[hl0m4n]

i just watched the vh1 show on wallstreet mill/billionairs and all i can say is wow. you think movie stars, trump, etc make alot of money, these wall street gurus are making 800 million year to even 1.5 billion a year. i would be happy with even 1 million a year.

anyone here involved in wallstreet? i am a freshman at college and am seriously thinking about getting involved in it. my parent's say the job is really hard and stressfull but if you can manage and make money you can retire early and be one happy man.

do tell your thoughts.

[007e92]

numbers used are just to simplify and can vary depending on different factors - firm size, firm volume, etc.

it depends alot on what you exactly do. immediately coming to mind are hedge fund managers and investment bankers that have the potential to make that much - but were talking creme of the crop. on the banking side, salaries usually top out at about 200k or so, but the bonuses are what pays the cash. all this depends on the individuals contribution, seniority and ranking, and magnitude of the deal. bonuses can range from 100k to 500k to inconceivable amounts.

on the hedge fund side, it all depends on the assets under management a fund has and the percentage they recieve for their managing services. for ex: a fund that is 1 billion in assets under management, and lets just say that the fund fee is 1% (this is usually determined on alot of factors: fund performance, age of fund, street credibility, etc) , thats 10 million that is spread out among the operations for the fund, mostly with the hedge fund managers and its main players raking in the dough.

if you want to learn more about this, i would suggest trying to read VAULT books on investment banking and corporate finance. it should have some good, realistic, information on income earning potential.

[hl0m4n]

^ thanks for info. are you in the financial/accounting job? the guy morgan stanley...jebus 1.5 billion sallary. one of my mom's nursing buddies son just got out of NYU and in about a year later is in wall streat earning 200k yearly already.

these days i don't think getting a mba, or whatever business degree from NYU is special anymore. academics increase every year and gets harder. now days getting a degree from like stanford, etc are the more top places which will land you a high job "first perspective" wise.

damn being a freshman in college is getting harder already. thinking about careers, majors, etc.

[007e92]

im in institutional equity sales for bloomberg tradebook. thats including bonus im sure right? alot of my banking buddies in NY usually hit about 100k salary not including bonuses and thats after geting MBAs...so im not sure exactly what your mom's buddy is doing but thats really impressive...did he just complete undergrad? - and yes degrees from the top institutes will make it that much easier to get an interview. yeah, you gotta start early. start thinking about what you want to do. getting an internship is really important in my opinion. try to get as much as you can. it will be gold when getting the exact position you want after graduation. thats why its good to know what you want to do so while youre a freshman you can rack up the interning experience in that specific field. when you finish, for the top companies its about GPA and the most significant experience...not to mention interview skills...one thing about finance though - its one of the most competitive industries in my experience. to get the job, its kill or be killed - too bad it doesnt end there. same goes for being on the job.

[RBP]

The earnings on "Wall Street" are of a very wide range. There are many that work briefly and simply don't keep up and succeed. That being said...I'm convinced that jobs in investment and finance are by far and away the most lucrative income generators. To build net worth however, the Fortune 400 are evidence that it is typically entrepreneurship that get you there.

You do not have to be on Wall Street however. Many hedge funds are domiciled in the Cayman Islands and can be operated from virtually anywhere in the world.

[leftcoastman]

I was very close to entering the private equity world. The pay was great - I was given the expectation of $250-350k all-in comp the first year out of graduate school. My classmates in the leveraged buyout world (also private equity) were averaging 400k for all-in comp package.

But looking at their lifestyle, I just couldn't fathom it. PE (of which hedge funds can be considered) is generally the creme of the finance world, so at least you aren't a model monkey working for Goldman Sachs or something. That said, the hours were still unfathomable. My buddies now average 80 hours a week and during due diligence crunch times, 130-135 hours is not unheard of. Yes, you read that right.

Money in and of itself is not a good reason to choose a career. I have buddies in PE who did that very thing and hate their jobs with a passion. They changed from my happy-go-lucky buddies to miserable people. Some of my other buddies in PE love the deal side of it and love doing the work despite the hours.

