Rich Kid Dilemma
My issue is that if you were to assume a 50% estate tax I would have a minimum of $30ish million coming to me (my dad still works so this will end up being more). I kind of struggle seeing the point in working brutal, god awful hours all in the hopes of one day pulling in a million or two a year. It just doesn't seem worth it at all given my position. However, I still really like investing and money and don't want to be known as just a rich kid. What I'm asking for is simple advice on what to do with my life. I know I want to do something in finance but I just won't kill myself to only make a few hundred k.
So given my position, what would you spend your time doing / careers would you pursue? Also, how do you make sure that girls don't want you just because of my money. Thanks to all.
Rich Kid Problems: Do they exist?
Rich kids don't have any problems… or do they? There is one problem that is unavoidable when you are financially set before you come of age. The issue of purpose.
Allot of people struggle and struggle well. They drive themselves to success seeking a better life for them and their family. In this journey, they find personal satisfaction. This journey takes on all shapes and sizes.
The dilemma is what do you spend your time working for if you work at all. Read the following response from certified user @gamenumbers. He comments on living a meaningful life when being born into wealth. This is specifically to the person who is young, wealthy, and interested in a long term career in finance.
I can highly recommend you follow his path. He is very successful, works his own hours, and lives an amazing life with a house in the mountains and a great place in the west village.
My advice is to complete your analyst gig and get into a top-flight business school. Coming out of business school, you will have both the credentials, connections, and assets required to launch your own fund.
My friend does PE, and he did a year after business school basically apprenticing for free at a PE fund. You could choose whatever field you wanted after school.
For the first year basically, he seeded capital from himself and raised a few million from friends/family. He teamed up with one business partner. His business partner was a guy from business school. The guy was interested in working hard for a nice paycheck with the added bonus of making a big payout if things went according to plan.
So for the first two years, they arranged one transaction where they purchased a small company, recapitalized it, turned it around a bit, and sold it.
This whole process gave them lots of exposure in the PE world and gained them quite a bit of credibility. He hired a pretty great team to raise capital for a serious fund in the $100-250mm range. That was basically when they started the PE firm in earnest. They do co-investment deals with the big PE firms like Blackstone, which allows them access to big-buyout type returns with a staff of about 7-15.
Some of these are consultant types, who generally are rich dudes with good connections who raise the capital and launch the fund. some of them are operations guys who actually work with their portfolio companies as a member of the board or as management.
They recently raised a third, huge real estate fund and launched a REIT. Their firm evolved over the course of about 6-7 years. Unless you have a high tolerance for risk, you will want to start off small and learn. Once you get set up you won't be using your own money anymore.
During the entire time, my friend was able to call the shots completely. He had competent people around him. His hours are great, and the work is very personal, very fulfilling. It sheds all the crap busy work from your day and the only things you really take care of are the important issues. And the networking opportunities are fantastic.
You could launch a hedge fund or one of these funds that invests in hospitals for kids in Africa. Whatever floats your boat. But with your BB experience, people will truly believe that you are credible. And you should go to business school. Seriously. Nobody will ever think of you as just some rich kid. They'll think of you as a guy who is very successful.
So then you get to keep a cool place in the city, have a respectable and rewarding career, travel to your heart's content, and purchase and actually use a second home (in the mountains or at the beach).