My MD works 10 hours a week and made $500k+
Hey guys,Currently an analyst working on the brokerage side my first year out of UG. I'm about 8 months in and have noticed that my MD does absolutely nothing. We are in a mid-tier market and absolutely killed it this year for us (did $800m in volume) between three brokers. After fee splits, each broker netted $500k-$600k on the year. Two of the guys kill it and work typically 40-50, but there is one guy that literally comes in from 11-1 and then says he is "working from home" and doesn't do shit. I don't even think he even knows how to open an excel doc.He has been in the business for awhile and has one client that brings us some business, but it's insane this guy is making all this money without doing anything.Any thoughts? Does anyone else have an MD like this in their office?
Edit: I’m not necessarily frustrated with the guy, it is just that his client brought in $100m of volume this year which is small in comparison to what the other two guys bring to the table. I understand I do all the underwriting and due diligence so that one day I can sit in his shoes if I’ve earned it, but I feel to be in a position to work that little, you have to be responsible for bringing in the majority of business. Our other two guys bring in 80% of clients and are involved in approving my underwriting and overseeing memo and bov materials. It’s just odd this guy gets paid the same.
My bad for not making that clear earlier.
Have worked with a lot of bosses sort of like this over the years. If HE makes $500K by working 10 hours per week, that's great. More often than not, it's YOU and others who make $500K for him while he works 10 hours per week. That's where the problem usually lays.
Obligatory "The only thing we have to lose is the chains that bind us brothers" communist rhetoric.
Relax guys I'm jk
My comment is actually very capitalist. If you are the owner of a company and want to work only 10 hours per day, go for it! It's your company.
If you work 10 hours per day, make $500K, and have underlings do the rest of the work, you are robbing the company tof he labor services which you agreed to in your contract.
If what he does is so easy, go do it. It’s a commission business. No excuses.
What kind of shop are you at major brokerage or botique? Also what product type?
Counting other peoples money will never benefit you. Keep your head down and one day maybe you will be able to live the dream like it sounds your MD is doing.
if it makes everyone feel better, that MD probably doens't even think he's living the dream. probably doesn't think 500 pre-tax is great money. he might even be worried about retirement.
You at Capstone?
First off, brokerage is a pyramid scheme. If you haven't realized this, you will soon enough. The whole point about being at the top means that everyone else's production trickles up. That's the point. This MD is where he is because he killed it earlier in his career - he's living the dream, and should be admired, not lambasted.
Secondly, who cares if he knows how to open Excel? He's a broker. He doesn't need to. Brokerage is a relationship business, so his "working from home" may actually be super valuable. Yeah, it might be frustrating for you that he plays 3 rounds of golf on weekdays, but if that's helping bring in business then he's doing a lot more than some Excel or Powerpoint jockey.
Either way, the frustration is misdirected.
We're not in the excel business we're in the relationship business and that MD may be a key factor for your shop doing 800M in volume last year.
If your MD's relationships is the reason your shop is generating so much business, then I think he is being underpaid.
Relationships are more valuable than excel skills, sorry to burst your bubble.
He's basically living the brokerage dream. Get a few good sized deals from long-time clients a year and then chill.
Let's say you were hired to manage a billionaire's investments. Let's say $1B and that year the fund is up 5% or $50mm...and the team gets paid $2mm altogether from MD down to the analyst. Lets say you as the analyst make $150k...The only thing the billionaire did that year was play golf and fly around in his/her private jet, but keeps $48mm of the $50mm...would you be upset at the billionaire?
My previous boss, a developer, "worked" 40 hrs a week...he would come in at 9AM and leave at 5PM but you would hear his TV on in the office and all day he'd be staring at his iPad. He would then take his dog out for a walk and play fetch and go buy some coffee. Then some weeks he didn't even come in because he was in Miami on his best friends yacht. Occasionally he would be on a phone call or a meeting. The dude's worth $120mm+ and employs a VP of construction, VP of Acquisitions/Financing, an assistant project manager, an acquisition/development analyst, ~8 project managers, an HR rep, assistant HR rep, a paralegal, 2 property managers (one for residential and one for commercial) ~5 assistant property managers, an in-house architect, a vendor rep? (the person who handles ordering materials), an executive assistant, an office manager, a commercial leasing agent, VP of finance/accounting (ie controller?), 3 FP&A employees who assist the controller, and probably a handful of other employees that I have never met..Do you know why he hired all these people? So that he could come into the office and watch TV, play on his ipad, play fetch with his dog, grab some coffee, and hang out on his friend's Yacht...But he started as a poor immigrant 30 years ago...
