Mod Note (Andy): Each day we'll be posting the top WSO forum posts of 2014. This one was originally posted on 2/23/14 and ranks #26 for the year by total silver banana count. You can see all our top ranked content here.
So everything comes full circle. I've been coming on this website for 7 years now. It was a huge source of information when I was first learning about the industry. I was super eager and literally read every single post from a few of the contributors that I respected (big shout out to Bondarb). Over time, I became more of a contributor, under a few different screen names, and eventually my participation faded out. There seems to be a pretty high correlation between my level of WSO usage and the passion I felt for what I was doing.
More and more, I have been thinking about leaving the buyside. I say the buyside (and the industry) as a whole, because I don't think any of this would get fixed by hopping to another firm. I have had fairly broad exposure with hedge funds so I know the pros and cons of various kinds of gigs. I can objectively say that my current seat is pretty damn good - tons of responsibility, see a path towards becoming a PM, covering a space that I like, PM is a nice guy. So what's the problem?
To start, my lifestyle is awful. I am basically working 7 days a week and I feel like I am always falling behind. I have zero time to myself, even when I am not working, I am thinking about my book. My coverage is broad, and marrying that with an investment style that is very labor intensive, basically makes it impossible to keep up. To make it clear, I know pretty conclusively that this will never change. So there's no light at the end of the tunnel.
Even worse is the constant emotional strain. Call me a pussy, but I think this job makes me feel like shit 90% of the time, because it's "why the fuck did I buy/short that" when I'm losing money, or "why the fuck wasn't I more aggressive" when I'm making money. And I'm constantly beating myself up for missing opportunities that are obvious in hindsight. I don't think this will change - this is how I'm wired. To me, this is perhaps the most compelling justification to leave, because I feel that others are better suited to handle the mental strain, and also because maintaining a positive psychological state is very important to me. I was not some coddled rich kid, I have gone through many struggles in my life, but I just wonder whether all of this is worth it to make a bunch of money.
My seat is good enough that I can make 7 figures going forward assuming solid performance. The thing is, I just don't know if that matters. I have been doing a lot of introspection over the last year, and always feel a little empty because I know I am not contributing anything to society. I don't really care about money - I have some nice things but don't need more of them, my lifestyle overall is fairly frugal, and the only thing that I would really need money for is traveling, which I cannot do right now anyways. I suppose the only thing I need the money for, is to make me feel good about myself. I will be really honest - it is just a way of keeping score. I don't have much of an intrinsic need for money. I also don't really have a need to win just for the sake of winning. I think this is why most hedge funds like to hire athletes, and they are probably right in doing so. I would think of myself as more of the intellectual type, and I enjoy the challenge of finding the answer, but that's about it. It just feels like such a sisyphean grind where I am never building anything. Every day, month, year - I am starting from scratch. Ever since I was young, I wanted to build something, and keeping improving it.
Finally, there are certain aspects of the job that I know I am great at, and others that I know I am not. I won't be too specific here, but the things that I am great at, they could be pretty valuable as an entrepreneur. The things that I am not great at, is likely the reason I feel so much strain, as I am using sheer force of will to keep myself in line.
There are a few things trying to talk me off the ledge. I have a voice in my head that says "don't be a quitter". Indeed I have persevered through a lot in my life, so this would really be the first time I have truly backed away from something that was difficult. I have put so much into this already, and not too long ago, I was so obsessed with the idea of becoming a PM and crushing it. I am afraid of regret - I am basically on the verge of becoming pretty rich in a few years if I just stick it out. I know I have a job that most people would kill for, and so I don't want to give up something of value. Being well seasoned in the hedge fund mindset, I also wonder whether leaving finance to start a company is "the consensus trade" or whether I am "puking a position on its lows".
There have certainly been times when I felt a lot of passion for this job and found it to be exhilarating. But more and more, I find it to be completely exhausting. I haven't seen my friends in months, my health is deteriorating, I now exclusively dream about my positions and sometimes wake up panicked. At the end of the day, my goal is to have an interesting life, not necessarily a wealthy and accomplished one. I have some money saved up so I can live comfortably for a few years and figure things out. So I'd love to get some feedback from you guys (people actually on the buyside or ex-buyside) - am I fucking crazy?
