Anyone feel their net worth rising too "slowly"?
Been on the buyside for ~10 years at this point at the SVP / Principal level in my mid 30s. Life is cushy, managed to accumulate ~$4M ish of net worth (mostly liquid, includes home equity for an apartment in Manhattan), but with Manhattan living costs (including mortgage and a young kid), I only see my net worth going up between $300-400K a year, including savings and increase in value of PA (which is probably conservatively positioned, with cash / gold sitting on the sidelines to hopefully buy into upcoming drawdowns).
Have not had any material carry realizations and the prospects of it don't look great or at least imminent. At this rate, the most likely scenario is retiring with very low 8 figures in 20 years - which is great but nothing life changing. I don't see this trajectory materially changing absent some major career upside (e.g. promotion to partner at a strong performing fund etc). Meanwhile, I see people in tech / VC with life changing outcomes (quite common even in big tech) at this age.
Anyone else feel this way? This post isn't intended to be any kind of flex - I suspect most of my peers and social circle are in a similar place.
I'm a bit younger than you (early 30s) but think most of my cohort in PE feel similarly jaded. We were sold a dream of early retirement and life-changing money based on performance of 2010-2015 vintages that will probably never be replicated. None of my friends have seen a dollar of carry distributions, and we all more or less look at PE as a high-paying corporate job at this point.
If you look at it through the "corporate job" lens, you're doing quite well and are in a position to keep accruing wealth in a low-risk environment. You should comfortably hit $10M+ NW a bit sooner (within the next 10 years) than you're estimating.
If that sounds disheartening, then maybe it's time to look in the mirror and assess whether your goals are to be comfortable but not wealthy, or to really shoot for the moon. The dream of a low-risk, high-upside career is probably a mirage, but the entrepreneurship door is always open.
Felt the same way in PE so jumped ship to HF to see if I could accelerate timing of more meaningful cash comp earlier in my life. TBD if market conditions will be supportive, but at least I have a chance to get to 8 figures in mid-30s vs. grinding it out for another decade to see if I have a chance at larger carry payouts which is anyone’s guess.
How is HF land been so far...thinking of pursuing smthg similar (ignore title)
Still in my seat so all things considered it’s good. Comp is tied to P&L so need a combination of skills, luck, and the right environment to get an outcome that would exceed trajectory of where net worth was going in my prior MF PE seat.
How fast do you think it should be going up? The name of the game in PE is carried interest, and that takes forever to materialize (if ever). It sounds like you’re being way, way too conservative with your investments, and purchasing is a terrible financial decision relative to renting (doesn’t mean it is wrong to do it, but it is financially suboptimal), so what do you expect? If you want your net worth to increase, spend less, and allocate more to equities. Your investment horizon should be infinite (you’ll never spend down all your money), so you should basically be 100% in equities for anything except short term needs (which would typically be a down payment, but that’s already done). Trying to “wait for a drawdown” basically never works, and it’s screwing you over.
This - shouldn't NW be going up like 300K/year just based on returns on $4MM of public equities/housing? So he's saving close to nothing each year
Exactly. Let's just assume year end 2022 that number was $2.95m (3 years ago, so $4m - $350k*3), and assume that $500k of it was into a down payment (20% on $2.5m property), so $2.45m liquid, and assume $100k of that is sitting in savings for emergency fund. If OP literally dropped $2.35m into the S&P 3 years ago, you'd have $4.4m just on that, plus the $100k emergency fund, and assuming NO growth in the value of the down payment or house equity, you're at $5m. With NO additional savings.
It boggles my mind that people in finance are so terrible about their personal finances. This "waiting for a drawdown" concept is a terrible idea. Per above, the S&P is up 86% in the last 3 years. So now you have to wait for a 50% drawdown to get in at the same level that you felt wasn't attractive enough 3 years ago? And what if there is no drawdown - even if you think the market is overvalued (based on what metric? Vibes?), that can correct by staying flat while earnings expand into the existing value. How long does it have to stay flat for you to feel comfortable calling it drawdown for practical purposes?
I also think that this concept that you should be entitled to $10m net worth by the time you're in your late 30s (which is the only implication that can be drawn from this post) because you're a midlevel cog in PE is laughable. There are literally thousands of people that can do the same job, with the same level of impact. Newsflash - unless you're bilaterally sourcing MANY off market deals at below market multiples, you are essentially at replacement value. If you think asset management is adding value to these companies, you're delusional - the only valuable thing 99% of PE firms do in asset management is find a new management team if things really go sideways. The rest is pretty much value destructive nagging to create the illusion of usefulness. And if you think the answer is that you're a "sharper investor" than everyone else - well, the pace of your personal asset growth begs to differ.
