Overnight 23-year old BTC Millionaire? Life Choices
I am 23 and work in commercial real estate finance at a big bank in NYC (9-6ish job), and have been an avid poker player (gave me some $$). I put all of my poker money ($120kish) into bitcoin at around $2.5k/3k per coin and sold at around $17/18k in late December. I've invested in smaller cryptos in early 2018 and sold $100-200k worth before the big drop. After paying the massive tax bill, I suddenly have a decent amount of wealth for a 23-year-old.
How would you guys approach managing about $750k in wealth in the current market cycle? I want to take some risk, as is my personality, but slow growth is also of interest. I know investing in market is good strategy for long term but market valuations so high (concerning, but I know market timing is kind of dumb). I am also trying to learn more about investing in multifamily properties and am possibly going to partner with a 29-year-old VP on my floor and begin doing that.
Would you alter career plans? I was planning to try to break into RE PE as I near the 2 year mark at the bank (which is quickly coming this July) but have lost some motivation.
I enjoy what I do and who I work with and the work/life balance allows me free time and vacation time to pursue my big passion (poker). I am a very strong player and really enjoy studying it/playing and have actually thought of quitting job to do that too but fear the resume gap later in life. I also like the stability of working and playing poker on weekends/vacation/after work and fear if in a number of years I want to get married, many females will look very unkindly towards a 'poker player.'
As a result, part of me wants to stay at the bank and enjoy the freedom and focus on building wealth (with the free time and capital I have). However, I am slightly concerned with the poor exit opportunities the longer I stay at the bank (fyi in my group I work on underwriting large commercial real estate loans and monitoring outstanding loans). I also don't get paid great but maybe I'm dumb, but I don't care too much right now about that. I like the freedom and am focusing on using my added free time resulting from working at the bank to build wealth and enjoy my poker passion..... but I am not sure if I am limiting myself in a really poor way career wise and regret it later.
Please, any input on whatever I have said, would be helpful. I feel like I am at a crossroads and am incredibly conflicted. If this sounds arrogant at all, I did not mean it to- I got SO lucky with bitcoin.
Tough choice man, trust random people on the internet for investment advice or see a Certified Financial Advisor.
Never heard of it.
thanks, however, I do not trust most advisors and prefer just market ETF's
If I would have sold at the peak like you did, I would move to a low cost-of-living area and focus on investing and poker. If that fails, you could probably find a way to spin a solid story for business school. That's just what I would do, though. Your best move is probably to focus on your career, and stick your money in an index fund. Cheers.
Thanks! Yeah, I have lost some motivation for career now in that making a little extra each year does not make a big difference. I have a lot of passion for poker and honestly need time for that. I am too afraid to move to an area with nobody I know and play poker. I'd feel I am falling behind and if I want to be married by 31/32 like, that seems counterproductive for that i would think
If you've really got $750k, then marriage should be off the table for at least another 10 years. You should be swimming in the finest tang. Don't let them get their claws in you, OP.
Be careful with poker. Look at Tom Dwan. There are a handful of guys with 7-8 figure net worths who completely busted.
I think he may have made a comeback? But, he lost millions.
Buy more bitcoin.
buying on april 12th when u said this wudda been very smart lol :)
I wasn't kidding. Would sell now though.
I would focus on your career right now, will make it easier to lead a normal life with a nice family in the future, build a network, etc...
If you continue to invest your money wisely you will be able to quit working at a relatively young age and focus only on your investments.
Part of me feels like using money for freedom now will mean more/yield greater benefit than if wait till 30s/40s. I am trying right now to keep bank job to leverage freedom to just to take long weekends for poker and spend a few weeks at world series of poker each summer to pursue a dream of mine and really make massive amounts at there. I would just drop job to do that but feels extreme and isolates me from my friends in working world
First, congratulations on the big Bitcoin win!
