Finally 40, thought I’d have a higher net worth by now
Ignore job title - this was an intended throwaway account then I just kept it.
Background - I’m a senior investment professional in a private credit MF / MF equivalent. My background is top undergrad in engineering, did industry for 5+ years (had CEO aspirations early on not banking /Wall Street), top MBA, 2 years at BB and then a decade in Private Credit MF.
Current NW around ~$4mm (post-tax late stage fund vested carry included only in that figure - obv higher with rest of pie in sky carry).
I’m doing well, earning low 7 figures now but it was a longer path than many since I really had an industry bend at first - this has also proven to be my greatest strength in my sector so that worked out I guess.
With all that said, if someone said you’ll be worth about $4mm at 40 when I was 25 I’d probably say - ok, a little low, but ok. While I believe this could be my most lucrative decade ahead and PC is a solid place to have experience today, I have to say, it’s a hell of a grind.
I am now heavily considering starting my own PC fund in the next 5-10 years bc that is the only way I’ll make real money. I am not embarrassed to say I want a jet or at least, I don’t want to think twice about paying for jet access. I would like to own more real estate and have a second home in another country etc. I would’ve thought this was more or less achievable as an MD on Wall Street but I’m finding out it’s really not unless you want to stretch yourself thin which I will never do.
Anyone else out there climbed the mountain and still felt like eh? This is it, Net worth or otherwise? Champagne problems for sure.
Similar age, path and current situauton. Can I PM you?
That’s still good for age 40, what do you reasonably expect it’ll be at at age 45-47 given your current comp and carry vesting schedule?
I think it could get close to double in that time frame as some of my largest expenses have settled down (home, cars etc) and my comp has gone up meaningfully vs my first 10+ years and compounding.
I will say $8mm at 45-47 would feel a lot better.
That’s a solid place to be at that age. I am curious, given you already make low 7 figures annually excluding carry, what does the vested carry payouts look like each year for someone at your level?
Hey richiee would you be okay if I shot you a PM? I just have a few questions about the path of your career
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So you have a senior role in private credit. You get good comp, stable income from base and bonus consistently every year, you’re in a seat that has a path towards even more money over the years, and hopefully you have decent hours compared to other high finance roles. You’re in a good spot and should feel proud of where you’ve gotten and the seat and path you’ve created for yourself.
Bro thought he could get insane $’s by working for someone else lmao
As you said: start your own gig or stay “miserable”. Even in high finance you’re still just someone else’s pawn and your 7-fig salary is just the scraps they’re willing to give you so you don’t immediately quit.
NB4 muh risk, that’s the point idiot, the risk/reward couple is the only one that will never divorce.
Just giving some perspective bud.
I agree with what you are saying but chill tf out
Why are you including post-tax vested carry in your NW if it hasn't been distributed? Doesn't make a lot of sense tbh (imo). It's like a tech unicorn employee counting his/her RSUs as part of NW. It's only cash when it hits the bank. What is your liquid NW?
It’s a small piece of my number which I’m quoting conservatively, but it’s very low risk. These are investments that have been paying high single digits and mid teens interest for 5 plus years and will be paid out on maturity. They are not restructured and are performing. My unvested carry in more recent funds is not included, that would be more akin to RSUs but at a good credit shop I’d say still much less risk than an RSU. If I claimed unvested carry as well it would mislead this discussion.
remember, Buffet at ~ 40 was worth ~ $30mn, so you're still a bit away from your net worth peak I guess?
Now I like that perspective! Thanks for the insight I didn’t know that.
$30 “mn” - who uses “mn” as an abbreviation?
plenty of European pitchbooks
He had that much in 1970? Nice!
How much is that in todays dollars, or is that figure inflation adjusted?
inflation always takes the fun away hehe but roughly 240M
still, that's x600 less than what he has today
It is not inflation adjusted.
https://finmasters.com/warren-buffett-net-worth/#gref
As someone who's about to start FT after graduation, getting to where you are seems like just a dream at this point. You've done very well and should be proud of yourself.
You’ll be amazed, in the blink of an eye you will wake up and be mid-career. Make sure you pick your head up and do a self assessment in between the grind. Best of luck to you, it’s tough but it’s fun as well.
