Recession: good time to quit or keep slogging it through? $1.5mm NW.
Hey guys I wanted to come here for some anonymous brainstorming.
I'm in the growth equity team at a crossover fund. Due to the macro environment, write-offs and general shit performance, there are a few fundamental changes to my job I am seeing:
- Deal activity is grinding to a halt. Less money. We've been given directive to stop looking at new deals, and save money for existing portfolio companies. My team has said that we plan to decrease our investment pipeline activity by over 80%
- All portfolio-related work will be pretty boring stuff like helping companies manage cash burn (read: tell them to start lay offs at the board meeting)
- Bonuses/carry/coinvest income will absolutely suck. Based on rough math I expect a total comp reduction of up to 40%. My annual comp will probably go from mid 300s to like 200k or something. After inflation and taxes, the hours spent : wealth gained ratio looks pretty ugly.
TLDR: My job will not be fun or particularly rewarding over the next few years. I am also pretty burned out. Which brings me to my current situation.
I have around $900k equity in overseas rental property (100k mortgage left) plus $600k (most of which is liquid). I'm been very lucky with markets as I sold all my equities near the top in Oct 2021 and have since been sitting on a bunch of liquidity (cash + inflation bonds + short-term CDs).
Considering all the above, I have thought about using my tiny year end bonus to pay off the mortgage (for peace of mind), then quit to take a break for several months, and then work on starting something myself. On paper I am comfortable I have the passive income to feed myself for a bit, maybe supplementing with some side gigs.
Is this a crazy idea? Everyone around me is saying a recession is the worst time to walk away. But I can't help but feel a little differently: isn't the opportunity cost of staying a lot lower now? Would appreciate thoughts or ideas.
I would evaluate this recession aside. Market conditions always change, so don’t make a career decision based off of one. Is this what you want to be doing, or would you be happier if you leave?
My endgame is to quit anyway to strike out on my own as an entrepreneur-investor. I was mostly just staying in my firm out of inertia, slowly burning out. I thought hey, why not stick around and see more deals/companies, get smarter and more experienced, plus I'm getting paid well so what's the harm? My timeline was definitely to quit anyway in the next 1-2 years. I'm just wondering if the recession advanced my timeline a bit.
Given what you said, I think your plan makes sense. No point in staying in your fund right now.
I'm basically doing this at the moment - quitting with the goal of taking several months off and then figuring out next step from there
What if next vintage gets raised, the weak leave and your left with a new vintage at the market bottom?
There’s a million ways things can go but don’t make career decisions based on market cycles
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