How do you know when to walk away and that private equity is not for you?
How do you know when to walk away and that high finance is not for you? When is the right time to step away from the golden handcuffs?
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Knowing when to walk away from private equity or high finance often comes down to self-reflection and recognizing key signs that the path may no longer align with your goals or happiness. Based on the most helpful WSO content, here are some insights:
Lack of Genuine Interest: If you find that you were never truly interested in investing or finance and only pursued it for the money or prestige, it might be time to reconsider. Many professionals realize this after encountering setbacks or burnout.
Burnout and Unhappiness: If the stress, long hours, and lifestyle are taking a toll on your mental and physical health, and you dread going back to work, it’s a clear sign to evaluate your priorities. Some suggest exploring roles with better work-life balance, such as family offices, corporate development, or smaller funds.
Reflection on Life Goals: Ask yourself tough questions like, "What do I want out of life?" and "Am I wired for this environment, or do I prefer a different structure?" If your answers point away from finance, it might be time to step away.
Golden Handcuffs Trap: The longer you stay, the harder it becomes to leave due to financial commitments (mortgage, loans, etc.) and the widening pay gap between finance and other industries. If you feel trapped by these "golden handcuffs," it’s worth considering whether the trade-offs are worth it.
Exploration and Happiness: Staying in a role you dislike is like eating the same food out of fear of trying something new. Many who leave PE or high finance find that the skills they’ve gained allow them to return if needed, so the risk of stepping away isn’t as high as it seems.
Timing: The right time to leave is when you’ve reflected on your goals, explored alternatives, and feel confident that your happiness and fulfillment lie elsewhere. Some professionals suggest having a financial cushion or a clear plan before making the leap.
Ultimately, walking away is about prioritizing your well-being and long-term happiness over short-term gains or societal expectations.
Sources: Why The Grass Isn't Greener: The Private Equity Associate Crisis (PEAC), Lateraling PE to PE, Private Equity or Pizza Equity?, Leaving PE - to the older folks on WSO, Q&A: Leaving PE After 2.5 Years for Corporate Finance
I'll take the flip side - private equity is right for you if (i) you're good at it and (ii) you enjoy it.
If either of these things isn't true (with the former based on feedback, learning curve, promotion path, ranking within your class, general vibe and the latter based on you genuinely finding the job interesting and accepting of the hours and stress), then probably not the right long-term fit.
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