Laid off from PE, got Lucky with a great role. How can I maximize my income?
Hi guys. I did IB 2 years then Lower MM PE for 1 year, I was laid off. I spam applied and got a random gig in "Growth" at a startup. My all in comp for my first year was $255k and hours are around 40.
All seems very well but the issue is I have no idea how this will scale at all. I do not have any equity, all cash comp. (I am too junior, 25 years old). Now that I am no longer in the running of "higher finance" (I know that term is cringe) my future earnings and ceiling just fell off a cliff most would agree right? Any tips or advice to maximize these earnings? I feel like my all in comp is pretty decent.
Save & invest if you want net worth. You’ll eventually get to a point where you’ll get equity and fwiw you could make more than your IB/PE counter parts. I’ve seen it with my portcos or look at people at those AI companies that scale well. You stack options and RSUs and wake up one day with millions of stock
Thanks, appreciate the response. What would you recommend parking your money in? I have so much thrown into agressive growth tech stocks, which has fared me pretty well so far.
Whatever you want but I do S&P 500 and forget about it. Your options, carry, career path, etc are all tied to economy ripping so why park your savings in it?
Did you find it on LinkedIn? Would love finding a job like this
Yes, Linkedin easy apply surprisingly.
how hard were interviews? were you at a top tier IB?
Hey - mind if I can PM? I just got laid off from PE as well (Sr. Assoc level) and would really like some tips/advice. Looking into Growth or biz dev roles as well. Much appreciated!
Hot take man but you’re asking the wrong questions, your income is more than you need if you’re honest witu yourself. If this is a sustainable job where you don’t work that much, have a degree of job security, and like the people you work with, you have basically hit the jack pot.
I’ve been thinking about this a lot. I’d look at some retirement calculators… IF you’re looking for the type of life where you can eat out a ton, still live in a nice place in Manhattan etc, you can pretty comfortably get by spending 60-72k a year and $72k annum Id find a little “high” . If you save the rest and buy some SPY that compounds at ~10% p.a, you’re looking at retiring with a comfortable lifestyle in what— 10 years or less ?
Life is of course all about trade offs. If you think you cannot be happy unless you’re doing better than every analyst from your class or your ivy classmates than sure, this will be pretty dull to you. But at that point, I’d ask you if you’re doing it for the right reasons eg if you have some deeper insecurities to work on.
Obviously life gets more complicated if you get married and have kids but arguably some of these costs have economies of scale so if you’re aligned with your partner, you actually can probably get buy with less spending.
FWIW I’m also reading this book called “A simple path to wealth” that talks about some of this shit and worth a read … little bit too simplistic for anyone that goes on WSO as it spends a lot of time talking about why index funds are good which feels like micky mouse finance but the fundamental idea where if you can get yourself satisfied with a high savings rate, you buy yourself freedom both to be less tied to your job and to take risks (because you don’t need all the money you make), AND your nest egg keeps growing faster, which when divided by the smaller expense number, gets you in a pretty decent spot relatively quickly
I totally agree for someone making the comp he cited but what about for someone in corporate (with IB experience) making barely over half of what he is like myself? The days of a 150k salary being decent in a HCOL are over. At what point do you pursue something “harder” or less “sustainable” for better pay?
Extremely personal question… depends a lot on what you value in life, where you are in life ( eg kids etc), etc.
From my vantage point, 150k is probably a bit of an inflection point where you can spend pretty liberally BUT not save much. To be clear, you obviously can save in New York on $150k cutting back on things that aren’t essential (eg im not saying anyone who isn’t living in a $5k a month one bed is slumming it), but for the purposes here I imagine that you’d need to cut back on things you wouldn’t want to.
But it’s a good question. Peaking at this level at 24 or so is not fun in my experience unless you have a good and settled life outside work (eg a partner, hobbies, lots of friends etc). If it were me, I’d probably make the trade off at 24… if it becomes a question of what a 30 year old should do it’s interesting. I actually think that at that point you probably want to move to the burbs, and there’s too many variables to say … eg what is the taxes like in the new burbs, kids, if you have a partner what their income is , etc.
But ya, not to beat around the bush, I’d probably try and push to get closer to the 200k range if you can but also not beat yourself up if it’s not there right away.
How do you breakout the $72k as being a good amount to be "comfortable" in Manhattan? Mostly asking because I've seen ridiculous discourse saying you need to make $300k, $500k, $1m+ to be "comfortable" in NYC so curious about your definition.
He's not saying 72k in income but rather that amount in post-tax annual SPEND
Ya as the other guy said, I’m saying this in terms of net income spent. Keep in mind that I grew up in a fairly middle class area where IB/ PE was unheard of so I’ll have biases here.
Rent: I don’t really care about my income here, I think it’s kind of dumb to be giving the real estate firms more than 3.5k or so a month. With this amount you can get a fairly solid studio in Manhattan, which I have found as a single dude to completely suit my needs. Note that I havent looked into the world of buying property which I probably should in a year or two and so mortgage economics might change that.
Credit cards for all other shit— I don’t really cook and eat out basically every day and definitely waste on other shit. My credit card bills average out to be $2k a month.
Round up another 500 to get monthly expenses to ~6k. Maybe you don’t agree with my line items here but, my point is IMO that if you’re doing this right, your lifestyle shouldn’t inflate as much as your income. And 200k+ gross gives you plenty of room to save without being “frugal”. I waste money all the time and dont budget or anything and think that 72k is plenty but as I wrote on another comment here , money is relative. I’m likely gonna get hit here for being too conservative. Go talk to the people I grew up with and these numbers are too extravagant.
this is what I learnt the most from that book I mentioned tho btw… the higher your numbers are here, the more you are trapped on the hamster wheel and the lower your numbers are the more freedom you afford yourself. I’m not some savings wizard but I personally cannot be convinced that that 5k apartment is worth it lol
Also man , really cannot emphasize enough how great your exit is from a comp pov. This is probably a 90% percentile plus exit from a comp POV from LMM PE.
The one thing missed above is that you probably have greater risk of this startup going tits up so would just make sure what youre doing is “marketable “ but then again, in a few years when you have a few years of startup experience, PE experience, and IB experience, your market worth is probably going to have a 200s floor (unless the economy really fucks up which is not impossible )
Rather than continuing to benchmark your success on $$$, I would recommend you instead think of your life as a portfolio and aim for excellence across all aspects of it. Workout 6 days a week and get in incredible shape. Spend time on hobbies and travel and become an interesting person. Do some personal development and therapy and deal with your emotional baggage so you’re mentally healthier. If you’re single, focus on finding a great partner you’d want to spend your life with.
Decatheletes are considered some of the greatest athletes because of their mastery over multiple domains, even if they’re not the best in the world at any single one of them. Aim for excellence across all aspects of your life and you’ll be a far more impressive person than some fat boring loser with no relationships, interesting experiences, or unique thoughts and a pile of cash that they don’t even know how to do anything fun with.
Hobbies and travel cost money
You can't have hobbies and travel on $255k?
Is your new corporate role in a tech-focused startup or more on the consumer, product, services side? Did you apply any filters when looking for this / was the comp advertised as that or did you negotiate?
I’m also looking for a similar role coming from MM PE so would love any pointers in finding similar opportunities. Ty!
Is it typical to get laid off in a structured 2Y program in PE? I thought the role was relatively insulated at the MM level but would love if someone could enlighten me the potential reasons.
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