Set to inherit ~50 million, how to approach career in finance?
I am very aware of my immense privilege, and am obviously very grateful to be in such a positon, but I was not raised to expect such an inheritance. This fortune was aqquired only VERY recently by means of a family venture. I have no family/connections in finance.
I am currently a student at an Ivy League school, and seeing my peers aggresively pursue banking careers has inspired me to do the same. I have been counselled that IB and then a succesful PE/HF exit is as a great way to learn how to manage money, and I hope to one day succesfully preserve and build this wealth for future generations.
I am seeking advice on essentially two things:
- Is a career in IB with the traditional PE/HF exit a good starting point to learn how to manage large sums? For example: IB --> PE --> Manage family office. Noone in my family works in finance, and I am generally unaware of other fields that would give me better exposure and training.
- Considering that I have no deep passion I wish to pursue, are there any careers as an alternative to IB/finance in general that I would be better off considering seriously?
I hope this doesn't draw too much ire. Whenever I've seen posts by relatively greener people on here (especially students and interns asking about college choices and such) they seem to get absolutlely flamed. Hope this post can avoid that...
I am also set to inherit some amount but not as big as yours (just enough cushion for my retirement). I would still advise doing a 2+2+2(+2) if you want to get the overall well rounded experience in finance if you are envisioning to create a family office type of investment vehicle.
2-years of banking allows you to develop your modelling and PPT skills of crafting message, whilst also interacting with senior bankers / lawyers / c-suite management (at least at an EB).
1 to 2 years of PE should allow you to synthesize a concise investment thesis on the private side, whilst also doing some portco work. For this part it might even be better to go to UMM or MM where you actually see the bigger picture vs. at a MF where you are siloed into being a modelling / IC / DD monkey.
Then after either MBA or MBA + HF/asset management. MBA is obviously for networking and a good vacation to take. This should allow you to get every type of flavor in finance, and if you are operating a family office you also need to develop asset deployment and portfolio management skills eventually, which should be able to get indirectly from HF/AM.
Above is by no means perfect and obviously is not a rule (i.e., you can start in VC if you are only focused on VC), but this is the path I would take if I had a sum of money that I need to manage, and I am deploying into both private and public markets.
Thank you for taking the time to share this!
I think your rec of choosing UMM/MM over MF for broader exposure is particularly insightful. I suppose, especially in college and in clubs etc, its easy to get caught up chasing brand names. I guess that if my end goal is to be a principal allocator then breadth of experience matters.
Still a long way to go for me, but this gives me a much more grounded view of how the different pieces of a finance career can be fit together. Thanks again for this.
Echo this. I know 2 billionaires who’s parents encouraged them to do paths like ivy + IB + PE + HBS/Stanford
It’s world class training for any venture
And even if you plan on not working at all it gives you a nice foundation and pedigree
The only exception would be if you have a deep passion like nuclear physics and want to go do a PhD in that
Anyways the point is you don’t have to ‘work (for money)’ . So take this opportunity to do something truly compelling and set yourself up for an exciting future
A lot can change before you inherit any money. It could be spent, if it’s a business it could fail, it could go to your uparents medical expenses.
Until it’s in your account, you are no richer than you are now. Focus on creating the skills necessary to make money / be a professional.
2+2+2 is a good idea. Gives you a respectable backstop + the upside of having a useful network to accelerate your growth; however, that network won’t be helpful immediately because you are supposed to rise the ranks alongside your peers. You would be jumping ahead of your peers and they will not be at the decision making level for many years.
My advice is get 2 years on the resume and start a biz in something you’re passionate about. Getting a head start on operating experience will pay dividends later
Wealth management will teach you to manage your money way better than IB or PE/HF.
That seems sensible, however I am unaware of anyone working in AM or wealth management out of undergrad. Sorry if this is super uninformed, but are entry roles available? Also, in your opinion, do you believe such a specific pathway is truly worth foregoing a broader overall understanding first (like the 2+2+2 that has been recommended by others)?
There are definitely roles post-grad (especially WM) but doing the 2+2+2 will be a broader learning opportunity that will provide you with knowledge about deal process, operational experience, dealing with investors, etc. and at the end of the day the more knowledge you have the better you will be positioned for success in the future. Keep up the good mindset!
I disagree with the sentiment on WM. You can hire people (wealth managers, private banks, multi-family offices) to do this. It's not that hard. Building a network and learning how companies are run financially is a better skill set. Who knows where your career will go? You can easily make some basic investments and live off of the income, but that seems like an unfulfilled life. If you ever want to be an investor in or buyer of companies then IB is a pretty solid start.
Probably the more important question is do you get this in the next 10 years or when your like 50 or something.