If you're losing your health, never see your friends, and are always stressed out by work -- how can it be worth still doing it? I think the most important thing for you to figure out is if you can change your mentality and lower your stress level so that you're not beating yourself up about bad trades / not being aggressive enough about good ones. Try seeing a therapist or sports psychologist or something like that. Then also see if you can lower the labor intensity of your investment style...
If you can't do these...do you really want to live your life being miserable?
Sounds like you've come to the right conclusions, but the one other thing you might want to consider is that not every seat/investment philosophy/firm would make you feel the same way. There are plenty of great investors who have solid work-life balance - hint, it helps to be longer term-oriented in your investment approach. Psychologically, you are a price taker and you have to accept that. True, you can never really turn off thinking about your book, but if you love investing that part isn't work. Being in the office on weekends, beating yourself up about price moves, and burning out, on the other hand, just aren't requirements for success in this industry. Especially if you're willing to be flexible in terms of how much money you make. If you like the basic role enough, go find a new seat that's at less of a sweatshop.
If I were in your situation I would take a long vacation and just unplug from everything. I'm talking like a month or longer just sitting on a beach or taking a train across Europe, doesn't really matter. I've been in similar situations before when it feels like no matter what you / how hard you work you can't get ahead and everything is just piling on. It's absolutely suffocating and nearly impossible to get some perspective on the situation. Everyone is different, but totally disconnecting myself helped a lot. And getting away will allow you to hit the 'reset' button per se and come back ready to work or solidify your decision to do something different.
But, I'm not sure why you think entrepreneurship is going to be any different than your current lifestyle. If you talk to any entrepreneur they'll tell you they work non - stop seven days a week and their business is their life. You're going to spend as much time worrying about your business as you do your book right now. And I'm not sure how much (if any) of your capital is invested in your current fund, but as an entrepreneur you're certainly going to have to invest considerably which isn't going to be less stressful for you at all.
You're certainly not crazy for considering making a change given the information you've provided here. Your personal/mental health isn't anything to mess around with / not take seriously. I'd just caution you about making a huge decision without really making an effort to step back and think about it first.
This is such a massive generalization on my part because I don't know you personally, but while reading your post, all of the things that you portrayed as negatives were essentially the reasons why I love this job so much. Perhaps the novelty of it was enough for it to be tolerable for a few years but now it's just waned on you and you weren't necessarily wired for that sort of work in the first place? Now given, as an earlier poster said, some investing jobs are very different than others, so it's not like the "buyside" as a whole is going to be just like whatever your current responsibilities are. But if you can't put a finger on where exactly you'd want to go from here within the realm of finance, then maybe it really is time to move on. I'd also warn though that starting up a company from nothing is probably going to be even more stressful mentally and on your social life.
I'm assuming you came from a liberal arts background and not a business one (solely on your use of the word Sisyphean, which I have no clue the meaning of but will again ignorantly assume must be something philosophical) and perhaps that is part of the "not contributing to society" feeling as well. I think most people in the investing sphere find a way to justify their social value before they actually enter the work force, but I know plenty of people who have left for some form of this reason... I think it's just part of the way you're wired, like you'd mentioned about a few other things. Personally I don't understand why my job should need to have value to everyone else so long as it has value to me and my loved ones, but to each their own.
I wouldn't go off the rails and make too quick a decision just in case it's a passing state of mind (we've all had the week or two where we were ready to call it quits, I think) but if it's not, better men than I have done the same, and nobody can blame you - the job can start to suck very quick and it definitely doesn't help that Wall Street is populated with assholes. Keep us updated, best of luck.
Curious of what kind of strategy you're running. As others have mentioned, lifestyle isn't flat across the board. With your background you could easily find a gig where you're in 8-5, no weekends. If you love investing, then you'll find a way to morph into a role that's more suitable for your risk tolerance/lifestyle.
I'll weigh in briefly on the social value of hedge funds. My boss states that there is unequivocally no social value in the work. He is incredibly philanthropic and a great person, but realizes that generating great returns is not saving the world.
I 95% agree with him, but also feel like if you have a client base that is primarily endowment/pension/charitable foundation based that you are in some minuscule way helping to pay for scholarships, retirement plans, medical research, etc.
I don't understand why it needs to have social value, but plenty of people seem to care, and we've had the same discussion around the lunchroom or wherever. General consensus is something along the lines of needing to give back above and beyond just doing your job. There's an argument to be made that you're helping keep markets more efficient which means the best companies get the better access to capital and all that, but mostly it's just the "rich leading the rich," and everyone likes to say that's a very bad thing.