Don’t take this personally but even at $50m you’re not going to feel satisfied. You’re obviously stuck on the hedonistic treadmill which never ends.
Spend time w the kids and wife man. Find peace. The quest for $ is a never ending one.
Interesting comment. I empathise with what you're saying in this thread and it is important to find perspective, it is totally valid to feel you had different expectations for yourself (esp. when younger, we all imagine our personal and professional lives in the future and when things are going well, time does make you feel invincible, as you stated in another comment). A few questions:
- When you say "pick your head up and do a self assessment in between the grind" - how did you do this or how would you approach this in hindsight? What should we examine in the self-assessment?
- Most of my peers in the industry tend to share similar feelings at similar life stages. Do most of your friends or peers in the industry (be it PE / VC / credit / HF etc.) felt similarly to you? For those who do not, why not? Is there any commonality amongst those who are truly content?
- Would you have done anything differently, in hindsight, post-MBA (I appreciate you would have started earlier) e.g., move into entrepreneurship, a different asset class etc that would have been more financially rewarding (although involve other tradeoffs). But also in terms of mindset, since the decades go by in a blink of an eye!
- With your carry, surely you will be able to afford a second home and other significant lifestyle perks within the next 5-7 years (even if you quit in 1-2 years, if vested)? Perhaps not a private jet
Remember, you still have decades of work opportunities ahead of you and a great life (incl. a great wife and children, beyond just your job / net worth) that people far richer than you would envy. To me, it feels like you have a broader anxiety-inducing feeling about life having passed by and having unmet expectations (which most people here will relate to over their careers because of optimistic projections and obsessions over our careers being significant wealth creators). And yes, go down your own entrepreneurial path if you want to be rich, this has always been the case.
May I pm you?
Seems like you've achieved a lot and are in an amazing position - easy to look back and see some minor missteps, but you're in an enviable position.
Your issue is that you're comparing yourself to other people who aren't representative of the general population, or even the finance/Wall Street population. How many people your age do you think are in a position to own a jet at this point? Aside from entrepreneurs, who are taking a different kind of risk and thus aren't really in a comparable position, I'd say you are well ahead of the curve. After all, you're only just starting to make big money. Sounds like you could 3-4x what you have now by the time you're 50, and that's pretty amazing. I understand that the grass is always greener, but to have ~10mm in the bank or in liquid assets by the age of 50 is... I mean, I think almost everyone starting their career at 25 would take that.
Also, owning a second home in another country doesn't mean "stretching yourself thin" by any means, unless you're looking for something insane. For $1-2mm you could have a gorgeous home/apartment almost anywhere in the world... owning a private jet might be a little out of reach, but I also think that speaks to some misplaced assumptions on your part. The average MD on Wall Street doesn't own a jet. The average MD on Wall Street doesn't have regular access to a private jet. You're talking about an absolutely tiny sliver of what is already a tiny sliver of the population.
Well said. It’s easy to compare to firm founders or the private school peer group whose parents already have them living a $50 mil NW lifestyle. Most of the latter seem bored as shit and are kind of jaded about it all so I just think it’s a blessing I didn’t grow up with all of this and I earned it and enjoy it. And don’t get me wrong guys, I’m very happy and life is more than good, but as someone mentioned, once you get taxed and pay property tax out the ass and all the other expenses that come with a growing family it is pretty incredible the impact on paper.
These numbers float around in our minds but in practice it’s pretty dang difficult to stack as a W-2 even with Carry.
Mind laying out approximate costs for you and your family per year? Think it would be interesting to account for how frugally or aggressively you’ve been spending.
Spouse with a job? Kids in private school? Country club membership/crazy vacations?
Did you find a wife? What about kids?
Sorry, I thought my response went thru here. Yea, beautiful wife and kids. Def part of the cost basis!
Congrats - you’re living the dream.
It’s amazing how many unexpected expenses come up, not to mention kids. Saving is never as easy as it looks on paper.
First off congrats on a successful career. It’s a huge achievement to be in your seat. While I can’t sympathize directly as a peer, it’s totally understandable to feel the way you do. Everyone has their own expectations and having slight dissatisfaction and not an irrational obsession in not meeting them while recognizing your success is totally fine. I also like that you mentioned you won’t sacrifice everything for career progress which adds further balance to your perspective.