I will likely only recieve the full control of the sum when I'm in my 40s-50s. However, I am sure that if I express a desire and show commitment to taking control of the estate earlier it will be possible to do so.
yea I’m sort of in the same spot here and wouldn’t really make career or life choices about money that’s 20-30 years out. Also would just do what your interested in regardless…I’ve been working in L/S and would do it regardless even if I still had the opportunity to work with my family.
Just don't get fooled. If you inherit the money at age ~30 and stick it in a vanguard index fund (my suggestion is split VTI and VOO), you will most likely be a billionaire in your lifetime. People will try to ask u for money to invest in their hedge fund or something, but don't do it.
I'm appalled by these responses. If you are actually certain on receiving the money, please don't go into finance. You can literally do anything else. Doesn't have to mean go lay on the beach and travel forever or whatever (although wouldn't blame you if you did), but you can literally go create any business or do whatever artistic endeavor you desire.
Think of all the crushed dreams out there of people being forced to give up on pursuing music, acting, sports, DJing, fashion, art, etc because reality set in and the walls were closing in around them with regards to needing a real career. Go create some form of art. The world needs more of it now than ever.
Also, no offense, but high finance is very competitive and has been battling decreasing headcount for years now and frankly someone who actually needs that seat could use it instead...you won't be missing anything. People will disagree but they are delusional in trying to look for confirmation bias to confirm their own miserable life choices. Be free.
I disagree
The IB/PE is a hardening process. Much like how wealthy elites may choose to serve in the military or other endeavors
If you have another passion then go for it; but if you don’t have a set passion then treat yourself to the experience
They will teach presence. Polish, work ethic . Client hands (which are great to have even if you are the client) etc
I think people on this forum undervalue the training you get. Not just for finance. But for polish, negotiation , etc
You are delusional and drank the kool-aid. I’ve went through the same “training” you are describing at an EB that prospects salivate over on here.
If you can’t see the ruse, seek help.
Eh, you get that polish being around other wealthy people socially. And for work ethic, someone cracking the whip over you in the bullpen is quite different than having work ethic/initiative for things you yourself drive.
IB is just a wage job, same as any other. Putting it (or pe) on a pedestal is cuck mentality.
The only way you get hardened/polished is if you are working for a family business (like the murdoch kids).
I'm inclined to agree with you. I have actually spent some time in the military and found the experience to be invaluable to my personal growth. Perhaps this route will be something similar.
Despite what I read on here sometimes, the senior people I've met who work in finance have always come accross as very intelligent and fantastic communicators. I admire the way they carry themselves.
Barring the collapse of the US dollar or some other significant financial crisis, I'm almost certain of receiving the money. We are not old money, and my parents came from absolutely nothing. I definetly think I feel a sense of pressure to live up to the legacy that they have created.
The issue is I have zero interest in the arts/sport and have (at least for now) no entrepreneurial spirit. I think I would do myself and my family an incredible disservice to throw away generational wealth on some kind of uninspired business endeavor. I do obviously feel bad for people who weren't able to pursue their dreams, but I mean what is there to say except I got lucky? If I truly had some passion, I would obviously pursue it; However, nothing really comes to mind.
I'm aware that high finance is super competitive, but I'm fortunate to be at a target and I am willing to work very hard to secure a spot. At the end of the day I don't think its right to feel guilty about the cushion I have. After all, that's what my parents worked for!
Thank you for taking the time to comment!
Some of us find finance/investing really interesting and are passionate about it. I'd rather kms than do something artsy.
And the world does NOT need more "artists" loool
Imagine if DJT said sorry dad I wanna be a DJ in bali instead
1. Marathons are cringe-tier typical finance bro activities...so no not even close. Try again. You wear common projects with linen pants and think you're different just stop.
2. No
3. You have poor comprehension skills. No one is talking about being a professional boxer or some nonsense underground fight club. What kind of straw man is this? Stop sitting behind a screen and being a bitch for your balding VP who hasn't seen proper sunlight in a week, and maybe you could think straight
4. You're delusional. You make 300k a year tops. You're a nobody.
Absolute cinema
no chance i'm turning comments from a neurotic mid-level trying to "add value" if i have $50m in the bank
you guys are fucking crazy on this thread haha
The delusion on this website is insane
If you want a career in the business world (and leaving aside what some other people who are miserable in the job may say),, there is no better training than two years in IB and two years in PE. Even more so if you have 50mm in the bank. There’s a reason all my smart billionaire clients want their children to start out in this role before joining the family business: sure there is the MBB route but I’m not sure it’s the same intensity and training.
Also, you can’t assume money lasts for ever. There was a time when I was in college and and a junior banker and on paper I stood to inherit several hundred million. Then the financial crisis happened and it went to negative. I’m glad I grinded it out and had the cash flow to support my family.