Totally agree that it doesn't need to have social value. Saving the gay baby whales and singing kumbaya isn't my style.
You should quit. You sound pretty miserable. I was in your shoes as a web developer--I wasn't making the money you are and didn't have as prestigious a job, but I was pretty much at the top of my game. I could have interviewed at Google, Facebook and landed an offer just due to sheer experience and senority in my career. I had (and still have) recruiters banging down my door (cellphone) daily trying to lure me in for an interview for their client But I was bored as hell with the work. I subconsciously sabotaged my interviews with good companies because I didn't want to work as a web developer anymore. Right now when I talk to my classmates they're actually envious of me and say they wished they had as much knowledge/experience so they could land a job in the industry as easily. But yeah, even if other people think you've got something good, it won't matter if you don't think it's good.
I think if your heart's not in it every step is just torture and misery. Added to the fact that your health is deteriorating makes this sound like a pretty crappy career. What good is all that money if you are losing your health and have no time to enjoy the money you earn? I found that something that made a difference for me when I got heart palpitations from stress was to take something like a sabbatical. You have so much money, so what if you take off for 6 months and think things over? Jobs will still be there for you when you go back. I went back to school for a master's which has its own kinds of stress, but I no longer have heart palpitations. Try taking a good 6 months or year off to recharge, then think about what you want to do with the rest of your life.
A lot of people think of buyside as the Holy Grail of careers, which is fine nothing wrong with that, but for others it's just a job. You are just someone who hates his job. No big deal. The fact that it's buyside doesn't mean you are crazy. There are professional athletes that up and quit because they just don't like it anymore. I was with a good PE firm,got paid well, but I found the work a bit mundane so I left. It happens. Just because I found P/E boring doesn't mean I'm crazy. Maybe in the eyes of people who love it but to each his/her own.
Good luck and follow your dreams before they pass you up.
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.
Wow, lots of great information / perspective in this thread. Specifically, I agree with a great deal of the posts from @"TheKing", @"Going Concern" and @"RLC1". SBs all around.
First off, I disagree with the suggestions that taking an extended vacation is a viable solution to your situation. It may be a critical element interspersed between your current gig and your next pursuit, but it's difficult for me to imagine that taking time off will prove the existential cure.
I also think you'd be a fool to confine yourself to a job that you so clearly do not enjoy. As it seems you've realized, one has a limited use for money, and above a certain level, it's a luxury rather than a necessity. Once one has reached that income threshold, it's easy to conflate the disuse of marginal income dollars with the platitude "money isn't important". I don't plan to stay in this industry in the long-term, but what time I do spend in it I hope will lead me to the point where the interest on my savings can support my lifestyle regardless of profession.
That financial liberty is valuable beyond whatever psychological burden I lay upon my shoulders by pursuing a profession that doesn't optimize my personal satisfaction. You'll never achieve ultimate satisfaction so long as you have external forces subduing your autonomy. We have plenty of cultural institutions that, for socially beneficial reasons, sanction such lifestyle conscription (if you will): marriage, child rearing, religion, luxury, careerism and the idea of cosmic purpose. I render no judgment against any of these institutions other than to point out that belonging to any of them is the result personal choice rather than compulsion. You are not required to have a spouse or a child, a religious affiliation or career track, a sense of purpose or desire for abstract meaning; and, indeed, each of these is restrictive to your liberty. Yet many people choose to sacrifice autonomy for participation.
I mention this only because I worry that your post contains a discomforting amount of what I would call "cultural rhetoric". Ostensibly, you've invested a lot of self-worth in your occupation, which seems to be the root of your current predicament. I am reminded of the Ivy League graduates working at BBs who report feeling like "failures" when they don't get that offer from a MF or the HF of their choosing or undergrads who feel similarly when they end up at a "lower tier" BB. In both cases, there is most certainly value in what they failed to achieve. Getting a more competitive job and a revered firm confers benefits to the recipient and in my experience, candidates are unlikely to be consoled by cheap catchphrases like "those funds are sweatshops anyways, and the people who pursue such jobs are obsessed with prestige anyways." And to the extent they accept such encouragement, they merely revise history ("I never wanted to work for those firms anyways") and exchange one form of superficiality for another ("I'm not a 'prestige whore', I'd rather to do something more 'meaningful' that gives me a better 'lifestyle'").