Second, you mentioned wanting to get married in a "number of years." If that number is 12 - 15 (or more), good on you. If it's much less, I'd urge you to consider focusing on your career and own success first. If a woman doesn't like you because you're a poker player... next.
As far as managing the wealth and career plans, I'm going to start with career plans, because a career plan change could influence how you're going to manage the $750k. You have a lot of money, but not "fuck you money," so I'd be wary of dropping a form of steady income. Especially considering your work situation. If you were miserable as an IB analyst working 80+ hour weeks, then yeah a switch makes total sense. But, you enjoy what you do and are in a job which gives you free time. You could consider finding an exit opp now if becoming pigeonholed is a concern. A new job may allow you even more freedom and perhaps something you even enjoy more, but if you have a good gig consider sticking with it and keep amassing wealth.
How would I approach managing $750k? Well, I'd figure out what my goals were (retire early? Career change? Etc.) and go from there. Personally, I'd figure out what I wanted to do career-wise, then find a financial advisor I can absolutely trust and iron out a plan. Depending how much of your personal wealth you invest in one of your ventures, you may want to keep more money in less risky assets, but if you have a more steady income stream you should be able to take on more risk.
Congratulations, again. Everything I said is just what comes to mind and is my opinion. Good luck with whatever road you choose.
Thanks a lot! Yeah, I mean my goal is to be married around 31/32 so yeah a bit shorter term. I like the freedom of what I do yes, but fear that I move to RE PE I cant do what I like (ie. take 2-3 weeks vacation each summer to go to world series of poker) and take 3 day weekends to play tournaments in Atlantic City as well as have time after work to manage some investment type stuff and enjoy life. I feel I get enough excitement outside work and what I do is lower pressure/interesting. I kind of lost passion for going for RE PE and you need that. I personally find the financial advisory industry kind of a scam, what do you think? Thanks a lot for advice!
There are a lot of stereotypically shady people in the financial advisory industry, no doubt. It sounds like you can probably manage it yourself. When you start having even more money, you could always talk w/a CPA about some of the finer points to minimize taxes.
Market timing aside, throw it in indexes and enjoy the side income that's more than your normie friend's primary income. Even if you don't do this, it's good to consider the opportunity cost that comes with investing that capital in other ways.
The real answers are all tied to your aspirations, but using the $750k as funding for practicing poker seems especially inefficient. That won't be the best strategy for happiness/peace of mind unless it's your absolute passion.
Thanks! yeah trying to slowly grow capital via Market ETF's but how can it just continue to grow without some real corrections?
Similar to above answer, you could just keep working a low-stress job, put your $750k in some low-cost index funds, and plan to happily retire early. And that takes zero-effort. 7% annual return gets you to around $3mm by the time your 43 in 20 years. Add on to that all your additional income/savings from working. Not exciting at all, but maybe use that as a base case. Just a thought.
This sounds very good to me but feels kind of shitty to be like taking the easy road at 23. I dont want to regret it down the line. Just not sure how limited I will be if stay at bank for a longer period in a job like a commercial banking job
$3mm in 20 years prob isn't a lot.
this guy hot the nail on the head. Do this, maybe invest in reale state. You are 1mm ahead of anyone else your age. If you get a regular job and contribute to you portfolio you could be at 5mm plus at 50. The downside is you invest your money stupidly and lose it all.
Quoted for "hot the nail on the head" before you could edit it. Saved for posterity.
I'm with some of the others that have posted. You seem to already have a lot of exciting / risk-on side hustle work going as is. Take your 750K and go the boring route. Passive index type investment (and don't use an advisor for that). Slightly more aggressive? Put half in passive index funds and use the other half to selectively invest in higher dividend equities a la Blackstone (~11%), Energy Transfer (13%), etc. Enjoy the $3+ million by the time you turn 40 and consistently reinvest the divs.