Oh look another MD who climbed the ladder during the easy years when his competition was effectively half-drunken frat bros on a rooftop and not prospects today who have to frantically position themselves from high school for just the chance to land a role. I can bet the last thing on your mind in high school or even college was IB, much less a career!
Hey moron, you ever wonder why juniors are so miserable in the role? YOU are the one in charge. Look in the mirror.
You’re having quite the crash out. Take a lap my man lol
Sucks to be you, doesn’t it
Go for banking for the experience and business acumen but I'd skip PE and do something I like after the banking. Recruiting and the actual junior job in PE is a pain, and it will not teach you a whole lot about managing your money. Working on large cap deals and managing 50 mm are two very different things. It's like navigating a cruise ship and rowing a boat. PE deals are more complex than what you'll do with your inheritance. There's no need to do banking 2.0 to prove yourself.
Get a good money manager, both for yourself, and your family. Be set for life. Figure out what your dreams are. You've got the money to realise them.
2+2 is a great starting point. I would suggest trying for allocator /fof/secondary type roles, because that skillset will be directly translatable to family office/wealth management. Getting a good grounding in not just individual assets and deals (IB/PE) but also investment vehicles, asset classes, fund-level deals, and thinking more broadly about asset allocation and market risk.
Can I has $1M
I think you should still at least start in IB so you get the benefit of a consistent training ground, standard finance skill set. Gives you both a good start to your network and some credibility. After the two years or so, I don’t think you need to swing for the fences going for a sweaty fund. You could do well at a chill fund with a strategy you find interesting, or work for a large allocator to learn that investment style. Long term I think it also makes sense to develop overarching goals for volunteer work or foundations you’d like to be involved with. It could be good to be involved before you even inherit the money, see if you care about the mission.
If I were in your shoes I'd do IBD->HF->family office
You're going to want to put yourself in a position where your parents will actually trust your advice on how to manage that money, because you're maybe 19years old now and as you said, won't be inheriting the money until your 40s-50s. You're going to want to make sure it's actually around (and ideally is larger) when you hit that age, which would allow you to focus fulltime on managing it. Puts you in a great position to be active in your kids' lives, if you decide to have them (your focus on generational wealth seems to suggest you want kids).
Also sidebar, I definitely would not tell women you're getting romantically involved about it lol.
Yeah exactly, I want to one day be confident enough (and obviously be skilled enough) to manage the money at some point in the next 10-15 years. At that point I'd love to call it a day and spend more time with family, while still having the optionality to spend some time every day managing a family fund (perhaps in a less aggresive, more passive manner?).
Right now the money is being managed by professionals through a private bank so it is in reasonably safe hands, but I'd much rather be in a position to at least have a deep understanding of the decisions taken by wealth managers if not manage it outright, rather than trust them blindly.
Also, I've already managed to make that mistake once...created a lot of resentment and conflict in what was otherwise a happy relationship. Won't happen again!
Thank you!
Investment Banking does not teach you better about how to invest than investing roles do. Why not just go after those roles?
lemme hold some
Prepared to get MS'd!!!!!
Is $50M really that much to punt on career path??? I don't think so to the point you wouldn't want to develop hard skills (ex: PE / IB) for continuing to substantially grow asset base. Moreover, if you do directional math, your ability to live off your own career salary and not take upfront trust distributions leads to substantially higher economic compounding over the long run:
Acknowleding that these are ridiculous problems... Also this would represent discretionary spending! Surely solvable by making cheaper purchases and living lower burn-rate life.
That being said -> being self-sufficient on own career income within first ~10YRs of life and developing hard skills in IB / PE for having strong skillset to continue growing asset base probably leads to a materially better life outcome with a few years of upfront investment.
Being able to turn $50M into $100M / $200M / $500M will get you to the point that functionally costs won't matter in any type of life category (house, trip, plane)
I would also look into consulting if you wanted to learn about business. Banking doesn't teach you about how a business operates and adjusts to competition and environment. As someone who has done both, I would pick consulting if you are not sure what to go into. Its also less hours and gives you more optionality afterwards.
Buyside research at a fundamental shop also works.
This is a fresh take! Interestingly, my parents actually prefer I pursue a consulting career, despite the fact that it would not be as helpful when it comes to learning to directly manage the money. They are of the view that bankers are generally uninspired and uninteresting people who only care about compensation lol.
However, I've heard it's hard to go from consulting to IB as opposed to vice versa. Is this true?
Yeah, it's harder to go from consulting to IB. But I'm not sure IB teaches you how to manage money tbh. Maybe if you go buyside thereafter, but even then most strategies would not be applicable to a UHNW individual...
I would argue that consulting teaches you to be a better business analyst, and the first step to being a good securities analyst is to analyze the fundamentals of the business.
