My boss recently retired after over 40 years in the business. He said that during his career, he has noticed that a lot of traders who quit the business become some kind of artisans, either on a full time job or a serious hobby basis. I find that pretty interesting and I can see the appeal of doing something concrete after staring at a blinking screen for years. Any thoughts? Yay or Nay?
A lot of finance people “retire” with substantial savings, and in some cases, few transferable professional skills. So, it is reasonable to expect that many of them start weird hobby-businesses. In fact, some people I know have indeed started some bar, bought a winery, or just sit around doing whatever.
^ So, they plan on just “hanging out” for the next 40 years so or something?
initially i wanted to retire at 35. travel the world and settle down around 40. make 4 kids. and be a stay at home dad. and teach my kids how to succed in life.
Look, how they massacred my boy
But then you realized that in order to credibly teach that, you would have needed to achieve some measure of success yourself and so that plan got derailed?
i am in the top 4% for my age group in terms of net worth. if that’s not success then what is.
It is more common to be let go from such jobs, rather than “retire” from your own initiative. Often, you cannot find a similar job or anything close, in terms of financial compensation.
If you are 40 or older, net worth $5 to $10 million, and have no immediate job prospects, what would you do?
Job seeking is not fun and is full of stress. I don’t know what every one of these people ends up doing with their time, but there are a lot of things that are probably more fun than a corporate job.
Top 1% or hacksaw
I’d spend most of my day in my garage working on cars and racing, pass on staring at 2 monitors for 12+ hrs a day
lets run the numbers:
first lets assume you are a single dude that started from nothing at age 22 with 50k per year post tax budget
the top 1 percent of age 30 is 1 million dollars.
S&P 500 total return is 13% per year for the time period.
you’d need to save roughly 80k per year.
so you need post tax about 130k per year.
or in california about 200k pre tax per year.
now lets see what it looks for 40 year olds using ohai stats
lets use same assumptions
goal is 5m right now.
S&P 500 total return is 7% per year for the time period.
you’d need to save roughly 150k per year.
so you need post tax about 200k per year.
or in california about 325k pre tax per year.
(the top 1 percent for age 40 is actually only 1.5m though)
to achieve 1.5m you just need to make 150k pre tax per year.
Why wouldn’t you be able to find a similar job, or even find a more senior position? I mean, if your in NYC that’s the financial capital of the world, and with the experience and credentials there should be some other job opportunities that you can transition into.
If you were let go, it won’t be easy. Space is super small and traders don’t usually let go if they are making profit, if they are not, it will be very hard to find another trading job
Ok I see. Why can’t they use their skill set to transition into some other type of finance job?
What skill set?
Wasn’t the whole point of this thing to move out of finance?
If y’all got paid the exact same, would you pick baker or finance role? I’d pick the former, I love baked goods.
Lol, guess so?
I would presume as a trader, you would need strong math and analytical skills, have the ability to work under pressure, understand equity markets and trading strategies and communicate effectively. I would think that if your not good (as a trader), you would have washed out pretty early in your career.
(To me) it appears that these jobs are being more automated so your seeing a reduced overall headcount in the industry (as csk pointed out, already in a small space).
Unlike other forms of cooking which allow for a relative degree of spontaneity, baking requires precise measurements and strict following of directions - it would not be advisable to vigorously stir your egg whites at higher frequency than 185 beats per minute for longer duration than 3.5 minutes as your souffle is unlikely to rise. Traders gravitate towards baking following years of quick decision making under high pressure - it provides a structured environment with well defined sequence of actions where the highest stakes for a misstep is an embarrassingly deflated souffle.