Yeah thanks, I do like the balance of getting excitement outside of work. Passive index funds pretty much same as market ETF's right? I mostly invested in US Equity ETF. Emerging market ETF, and International Equity ETF.... What are the higher risk investments, never heard of those?
bro this is sick, i really dont know how to advise you, but just wanted to say congrats
Thanks! Yeah, got pretty lucky honestly, just had the balls to go for it and road the BTC surge straight up and hopped off at the right time
Maybe a trading job. Sounds like the personality.
Stocks really are not that expensive right now 16-18 forward pe. Not a bargain and the market doesn’t have the operational leverage of a depressed economy but still a reasonable steady state price.
Value managers have been underperforming for years.
If you want to swing for the fences investment wise look at generic pharma. They’ve been getting killed on pricing for years, but the entire industry is massive job and product cuts,. Less supply of a product could help then regain pricing power and then cost cutting lowers their costs. Highly leveraged and potentially a lot of operational leverage. But guys have been getting killed in that space for years, could be an inflection point.
Now you understand why it's so hard to motivate yourself once you're rich. For what it's worth, you're not rich. I'd get that idea out of your head. It's short-sighted to imagine that your compensation won't increase over time. You are still at the point where 5 years of additional work experience yields enormous dividends before going out on your own.
In graduate school, I lived with a guy who played online poker all the time and made roughly what you made before your bitcoin purchases. He used his winnings to pay for his master's degree and got a trading job at Goldman Sachs. He's now a PM at one of the world's top hedge funds trading macro products, and makes much more per year than you currently have in the bank. He's 33 years old, and has been making $500k or more for at least the last 5-6 years (he's now making between $1m-$2m).
If you're especially entrepreneurial, you could use the money to help fund a start up in a space you like (RE-tech comes to mind). If you feel you know enough to try your hand at developing RE on your own, you could try that, but you either need to start very small or get some partners to go in with you because that $750k will run out faster than you think if you're not successful on your first or second projects. If you pursue this track, you would still benefit from a few more years of work experience precisely because it will make you considerably more credible with your creditors. I wouldn't loan money to a 23-year-old with a year of work experience because he wants to lever up his bitcoin and poker winnings so he can try his hand at some other risky venture (RE development, for instance). I imagine a lot of lenders will feel the same way.
I wouldn't overlook how nice it is to have a bankroll that allows you the privilege of walking out the door of any job any day you want. It gives you the freedom to go to b-school or graduate school or launch a small business without going into massive debt. Public market investments seem to bore you a bit, but they're generally a good bet a decent long-term return gets you to retirement as long as you live off your base and bonus (which will almost surely increase over time).
If you can move into a RE development role, learn the business a bit, and through your work connections meet interesting people who have worthwhile projects, then you break out on your own and take some risk (which you clearly don't have a problem doing). The thing is, the people you would meet on your own might be a bit lower-class than you might like. The institutional role you have now gives you more credibility in those initial interactions which will change the way people see you. After getting to know them professionally, when you then reveal you have some money and are willing to take some risk, you might be able to buy your way into a partnership position, jumping the VP and Director roles. But you can't do that at 23 with $750k.
I remember being told once that the easiest way to become a partner at a venture capital fund is to buy your way in. That's true in my experience. I imagine that's the case in RE development as well. Moreover, I think you probably don't want to move to a low-cost area to focus on your poker because you like the cosmopolitan nature of New York City and its women. I can't blame you. At 23, if you have money and some free time, NY is fucking great. You know what's not great with loads of money for a 23-year-old? A new, low-rent city where you don't know anyone. How many 23-year-olds in St. Louis have a million bucks of liquid assets to play with? Maybe a few dozen, a hundred? It's not many in any case, and you won't likely break into their social circles very easily. The smaller the city, the more tight-knit the upper-echelons of society. It would take you years to break into those circles in a way that isn't nearly so hard in NY.