Sorry for the rant, but the level of entitlement and lack of perspective from people in this industry writ large really gets to me sometimes.
My investment horizon is basically infinite bcoz im young and zero financial pressure thankfully. (45 years realistically)
Would you go full 100% on equities or put 10-15% in Gold? (I'm a gold bug at heart, it gets me going)
I know warren buffett hates gold and he probably invests with one of the biggest horizons in finance.
Gold is up ~67% in the last year, what would the purpose be of allocating 10-15% of your portfolio to it right now? It's mainly used for hedging inflation / currency risk, but if you want to do that (at least for USD), you can buy non-US equities
If you like gold for some reason, invest in gold. It doesn't really have any fundamentals to go off of, but I generally think that you're fine using 5% - 10% of your investment portfolio for "fun". For me, that includes single name equities and some special situation plays (as well as some, in hindsight, incredibly stupid market put option purchases at the bottom in 2020)... If gold is fun for you, then go for it. There are plenty of people who consider it an important component of a portfolio (for reasons that never have and never will make sense to me).
I'm basically even over the past 5 years on the "fun" slug of my portfolio, which means around 85% opportunity cost given broader market performance, which you will note is atrocious. That's why I keep it limited. My only saving grace is that almost the entirety of my losses were from two positions - one was a consumer focused name (which helped me realize I have zero ability to predict the vicissitudes of consumer tastes) and the other was a super low conviction YOLO option on the continuation of the crypo treasury company gravy train when Trump got elected. When I've actually stuck to my knitting and focused on things that I'm equipped to evaluate, it has compared much more favorably.
I feel sorry for u that u feel $4m liquid net worth at 35 is unsatisfying. You’ll never be truly happy if all youre concerned about is having more money in the bank.
Agreed - we live in a bubble where it will never be enough.
It's not as simple as just wanting "more money in the bank" - this is crucial to long term security in your 50s and beyond, where passive income from liquid assets funds major expenses (e.g. kids college, elderly parents etc). Getting to ~$10M liquid is pretty much the bare minimum if your monthly expenses for basic needs in the NY area are ~$20-30k, so it's not because I'm chasing some artificial number for no reason.
Move to the burbs and quit chasing the NYC socialite life. U have a kid, what are u still doing in the city. U aren’t chasing tail and getting shit faced no more lol or at least I hope u aren’t
This is absolutely insane talk. If you’re mid 30s and have 4mm liquid, stop being a loser about it because that is a blessing. Low interest rates are over and none of us are getting carry like our predecessors. Ask yourself, are you in the nyc rat race? 4mm pv 20 years assuming 6pts year and 300k investment is 23mm fv. Is that enough? Can you keep your “low” pace of investing 300k? Can you make a meager 6pt on your investments a year?
I’m really not trying to be mean, but this post is so fucking stupid. If you want to be worth 100mm start a hedge fund. Days of being a carry princess are over.
in what universe is $30k required for "basic needs"?
I’m in your camp. You can’t just quit your job/be fired/get a health issue with $4. You need $10 to have normal Manhattan lifestyle and probably $20 to feel no financial strain in job loss scenario
$30K vacations per year for family
Could not agree more with this. $4ml net worth at 35 is incredibly successful, pure compounding alone will get you to >$10ml when you are 60 even if you assume you save absolutely nothing else going forward
OP you will remain a sad sack if you keep up this mentality. You are on a path to get to the top 2% of wealthiest households if you basically just sit still. If that's not enough, nothing will make you happy
Yes, and it’s why I moved to Texas from NY years ago
This is the best comment on this thread. If you left nyc, your $4M could mean you never have to work ever again - and that is truly life changing. Trying to “make it” and comfortably retire to an upper class life in NYC is impossible unless you’re a founder of some sort (business or a fund).
The name of the game is to earn in NYC and leave immediately once you’re done so you can actually enjoy the fruits of your work.
100% sure you don’t have a family
As someone who left IB/PE after 4 years for corporate making peanuts and seeing all your numbers, it makes me fucking depressed tbh. You all are insane
Going home at 5pm vs 11pm is a big difference though. most people's material living standards have very little variation. Unless you start a business and make it big all outcomes are pretty efficiently distributed.
