a) Making say $200k-$250k/year at a job and company that you kind of enjoy? Or b) Making $350k-$400k/year managing your own money, and not having to go to work?
Option B!
Clearly B is the better option. However, since you are managing your own, there is always the risk of capital loss if you are managing aggressively. If you have a $10M portfolio that can confortably get you the return you need, fine. Would I take my nest egg and lever it up to make $400K a year so I can quit my day job? Probably no.
Yea it boils down to how much you are managing. If you have 13MM, then $400k is only 3%. You can just buy bonds or utilities paying 5% dividends and you’re done. heck you make a few trades, and then go do whatever for the rest of the year.
The answer to this really depends how important it is for you to make an impact on others, and how closely you associate with your company. For me, this is a close call before I’m not your prototypical “finance” guy and the projects I have enjoyed the most have always been ones that are most transformational and impactful. I want to eventually have a legacy where people know me as someone that left a transformational impression on an institution or community. With that said, I know that if I could do B and be successful at it, I’d probably eventually want to use some of those funds to fuel a venture like A, where I could lead people as well as a company… So does that mean I’d really be both A and B? Does anyone else here share similar points of view?
I think you need to flip the numbers around for this to be closer.
most ppl cannot obtain option B. managing your money consistently and generating superior returns is quite difficult. reasonably speaking, to get that kind of cash, you basically need at least $2.4mm and obtain annual returns of 15%. now that’s not really realistic over the long term for most of us including myself. index would require at least $5mm. the question should be whether you want to make 100k on your own or 250k with a company.
jcole21 Wrote: ------------------------------------------------------- > I think you need to flip the numbers around for > this to be closer. The example I gave is pretty much my actual current situation. I am debating whether to quit a stable job in finance for a “higher beta” self employed path.
AlphaSeeker Wrote: ------------------------------------------------------- > jcole21 Wrote: > -------------------------------------------------- > ----- > > I think you need to flip the numbers around for > > this to be closer. > > The example I gave is pretty much my actual > current situation. I am debating whether to quit a > stable job in finance for a “higher beta” self > employed path. When you say manage your own money, do you mean you are worth $x million and 350-400k is the income your own, personal wealth portfolio would throw off, or going into PWM and making 350-400k based on AUM? If you’re talking about PWM, I’d probably stay as-is, but the beta analogy is perfect and the potential return and lower work-load (eventually) is attractive. If not working too much more than ~50 hours on average - I’d stay corporate (personally).
AlphaSeeker, quit your job and give it to me.
jcole21, when I say manage my own money, I mean it’s just my own investment, all income generated is mine. topher, Will let you know when I do. It does require a CFA…
Option C
Option B, and I will go ahead and assume that I can earn that much by holding all cash in money markets and sipping drinks on the beach
whatever the reason, anyone who picks A is a complete idiot
AlphaSeeker Wrote: ------------------------------------------------------- > jcole21, > > when I say manage my own money, I mean it’s just > my own investment, all income generated is mine. > > topher, > > Will let you know when I do. It does require a > CFA… So then wouldn’t you right now be earning whatever your return is + the 200-250 (say you’re earning 200-300 on your own with your own investments now passively, the sum would be 400-550 vs 350-400)?
Jcole21, that’s correct. I am weighing whether the freedom I will be getting by not having to work is worth giving up the $200k-$250k/year additional income. BTW, I hate the expected tax increase for high earners…
AlphaSeeker Wrote: ------------------------------------------------------- > Jcole21, that’s correct. > > I am weighing whether the freedom I will be > getting by not having to work is worth giving up > the $200k-$250k/year additional income. > > BTW, I hate the expected tax increase for high > earners… Munis bro, Munis.
AlphaSeeker Wrote: ------------------------------------------------------- > Jcole21, that’s correct. > > I am weighing whether the freedom I will be > getting by not having to work is worth giving up > the $200k-$250k/year additional income. > > BTW, I hate the expected tax increase for high > earners… Very nice, so basically you don’t have to work anymore… how old are you again? I remember reading about your type in CFA level 3… independently wealthy. Nice work if you can get it… So what do you do again that has allowed you to accumulate such a tidy sum and given you this freedom. I want some of that.
^^ Yes I’m also interested in your story.
Muddahudda, pgh.ndt Not sure when you read about my CFA level 3. I got my charter in 05… Late 30s… Yes independently wealthy, relatively speaking… Just paid off the mortgage of my house in a top 1-2% expensive zip code… MBA + CFA, in finance/investment… $200k-$250k annual pay… But got most of money from investing on the side… A couple investment strategies (some deep level 2 shit…) have been working well for a quite few years, except for 2008… BTW, I am a Republican…