If I were you, I would get a membership at one of the NY private members clubs. I like the Core Club, Ludlow House, and The Norwood. The Parlor used to be interesting as well, but I let my membership lapse a year or two ago, so I can't speak to its quality today. The Core is great if you can get in (though it's kind of expensive). It might seem like an odd investment to make, but from a networking perspective, a membership at The Core is more valuable than an MBA from anything less than maybe HBS and Stanford.
Most people on this site are kids, and don't have that much money, so they can't conceive of what to do with any money (as evidenced by the lack of imagination in previous posts). There is no way that someone who has the risk tolerance to make $120k playing poker and then invest it all into Bitcoin at $2.5k on average and then hold it to the highs is going to be happy moving to some Class D city grinding out an existence honing his skills playing (online) poker (since you won't get a meaningfully-sized cash game in Cleveland). The connections you can make at a place like The Core (as long as you are a good networker, don't hang around the club more than once or twice a week, and don't bother people, but wait for introductions that make sense) are worth the price of admission.
If you want, you can PM me if you have any questions.
And congrats on having the risk tolerance you had to do what you did. I don't want to minimize that, but I'd be very cagey of explaining to anyone that you made your money that way because investors don't trust gamblers, and if you want to eventually do interesting things with your money, you'll eventually need investors to trust you.
Based on your VC experience, can you elaborate a bit more on what buying into a RE development firm to become Partner might require? What would the commitments and expectations look like on both sides?
How do you even approach that sort of proposition? I assume it would be after you have built a trusting relationship through previous dealings with the company.
I'm not saying it doesn't happen, but in all honestly I haven't seen it in real estate. There's really no incentive for a development shop to just bring on some random rich guy who won't contribute to the day to day operations. That's what equity partners are for.
If anything, I've seen it almost the other way. A buddy of mine in Nashville started his business doing fee development for rich people with zero experience. Essentially, rich people would go to the bank for a construction loan trying to get into the game, the bank wouldn't lend them a dime because they have no idea what they're doing, but they'd put them in touch with my buddy who did know what he was doing but wasn't wealthy enough to guarantee debt on his own. In that case, the rich person is a GP and not an LP I guess, but they don't do anything and they're not building a company.
^^^ I like this guy. Great answer on several levels
Other than Soho House, do people know of private clubs in LA or SF similar to Core Club, Ludlow, Norwood, etc?
Yes, but to be fair, if you don't even know the names of the clubs, you won't be getting invited to become a member.
Wow thanks for this thoughtful post. I agree, I am definitely not rich and understand that compensation grows over time (hence why I am hesitant to leave job for poker even if can make more currently). FYI I was thinking about the poker thing as profession before the bitcoin surge. My big fear is the resume gap it creates and I would love to take chance and go for it, as it means more to me than anything tbh. Not sure how you or others see that, especially if I'n not gunning for total top jobs. I might just to get extra vacation time and pursue passions, but again, may look bad. It's not related to a lack of passion, I just have passion for trying to crush it at poker, which i study a lot, and love.
I just do not think it fits my personality to really grind up in the corporate world and crush it like your grad school friend. I am also not necessarily interested in RE Development but rather more passive RE investment with some value-add component potentially down the road.
Very true about NYC haha I love it here and likely best suited here. Very interesting about private member clubs, gotta look into what makes it such great networking. I am an average networker but often find it superficial.
And thanks again!
Congrats on the earnings qwerty201079 , brotherbear made excellent comments and suggestions. Focusing on yourself and overall goals while keeping the cash as cushion would be a great help, too.
By the way, what is your average winnings on your poker nights qwerty201079 ?
I typically make about $100 an hour playing , but that's an average I mostly play tournaments so some days I lose $2-4k and some days I win $10k+
Surprised that someone hasn't already pointed out that qwerty201079 isn't actually a BTC millionaire. 750k
[quote="MBAmarathon"] Surprised that someone hasn't already pointed out that qwerty201079 isn't actually a BTC millionaire. 750k
Congrats on the BTC bet- honestly I’m more impressed with your poker winnings at 23. We have the next Mike McDermott over here haha.
