How much of a pay cut would you take for work life balance?
For argument sake - hypothetically you’re on 375k or whatever at APO as Asc1 doing 100 hour weeks. Would you take a 100k pay cut for 50-60 hour weeks at a Tier 2 hedge fund? Obviously assume end goal was always HF. Is it too early in ones career to be thinking about WLB?
I don't think there is a standard answer as it depends on your personal circumstances. In general your wellbeing is worth much more than 100k but you need to consider cost of living and your post paycut salary, if the latter is top of market then it's easier to take a paycut without sacrificing your life standards.
With the figures mentioned above, I would take the paycut as going from 100hrs to 60hrs per week will significantly improve your life and personal relationships.
I would 100% take the $100k pay cut you are mentioning here vs. working 100 hour weeks for $375k. And to answer your second question, I don't think it's ever too early to be thinking about WLB. Pay & career progression is just one aspect of your life. Your health, relationships, hobbies, etc. shouldn't be neglected. Especially when we are talking $275k vs. $375k which, when you take a step back, are both ridiculous amounts of money to be making in your early-to-mid 20s.
It needs to be proportional. If I have a guarantee that my hours will be halved, then I can take half the money. If I'm expected to work double, then double my salary. Truth is, you need to watch out for lifestyle inflation. If you used to live a certain way as a banker on $150K and then move to APO on $300K and start doubling your cost of living, then going back will be tough. But if you maintain the same lifestyle, a T2 hedge fund offering $200K for a 50 hour week is very doable. If you're stuck paying off a ludicrously high mortgage and other expense from your $300K APO salary, you won't take a pay-cut even if it improves your WLB.
In a heartbeart. Beyond the big stuff that's already been highlighted (relationships, health, etc.), the increased flexibility and predictability make a huge difference in day/to/day life.
When you benchmark from banking, most other jobs (esp. non-investing) are going to have a material pay cut, but you'll probably still have plenty. Unless you're trying to maintain a lifestyle that requires that incremental $100K, you probably won't feel like you're sacrificing anything.
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