If you came off as miserable, a different reaction would be warranted but you don’t.
So besides "eh", was the grind worth it or not?
My responses keep failing to post, sorry about that. I do think the grind has been worth it, but there is unfinished business and I think that is what nags me in a healthy way. I think the grind in and of itself is good and looking back I take pleasure having been in the trenches with my guys through the market ups and downs, restructurings, turnarounds, the whole thing. There is some pride in being experienced and there’s only one way to get there.
All that being said, chop whatever you see on paper or are being promised in half. That’s prob a good starting point to more reasonable expectations.
Man, I thought I was arrogant and liked to humble brag, but even I think this is cringe.
Not bragging, Smoke. Just some introspection at 40. I very much underestimated the costs and wondered if others felt the same. I also took a longer path than many on the site who chased this since highschool which is awesome awareness. None of this came easy and it’s still not easy by any means.
C’mon homie, not bragging?
You're 40 and a multi millionaire and made over a mil a year. And you’re smart enough to know that the only way to achieve generational wealth is to start your own company, yet you’re acting shocked you’re not richer.
Trust me, I get the urge to humble brag too, I do it all the time on here. Don’t bs a fellow bullsh*tter.
Smoke, I actually like you and enjoy your posts, but honestly, I’m shocked at many responses to my post. If I got on here and said hey I’m worth $25mm and struggling for meaning, I would expect these responses.
If you aren’t happy with reaching 4MM at 40, chasing more money won’t make you any happier. Find something else that makes you happy like a hobby or something. Seriously, 99% would kill for that kind of money. Money isn’t the path to happiness, it’s helpful but you’ve reached that point already.
Came here to say this. OP gonna blink wake up at 75 and be like “ah shit, too busy chasing $50m”. Posts like this prob only reinforce this gal
Money is important for happiness to some degree, and you have done well so be proud of how far you've come. You have a lot of earning potential in your position and you are in a great space.
Comparing yourself to others with more, like a HF manager for example, would be what is creating unhappiness for you. Take time to appreciate your accomplishments and what you have frequently, and continue to do what you're doing to make even more from your investing position
Why would you buy a jet? What's the problem with buying plane tickets? Is it really worth giving away like 10-15 years of your life just to fly by yourself? How many healthy years do you think you've got left while your body functions properly and doesn't constantly hurt and the brain can think clearly?
Why would you buy real estate? For well invested $4M, you can rent gorgeous real estate around the world for the remainder of your life and can move around and see the world instead of being stuck in one location where you buy a vacation house.
Wow, $4M NW, making 7 figures a year, and still complaining? I guess some people just do not know how to be happy.
You mentioned you figured you would have a higher net worth by now. Have you considered moving your family into a tent?
No - but I saw that supposed CIO post about living in his car though and laughed my ass off then was concerned for his well-being.
hahaha
You've done very well my friend. Remember the math of compounding is on your side, you'll in all likelihood hit >$10ml by 50 and easily $20ml+ by 60. You have done very, very well
I guess the one thing is you'll have to keep working till 50 to reach true indepndence. That's the crappy part about it, the math works out that it's in your later years that you really hit it big...but also at the point where the money matters less
THink of it this way -- you'll be able to afford all the best possible medical solutions (i.e. stem cell injections) to feel like you're 20yrs younger (i.e. feeling like age 40 when you're 60) esp. as the pace of medical advances accelerates over coming few decades. And you'll leave plenty for your kids who in fact can achieve what you haven't -- $10+ml high net worth by 40 (financial independence). So I get the frustration but you are crushing it
I will be pretty darn happy if I get where you are now at age 40. Yes, would love to have >$5ml or even $8ml by 40 but $4ml is crushing it if you still plan on working as that capital will continue to grow with low supervision
Agree - 10 milliliters by 50 is pretty good.
You gonna bully everyone into using $mm?
Lmao you gotta let this go man
what's the point of accumulating money until you die? or are you planning to start spending your millions once you hit 70?
