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At the top SM funds(think viking, LP,TGM,PS) there are many analysts that are early 30s that have a net worth of 50mm or more. No clue about pod shops though
Thanks. Seems like 50 is the new 10
As someone at a fund like that, I promise you this is absolutely not the case lol
5-10 early 30s yes. But that just requires a few $1-3m years which can probably be done at most scaled SMs and definitely all the podshops
Highest NW I’ve heard at 35 is a pod PM at around $25
50 by 35 at a SM is just not happening. The biggest rockstar I know is at ~25 and he is ~30 at a top SM.
Lmao thanks Jake from Wharton for the industry answer
You’re a moron if you believe that
Did you really just cite Pershing Square as a top SM? Seems like you’re clueless
Man people on this site are stupid or delusional. Likely both
Can you kindly fuck off with this BS? That is not and never has been the case even during the heyday of this industry.
I definitely wasn’t close to that when i was an analyst…
contrary to popular belief… yes this is a marathon not a race… you’ll eventually get to 50+ as a PM… time will tell
let’s pause and think what 50 by 35 means…close to 100 of pre-t $ income… over 7 years?
zero analysts… not even at the top funds… make $15m…
you absolutely can as a pm. analyst no. not at citadel not at bcrest not at tiger not at any fund.
you asked pre-PM… i think most are ~$5-15m depending on a few things… pm / sr pm / partner is where your earnings power inflects
In order to have $50M in wealth, you'd have to consume nothing and earn approximately $100M in pre-tax income, which is about $500M in pure alpha at the fund level. Most PMs get started at ~ age 30. About 50% fail. Another 40% can grind out $5-25M of PnL/year which equals maybe $1-5M/year in pre-tax income. maybe the top 10% can have a realistic chance of succeeding to the point where they can save $50M one day.
As a lifetime super senior analyst who has no PnL attribution, you can realistically earn ~$1M per year averaged over time. After consumption and debt, a typical junior analyst might save $500-1000k by the time he makes PM.
I think your mentality of trying to accumulate $50M of FU money is not right. You need to realize that once you can support your annual consumption (food, rent, beer etc.) thru a decade of unemployment, you've basically already achieved full financial freedom. Realistically if you can make it that far, you will never experience such a long period of unemployment ever. If I fail as a PM I can just get busted back to analyst and still earn $300-500k/year. If I fail somehow at that, I can become a software engineer and make $250k/year quite easily. With a measly $1M banked, I can't starve; I can afford to sacrifice $100k/year in income for lifestyle balance.
Can't stop thinking about the fact you listed beer as an expense item that needs budgeting on its own, up there with rent. Respect.
You achieve this by winning the race in the fallopian tubes, starting from the ballsack of your rich dad to your mom's eggs.
How do yall work in the hedge fund industry and not realize that your personal wealth can compound as well? If you can invest your personal wealth in the fund, often pre-fees, and they compound at 15-18% gross it’s a much different equation than the 100mn pre tax income everyone has come to. Obviously still impossible, not sure where OP and others get this idea from but 100mn pre tax is just not the right way to think about it…
PE comp is so back end weighted that compounding isn’t actually that big of a driver unfortunately
Who is talking about PE comp
1. being allowed to invest in the general is the perk. employees can/do pay fees like any other LP.
2. conditional upon success, your income will grow exponentially, so the return on savings only starts to matter after you stop increasing the size of your book.
3. conditional upon failure, you won't accumulate very much savings. consumption is high, you're looking at a more normal 5-10% rate of return in the stock market, and your income will only increase linearly.
Savings will always compound exponentially, not sure why you think lowering the exponential factor makes it linear lol. Also, not the case on paying fees at my fund, have not heard different from others I know, but thanks for info for the future if I consider jumping ship
Employees do not pay fees at any fund I've ever been to. It's different at Citadel and funds like that but for every PE and single manager I've ever heard of, you don't pay fees. The question is whether or not you can get friends & family money in on a fee free basis or not or whether the perk is solely access for them.
