Managing your own money

Taking a quick survey for perspective... How many folks here manage their own money and finances entirely?

I'm managing my own so far, but I'm by no means a big fish in the grand scheme of this industry. I've made some fuck-ups in my own financial planning (notably tax issues, having moved countries multiple times), and am somewhat disorganized, but all-in-all I think I've kept it under good control to date... but wonder if I am approaching the threshold where it makes more sense to have somebody dedicated to managing it.

Few of my superiors seem to manage their own money. I know several who are completely hands-off. I'd initially heard this and thought it was a red flag - how could somebody in PE, who should be a competent investor, be giving over the reins to their account? But more and more I'm feeling like it may make sense. I genuinely enjoy managing my PA, but the rest of the "financial planning" not so much.

Curious for this board's perspective on this. I'm mid-late 20s with ~$450-$500k net assets for some context.

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Comments (27)

Jan 15, 2021 - 12:44pm

Managing everything myself, but it gets more and more complicated. live in multiple countries and taxes, insurances, pensions and investments in multiple nations become so complex.

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  • Associate 3 in PE - Other
Jan 15, 2021 - 12:51pm

Thanks for the reply. That's about where I'm at too re: multiple countries - Holding a bunch of stuff in both Canada and US right now and was pretty ignorant about tax implications. Not investing in the most tax advantaged way either. 

What's the threshold criteria for you to make the call to outsource this stuff?

Jan 15, 2021 - 1:16pm

I think the threshold is based on time, not assets. If handling taxes, tax shelters like UK-ISA, multiple stock portfolios, regulatory/compliance, paperwork/emails, etc take more than what you want to invest in... give it to someone else.

the maximum I am willing to invest would be :30 per week, ideally less.

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Jan 18, 2021 - 12:23am

Oh ya'll expectin me to say something?

What specifically..that ive felt ive been watched by cops for the last few years to the point that i was so paranoid i went back to prison..and that i tried to tell people this but they try and make you out to be crazy....which is a little true but not all the way..and so anyway i could really give two flips about a bunch of momey im more in search of answers so i can find peace of mind...direct to your comments and who ever else want a voent

Jan 15, 2021 - 1:26pm

as someone who professionally manages people's money, there's no blanket "here's what you do" answer. all else being equal, you do NOT need someone like me, just like you don't NEED a lot of professionals people pay for advice, it's just a question of how valuable is your time and energy.

first thing's first, find someone who understands US/Canadian issues. you will most likely need to find high quality advisors in Seattle, NY, or Boston as they likely have Canadian expatriates so are familiar with those issues, given proximity to major Canadian cities. the way I'd probably go about it is find an advisor and then ask for a referral to a CPA (you won't be able to get CPAs attention for the next 3 months given tax season, otherwise order doesn't matter). I could potentially help you out if you were dealing with LatAM/certain EU country issues, but I've got no knowledge of Canadian/US tax issues.

since you like managing your PA, look for financial planners that have a specialty in what you're talking about that also charge by the hour. note, this will NOT be at major firms (ML/UBS/MS) but there are plenty of high quality advisors outside of these firms. the benefit there is you get professional advice but your overall long term costs are lower as the burden of investing your own money still falls on you.

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  • Associate 3 in PE - Other
Jan 16, 2021 - 2:11pm

Thanks for the thoughtful reply.

I'm comfortable (and enjoy) managing my own PA. It's like you said - the tax and "admin" stuff that I think I need help with regardless. I am already working with an x-border accountancy firm but they're just running my taxes and whatnot. I'm more so concerned that I'm not doing things super efficiently - my cash is split maybe 75-25 between US and Canada and living in Canada.

Most Helpful
Jan 15, 2021 - 2:31pm

Multi-mil. I keep it easy.

1. No credit card debt.

2. Max out 401-K contributions, 529s and any other tax-advantaged vehicles (e.g., backdoor roth)

3. Keep $100k or so in cash (emergency fund, opportunistic equity cash, co-invest / carry commitment)

4. Allocate sizable portion to co-invest at fund - but be wary of the illiquidity - can take many, many years to see any money back but generally has the benefit of leverage and better returns than public markets (probably primarily due to leverage).