Most people here likely strive to have a role that's not super time demanding like that of an analyst, but able to accumulate significant amounts of money consistently with either their job, ownership stakes and / or investments, so why wouldn't you? I recently spoke with an older family friend who is a medical chief at a random hospital, he gets to go to week-long conferences in the nicest cities around the world, flies first class, gets great lodging and meals, and gets paid tons while giving speeches and meeting with other doctors, it's important work for his hospital but probably enjoyable lifestyle simultaneously
You can enjoy a lot while you're young and still accumulate money if your job pays well & you invest intelligently...it's not one or the other. Regarding why have so much 'left over' at 70, it's to leave money for your kids and grandkids so that they can live comfortable lives while also having the freedom to do what they want
I don't know what the perfect number is, that'll depend on a lot of factors. The ideal is to leave $5ml (in today's terms) to each of my kids -- though maybe $3ml at low end is fine too. I'm sure my perspective will evolve over time on this as will all of ours
Right, but what's the flip side to this? That people should expect to be wealthy enough to afford to own a private jet by the time they're 30? I just don't understand this mentality, it's so... entitled, I guess. Sure, you see people on Instagram living their best life or whatever, but they're only showing you the vacations. That picture on the jet? That's them spending $20 to go in a fake fuselage and take Instagram pictures, not them truly jetting off everywhere.
To be worth $10mm at age 50, a net worth and age at which you can afford that vacation home and can basically live off your passive income... that is insanely successful. I feel like to even give the slightest shred of credence to the idea that that net worth at that age is even possibly disappointing is to prop up a super unhealthy idea of what success actually looks like.
To get to this point and think "I don't have it that great, I thought I'd be more successful" is a sign of mental weakness. Something else is wrong in your life if you believe that; some fundamental piece of your psychology is just straight up broken. And calling that out is the proper response.
It seems like OP created a troll post. Having 4m AND consistently making low 7 figures yearly in an investment role, AND having potential for other additional earnings and carry in future funds is not a situation where anyone would sound disappointed at age 40 - that's a great place to be for even highly motivated and driven folk (I am skeptical that people on the buyside are that unrealistic with their expectations, especially in pc where people are seldom optimistic to begin with)
Why are you talking about private jets and crazy Instagram influencers who are burning money to 'live their best life'? You're missing the entire point of the money. It isn't to jet set an drink $300 bottles of wine, but to offer the freedom to do whatever you want -- if I had $10ml today, I'd quit and start my own fund. Run it in a true long term fashion (not what we do at AMs). Read and consume vs. doing dumb busy work that has almost no value add. That's the point of the $10ml. I wouldn't spend any differently than I do today except for finally buying a house. And I'd save and compound to leave the rest to my kids as I'm very happy with my current lifestyle.
I agree that $10ml in today's terms by age 50 is insanely successful. I'd be pretty darn happy to be there. OP might as well. But again, the compounding math works out that you have much less than that at age 40 and so $4ml doesn't look as good (even if the trajectory is to $10ml+ by 50), although yes on an absolute basis $4ml is good. It's not broken psychology, it's just being human. For 90% of people, nothing is ever 'enough' in terms of wealth. It takes living a very conscious lifestyle to be happy with where you're at.
Congrats on the success so far on your NW. It is post like these that makes me sad to sometimes to read stuff on WSO. We are living lives so far better than anyone else who had ever existed in civilization. Also, the majority of people with NW more than 10MM+ are so far and few in between, I know of a handful that I had met over the years that are like that.
The people who brag or have shiny objects on IG/Social Media are often in debt or barely hanging on. I've seen people in homes at the $1M+ range go into foreclosure or had to sell off their vehicles because the lifestyle they were living was not sustainable. I know people who often pitched the get-rich-quick by working XYZ career/job and saying that others had that success - are not so true. Once you peel the lairs of the onion, you see what is really going on inside. One think I like about finance is that it is a linear path (all things considered) and you learn how money works.
However, I'll end with this. The real way to make money is to open your own business. I grew up around people who had nothing when they arrived in America (refugees), but they made something of themselves and are worth the millions. It is quite inspiring. Feel free to PM.
I like Ozymandia's breakdown and analysis of the situation.
Interesting post.
Pretty similar overall I feel everything you mentioned. Every year becomes a struggle between “take more career risk” vs “take more leisure time”.
The own jet goal or own small island estate for me. Think we have to put those to bed for now.
I know people think you are “complaining on here” while its more I need something to keep driving me forward.
Exactly
Ugh. Posts like these- you're 40 and you haven't heard of the hedonic treadmill?