Yep. I had a thread popping up on my Reddit home page today from an FP&A subreddit titled "Compensation comparison". People were posting their comp, YOE, and COL location. Pretty much everybody was $100-150k even with 6-8 YOE in a HCOL location. People with 10+ YOE had like $180-200k. And I know for a fact that plenty of them are working decently long hours and have solid skills including some knowledge of programming languages and various software. These guys literally have $200k NW in their mid 30s, and people in this thread are talking about $4M like it's normal.
I left PE / IB after 4 years and made it well beyond $1M by 30. Corporate money is very good once you get promoted a few times. If you saved during IB / PE, invest, and continue to save while you’re in corporate, you’ll be more than fine.
Were you at a F500? I’m regretting making the move a bit. Most people who are Director and up are old frankly.
Your net worth in PE won't really start spiking until you have been a principal/director (the level after VP and before partner, some firms have different titles) for a few years AND are at a firm with performing funds that pay real carry $s. At that point, your annual cash compensation should reach 7 figures and you should also hopefully be getting meaningful carry dollars from the grants that you received when you were a VP. That then gives you sizeable $s to invest in the market (above what your living expenses are) which should generate even more returns over time.
If you can then make partner at that firm, your cash compensation should get into the low-to-mid 7 figures, and your carry checks will get even larger. That is when things really snowball in terms of NW.
It looks like you are at the stage right before all this happens (really starts after 11-12 years in PE depending on promotion timeline), so I would keep pushing hard assuming you still believe in your firm - the big inflection could be in sight...
Taking a step back, the most attractive NW outcomes that I have seen for PE individuals currently in their mid-to-late 30s are not the ones that went to megafunds or the largest firms when they were starting their careers.
It was the individuals who took a little more risk and went to the up-and-coming MMs (for example, Thoma was a $3-$4BN fund just over a decade ago) that continued to have good performance and are now large cap funds. Not only did those firms pay out real carry $s, but the growth in AUM created faster promotion timelines and more opportunities for junior investment professionals.
Coming into PE now, if you are looking for a $20M+ type of outcome by the time you are in your mid-to-late 30s, you will likely not reach that goal joining an established, large cap firm (or even a MM that has been stagnant) as carry is harder to realize at that scale and promotion timelines become longer if fund size is not growing. You need to find the next CD&R, Thoma Bravo, etc.
That requires "luck" (as do many things in life) or some level of foresight / ability to accept the risk of joining a less established firm.
What is the next Thoma Bravo? Integrum?
That is the billion dollar question. From my perspective, it is likely a mid-sized firm that has a working strategy which is different than what others in private equity have been successful doing over the past 10-15 years. Or a more focused strategy that may not have been very popular in the past, but one that you think is very aligned with the industries that will thrive going forward.
It could also be someone at a smaller scale (i.e., $3-$4BN fund size) who is actually just doing what everyone else is (i.e., investing in tech / software over the past decade), but finds a way to outperform the market across multiple funds and sees significant AUM growth.
Identifying either of these is pretty tough (the latter is really just a shot in the dark) as a junior investment professional and I personally think it is mostly luck.
There is a chance you can "see something" and build conviction on a firm after spending more time within the industry, but then you need to find the courage / hustle to actually try and lateral to that place.
Integrum holdings maybe? Founded by ex KKR guy
yeah naming random firms on here is gonna find u the next big thing
What about deloitte?
Or go even smaller/earlier. Fund 2/fund 3 but with very differentiated niche strategy and proprietary deal flow proven in that first fund.
They exist, and while hard to find - at least it’s easy to filter out everything else. Any firm that is reliant on sellside sourcing and auctions basically will see much of the alpha competed away. You’re not going to generate consistent dealflow at below market multiples in that way.
Go to a place where you can move the needle, where the platform elevates yourself personally when you create value. If you need ideas, look into all those who made partner early or founded their own firm and how they did it.
Say what you want about Vista’s returns structure ethics now but the origin story is interesting and informative.
This. Too many take a cookie cutter path with zero risk plus lock step advancement and yet still expect to have disproportionate upside. Don’t have to straight into entrepreneurship on the other extreme end of the risk spectrum, but it should be obvious that the typical MF isn’t going to deliver outsized outcomes
This assumes that someone would receive an outsized share of the economics by taking the risk of going to an earlier stage/less established fund. How often does that happen at VP and below? And then once a junior has come up the ranks and the firm is more established, does the firm continue to offer outsized carry allocations (assuming they ever did for anyone below MD/Partner) or take a market approach? It seems all seats are becoming more commoditized. It doesn't matter whether you join an earlier stage/less established fund and try to take more risk to secure additional upside. There's someone else that's likely just as good if not better that's willing to take the spot without the outsized carry to offset the additional risk. The only benefit seems to be that there would be more room at the top over time assuming the firm continues to grow.
