60 acre farm on Lake Michigan, the costs for you to tinker with your old mustang and all your other costs? By the way, definitely don't limit yourself to being on Lake Michigan. That much property will be tough to come by on any lake, but there are some great smaller lakes in Michigan.

I have no rent, and I'm paying agricultural property taxes. Also, I'm leasing out the 60 acres so I'm getting some income on that.

I think of my walkaway number in terms of covering my future housing, discretionary and healthcare costs. If healthcare wasn't such a wildcard I think this number is much lower than I would've thought 5 years ago.

That's where Obamacare comes in. For all of our complaining about government healthcare...

7/6/12

Cash flows are the answer - no questions asked. Get some money, invest in a safe asset with a moderate return, and travel the world on dividends.

"You stop being an asshole when it sucks to be you." - IlliniProgrammer

7/6/12

I was at first inclined to say "More", but that's probably a bit obvious.

To live the life that I dream of, I would probably need 100k/year, for the next 10 years. I doubt I'd spend all of it, so the leftovers would be invested.

In 10 years or so, I would like to have children, so that would definitely increase my cost of living, exponentially so as the children age.

For retirement, I'd obviously want a nice nest egg to play with.

So, I guess my number is ~4MM. I can definitely live on MUCH less, but that's certainly the walk-away point.

Edit: I should also note that the 4MM would be just for me/my immediate family. If I wanted to get involved with relatives and such, that's going to involve a lot more money.

In reply to IlliniProgrammer
7/9/12

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In reply to youngblood90
9/13/13
9/14/13

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

In reply to heister
9/15/13

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

9/16/13
9/16/13

"I like money (as do most females) but love is...great :)"-student
"Perhaps you've failed to take into account my hidden assets"-007
Omnia

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