How are you almost twice my age and haven't figured out that no amount of money is a replacement for your insecurity- like spend $1MM on therapy if that's what it takes for you to find some perspective.
It's not enough to fly first class in the miracle of modern flight. No, a private jet is what's gonna finally fill that void. Come on, be serious.
Luxury is all well and good but it's diminishing returns. Health, fitness, community, and genuine hobbies: sunlight, a good dinner, hiking, vacations- cheap or nice, you don't need $10MM or even $4MM to have a good life. But you can spend too much of your life thinking about how to turn a $1.00 into $1.20.
I think you are misreading the post and for some reason expressing your anger. This is not a 10% happier outline, I’m good. This is about net worth and theft via Uncle Sam.
Flying private is a massive lifestyle advantage, throw younger kids into the mix and it is a godsend to get around. Airlines suck ass and I won’t apologize for trying to get around them.
The post is not about whether or not you are happy on a daily basis it’s about finance and wealth accumulation from my perspective.
You can save your diatribe for Mr Money Mustache.
You’re worried about tax burden, yet you still want multiple properties and a private jet which magnifies your tax burden?
Your post is all over the place.
The dissonance to want lifestyle but to also want high NW – at no point do you ever say why. Yeah nobody likes flying commercial airlines. Yeah they suck ass.
This perspective is just so out of touch and alien to me – like I kinda felt this way a while ago (never to this extreme) but it’s just such a roundabout way of finding happiness – which is the *purpose* of wealth unless you’re just trying to make the numbers go up. Which sounds like your post.
Is this one of the better troll posts of the year? Or is OP really this insecure and stupid
Why do you guys think making more money for your labor is insecurity?
Some serious feel the burn going on this site the past few years.
If he’s insecure I don’t see the point to ever being secure.
I mean, this sounds pretty awesome for someone who is essentially just a well-compensated employee. Think about how many employees are worth $4m by 40 without outside help/inheritance (almost no one).
Only way you can do better is by winning the lottery, getting really lucky on risky investments, or starting a successful business.
I personally went with the last option because I'm generally unlucky (used up all my luck allocation on my height and handsome appearance), and my life wouldn't be made meaningfully better by making $1.5m vs. making $300k (realistic industry peak for an engineer). It's still the same shit, just slightly higher quality house/car/clothes/vacations, etc. For me, it was all or nothing. I can always get a normie salary job somewhere and live an OK life, but starting a successful business is a once in a lifetime opportunity. Only way to get that private jet money. Maybe you should do this. If you have the energy, there's no time like the present.
I'm still not rich but my paper net worth is good (equity stake). Embarrassingly broke for most of my life but I had a lot of fun. Will probably sell sometime soon.
Sounds awesome, what business did you start?
Without getting into too much detail, I design and manufacture materials and products to improve building energy efficiency
How old were you when you decided to do it?
24. Right out of graduate school. Part of it had to do with sheer chance - I happened to meet people who would later comprise the founding team. I saw the opportunity and jumped on it without looking back.
I worked (and continue to work) jobs on the side to keep the lights on, get insurance benefits and keep the family fed, but I work easy peasy government jobs that maybe require 20% of my attention, with the other 80% being dedicated to my business. I have high asset requirements (patents, factories, industrial equipment, etc.) so I don't even pay myself through my business, reinvesting basically everything the business makes. I only need about $100k/year to stay on top of my expenses.
When asked why I don't quit my other jobs and fully dedicate myself to my business, the answer is risk mitigation (insurance for my family, stable income, impossible to get laid off, very difficult to get fired, and pension) for barely any effort, and I use my day jobs to find new potential clients. Working for the government, you learn who every player is, what their issues are, and how you can pitch them to solve their issues. You sort of need to be on the inside to understand the system. No, it isn't illegal to do this as long as the actual bid process is fully above board and you don't use your government job to secure favors that aren't available to competitors. As long as you keep the two separate, it's all good.
I work long hours, but I love what I do. If I was given $100m tomorrow, I wouldn't retire or quit this work.
Being a business owner or a big shot PM at a top shop is really the only to have private jet money. Even the cheapest jets out there will run you high six figures per year in operating costs. I know a guy that flew a private jet for a dude that got a several hundred million dollar check when he sold his business to Blackstone. He just sold the jet this year because it was costing him so much money and it made way more sense to just charter a jet when he wants to go somewhere. But even chartering a jet is going to cost tens of thousands per trip.