5. We are young. Deploy a sizable position in equities but keep it simple. ~50-70% in S&P 500 and the rest depending on your risk appetite you can pick a few companies you want to hold on for decades and just let that compound out.  

6. Any remaining you can deploy in real-estate, crypto, or anything else that fancies your boat. Obviously buy your primarily residences because (a) you want some RE exposure regardless, (b) there's real / psychological benefits to owning the piece of land you live on, and (c) mortgages are dirt cheap. 

If you work in any area of finance and use the above formula - it's hard to retire (~50s) without a few million $+. It's not hard at all. We all have the greatest asset there is - time and compounding. 

Jan 16, 2021 - 1:24pm

I have a very similar strategy and manage my own. Especially on equities, ETF's are an easy way to capture market increases without having to pick an individual stock which you can go crazy on in terms of time spent. 

I do keep less cash on hand but probably makes sense to have it $50k-$100k for co-invests as well as emergency fund, etc. Do others do this or do they sell some positions to fund large checks?  

  • Associate 3 in PE - Other
Jan 16, 2021 - 2:18pm

Cheers for the detailed reply.

I think I'm comfortable with my debt/liquidity management (no debt aside from general working capital spending on the CC), on my PA and how I'm investing - it's more so managing the "admin" side that I'm concerned about these days. X-border tax issues and shit. I'm not super efficient with retirement accounts given I've moved countries 2x (CAD-USA and back again) in 3 years. I cleared my accounts the first time around but now I'm kinda stuck with HSAs and 401ks I can't do anything with while being Canadian resident.

I'm probably 60-70% in equities, with mainly individual names. Got super long commodities late last year and I'm happy with it so far.

On the co-invest, I'm up for VP this year and it becomes a real consideration. Liquidity matters to me though and I'm not sure if I want to commit 5+ years to this fund to achieve meaningful carry/co-invest returns. I may also be leaving to corp dev this year so unsure there.

The more I think on this and the more I read and respond to this thread I think I'm in a bit of a temporary situation here. I have those USD accounts ive left and am starting the cad accounts (RRSP/TFSA), unless I sign for this job which would potentially take me to yet another country..

I'm rambling now, but I think it's just a lot of near-term career/jurisdiction uncertainty that's giving me an admin headache

  • Analyst 2 in VC
Jan 16, 2021 - 5:05am

Had a senior colleague tell me to view my salary as "bond-like" - stable, no need to worry, but not going to make me rich. So instead of investing in real estate etc he said diversify your "income" by investing in "equity-like" assets - stocks, private companies etc. And do the opposite if your main income stream is "equity-like" - ex. sales and other commission based jobs.

Jan 16, 2021 - 2:13pm

Our investment strategy still has plenty of capacity so I see no reason to let anyone else touch my money. Obviously using an outside firm to help with tax strategy & optimization but no say in where money is being allocated.

Allocation of new cash coming in is basically:

10% cash/real estate - I treat RE as a savings account that I can re-lever for cash if I need it. RE is a pretty stupid "investment" otherwise. Nice to protect from inflation though.

20% angel deals - Used to do these more proactively but now only if I can do them quickly with minimal diligence. Usually means I know the entrepreneur or worked with them previously in some capacity like an ex-employee. Tough to allocate here b/c good deals don't pop up often which is why this category is likely going to shrink.

65% buyout - This has the most capacity and will probably receive 90%+ of new dollars.

5% public equities - Usually just index funds but sometimes individual stocks. Will bring this to 0 soon.

  • 4
Jan 18, 2021 - 1:00am

Anonymous Monkey

Taking a quick survey for perspective... How many folks here manage their own money and finances entirely?

I'm managing my own so far, but I'm by no means a big fish in the grand scheme of this industry. I've made some fuck-ups in my own financial planning (notably tax issues, having moved countries multiple times), and am somewhat disorganized, but all-in-all I think I've kept it under good control to date... but wonder if I am approaching the threshold where it makes more sense to have somebody dedicated to managing it.

Few of my superiors seem to manage their own money. I know several who are completely hands-off. I'd initially heard this and thought it was a red flag - how could somebody in PE, who should be a competent investor, be giving over the reins to their account? But more and more I'm feeling like it may make sense. I genuinely enjoy managing my PA, but the rest of the "financial planning" not so much.

