Have over 2 million at 21... Should I still do banking / PE?
Incredibly, incredibly, incredibly fortunate. Not in a trust, in my own personal account. I go to a decent school (NYU, Cornell). Interned at a BB, got a return, and signed.
Part of me wonders if I should still pursue this path considering the "soul-sucking" aspect and sacrifice involved. That being said, I do think I want to do private equity.
I guess what I'm asking: If you were in my shoes, would you still pursue this career path considering my financial situation? I realize that for a lot of people, they pursue it for the money, but maybe the incentive is less there in my case? Also don't assume I maintain an expensive lifestyle or even want one. I'm extremely price conscious and don't spend more than my peers. I only "splurge" on experiences like trips (but even then I won't get a nice hotel, just whatever my friends would get). Pretty sure people in my high school thought I was poor and have never come close to cutting into my principal or interest / returns.
Thanks for reading / sharing any thoughts!
If your goal is private equity, then sure I guess. I would have absolutely no desire to take shit for two years to do that if I had $2mil though. I'm trying to get up to a tenth of what you have to get a nice nest egg started in my early 20s and then GTFO. I would invest that money and be completely fine with a regular hours job making less knowing I didn't have to plan any more for retirement/savings with that $2mil compounding in the background or 30+ years.
I'm a few years younger than you so I don't know if it's my place to give you any advice, so take this with a pinch of salt I guess. I'm a bit like you too with regards to spending habits, but I want to do IB/PE/HF because I have a level of success that I want to achieve, and the most quantifiable measure of success in my (quite possibly naive) view is compensation. So I'm not in it for the lifestyle that the money would enable me to achieve, but entirely because of the notion that money=success. If you have a similar view, then you should defo do IB-I would, for what it's worth. But if you don't need/want the money, then I would think you'd derive much more happiness from pursuing your other interests.
If you want comp you should be going into tech lol
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I would probably put that in the market (or whatever you method of investment) and do banking for 2 years with the mentality that if shit ever gets unreasonable you can always quit.
$2m is a lot of money (esp. for someone so young) but in all reality isn't THAT much money given that you still have 60-70 years left to live.
If you're still interested in perhaps having a career in finance I would consider going into IB.
Just out of curiosity, how'd you get the $2mm?
Also, to parrot others, I'd just put it in the market and forget it.
$2mm is by no means "fuck you money", but it can turn into "fuck you money" within a decade if you approach this situation wisely. I think if business or entrepreneurship is your passion, then IB is a great move. The money you'll earn if you stay in IB or PE will allow you to achieve "fuck you" status much faster (if you intend to stay W-2), and if you intend to leave which I expect you will, the skills will make you a much more sophisticated business owner. The intangibles you'll pick up in 2-years of IB will be more valuable to you in the long run than the $400k could ever be.Wondering how you came into this windfall if you don't mind sharing?And also, put that shit into assets correlated with inflation ASAP so you can benefit or stay neutral from this crazy inflation we're seeing. Every month you sit on that is a loss of ~$8,333 just by virtue of keeping it in cash. Make sure you diversify. With that much money if you don't know what to do with it, hire a fee-based financial advisor from a top institution and stay away from their bespoke products.
OP here,
Thanks for your comment and advice! Without giving too much away, through money from parents (mostly (90% of it lol)) and (mostly them/myself) investing this gifted money over time.
It's currently definitely not all in cash. My "investment" breakdown is as roughly as follows:
- ~20% High-yield bonds (Municipal, distressed-debt, some corporate bonds)
- ~70% Equities (Bunch of companies + some preferred stock)
- ~10% Cash/Money-Market
Get the experience and network enough to open your own fund and be able to navigate it without any doubt under any weather , that's it
Yes.
Yeah get a few years experience. You’ve worked so hard thus far to get to this point.
What's your goal?
If you had dreams of moving up the ranks in IB / PE / HF in order to be earning $1m by early 30s and more and more as you go on in your career (whether for money / passion / other), go into banking because the $2m is nice but not getting you much.