Correct works out to about 10k-15k/Hr flight time
Though I’m not buyside. I can relate. Wrong end of mid-30s and not at the MD level (where the ladder / pyramid starts all over again). Similar net worth, but still in the 6 figures range mostly. Some years hit 7 but rare.
What I remember vividly is the ‘eh’ feeling after the first 7 figures year. Frankly, I was mad at myself. Early career me would have been on the top of the world for days. Possibly weeks. But I’m not going to lie to myself. Maybe it was a combination of the years of work amounting to a 5 minute conversation and number. Maybe I mismanaged my own expectations. Maybe the world changed and I don’t recognize it, but that’s not true… the truth is I changed.
It’s an odd sensation. I tried spending more time with family/friends, upping time outside and in the gym, went on a vacation I’d never think of doing, talked to friends in similar roles, soft sounded the market for other jobs, etc. Nothing. Didn’t make me think any differently.
I’ve come to peace with it (though not really). Like you, I’m starting to weigh some more uncommon routes or leaning more into risk. Trying to leverage what I do know / have to develop my own shop that hopefully can have some scarcity value to differentiate (hold your laughter). Calling this ‘tough’ doesn’t scrape the surface.
In any event, my two cents. Sounds like you’ve seen success so no doubt you’ll figure something out.
Interesting perspective, so do you think your apathy to making 7 figures is because it not enough of an outlier to significantly change your lifestyle and therefore feels underwhelming, or growing to accept that whatever amount is earnt no figure is enough, or that more broadly in life you feel an underlying feeling of "eh" and you can't yet point to why that is?
When you say "the truth is I changed", what do you mean?
Only 4 at 40? Yikes. You ARE behind. Should be nearing 5.5 by now. Ramen noodles from here on out.
Lol
Just curious, do you feel "poor" relative to other people at the office?
Or, is it more like you feel "poor" relative to a friend of a friend who is a HF PM, or to some CEO you had dinner with a month ago, or some PE guy who is 20 years your senior, or John Smith who was on the front page of WSJ, who just bought some new penthouse in Miami and is the same age as you, or because you've "done everything right" but are no where near rich?
Def not poor to some HF PM nearly all my HF PM buddies from citadel got spit out and are either running small money or even reverted to senior analyst roles at other shops. They lost their mojo entirely.
Some boutique PE guys have done well for sure. I’m happy for them, hence anyone forgets what we are trying to accomplish.
Just curious, do you have any insight into how your PE peers at larger shops have done?
Wow that’s awesome OP. Do you have any advice on doing well in PC?
I have some thoughts on this, let me summarize them and come back to you over holiday.
Agree a lot with Ozymandia points, add a couple of my own:
- So the OP says they "though theyd have higher NW by now"; at what age did you think it would be higher, 5? 18? 25 like you said? Unless you didn't look at your NW for 15 years and did a "Deal or No Deal" suitcase presentation on your 40 birthday, how did you not see it wasn't going to that number? (Unless you had a deal at 39 years and 364 days old that fell through).
- I do get what your saying though, yes it is rich/1st world people problems. But that's the shake, you just thought you'd be in a better place. You're like an NFL player who is a good player, has played years, but thought they'd be in the hall of fame by now, but may or may not make it. Do you tell that NFL player they shouldn't be disheartened because they actually made the NFL; yes you should have that perspective, but that also doesn't mean you shouldn't try to do better. So, should you try to make more/do better, yes, but realize you're already in great shape. I know people who got a bad shake; one of fiances friends I found out had his identity stolen by his father, some people have a rough go, some better have a better go.
- If you do the math (doubling your investment amount every 7 years), youd be at ~$128M by age 75; that's pretty good. Even $4M most people wouldn't get level ever in their life. And its all about how you spend it right, $4M is a lot to some, that much to others.
I agree with the logic that people should always aim to reach their full potential, regardless of where they are or how they started. If you work in PE and made a lot of money, you should appreciate where you have gotten but always find more ways to build from there until you're too tired from working. But not as confident about doubling money every 7 yr - that assumes a 10% compound rate, which people rarely achieve. May be more feasible if they're in a seat like OP making 7 figures yearly while fully invested, but people also make that amount consistently until age 75 either
True about the doubling, that was back of the napkin as an example. Even if its "only $50M" or any number, thats real good.
