Mod Note: RLC1 posted a great response in response to this thread: Leaving the buyside and we thought it deserved its own thread.
I'll share my experience. I quit a partner track alts gig that would make many of the kids on this forum drool. I quit to pursue entrepreneurial opportunities within finance/the buy side. I was both burnt out and had the same existential issues with the job that you do. I figured I could build something my way, using the skills I already had, and get a fantastic return on my time, with uncapped upside if things worked out.
Well, it didn't work out for a couple of years, and I can tell you definitively that it was a lot harder to be constantly poor as an entrepreneur, than it was to be cashing checks as an existentially challenged but well paid employee. Also, while it was briefly refreshing to go from constantly busy and in contact with smart people to making my own schedule and dealing primarily with myself, that effect wore off and became mentally challenging and almost depressing.
There will be days, if you quit, where you will look very fondly at your current level of activity through nostalgic, rose-colored glasses... That intellectual stimulation is very difficult to replicate outside of a high performing institution. There were (and frankly still are) days when I feel like a shark swimming too slow to get water in my gills, which is unnerving.
Meanwhile, life tends to become more complicated and more expensive as you go along. Spouses happen. Children happen. Illness happens. If these things happen to you while you're a new entrepreneur at the bottom of the j-curve, it's going to knock decades off your life expectancy. My experience has been, to paraphrase the old maxim, that money, like sex, is only something you care about when you don't have enough of it. So don't discount money.
I did cross positive on the j-curve (vs. the partner track gig) about a year and a half ago, and continue to be in a strong updraft. If I keep doing what I'm doing, I will achieve financial independence (which, NUGGET OF WISDOM, is when your investable assets are at a level where the sustainable returns on those assets exceed the sum of inflation and your cost of living) at a relatively young age. And yet I'm not sure, in retrospect, that the cost of this path was really worth it, given one fact that you seem to have in common: I could have achieved financial independence with much less risk, as an employee, by simply showing up to the office for a few more years.
Take that for what you will.
and re: the utility of alts investments -- If you exclude alts managers from the group you are calling "society," then alts are in fact massively net negative from a social utility standpoint. Making money for one group of investors is zero sum vs. other investors, so creating wealth for your clients does not equate to increasing society's overall pie. And the friction costs of alt fees are f'ing massive, and are often paid over and over by the same LPs to different managers trading the same assets.
Glad this was made into its own post. Interesting perspective that, while not immediately relevant to me, is good to keep in mind.
The end of this paragraph is mind-blowing:
Cue the goosebumps.
RLCI.
I congratulate you an a very human description of the challenge of entrepreneurship. People should be very honest about their motivations. It's the emotional maturity that comes from self-reflection (not that common in our profession). If money is the main driver, then you probably are indeed better off in a high paying job, than going through the emotional roller-coaster that is entrepreneurship.
The good thing is that you probably still have not found what really motivates you in life, which means you still have a wonderful opportunity to continue growing and developing.
About Alts being zero-sum and negative to society. I might have a more unique perspective. I work at a principal level in private equity within a development bank. The money is not great and the environment stifflingly bureaucratic, however the type of transactions I see are definitely positive for society. There are plenty of shops out there that are investing in profitable and socially productive ways. My advice would be holding off for a couple of years and joining a firm of this type.
Best,
E
Inspiring read for a fellow entrepreneur going at it alone. I can relate to the of loneliness, lack of intellectual stimulation and often feeling as if I'm going nowhere. But the knowledge that I will hopefully be in the position to control my own destiny is what keeps me going. I haven't crossed my j-curve yet, but i can see the day I do isn't too far off.
Very good, realistic post.
Well at least by taking the road less traveled when you finally make it you can look back with a glass of scotch in your hand and proudly declare "I did it My Way".
That and also nothing is really permanent and immutable in this world. Many venerable institutions have collapsed and taken their hard-working loyal long time employees' visions of financial independence along with them. This is especially the case in the hedge fund world where money can flow out just as easily as it come in and multi-billion dollar funds regularly go under in no time as investors flee to the exit, often all at the same time. It only makes sense to always keep an open mind and look out for any potential new opportunities. It is much better to be in a position to make a move or strike out on you own terms than having changes forced upon you.
I am flattered this was made into its own post, and that people appear to have taken something from it. The core message/TLDR is that being an "entrepreneurial risk taker" often looks, in practice, a lot different from Richard Branson parasailing behind his mega yacht. Spouses, children, illness, taxes, mortgages, lawsuits, recession, brokeness, missed social events, shattereed egos, etc. The entrepreneurial path is ulcer city for most people that go down that path. If your opportunity cost is a legit high finance career, the bottom of the J-curve will be deep (financially, emotionally, stress, etc) even if you have relatively smooth sailing. Obviously there are exceptions to this (Mick Mcguire And Keith Mesiter come to mind).
Of course as @"brandon st randy" pointed out, the average high finance career isn't exactly low risk these days. So... you know, good luck.
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