The problem with feeling like a "failure" while sitting in a classroom at one of the most competitive institutions in the world is the rigidity of their value framework and the amount of self-worth they have invested in such obverse success. They are measuring the value of their occupation on a continuum that has been culturalized within an Ivy in-group, which has alarmingly distorted their definition of "failure". As well, they have invested so much self-worth in said continuum that, despite their achievements, they experience the same visceral melancholy as wildly less successful peers do.
Units of importance such as "social value" or "prestige" or "compensation" or "purpose" or "significance" or "meaning" are all equally vapid. It seems you reached the point where you've determined that there is little substance to the devil-may-care pursuit of compensation or prestige. Identically, my friends working as doctors or at NGOs have made such determinations about the "social value" and "meaningfulness" units. They are unsatisfied, as you are, because they have invested self-worth in the cosmic importance of their measurement units, only to have revealed their culturalized superficiality.
I am skeptical that you will discover happiness by exchanging your current units for "social value" or "meaning". Did you pursue finance out of the (retrospectively) blind hunger for "prestige" or "compensation" (which is how I read the portion referring to "keeping score"), or did you pursue it because you legitimately enjoyed the profession and valued the financial independence it offered you (which is how I read the first paragraph of WSO nostalgia)?
If you answer favoring the former, I question the prudence of changing units. If you answer favoring the latter, I simply ask: 1) have you entirely lost that enjoyment and 2) have you reached the point of financial independence?
Finally, I offer the best piece of advice that has been offered to me: without deferring to sentimentality, do you think you would you feel more regret in 10 years if you've eaten through your savings in your entrepreneurial venture with limited success or if you spent 2 (4?) (8?) additional years in a less satisfying profession to reach your savings goal before exiting finance, wondering what may have been had you left earlier?
Disclaimer: Please take all of my ramblings with less than a grain of salt. I wish you only the best.
I would suggest figuring out what you want to do next before you leave. So if you know you want to start your own gig, figure out what that is going to be before you leave. If you are going to take a job with less stress, again, figure out what that is going to be before you leave. I know a lot of people who leave and are very stressed when they are not tangibly getting closer to making money. I left banking and have shifted my business plan completely 3 times in 2 years, only because the info I figured out could only be learned by jumping in head first, that cost me 10k plus cost of living for 1.5 years....which isn't too bad. Now it finally looks like I'm going to start making money while my peers are pulling in 180k and I'm in 100k of debt, have personal guarantees on everything, huge unforeseen liabilities (have insurance, but still scary) and yeah....haha. I'm lucky because I chose / built a business that makes enough money to live and grow the business. I've got lots of friends whose start ups (ignoring tech for this example) are making 20-40k....not an ideal situation for everybody.
It's tough because only X % of start ups from ex finance people will "succeed" (emphasized because this is very subjective) so some people will succeed, and some will come crawling back to finance regretting the decision or maybe not regretting the decision and be content with the decision and potentially benefitting from the experience. I took the chance that I will succeed, knowing that if I don't, coming crawling back to finance wouldn't be that bad as I would come back as an advisor at a BD that allows you to be autonomous and hopefully using the experience to my advantage (I've already met a ton of successful people who aren't in finance and thus don't have 10 financial advisors fighting for their business....ie...good prospects, and they trust/like me and currently ask for investment advice). Mind you, I was not in OP position, so I had a lot less to lose, but it works in reverse too, as OP experience is enough to get him a decent job even if he f*cks around for a few years.
I've found money is not the goal. The lifestyle is. Working 7 days a week and a shitload of hours doesn't allow for much of a lifestyle regardless of how much $ you make, but also, one day you will have a wife and kids etc...and making 80k might also not be the lifestyle you want at that point....so there are many decisions. Don't forget though, your kids don't give a f*ck how much you make. I know a lot of finance guys who grew up upper middle class and struggle because they feel compelled to give their kids what they had...but remember material things are not the only or best things you can give them, being a good parent is the best possible thing you could give them.