Of your peer group and friends (mba, IB class etc) which career path would you say have done the “best” financially by your age? PE,HF,PC etc? Curious. And outside of work did then people who saved the most do things smartly e.g. start to invest young etc
Wondering as well
Younger guys who started boutique PE firms did the best and are on a path to continue to do well. They did some Joint Ventures with larger firms, got lucky in some restructurings and ultimately are prob doing the best. Yes some HF pms did well but got spit out and are now running smaller money. They are still under 50 and could have a few chapters left but for now I’d say boutique PE founders got the best outcome within reason of something being replicable and not impossible (aka billionaire PC founder at XYZ firm).
Ignore the haters. Surprising the number of kids decrying OP’s “false modesty” here. I don’t get it. If the goal isn’t to make bank by 40, why are you toiling away as an analyst?
OP: $4mm at 40 does seem low if you are pulling in low 7 figures (I assume $1-2mm pretax, if $2-4mm it is abysmal). Are you excluding real estate?
Future value of $100k a year growing at 6.75% after 20 years is $4mm, so you must have either:
The good news is $4mm today plus $500k a year for 20 years at 20% is $250mm.
Plug in your own assumptions, but the answer is this: If you take the same time, energy, and care you spend at work on your personal investments, the ultimate payday is still achievable. At small scale, 20-30% returns over the long run is doable.
Please realize you don’t have to launch your own shop to get there. Private credit in the boring bank loan form needs scale and it’s not easy to get there from a standing start today, while the mezzanine approach takes a very long time to return a fund and generate carry. It’ll be 15 years and multiple vehicles before your business is fully scaled. Credit as you know is also a cyclical business, so luck will be involved.
You have it better than many but don’t let the broke kids here tell you that it’s enough. You deserve more and should aspire to more, and can do more. Good luck
Thanks for the response. I think the late start in finance and lower earnings plus expensive MBA first decade played a big role, more notable earnings power is from last 5 years or so. I haven’t blown lots of money but when I was young and single I made sure to have fun and did not let costs get too much in my way (which I think for me was the right move and has kept me sane when getting crushed ). No divorce and all good on the marriage front but we have kids and of course they are expensive.
Compounding capability is really crazy when you think about it, even when at reasonable interest rates. I think part of my feeling here is you almost feel like your work journey is wrapping up but truth is (and thank you to those that pointed this out) it’s only getting going. Esp when you have young kids, it’s really all just starting. With that said, I will likely be looking for ways to wrap up sooner than later. By 55, only 15 years away, god willing, I’d like to really take the foot off the gas if possible. At least that’s how I feel now, that could change.
My father is 55 and he first retired about 5 years ago. After two years of working on the cars and fixing the house he got back to work teaching a class. He gets to travel around Europe now and sneaks my mother out there when she can take time off. I think the post-retirement career could make sense if you think you would be bored doing very little for 20-30 years. Especially if it lines up with empty nesting. My brother and I were both out of the house around the time he went back to working. Really depends on what you want to do. He’s making the most money of his career right now and the best lifestyle.
My brother in christ you're making over $1mm/yr
Look to your personal life for fulfillment bc obv money isn't doing it! This is not an insult, just a neutral observer's opinion.
Question for OP:
What is your net worth breakout? While you mentioned the carry soon to be paid is a small amount, is the remainder mostly tied up in your house / 401k?
Also what would be the vested but unpaid net worth, and what is the "pie in the sky" assume you hit a 2x and fully vest on every fund you're currently in? How much annual income are you spitting out from the funds you invest in, rather than your salary?
The reason I ask is because if your liquid net worth that's generating income is low, that could feel like you're not doing as well as you are. On the carry, it's a good indicator as to where you may be in 10 years, or what could naturally happen if you walked away today (assuming they didn't ding you on your economics).
You are doing great and it sounds like you have a skillset that will keep you in the game longer than most (aka direct industry experience). Keep going and at 45 you'll very well have enough ($8-$10 mil) to decide if you want to go out on your own or build a platform within another manager that may make you plenty as well.
Best of luck although you don't need it.
DD
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