Just out of curiously, you make that all from home games in NYC or are you one of the HUD online guys? Regardless that in itself is really good- bet you were playing 5/10 or 10/20.
Anyway to your question- I am a very risk on person as well that plays poker, sport bets and use to day trade- I would suggest that you actually try looking for value stocks which is doable again in the current market environment- or if you want it managed just invest in active middle market value and mm growth dividend funds over a 9-12 month period.
You only have 2.25m to go until you can be a PWM client at Wells
Yes I play a lot of online as it is a better way to develop and refine skills. I enjoy playing live too though as stakes are generally higher and players are worse (however, u play fewer hands an hour so its a trade-off). And yeah I generally dont think I can beat the market , but interesting idea for some who enjoy fundamental analysis
I will get to giving some advice..but some context first..I am in my mid 30s married and with kids. Did Sales & Trading at MS then Wharton then buy side asset management at top tier bank. Climbed the ranks fairly quickly to become investor in team managing $90bln. After working my ass off for 14 years to get there..I got there and I was like “now what?” Am I suppose to just do this for the next 20 years? My wife and I were really good about saving ( We never spent bonuses) so we have + $2mln in non 401k investments. As a result of having the runway...and Even though it was scary as hell..I quit my job and I started my own business (which is something I always wanted to do) The last two years has been insanely challenging. At the same time I have learned more about how the world works in these two years than I had the prior 12.
Ok..now I will get to the advice part career wise. I would sit down and think really hard about what job you would like to do if even if the salary was $30k. Then go do that. If you don’t know what is it that you want to do. Then take some time off and go sit down with people in total different jobs than what you are doing now. See what strikes you as interesting and take a job there even if the pay is shit. If you still want to stay in finance, go work at a Series A fin tech start up in a space that interest you. Now that I am out in “the wild” in the start-up scene I am realizing how quickly the wealth management space is changing for instance. If you don’t care about salary, many will hire you even if you don’t have the right experience. Other option is to go start your own thing...but I think if I did this at 24 I probably would have fucked it up by now.. but whatever.. if you decided to go that route and screw it up it will still be a great experience that most people your age won’t have.
On the money side...for you, the hardest thing will be to not let “lifestyle creep” set in. Very easy to normalize spending $15-20k a month if you don’t keep yourself under control. Don’t fly business and don’t start training your friends to expect you always buy the rounds. Move a big chunk of that money to an account that is not visible daily, As behavioral biases start to set in and you end up spending or trading it. Hire a top accountant and a top planner. For planner, I don’t mean like a Merrill Broker who has a $1,000 suit. I mean google “Fee-Only” advisor or “fee only” planner. Find a good one that charges a flat fee. It will cost you $3k-4kwhich is probably what you spent on your annual gym membership. deciding what ETFs to buy or whatever, that’s the easy part. The hard part will be to keep yourself accountable and away from making stupid $ decisions. Congrats and Best of luck man
Nice write up. What industry did you pick with your startup?
Well spoken, and agree wholeheartedly. Our age difference isn't huge, but I have worked in many of the different industries with all walks of life. Congrats on striking out on your own and quitting the industry altogether. No regrets, right?
The lower income folks are just putting man hours in to make that buck, and these guys know how to hustle and hustle well.
Probably the best of friends I met were at several different contracts I worked, it's a blast and you get to only live once, right?
Yeah..'bout those lifestyle choices...it is tempting not to blow all that cash.
Thanks for this thoughtful post. Very impressive background and super interesting to go from so much structure in your life to be being on your own.
I really want to use the cushion I have to try to do big things in poker and think maybe staying at my interesting but not heavy on time commitment job would be cool for that. I do enjoy it even tho it isnt that prestigious, Feels weird tho to have other friends pushing forward doing other stuff, but honestly don't have the total passion for that.