I work on the buyside and have often had similar feelings regarding the value of my job and if its fulfilling. I will say this though, I think your situation is specific to a subset of investment people that I generically call Wall Street guys. For background, I work at a mutual fund not in NY, MA or CA. So what does that mean? That means I dont have nearly the same stresses that you do. I dont trade. I make long term investments based on fundamentals. And believe it or not, that is actually a winning strategy... over the long term. I have to beat a performance metric but its not a quarterly one, its not even an annual one. The biggest weight of my bonus is the 10 year number. I work roughly 50 hours a week and even though I often think about and do work at home, I dont often dream or have nightmares about my position. This is a common side effect of too much stress. I am comfortable with my job because from the early days of college when I decided to pursue an investment career, I decided to do it not because I could be the richest person in the world and be on the cover of every magazine and be "admired" by the industry and press, but because I enjoyed the work intellectually and I knew that investing other people's money will make them and me wealthier. We both win.
But I started off saying that your a wall street guy and even worse a hedge fund guy. I have never wanted to be in a hedge fund precisely because of the lifestyle you describe. Maybe early on in my career, but once I figured out what a hedge fund really meant, I said no thanks. To some that might make me a lesser person. But I see it the other way around. People who value money over all else are the lesser people. The problem with wall street guys (and gals) is that they very often go to the same schools, they live in the same towns, they work in the same companies, they know the same people, they make the same trades, they value the same things and worst of all, they share the same mentality. That means they are highly connected and very often act in the same manner. No disrespect to any wall street guy reading this, but I see these guys all over and think to myself how big of douchebags they are. Life is not about money. Its not about beating everyone else to the top, but if you live in NY or SF or LA or Boston, there is some subset of people who think those things are valuable and place a lot of emphasis on them so much so that our society has reached a point where a much larger part of the population thinks they have to value those things too just because these other people who they believe to be successful are. Its herd mentality at its finest.
As a side bar, I interact with CEOs regularly. These are men and sometimes woman who make multimillions of dollars a year, are worth even more multimillions of dollars and considered by most to be "successful". The one thing I often do is look at their ring finger. More often than not, CEOs arent wearing a ring. Most likely they are divorced. Kind of like cops, the divorce rate for CEOs is high because getting to the top leaves a big wake. If you value money and being at the top and dont care if you are divorced and barely see your kids, then being a CEO is a good path to follow. Its much the same with Wall St guys. Its all about your value set.
Another side bar, I have a friend who's a HBS grad from the late 80s. At the time, his entire cohort was going to Wall St because that is just what you did. He worked at several prestigious buyside firms but was recently let go. He told me how he and several of his peers from his grad class would lament about their wall street lives. They all thought they would go to wall street and become very wealthy and by default very happy. Neither came true. The majority worked at similarly prestigious firms and all made very respectable money, but only the few that rose to the top made any significant money. They bulk of them had very mediocre experiences and were questioning the paths they took.
Dont get me wrong. There are a ton of great people in the investment industry even at hedge funds. And there are a ton of people who become wealthy with good values. But at the end of the day, that lifestyle demands a certain level of commitment to those more unsavory values. If you chose to pass on it, no doubt those who stay will call you a pussy or a quitter, but thats because they are too chicken shit to do it themselves. Heres one test I do - walk into work or go to an investor conference and ask yourself how many of these people are actually interesting people and if you just met them in a completely random space, would you want to be friends with them. If the answer is yes, then you're in the right place, if its no, you need to move on and don't look back.
I left finance to start a company. Took a long time and several pivots. 2.5 years later, I have a young business. It has societal value and I'm passionate about the product, but it's not very profitable, with very tight margins.
I've realized a lot of things. Work is work. You trade one bullshit for another, but it's still bullshit. So don't think that being your own boss is glorious or bullshit free, it has so many headaches, I often wonder why I didn't just stay where I was....at least I was getting paid for those headaches. But I do know the regret would have eaten me alive, so I have no regrets now, also I had gotten pretty unhealthy and that depressed me. I would say, first things first, figure out how to get healthier.
Point is, being an entrepreneur isn't necessarily better, it can be very isolating and lonely. Most entrepreneurs I know are poor. Making 70k / year now seems like being rich to me. People always say, "yes, but eventually, you will make a lot more"....and I think "that's a HUGE maybe" and there's a huge chance that everything goes up in flames, or worse, it burns slowly.
I think op should find a role with less stress / less hours, just don't think it's only a choice between your current role and starting a company. Nothing wrong with taking a pay / prestige cut, to get a better lifestyle. 10-15 hours more per week of free time can make a big difference in your life.