3 anecdotes of my friends becoming millionaires before 30

Isn’t anyone who does IB PE path a multi millionaire from PE carry by the VP level (late 20s)? Even if you take a hair cut to marks that is 2-3 million

You will hit $1MM net worth around 30 years old if you are not retarded. Most people on the IB/PE track don't hit $1MM liquid until early/mid 30s.

I’m at c.$1.5M liquid at 30 in PE. I don’t have any major outlier stock market returns or anything. It’s definitely very possible

I just hit millionaire level at 32 as a LMM PE VP. Had some low paying associate years and blew through a lot of money in my 20s on hedonism. My goal is to get to $5m and then get out of the game. That is enough to own a house, have a passive income, and start a small business. With those things in place, I'll be as close to "free" as one can be. 

Yes joining a startup has potentially the highest returns but in terms of expected value they don’t compete with finance/law

I have $1M net worth at 28 in PE. Definitely not an outlier.

This a great thread to demonstrate how much being in the right place at the right time impacts personal wealth. It's not pure luck, but it's more luck than skill. All you can do is keep putting yourself in positions to win -- minimize the left tail while preserving the right tail.  

Some examples of friends who were not as lucky (or lucked out in everything but the liquidity event):

1. I have a friend who is working for the 4th or 5th tech start up in his career.  The other ones didn’t make it.  He’s tired.  Has to report to a 20-something CEO.  His parents are wealthy, so he had a financial cushion that impacted his career choices.
2. I have another friend who was in the C-suite of a tech start up that IPO’d. He could have sold but stayed true to the company and went down with it as the stock cratered.  Having paper gains and then losing a lot of it has impact him mentally, including a factor leading to divorce.
3. I have another friend, who created a great niche tech business and sold. But I think the exit vs their equity raise, the multiple was 3 or 4x, which I’m not sure how much the founders and team will get after the VC and angels take.  Could be the case of being successful, but not successful enough, which is kind of cruel if you think about it.

As mentioned in the PE is F’d topic, owning part of the platform is the way to bigger wealth generation.  In RE, workers get enamored by carry on individual projects, but the platform is never given out to staff. What is the platform? It’s a track record, balance sheet, and team. 

Which is why the OP’s examples of right place, right time is a good lesson, because tech company shares are like owning the platform.  None of his friends by 30 years old were executives when they experienced their liquidity event.  They just more or less did their jobs and got rich.  That’s awesome.

Since 2012, I’ve been a key contributor to five businesses that went 0 to 1, or 1 to 5, or 100 to 200 during my time there.  Three of them I owned part of the platform, and two, I did not (although I did get carry, which was contingent on employment - what a mirage). 

A lot of it is luck, but also positioning.  For example with me, we ran health care businesses and I was either a co-founder with a unique skillset or the only finance person. 

There are more companies than just “tech” out there. I call it “skillset leverage.”  There’s downsides to working for a non-tech startup what offers you a piece of the platform, in that they are usually closely held companies and subject to partnership risk.  That’s a bit different (but maybe there are similarities) to stock or stock options in a Delaware C-Corp (see The Social Network movie as an exception, although if the CFO didn’t sign the contract that diluted him only, then he would have been better off).  

What I’m staying is there are ways to straddle the line, but luck is needed and new risks pop up.  I’d say, good timing was the biggest factor with luck.  From a founder perspective, building the business and then exiting we’re both hard. 

Again, great if someone just doing their job becomes a multimillionaire.  There was a lot of that in Silicon Valley the past 20 years.  Being in Florence during the Renaissance, is a good way to put it.  Except I went into real estate, which turned out alright.  

Where and what is the next Renaissance? Do that. 

Nice anecdotes but your friends all just got really lucky on equity upside, which is obviously "high risk" relative to going the IB/PE/BL route. The only jobs you're going to have a meaningful shot at becoming worth multi-millions in yours 20s/early 30s on just normal base + bonus comp are from being a quant at a reasonably scaled shop or performing well as a HF analyst/discretionary trader (which will obv come with more risk than the aforementioned paths). Nowhere in PE/IB/VC/BL/Corp Fin is going to get you there, and they're not supposed to. Their value proposition is that for the "lifers" in each area you will be making a consistent $1m+/yr once you're 10-15+ years in - it's not about speed to wealth but a well-trodden path to it. 

You're right to include that last entrepreneurship anecdote - you're MUCH more likely to become worth millions in your 30s if you started a company in your 20s and scale it for 5-10yrs with some success - but that's going to come with a HELL of a lot more stress and challenges, and just overall takes a very different personality type vs those that typically pursue traditional white collar careers. 

The easiest path to riches over the last 10 years was simply to get a fake email job at Amazon et al as an "account executive" selling cloud or whatever else they do at these places

On the flip side, (from an Ivy) nearly all of my friends who stayed in IB post undergrad surpassed $1mn NW by 30. Maybe due to bull market but my two cents.

Gonna touch some grass for some of the people viewing this thread.

Yes, it’s possible to hit a mil in liquid savings by 30 and no it’s not a common thing. Don’t get it twisted. I’m in my early 30s in nyc and most of my friends have no where near this in savings. I also know several people who have ridiculous incomes and spend ALL of it. Lifestyle inflation here is very real.