Give it to me
...
Comments saying do something else is so boring. A lot of the most successful investors had inheritance/family money to help them start out. Obviously it's not required but it's so much easier to start your own fund with your own capital behind you. If you're interested in finance/investing (seems like you are) then this would be a cool idea. Starting your career in IB + PE/HF is also the best way to gain the network/experience to make that happen.
You should open a restaurant or a bar or something cool. Working in finance is an incredibly dull way to spend your 20s as a very wealthy person and is largely pointless other than for people who actually need to create a career and their own wealth.
Some people enjoy it, and it’s a LOT easier than opening a restaurant or a bar. Few jobs faze me but hospitality has brutal hours, and a very low probability of success. Utmost respect to the people who succeed because they will have killed themselves. Once you figure out banking, it’s actually a very easy job.
You would be surprised at the proportion of senior people in the industry who never needed to work.
And don’t underestimate the PA investment opportunities that come up in the job.
I agree banking is not hard. However it requires almost full commitment of your time and frequent personal sacrifice, which I don’t know why any independently wealthy person would ever want to do that in their 20s.
This guy is an MD who likely just "fell into his role" like every other finance guy in his cohort. He didn't work 1/10th as hard as an average prospect today and will never have the wherewithal to admit it.
If you want to learn about businesses, do consulting.
If you want to learn about maintaining and building a portfolio, consider private wealth management.
Transactions (banking) and fund-level investing (PE/many AM) are different (with overlap) to portfolio construction and allocation within objectives (ex: required lifestyle funding). FoF also good for learning allocation.
Since working in PE I'm blown away by the number of people who are excellent deal-level investors but lack a holistic personal portfolio strategy.
If the inheritance is tied to an operating company that you're interested in contributing, consider exposure to the cutting edge in an business function or service central to the family business (via operating company or services: consulting/banking/maybe law if it's a fairly regulated industry).
If you find an interest along the way, there is probably a lot of fulfillment in pursuing this. Some of the most interesting and high energy people I've met run cafes/bars/smoothie shops, are surf/martial art instructors, or incredibly deep in a field they care about via academics/research. Many are incredibly intelligent and pivoted from a corporate path.
As someone at a HF who came from a lot less than the average person, please listen to the guy who commented on following your actual passions instead of IB/PE/HF. Do something you will actually enjoy with your life instead of listening to these morons, most of whom are either in college or a year out of college, who want you to take a job that’ll just entail you turning comments on random things and editing power points just so you will “build your network.”
You already have a well connected, warm network through your parents by virtue of them having such a high net worth. Unless you 5-10x or more your net worth (or your potential friend from IB/PE/HF strikes out), the quality of the network isn’t going to differ much, billionaires aren’t going to invite you to their network/neirher are you going to be mixing with that circle and be close friends just because you did IB and stand to inherit less than a tenth of what they are worth unless you are already buddies with them.
To the people telling you to go to a HF/FO to learn to manage your inheritance money, don’t. These clowns haven’t worked at a HF. If you do, do it because you like following public markets, but don’t start trading your inheritance based on your short experience. If you do, there’s a greater than 50% chance you blow up your entire inheritance on some investment you think is smart just because of your limited work experience. Park it in some indexes or other relatively investments and let it compound. That’s what your future generations will thank you for. That’s the best you can do outside of having professionals with DECADES of experience manage your money. You aren’t going to turn into a smart money manager or a great allocator with 2 years of IB and HF experience, you will just be riding on your luck trying to make money without the same institutional resources of a well scaled HF.
You have a rare privilege of following your actual passion in life without worrying much about financial security in the future. Do some soul searching, deep thinking or whatever they call it. What are you actually passionate about, what would really make you happy. You have one life to live. Don’t live someone else’s life, live your dreams. If for whatever reason, IB is your calling, so be it but make a well informed decision.
The most helpful comment on here.
You should consider an allocator role at an endowment, family office or OCIO. That will teach you how to underwrite funds and asset management. You may even be able to do an in-semester or summer internship with your ivy’s endowment. I was at an Ivy endowment for a bit and it’s a sweet gig.
It could be helpful to do IB before this. I would suggest if you go into IB, go into it with the mindset of gathering hard skills. Don’t let yourself get crushed. Get your skills and move on.
I would mention that $50mm is on the small side for having a standalone family office. Think about if you had to write $5mm checks to various fund commitments. You wouldn’t be able to get the right level of diversification. The better bet, unless there’s more assets, may be to use a PWM manager or OCIO.
If you were working for a family office, you might be able to work out some kind of structure where you could co-invest your own assets alongside.
At he end of the day, you could invest it all in the S&P live off the dividend and just do whatever you want to do.
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