Find what you love. If it's just money, I'm sorry to hear that.

[RBP]

But you can grind for 5 years and make enough to get completely out.

Lifestyle is certainly important....but it's money that buys the lifestyle. I'd rather kill myself for a few years for the money than plug away indefinately even if it's something I don't mind doing. With a lot of money...I can do whatever I want, whenever I want.

[leftcoastman]

Originally Posted by 007e92

on the hedge fund side, it all depends on the assets under management a fund has and the percentage they recieve for their managing services. for ex: a fund that is 1 billion in assets under management, and lets just say that the fund fee is 1% (this is usually determined on alot of factors: fund performance, age of fund, street credibility, etc) , thats 10 million that is spread out among the operations for the fund, mostly with the hedge fund managers and its main players raking in the dough.

Well that's not the whole picture. That "fund fee" as you call it is generally there to keep the lights on and pay the base salaries, if that. If you're doing direct investments, you might be flying around QUITE a bit and trust me, that gets expensive very quickly.

No fund manager will get rich off of the 1% fee.

The gravy comes with the back-end carry or the promote. Here's how it works. The fund generally promises investors an x% return, called the hurdle. Once the investors get that return, anything above it, the fund manager takes 20% of the profits.

Simple math:

$1bb fund.
1% fee - $10mm to keep the lights on

Say the fund has a 5% hurdle. Say this year it returns 25%. The managers get 20% of (25-5%) = $40 million in promote.

That's where the money is made. Sometimes there is no hurdle rate.

[leftcoastman]

Originally Posted by RBP

But you can grind for 5 years and make enough to get completely out.

Lifestyle is certainly important....but it's money that buys the lifestyle. I'd rather kill myself for a few years for the money than plug away indefinately even if it's something I don't mind doing. With a lot of money...I can do whatever I want, whenever I want.

That is the theory. But how many financiers do you know who have retired after a few years (aka wasting away their 20s and early 30s) ? You get sucked into the make-more-money cycle and simply up your consumption to boot.

I once heard a hedge fund manager at a cocktail party say, "I had to buy a new place. I just bought a $5mm painting and there is no way in hell I was going to put that on a wall of a $1MM condo."

Cranking for 5 years isn't the whole picture of your "costs". Getting $300-500k straight out of grad school requires you go to a Top 5 Business School - count on a six figure student loan.

I can count, on one hand, the number of people I have heard of who retired after a few years in the finance world and are sitting pretty. And they aren't your run of the mill Harvard Business School students. They are guys who do things like start of the first private equity funds with George Soros. And even then - it was closer to two decades before he retired.

The key is to find something you love doing that pays exceedingly well. It's out there, it's different than everyone, but it's what everyone should strive for.

[kick]

A mentor of mine sits on the board of a company that makes automated trading software (it's based on fractals, can execute 14k trades/second, crazy, fascinating stuff), and the money floating around out there that no one is really aware of is astounding. One of the other directors manages an enormous hedge fund in Europe. These guys keep really low profiles and live a life few are accustomed to.

If you're good at math and don't have a family, go into private equity. The highest paid fund manger last year (cashed a ~$1bn bonus) is a retired High School math teacher.

Food for thought.

[RBP]

If they're still in it and are doing it for progressively more money...then they are obviously doing what they want (or love) to do. If they truly hated it, then they have the resources to get the hell out whenever they want.

Personally...I love high intensity and high stress. I also love the fact that I can also go golf and sit on a beach for the rest of my life if I felt like it.

[RenaultOne]

Originally Posted by hl0m4n

^ thanks for info. are you in the financial/accounting job? the guy morgan stanley...jebus 1.5 billion sallary. one of my mom's nursing buddies son just got out of NYU and in about a year later is in wall streat earning 200k yearly already.

these days i don't think getting a mba, or whatever business degree from NYU is special anymore. academics increase every year and gets harder. now days getting a degree from like stanford, etc are the more top places which will land you a high job "first perspective" wise.

damn being a freshman in college is getting harder already. thinking about careers, majors, etc.