As someone who worked in PE before, this is such a typical whiny PE post. You're comparing your financial position (which by really any metric is very good, you're just succumbing to comparison) from working in PE (a low risk career choice, even if it is a lot of work / hours) to the upside outcome from working in higher-risk roles (e.g., VC / startup tech). For every person who joined the early stage startup that had a $10bn+ exit, there are 10's if not 100's more that floated around a few failed startups earning low cash comp that ended up with near worthless equity comp. You're in a significantly better financial position than they are. If you want a shot at higher upside you're going to have to take more risk joining a new fund or doing something entrepreneurial, but you're not going to get the benefit of continuing to clip safe mid / high six-digit cash comp along the way if you do that
therapy might help
Lowkey one of the most helpful comments on the thread
Respectfully, I want whatever this guy's on
PE is largely a mature business if you want a chance at material wealth creation in a “short” period then you need to be taking actual risk - whether it’s a venture of sorts or an up -and-coming fund with real economics.
Too many people in this industry refuse to accept that they’re highly compensated pencil pushers.
I only see my net worth going up between $300-400K a year, including savings and increase in value of PA
Dude you need to get a grip. Most Americans right now are struggling to make rent payments, afford extortionate insurance premiums, or pay for childcare, while you're in the small minority that is reaping the rewards of an objectively broken system.
Posts like this remind me of why I left PE - predominantly self-interested people who are only concerned with the size of their bonus, and don't give two shits about their neighbor or the impact they're having on their portcos / the world / etc.
Recommendation for you next time you feel inclined to whine to strangers about your "anemic" portfolio growth rate: 1) join a community impact group that benefits someone outside of your Horace Mann bubble; 2) take a trip to Queens, the Bronx, or frankly any neighborhood outside of your Upper East Side safety blanket and speak to a human (bonus points if you don't Uber); 3) touch grass.
100% agreed
Obvious troll / rage bait post. Well done, OP.
The issue is I think he is being 100% serious
Thought the same tbf
thought the same, but then started reading comments and realized that these people are for real
The problem with ragebaiting WSO is that there are too many earnest folk in the comments...so you'll usually end up adding value
Just fyi -- a 4 million net worth in your mid 30s puts you at either 98th or 99th percentile wealth in the US for your age (35-39). Some perspective here would probably be helpful.... https://dqydj.com/net-worth-by-age-calculator/
Top tier troll post. Respecc. However plan failed as the thread still added value.
Only on WSO will we have people saying their net worth isn’t rising enough for saving $300-$400K a year…
Thats why we the GOAT
Heard putting it all on black solves this problem
Retiring with mid eight figures liquid seems pretty life changing. I think we all need to get a grip.
Not to pile on or be a hater. But truly insane how $4M NW in mid 30s has become "too slow".
Also combined with the Net Worth mega-thread
I'm a PE monkey too so pot kettle black. But man we gotta have some more perspective on these 99th percentile outcomes, compared to real world americans
I was going to come here and rant about how the buyside sucks compared to a decade ago and how banking makes you more money, but you're honestly moving exactly at the pace that you should be. Dude, you're living in NYC where uncle sam automatically takes half your pot, and you have a kid. Increasing your NW by 300k/400k per year while having a kid and living in NYC is exactly what should be happening even if you are a principal in PE. The reality is, us folk in IB/PE are not the rockstars that end up with the crazy payout. Those are the owners of the businesses that we sell. You are moving at a fantastic pace for your age and life situation, stop being so neurotic.
To OP: Is the $4M net worth, $300-$400k savings household or individual?
Bozos be working on the buyside for 10 years and don’t understand the risk return tradeoff
If you currently have a $4M net worth and think you will only be able to make ~10M by 55, you are financially illiterate or spend your money like a heathen. Learn financial discipline and personal finance.
Greg: I'm good, anyway, cuz, uh, my, so, I was just talkin' to my mom, and she said, apparently, he'll leave me five million anyway, so I'm golden, baby.
Connor: You can't do anything with five, Greg. Five's a nightmare.
Greg: Is it?
Connor: Oh, yeah. Can't retire. Not worth it to work. Oh, yes, five will drive you un poco loco, my fine feathered friend.
Tom: The poorest rich person in America. The world's tallest dwarf.
Connor: The weakest strong man at the circus.
