Predicted Net Worth in Trodden Finance Path by 60?
My parents came to the U.S. with nothing and built a company worth ~ $5-10mm today. I attribute everything I have to their success, and most importantly, I attribute who I am to the values they've instilled in me.
They are contemplating retirement and I just learned the $ figure on what they've built. Now that I am starting my own career, I cannot help but feel a responsibility to reach a multiple of that benchmark; otherwise, I will consider myself to have failed and wasted the platform they've privileged me with.
So then, what does the NW of an individual who follows this traditional finance path look like by the time they reach the same age (60), e.g. via PE, Corp Dev, or making MD?
lol that ego death is going to hit you hard brother
Could you elaborate more what you mean? I think I get some of it
comparison is the thief of joy my friend.
OP here. Agree with the above and appreciate the words of caution, definitely think this is a perspective on life that I should free myself of. But just looking for a ballpark figure here to make myself feel a little better...
What number is going to make you feel better here? It's not even real and you still have to do the work to get there...
In a similar boat, but then I realize when they were my age, they were working for less than minimum wage, with no agency, no citizenship, no social life or knowledge of the language/culture, raising young kids, and providing for family overseas. They didn't bring you up to outperform them financially, but for you to have a better life and for their grandkids to have a better life. The scoreboard is for everyone else, your parents are just happy to watch you on the field. No amount of money when you're 60 is going to matter to them and they probably won't be around to see it. Call your mom, have a beer with your dad, see them when you can, and remember the big days that got overlooked when they were heads down.
If you have a family business of that size, you should plan on taking it over and growing it more. You owe it to them to build upon the foundation your parents layed vs trying to lay a new one. Taking the business to new heights that they couldn’t imagine should be your goal, not tying to recreate their success.
To that end, only do IB and PE as a way of learning new skills that you can apply to your family business,
Agreed. Would much rather takeover/work for a successful family business than try to grind up PE in today's world where both PE promotion odds and carry are far from certain and difficult to achieve. Yes this probably means you have to move away from a Tier 1 city, maybe live in the suburbs somewhere.
Doing IB->PE is great learning experience in your 20s when you're single and willing to grind but after that other ways to make money while having good WLB especially with a family. Most people don't end up making MD in either IB or PE - many decide to leave on their own.
I wish I had a family business to takeover (current PE VP)
You realize that if they can somehow achieve 5 - 10mm liquid then they are close to the top 1% of net worth in the US. So why would you think that the expected outcome in a career that has no real barriers to entry and is subject to internal politics, up-or-out culture and the vicissitudes of the economy would expect to net you in the top 1% on average?
If you start making $300k PA in your mid 20s and maintain that income with normal raises until retirement then you should easily achieve a $5-10mm net worth.
I think doctor is the only career where you can reliably clip over 300k in perpetuity. otherwise, you are out of the system in most other lines of work.
It sounds like your parents were heavily involved in your childhood and shaping who you are today. Ask yourself if you can provide the same to your (future) kids, while working a finance job until 60. Not buying them the newest toys or fanciest vacations. But instilling those same values
Look around at your older colleagues. Do you think their kids feel the same way as you do?
You only get one life. Figure out what's important. You say the most important thing was the values your parents instilled in you. Then you say you need to beat them on a meaningless scoreboard of net worth, while working a job that affords you minimal time to spend with your family
ya man you will make way more money by taking your parents co, improving it where you can, and selling it to PE then you will working in PE
Can run the math on end net worth pretty easily
Basically function of 1. overall comp/career success, 2. investment success (market beta timing plus your own investment ability) and 3. cost structure(private school, COL city, spouse expectations)
Depends on a lot, like how many kids, divorce, market conditions, lifestyle, etc. Starting in PE now may have very different outcomes than starting 20 years ago. If you maximize for net worth while taking the proscribed institutional path, and don’t make any mistakes or have any lifestyle issues, $20mm-50mm at retirement is realistic, but can obviously be higher under right conditions or lower under the wrong ones. If you aren’t maximizing for net worth, and taking interesting/chill jobs, $3-10mm is reasonable.
0 way of predicting this
The outcome distribution goes from you grinding through MD to realize you suck at origination and getting fired, or joining a PE fund that goes bust and you see no carry, to you becoming a rainmaker taking home 10 bucks a year or getting multiples of that in carry
Just live your life, find what you like doing and try and do your best. The rest you can’t control
Facts. Big part is timing which isn't in your control.
Joining PE in 2010 (especially software) -> you were stacking carry checks.
Joining PE in 2025 (especially software) -> way worse outlook overall and good luck getting carry to pay out.
Well. If you get $1M in the market by 30 (should be achievable if you are reasonably good at your job and don’t burn out) and then figure you save another $150K a year which is conservative) until 60, you’d have $17.5Mish at 60 gross of taxes assuming 6% returns. This can obviously scale up quite a bit if you can 1) save more and/or 2) generate higher returns through carry / hedge fund returns.
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