How do you work in the hedge fund industry and not realize that you pay taxes every year on your HF K-1, often in the way of short-term capital gains? I.e. the 15-18% you mention at the personal after-tax level means the fund is returning 25-35% a year. To state the obvious, this is extremely unlikely.
nothing lollll
Ankit Raj? I heard his pod pulled in 500m last year or 2022
Seems like all those DRW rainmakers come from sellside funny enoguh
can we talk about names in this thread？dont wanna bring any trouble loll we can dm
only few traders in his pod
I can tell you explicitly the number was not that good … but it sure wasn’t bad either.
Doesn’t seem that hard to do at a good SM
This is a pretty common path: 2+2 banking / MF PE, then analyst at SM when you are around 26. First 4 years probably average 1M/yr, so now you’re 30 and this is where it really scales up. 31-33, $3-5M per year, 34 $80M inheritance when grandparents pass, 35 $8M bonus. This should easily clear $50M all in cumulative net worth.
Had em in the first half ngl
.
$50mm? If you have $15mm, assuming you move to a lower tax state and get mostly taxed at LT capital gains, you can basically have $1mm dollars of annual cash spend with a few mm to pass on to your kids when you die. I rather have $15mm at 40 (which I won't, by a long shot) than $50mm at 55.
I don't think $15mm is escape velocity quite. Using the 4% withdrawal rule (have to account for long term inflation of ~2-3%, 60/40 portfolio returns ~5-8% nominally, you can make a more levered bet on the market but now you're introducing more risk of having to get back to work if your portfolio take a 50% haircut), you're talking more like $600k of 2023 USD worth of purchasing power in perpetuity, pre tax / ~$450k post tax. That's okay to run an upper middle class household but you're not exactly scratching every material itch. Don't expect annual international family vacations or a second house or any help really. For a lot of people, that's okay. Depending on your tastes / # of kids / COL of where you live, I think $1mm pre tax / $750k post tax of income is a reasonable goal therefore my walk away number is $25mm, which I think I'll reasonably have by 50 (I'm 30 with a $500k-1mm / year seat and $1mm net worth).
How are you reasonably getting to 25MM?
If you make $750, that’s $375 after tax and $200k after expenses. How does that compound to $25MM at 8% with $1MM today?
As someone who has been in the industry for a while, working at a solid SM (not PS / Viking caliber), just grinding away throughout the years, I will probably get to $50m by my early 40s.
Do not underestimate the power of compounding, tax optimization, and patiently waiting for the big years.
How to tax optimize? What will we do if the sp500 repeats performance from 2000-2012
Worked in several low cost jurisdictions outside of the US.
Massive sampling bias in this, but if you are good enough to be a senior analyst/PM, you theoretically are really solid at trading and investing. Most people I know at this level crush the standard 7-10% annual PA return by multiples, or at least, should be able to.
Not sure if others who are in risk-taking seats feel this way, but with trading restrictions etc, I've always found my entries on the PA side are often pretty epic. I think the two parts of this are:
1. You have a deep network of good people across tons of different asset classes. If someone whos a star at their sector/asset class is in pain/drawdown, I almost always size into the types of positions they've gotten crushed on. Central risk books ofc do this, but w a bit of smart options plays, you can really crush.
2. If you are solid, its not to contentious to say that making a good call on a 3-6 month+ horizon is pretty easy. The hard job of working at a fund is hitting a target budget while minimizing drawdown and the silly risk params most funds run. If you are high conviction, nobody can stop you out of a PA trade you are down to warehouse, so you can size much easier. My PA can take a 10%+ drawdown on a trade/investment I have high conviction in, but your risk dept will shoulder tap you longggg before that.
Also wouldn’t mind hearing how you structure your options trades
Having a loose personal trading policy is certainly valuable. But for many places, you’re pretty restricted to ETFs and mutual funds. Doing single names is a pain since you have to get PM approval, etc. and your boss may discourage you from trading your PA
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