If you want to live in a HCOL city, again, the $2m is nice to have and will allow you comforts and luxuries early in your career (e.g. dates to the nicest place, being able to take your date, girlfriend, whoever to $500+ night hotels rather than crap vacations, etc.), but doesn't set you up for life.
If you want a comfortable lifestyle in a LCOL city, don't go into banking and find something you're more interested in.
If you don't know, consider banking because it provides you optionality. You can always quit if you don't like it / make a decision that having a nice life in NYC and sending your kids to private school doesn't matter.
Passions aside, all-in-all, if you're from the south and your end goal is to move to there with a little bit of money so you can live comfortably / enjoy your days, don't go into banking. If you see yourself as wanting to live in NYC / NYC suburbs, have a family, live in a nice / upscale / luxury place, go to nice restaurants, etc., go into banking. FWIW, people on this site tend to not consider having families down the road - if you're the main breadwinner, it can be very expensive
Nice “problem” to have. Here’s my two cents.
You will come to realize that any quality job requires hard work. You think teachers don’t work hard during finals week? The guy who runs his restaurant? The construction guy? The account during tax season?
Anyone with their salt will have to work long hours, it’s just in banking you get sick pay. And it’s not even as important or difficult as being a doctor, police officer or fireman.
There is not a soul sucking feel to banking for me. I work as hard as my successful friends who are lawyers, doctors and techies. Everyone works.
Buy TQQQ with that and you won't have to worry for the rest of your life. Or if you are conservative of market crashes, put half $1M into TQQQ and the other half $1M into dividend payers let's assume conservative ~7.5% a year. There's your annual additional income of 75k from doing absolutely nothing. Can take a chill job or do whatever to bring you over the 100k mark easy. And then in the background you still have TQQQ compounding returns like crazy through the decades easiest 8 figures of your life.
If you aren't yanking our chain, the only millionaires I know are business owners. They don't work for other people.
A lot of them could probably live on interest and just be free people, but they choose to start new businesses and make large profits. That's how they got there in the first place, by starting successful businesses.
The only person I know who was born into immense wealth was the daughter of some billionaire that I very briefly dated. She likes to do a lot of online shopping and glamping, but I figure that's probably not your thing. The truth is that a certain level of wealth makes you a member of the idle class, and the rest of us have to work or we will not be able to eat or have a place to live.
You could always just get some land and settle down, give the rest to charity. If you are skilled with money and you have a couple million, you should not need to work for the rest of your life.
Definitely depends where you are, on the West Coast none of the millionaires (eight to nine figures) are business owners, just got lucky with IPOs/acquisitions. Your point still stands, as almost all of them are still working in some capacity (ranging from a new startup to semi-"retired") despite many of them hitting eight figures before they were 30.
You should get a job, but you should stick to a job that is your #1 dream. If that is banking, go for it. Some people are really excited by financial markets.
I feel like a lot of people end up in this job because they aren't sure what to do. If that is you maybe think harder on what you'd really want to do.
Fuck no.
Do 2 years in IB, go work at a LMM PE fund for 1-2 years then go out on your own and invest / run a SMB. Can do more than 1 deal and raise outside capital as needed. You'll do well.
Work, but without the worries of getting fired / laid off.
i too, went to a "decent" school that is comparable to the likes of cornell such as nyu
Why is everyone talking like $2 million is not an unbelievable of money at 21? And why is the general consensus to work in IB when he literally has $2 million? Aren't there a ton of other paths like Consulting --> MBA --> PE or angel investments --> VC --> Growth Equity/PE ?
these responses surprise me. i along with many on these forums grew up around disgustingly wealthy people (not northeast wealthy, but still) and people have always been far more interested in the prestige of finance/IB than their family money and inheritances
you have an SA under your belt so you mustve been interested in it at some point. stick with it unless its not a field youre interested in as a career
Give it a shot. Looking back..holy cow 21 is young (I'm mid-high 20s now). You've got a lot of life ahead of you, and as you know, IB gives you all the optionality in the world. I say have at it. Worst that happens is you leave for something else/quit without worry of your immediate financial standing
Stop answering OPs like this unless they give the info we all want. In this case, how did you get the 2mm? You purposely left that out.
Check thread. Info was given above.
Inheritance?
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