Curious for this board's perspective on this. I'm mid-late 20s with ~$450-$500k net assets for some context.

Yeah no shit i aint got no means either and i dig the whole go to school thing but im getting a little old for all that less it might not take to long im more trying to find out whats up with my Uncle dead apparently but the cops..man i dont even want to talk about all that but when the lady law told me what she told me it messed me up and thats how come i ran off and went back to prison
Dont take much to get me goin as it is and i knew people were getting planted on me and i was fine in prison but soon as im out i start feelin it again..this all comes back to all that..my uncle probably had a little batch of money put up because he was a pretty smart dude from what they say just throwed off a little and he went out to California bout the time all that computer stuff was kicking off and now im just assuming that he would have a reason to go to California and not just wondered off like they say he done

Jan 18, 2021 - 1:11am

Okay well for one we may be able to communicate better if those two acrynms wasn't in there i just skip over those if i dont already know what they mean and feel they are not important since they made em short...maybe they mean something
After all..so could tell me...now as for who is writing this..i dont know anyone been living in other countries all the time except for Nadine shit started bout the time she showed up and besides i dont know if whos who anymore i just talk to who ever is typing at the other end figure i cant win against all that

Jan 18, 2021 - 1:34am

Anonymous Monkey

Taking a quick survey for perspective... How many folks here manage their own money and finances entirely?

I'm managing my own so far, but I'm by no means a big fish in the grand scheme of this industry. I've made some fuck-ups in my own financial planning (notably tax issues, having moved countries multiple times), and am somewhat disorganized, but all-in-all I think I've kept it under good control to date... but wonder if I am approaching the threshold where it makes more sense to have somebody dedicated to managing it.

Few of my superiors seem to manage their own money. I know several who are completely hands-off. I'd initially heard this and thought it was a red flag - how could somebody in PE, who should be a competent investor, be giving over the reins to their account? But more and more I'm feeling like it may make sense. I genuinely enjoy managing my PA, but the rest of the "financial planning" not so much.

Curious for this board's perspective on this. I'm mid-late 20s with ~$450-$500k net assets for some context.

Well if they got a bunch of it then probably none of em manage it they wouldnt know how..if they are just middle class or what ever then every one im sure manages their own money..youd think anyway i mean i dont know i blew a 100$ last night and got to figure out why the hell i did that cuz it made no sense when i aint got it but id do it again soon i get paid again..but im theoretical not functional so youd think it wouldnt be to hard to keep up with ..well you shut the thing down so i cant scroll around so i cant check what how much you said but it was like 500 hundred grand or something thats not much youd figure the average person could figure that out on their own..whether they do or not thats up to them im just saying..but a bunch of money..i assume no one really thinks they got a bunch of money if they only got a few million dollars specially me id blow through that in ten years be back to blowing a hundred on the weekends..but functional people even they dont know what to invest in who the hell would specially down here got different stuff going on down here

Jan 18, 2021 - 1:53am

Mid late 20s in age or you mean the mid 1920s you got to be more specific cuz im thinking something else not thinking from that direction...but if you was trying to invest in the 1920s id say alcahol cuz
Shit load of money was being made during prohibition didnt really matter that it was against the law because you didnt really get in much trouble if you got caught so it was just practical..or would be for me back then like i say really wouldnt have got in much trouble for getting caught so made it worth the risk..now if your mid 20s in age probably alcahol again specially down here i dont know nothing about it little to social for me i mostly drink whats on sale get more of it that way
..well when i used to drink that is im by law not allowed to drink but fuck i do anyway fuck em caint do much to me to scare me with prison no more...but if your young trying to find something here in Texas at least dont know might not sell in Canada but Texans are buying it up that weird kind of beer i aint drank none feels too girly so folks like me not so much but enough people must make money enough to keep it on hand then they like to drink moonshine too apparently and i guess they got it where you can do it and..well they got a big deal with all that but i cant do none of that by law
Though im not opposed to not following the law just depends on how much trouble id get in if i got caught

Jan 18, 2021 - 5:34am

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Money can purchase freedom, if you have the guts to buy it

Sep 13, 2021 - 9:26am

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