who is this guys sound sfucking solid
Lol...I know all that sounds impressive, but he is "just a mid-sized developer." I imagine most companies his size or larger have the same employees..probably more. I think in total he has like ~25-30 employees. He's also in his 50's. But to his credit, he is, in my opinion, a very aggressive developer and has great vision. Leverages the shit out of everything and only develops in non-gentrified/overlooked markets. He is a first mover. Once a market is deemed "up and coming" or "hot" he stops acquiring and moves on to the next one...that's a lot of risk. But at this point, he has so much equity that he creates his own market. Right now he is focused on a part of town that was considered rough 7 years ago and he started acquiring like crazy there. Bought every single autoshop/industrial property he could get his hands on. Also acquired some ~50 3 unit (~150 units total) properties at ~$500k-600k ea...7 years later, all of these 3 unit properties are worth $1mm+. All his industrial properties/autoshops are now 20-50 unit buildings (either completed or in construction)...he owns ~10-15 of them. He is the largest investor of this market and because of his investments and developments, other investors and developers have poured money into this market as well, further driving up his values. And this is just one of the markets he is in..He has a larger portfolio in another market valued at ~$100mm+. Anyways...the person you should really be asking about is his friend with a Yacht...apparently that guy is richer than my ex-boss by a number of multiples
What was his job first when he got here?
All I know is he started in construction and bought his first 3 unit property in ~1990. I don’t think he went to college
incredible. but that's far better than being a large corporate developer - hes rich and doesn't answer to anyone
is this in miami?
No, in a major market (LA, SF, NYC, Boston, DC). It's better when good times are good...but Covid was not a fun time for him lol. But I'm sure he made it out fine
Well if you're worth 120 it would take some big mistakes to find yourself in a bad spot wouldnt you say
Your MD is a Finance Chad and you need to pay him your respect.
Facts
Man is out here living the dream.
Well except for working 10 hours. That's too much.
Man has it figured out
I would nod my head at that stuff, and go about my day. Like stated; he most likely killed it in the beginning of his career to be where he is now.
There's this idea with Type A folks in finance that you need to kill yourself to earn your paycheck. There's a sense of pride in working 80+ hours a week.
Work towards yielding the most from the least long term. That way you get to live the thing we call life.
DIdn't read the whole thread but as an older (57) very experienced MD type sales pro in financial services I know this can and does happen a lot. Heck, many times I work less than 10 hrs per week and make more than 500k.
What you don't see is two things:
1. You weren't around when he killed himself building the business getting to this point. I used to be a workaholic to build a sustainable lucrative business that can operate without me most times. That's very hard to do and takes a lot of guts and hard work. He's simply enjoying the relationship capital he built.
2. Success isn't about time spent, it's about effectiveness and actions taken. There are essentially 2 economies. 1.The time and effort economy where you trade your time and effort for dollars which can not be scaled because there is only so much time, and 2. The results economy. Doesn't matter how much or little you did, what matters entirely is the result. Disney doesn't care how many hours the CEO works, they just want results in thei stock price, enterprise value, etc. If the CEO could work less and have more positive results, they'd be happy to pay him more. Conversely, he could work 120 hours per week and if the results aren't there he gets fired and should!
Success is about effectiveness, period.
Are you a financial advisor?
Both a Financial Advisor and an Insurance Broker (built a network of FAs that write their insurance business with me).
Also, three phases of building wealth.
1. Work hard for your money (that's you now)
2. Get other people to work hard for your money (that's upper management)
3. Get your money working hard for you (that's investing - RE or anything)
Once you get to three, you'll find some years your money works harder than you do. Eventually it will be all that you need.
Looking forward to the day when #3 starts to happen for me
My senior broker is in their 50s, has been doing the biz for 25 years, and works 50-60/hrs a week every week. Is a true hustler. Clears $1-2M a year as a MD but we're in a Tier 1 Multifam market, so it's ultra competitive. Has a small team of juniors like myself and an analyst & marketing person to help
Working a couple hours a week and making a mint is the dream. Good on that guy. Zero clue what the issue is here.
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