I am trying to get better about spending haha but definitely dont spend more than 5k a month on everything (rent included) haha. I mostly like 'spending' on investing in getting better at poker (coaching from better players etc) and playing higher stakes tournaments (which i still presumably have a positive ROI in but just are more prestigious and higher risk),
Congrats on the winnings!
As someone who is only a few years older than you, I have a few words of advice. First is, get out of the mindset that you're rich. For a 23 year old, you have a decent amount of money, but in no way are you rich in the world of real estate and finance.
Seeing as how you made the money in fairly risky ways, it would make the most sense to invest that money in very un-risky ways, like index funds.
You're going to gain a ton of experience in your 20s and your salary will dramatically grow, I would work as long as you can, so long as you enjoy it, and focus on starting a company after you've gained enough experience.
Avoid lifestyle creep at all costs, live life within your means and don't blow your savings and you will never have to worry about money again.
Agreed. Definitely not rich in those realms. I don't think I can enjoy jobs that require so much time as I enjoy my time to balance playing poker and it makes up for getting paid less for more 9-6ish jobs.
I'm somewhat similar to Awake: mid 30s, married w/ kids, b-school, stints at small cap PE (pre-crisis), a couple asset mgt shops, and a hedge fund. I saved (not enough!) and struck out on my own (with a partner) a few years ago. I'm still in investing, and a struggling entrepreneur, but I wouldn't trade having this experience for anything. If I could do it over again, I would've saved even more to have that freedom and flexibility.
What I would say is also pretty similar to Awake--find out what you want to be doing, even if it's not paying that much. Then do it. There is no substitute for interest/passion. Life is too short. Now, for me that passion is investing: while working on deals in PE I was spending my free time reading stock pitch write-ups and dreaming of value investing. I run a small hedge fund now, but also invest in private CRE, and am looking at private equity too. And going to work never feels like work to me.
Yeah thats great to hear. I definitely enjoy my job but wouldnt say im like that that passionate. I have passion for poker honestly but feel I get to balance both reasonably well rn. Going to start getting 4 weeks vacation next year and can buy an extra week and can take a lot of long weekends and my 3 week trip in summer to world series of poker in vegas.... Part of me feels like I could leave my job and do it full time with a few friends already doing it professionally and doing well.
I just fear how it will look when I try to get a job a number of years from now, but wonder if I can dictate my life around that. However, many shape massive decisions around career, so its definitely reasonable to shape life for how you look on paper it seems. So conflicted bc the lack of security of a job also troubles me as it makes me anxious and my parents would definitely strongly disapprove and not having support network there hurts.
I would invest in CRE or other property if already in the industry, personally. Congrats.
invest 50/50 blow and hoes
OP - a female perspective here. For someone who is attracted to risk, I would totally date and marry a guy who is working on his own investment and his poker passion. I find that very entrepreneurial. Actually, I am just finishing my two year stint in banking and I am going to take one year off to pursue my interest in investing and go to a graduate school one year later. I can always spin my story during my one year off. :)
That's really cool to hear! thanks for that insight and sounds so exciting to take that year! I guess spinning things isn't as hard as I am maybe making it out to be. I just generally feel anxious about it and I would feel like I am falling behind if I am not sucessful
First, how does $750k make you a millionaire? Second, if you put $120k in at 2 .5k per share and sold at 18k per share, then how does that leave you with $750k after-tax? It's not even $1M before taxes. Third, I hope that you didn't tell Mr. VP that you have such a large chunk of change. If you did, then I hope that he uses lube. Fourth, if this is real, then in the big picture, $750k isn't going to last long for someone who hopefully has so much life to live. If you like what you do, then I say stick with it, and enjoy the crap out of your personal life. If you don't like what you're doing, then now is a chance to make a transition with a safety net. I wouldn't consider going all in with investments and no steady source of income though. I don't think that I'd go with real estate either, but to each their own.
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