Well the University of Pennsylvania and NYU are the top two schools (according to the subjective data of U.S. News & World Report) for financing degrees, but Stanford is not known for its business school at all but mostly for its biology and engineering classes. And working your ass off for that MBA at one of those top business schools will be worth it because I think giving investing advice is fun and you could possibly retire before 45 or even 40.

[kick]

Just FYI, the real deal PE firms don't go after guys with accounting degrees. They go after advanced math degrees. Even a few years ago, an MBA was absolutely required, but that's not what they're looking for (at least, not primarily), anymore.

[RenaultOne]

Originally Posted by kick

Just FYI, the real deal PE firms don't go after guys with accounting degrees. They go after advanced math degrees. Even a few years ago, an MBA was absolutely required, but that's not what they're looking for (at least, not primarily), anymore.

Are u serious! OMG i absolutely abhor math and i may want to work in wall street too. I think im just investment savvy when it comes to telling people what stocks/companies they should invest in, but the math part is the one thing i absolutely loathe! Hopefully this trend doesnt continue when I get my MBA (or even if i really get one because im kinda ambivalent between being a surgeon or an ant that works his way up to the top of the ladder in wall street).

[leftcoastman]

Originally Posted by RBP

If they're still in it and are doing it for progressively more money...then they are obviously doing what they want (or love) to do. If they truly hated it, then they have the resources to get the hell out whenever they want.

Personally...I love high intensity and high stress. I also love the fact that I can also go golf and sit on a beach for the rest of my life if I felt like it.

I guess I'm not making myself clear.

With $500k in the bank, you can leave and do whatever the hell you want, as long as you don't live the consumption lifestyle. What I have seen as I have made more money (and certainly my friends who make beaucoup bucks), you develop more and more expensive tastes. You just up the ante and have to make more to support that lifestyle. Some of my friends laughed at me for getting a 335i and said, "Dude, if I were you, I'd buy that 430. You don't want to show up rolling in a pedestrian car like a BMW."

Frankly speaking, you don't need much to survive. Once you get a taste of the forbidden fruit, nothing else will do.

I hate to say it, but I assume you are young - like lower 20s at most. I hope you don't take offense to this.

Don't get me wrong - I am a capitalist to the core. I'm just happy I escaped the fate of the finance lifestyle, a lifestyle in which very few people find fulfillment. Same with my close brush with lawyerdom after undergrad. A girl I dated back in school is now starting her law career - STANDARD starting salary is $160k. They are all miserable, however. I'll probably make more money in my current field anyways, since I love and therefore put a lot of effort into what I do.

That's just my thought process. Yours is not better or worse, just different. Different strokes....

[leftcoastman]

Originally Posted by RenaultOne

Well the University of Pennsylvania and NYU are the top two schools (according to the subjective data of U.S. News & World Report) for financing degrees, but Stanford is not known for its business school at all but mostly for its biology and engineering classes. And working your ass off for that MBA at one of those top business schools will be worth it because I think giving investing advice is fun and you could possibly retire before 45 or even 40.

Are you serious? You must be talking about undergrad business (which I find utterly useless and a waste of undergrad years, but that's another story) because their MBA program has single digit admissions rates and is perennially ranked in the top 3.

[kick]

Originally Posted by RenaultOne

Are u serious! OMG i absolutely abhor math and i may want to work in wall street too. I think im just investment savvy when it comes to telling people what stocks/companies they should invest in, but the math part is the one thing i absolutely loathe! Hopefully this trend doesnt continue when I get my MBA (or even if i really get one because im kinda ambivalent between being a surgeon or an ant that works his way up to the top of the ladder in wall street).

PE probably isn't for you, then. That doesn't mean you can't work in finance. If you understand money, maybe financial planning is something you could do. Hedge fund most definitely are not for everyone.

[RBP]

Originally Posted by leftcoastman

I guess I'm not making myself clear.