Agree -- people generally make less money than you think, and have less money than you think. There are outliers, but this has been my experience time after time.

"all of my millionaire friends did it through entrepreneurship or tech"

Kinda conservative salary assumptions (under MF/EB standards) for someone in high finance:

Year 1: $160k
Year 2: $190k
Year 3: $300k
Year 4: $375k
Year 5: $450k
Year 6: $550k
Year 7: $650k
Year 8: $750k
Year 9: $800K

Apply 35% tax rate to be conservative and assume a fixed cost of living of $50K for single man in NYC. Maybe underwrite it going up a little bit. 

Year 1: $71.5k
Year 2: $91.0k
Year 3: $162.5k
Year 4: $211.3k
Year 5: $260.0k
Year 6: $325.0k
Year 7: $390.0k
Year 8: $455.0k
Year 9: $487.5k

Assume you get a 7.5% return compounded you get to 3M+ with conservative capital appreciation. This also sets you up for a strong flywheel (double digit millions once salaries grow and capital compounds). 

You have to be pretty shit with money or have huge familial responsibilities to not hit at least 1M. Finally the main differentiator between finance and tech is the late game. It’s completely stupid to compare tech and finance liquid in your 20s. Finance professionals don’t provide value until their connections are at play later in the career. SWE comp and finance comp are in line for the first 5 or so years. Once people become client facing, the gap widens. 

But sure, continue to cope man. Tell yourself the only way to have 1M+ liquid is by gambling your future in series A. If your competent with your money, you can nearly match your friends outcomes by early 30 without the risk (i.e. you could of underwritten much higher than 7.5% return if you dump your paycheck into QQQ which is less risky than deferring cash comp for a single early stage tech company (insane amounts of idio risk on top of the high beta). 

As someone in their mid-30s who is worth $4m, I would suggest that you combine both paths. Start in professional services, get to a reasonable net worth number (think "Coast FIRE") and then take off and try something with a potential higher upside. 

The expected value will be lower at a start-up (yes, I know there are outliers), and with 5 years or so in IB/law/consulting, you will protect your downside risk (both because you will have a financial cushion and you will have enough experience to improve your chances of landing a W-2 job).

Read The Psychology of Money. As your net worth grows, the incremental value of a dollar diminishes, but getting to a baseline of financial security is crucial.  We are lucky to be able to earn a good salary early in our careers. If you save and invest aggressively, you'll be in a great spot in your late 20s or early 30s. From there, you can do whatever you want (startup, corporate, back to school, travel vlog).

Why is the focus on making $1M by 30? So what are you going to do once you have the $1M?

The way this really works is as follows:

First 5 Years

• Build resume that provides downside protection. You're confident that your skillset and professionalism will be employable for a minimum $200K job at any given time.
• Build reserve for 3 years living expenses (in a tight situation, but not needing any dramatic cost cuts to achieve).
• Have the rest working for you in the markets / real estate
• If somehow a liquidity event happens through employment during this period, great, but any event is still insufficient to create F U money conditions. So you have to go back to the labor market either way, which really renders the whole "1M by 30" idea moot

5-10 Years

• You continue to extract liquidity from your employer. Money starts to stack a bit more and you now have more savings that you have immediate use cases for (e.g., downpayment on a first home)
• You have a budding network of real decision makers or people who could back you in an entrepreneurial endeavor.
• You are now a master of your chosen domain. Whether engineering, banking/PE, markets, etc. Your skill set is highly desired by a wide swath of potential partners / employers.
• You are keeping a keen eye out for a real "at-bat" opp. Could be founding a startup, leadership at growth stage, spinning out to do your own deals / set up a boutique shop, etc.
• But you shouldn't swing unless the potential payoff is 10x over the next 5 years vs. staying put in whatever your path. Stay calm and observe the opportunity set.

10 Years +

• This is where it starts to get stupid to stick around at a big IB/PE shop hoping to grind out the next 10 years, if there is no signal from your employer that you're on a special fast track.
• You stagnate in skill value. Nothing new added to skill set since 5 years ago. Just rinsing and repeating.
• But you stay for the $50-100K bumps (net of marginal taxes $25-50K in NYC). Or you tell yourself lies about "option value" in your carry or whatever
• But your mindset is now calcified as a safe haven seeking employee. You got big family plans and your wife has a lifestyle expectation. Your self-image has become fixated on being this "respectable" clean guy who is on the "track". It becomes extremely difficult to shed this identity and take the early years pain of trying something risky.
• If you're not actively making plans for how you're going to uncap your upside and take your own risks, that's on you at this point. It's definitely not because of money, because at this stage any incremental spending or lifestyle creep is an indefensible choice. You're going to be someone's well-paid slave for the rest of your career if you don't take a swing here.

Along the way, life happens. Family, illness, exits, lucky breaks, whatever. But this full lifecycle of earnings opportunity is what you should be optimizing for. The 10 Year + point is where you have to be really vigilant if the goal is incremental freedom, not safety. But the idea of optimizing for best shot at $1M under 30 is just so dumb. Seen people lose $1M in less than a year, when not appropriately planned for. You're so far from freedom at that point.