Ah yes, one of lifes most renowned and challenging problems...inheriting $5M
This post reminds me that if PE fundraising and performance truly slow down, the psychological trauma and identity crisis to people like this will be insane.
Wait until you find out your "PE skillset" and being a work slave is worth ~$200k a year (at the top end) in most other professions.
I imagine people like this will go back to banking.
PE returns are already at the threshold where it doesn't make sense to have an allocation as the returns are pretty much in line with public equity and you get the illiquidity going along with it....only reason the party is still going is because institutions like that it's not marked to market so they can use it as a 'diversifier' in their allocation. Just wait until privates are included in individual 401k plans, the returns will be materially worse than public equity with all of the illiquidity. Good luck
You’re definitely not alone in feeling this way, and I think a lot of people at that stage quietly wrestle with the same tradeoff. On paper, you’ve built an incredibly strong and stable position, but when you zoom out and compare trajectories especially against tech or VC outcomes it can start to feel capped rather than exciting.
What stands out to me is that buyside paths tend to optimize for consistency and risk-adjusted outcomes, while tech and VC skew much more toward variance. The life-changing wins you’re seeing are real, but they’re also the visible right tail there’s a much larger group that doesn’t hit those outcomes or takes on a lot more downside to chase them.
That said, it’s reasonable to question whether the current path still matches what you want from the next 10–20 years, especially if the marginal upside feels limited without a very specific promotion or fund outcome. I’ve heard similar reflections from peers who are financially secure but debating whether optionality, autonomy, or asymmetric upside matters more to them now than incremental net worth growth.
Curious how you’re thinking about tradeoffs like stability vs. upside, or whether you’ve considered parallel paths (angel investing, operating roles, advisory work) to scratch that itch without fully blowing up what you’ve built.
Are you planning to leave your firm soon or do you expect to continue grinding it out? The big upside outcomes really only happen once you've made MD/Partner as someone above mentioned. The level of carry you get at that level is substantial and as long as the fund can generate an average return, your carry should be meaningful. Low 8 figures in 20 years seems too conversative unless you're assuming no carry realizations for your current funds, you're leaving soon, or your firm won't raise another fund.
All that said, in general I think most of mid-level PE has also seen very limited carry realizations to date and not great prospects for it going forward. There are also tons of UMM/MFs with vintages over the past ~5 years that likely won't hit their hurdle rates for carry. Too much capital came into the industry and we're likely going to see a wave of consolidation in the coming years.
If you don't think you'll get promoted and have the risk appetite for it, you may want to consider going the IS route. Since it's deal by deal it can be very lucrative if you can hit at least one home run.
Nothing wrong with trying to do better, not sure why people feel the need to shit on OP. $4mm is respectable but aspiring to more is to be applauded
Invest your PA better because low teens ought to be very doable for a finance professional
Consider whether your fund has long term alpha which seems to be the key determinant of the value of your seat. Then consider the path to real equity ownership in the upside - carry paying out seems uncommon in this forum, if your fund is doing well how much are you in driving that outcome? Or is it the seat that generates value?
To do better you either have to take more risk in your PA/career - or find more alpha. Ideally both. This requires you not to be simply a cog in the machine but to be an alpha generator. Only you can know how realistic that is and whether the lifestyle sacrifice is acceptable
Good to set goals for yourself to benchmark against even if they are a stretch. Then it’s easier to gauge whether you need to change to hit them.
Finally remember compounding requires being in the game as long as possible. Pete Peterson started at 59. Warren Buffett had an extra 30 years than most - 15% over 30 years is another 67x.
Good luck!
LOL. You think a typical PE guy can sustainably generate alpha in the public markets picking individual stocks? The bulk of public equity professionals (who do this as their life's work) can't even do that. I bet some private folks can, but that's probably ~10%
Why are you in finance? If you can’t at least aspire to generate some alpha find a different career, seriously
The Manhattan cost of living is definitely the anchor here. You’re doing well, but $400k a year barely feels like a dent when you're paying for a kid and a mortgage in the city. If you want a massive jump, you probably have to wait for those carry realizations or move.
OP is so out of touch it's hilarious.
Am I crazy or $4m NW is already a lot of money at mid-30s? In what world do people leave?
Someone should start calling OP slurs
damn im poor
The day is coming where I too will complain about my $4M NW on WSO. Please prepare accordingly.
(money I've made, not my great-granddaddy's robber baron fortune)
Same, 4M is nothing out of the cage. need 10M AT THE VERY LEAST!
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