With $500k in the bank, you can leave and do whatever the hell you want, as long as you don't live the consumption lifestyle. What I have seen as I have made more money (and certainly my friends who make beaucoup bucks), you develop more and more expensive tastes. You just up the ante and have to make more to support that lifestyle. Some of my friends laughed at me for getting a 335i and said, "Dude, if I were you, I'd buy that 430. You don't want to show up rolling in a pedestrian car like a BMW."

Frankly speaking, you don't need much to survive. Once you get a taste of the forbidden fruit, nothing else will do.

I hate to say it, but I assume you are young - like lower 20s at most. I hope you don't take offense to this.

Don't get me wrong - I am a capitalist to the core. I'm just happy I escaped the fate of the finance lifestyle, a lifestyle in which very few people find fulfillment. Same with my close brush with lawyerdom after undergrad. A girl I dated back in school is now starting her law career - STANDARD starting salary is $160k. They are all miserable, however. I'll probably make more money in my current field anyways, since I love and therefore put a lot of effort into what I do.

That's just my thought process. Yours is not better or worse, just different. Different strokes....

No I'm not in my lower 20s and I think you are quite a way off the mark to say you can do what you want on $500K. Consumption for some does not have a limit...but doing what you want does have a price. If what you want for example is to have 2 homes, a couple cars at each, 2 part time staff for each house and to do unlimited travelling....then there is a price to that. You could probably afford to keep it all going with $50 Million. Once you get passed that hurdle, then you can leave when ever you want. What I am saying about all these people you seem to know who up the ante every year at the consumption jamboree is that they probably enjoy what they are doing. And the whole consumption argument is a little flawed in that there is always an arugment that a person can do with less...we made it this far by starting in caves without fire. Having a BMW and scoffing at consumption is a little counter intuitive regardless of the model. Some people just like cars. Jay Leno has a ton of them, but last I checked he doesn't yearn for the latest cubists auctioned at Sotheby's. If what you truly want is a small apartment in a small mid-western town and you truly don't want any things, then you're $500K might be just fine....but then that guy probably didn't contemplate a private equity job in the first place. And I think you can keep upping the ante on consumption until you are done. Personally I wouldn't want 25 houses, 6 yachts and 4 jets and I don't have an appreciation for paintings and sculptures but a couple of houses, a boat and some cars would be something I do want...and that comes with a price.

There doesn't have to be a conflict with making money and enjoying the job or even putting in hours. I've come off some seriously tough weeks and felt great about it. From the outside, many would say that an 80 hour week is ludicrous but there are many that enjoy it, and for many, the money is the end game.

Oh and the dude above who said all hedge funds want are math wizzes is incorrect. Some quant funds do want modellers but others just want traders to execute orders or analysts to churn through data. There is a ton of software already out there and all the math in the world won't make a perfect trader, otherwise markets would all be predictable and none of us would have anything to talk about. Guys like Carl Ichan don't create an algorithm to make a decision.

[kick]

I'm just going from my experience. You're right, too.

However, if you think you need $50m for a couple houses, cars, and staff, you're aiming a bit high. Easily achievable with much less. Interest if you friend.

[FirstClass]

Originally Posted by leftcoastman

Cranking for 5 years isn't the whole picture of your "costs". Getting $300-500k straight out of grad school requires you go to a Top 5 Business School - count on a six figure student loan.

Parents man, parents.

Top 5 being Wharton, Harvard and what else?

[j|rz44]

Nice thread!
GL to you all

[leftcoastman]

Originally Posted by FirstClass

Parents man, parents.

Top 5 being Wharton, Harvard and what else?

Parents paying for business school? I am surely not going to be doing that for my kids if they decide to do Bschool. Especially since you're typically in your late 20s when you go to Bschool.

Here are the schools generally that I consider top tier: HBS, Wharton, Stanford, MIT, Kellogg. Columbia is pretty hot for finance, but otherwise it's not quite first tier.

Before you choose any career - go ask people who:

(1) Have done it for 20 yrs
(2) Have done it for 1 yr
(3) Have done it for 5 yrs and then quit.

If you're not bugging them for a job, they'll give you a lot of inside information.