r/financialindependence • u/fidgit86 • 9d ago

What do you do that you earn six figures?

It seems like a lot of people make a lot of money and it seems like I’m missing out on something. So those of you that do, whats your occupation that pays so well?

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u/Captain_-H 9d ago

I did this too! She runs a private equity firm, and I would highly recommend marrying someone that runs a private equity firm. We met as teenagers so it’s a tricky road to follow

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u/ImagineAllTheKarma 9d ago

Whats the secret to finding someone who's gonna run a PE firm as a teenager?

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u/RustyCraftyloki 9d ago

Find someone who’s parents are very wealthy, or also run a private equity firm.

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u/MrMudPhud 9d ago

Nearly everyone I know who went into private equity or VC came from a wealthy background. In those fields they are almost blatantly pro-nepotism.

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u/mawhonic 9d ago edited 9d ago

Key point is nearly. As a PE guy who isn't from a wealthy background, I realize the reason for this is less about nepotism, more about exposure.

Wealthy people by default understand what IB and PE is and when talking to their kids about future careers, they share this knowledge so the kids can read up more about it.

I didn't get this from my parents, I got the standard do accounts, engineering or medicine. So I went with engineering and did well enough to get a scholarship overseas (I'm from a third world country) where I met a lot of people who were from wealthy backgrounds and shared that they wanted to join these industries I'd never heard of at that point. Cue research into these crazily high paying jobs which led me to join MC which led me to PE eventually.

People from my background tend to not know it exists or once they know, have no clue about how things work. I had the privilege of having sufficient friends to share insights and help on practice interviews.

So yes, wealthy people have the upper hand but it's not intentional nepotism. At least in my company, we look for the best and brightest, we just don't get many applicants who aren't wealthy and when we do, they don't fully understand what they're applying for.

Edit: MC = management consulting

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u/Pie297 9d ago

I agree with you, but some industry people don't like when information on these high paying jobs is spread. For reference, I just finished an internship in PE and got my return offer. I have a blue collar background. Trying to get any actual information on the industry (other than being told to prep with interview guides), even from alums, was like pulling teeth. Luckily my firm seems to recruit similarly to yours, or I'm not sure I would have had this opportunity.

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u/mawhonic 9d ago

That's true but when I experienced that, I put it down to just a general "I don't have time for you" attitude which is common in any high paced industry, not that they consciously don't want to share to keep the industry exclusive.

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u/RustyCraftyloki 9d ago

It’s because you don’t belong. Same thing in medicine happens where people talk to you wildly differently about the fiancé’s as soon as you’re in school.

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u/MrMudPhud 9d ago

I assume you mean finances, and not fiancés, haha.

I think the same thing happens in medicine with counseling, but to a far lesser extent. Everyone and their mother knows that GPA + MCAT + ECs = Med School admission. Is there some behind-the-scenes schmoozing? Yeah, but its minor.

However, I pretty commonly meet rich family friends who's kids are interested in medicine, and the conversation tends towards, "hey, help my kid get in," pretty quickly.

It's gotten a lot better than it was though. No more medical mission trips or specifically rewarding kids for writing personal statements about their doctor parents.

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u/BarterSellTrade 9d ago

How old are you starting into the field?

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u/Pie297 9d ago

Directly out of undergrad, which is an uncommon way to start.

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u/LegitosaurusRex 28 | 76% SR | 31% FIRE 9d ago

MC

Literally cannot Google that, so you're going to have to help us out here. I'm assuming you weren't a master of ceremonies.

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u/contactwho 9d ago

I’m a management consultant and literally had no idea what he was talking about.

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u/mawhonic 9d ago

Yeah, I realized in hindsight that it's not a standard term.

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u/Extension-Pen-642 9d ago

I sympathize. I am also an immigrant from a third world country and although my English is acceptable, sometimes I think terms that are used in my circle are more generalized than they actually are.

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u/bonozos 9d ago

Management consulting

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u/Mynameistowelie 9d ago edited 9d ago

I work as a junior analyst for a MM Hedge fund, switched from corporate finance working in FP&A.

Good compensation plus performance bonuses, but ironically I make more from trading options, commodities and currencies in some months than I do from my actual job.

I think a key factor to building FI is having multiple sources of income, both residual and passive.

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u/WhatIsThisWhereAmI 9d ago

Any insights into how a total pleb from a blue collar background can learn enough about trading options, commodities and currencies to make a passive income?

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u/bokizap 9d ago

I have so many questions on options haha

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u/bluepaintbrush 9d ago

I think there’s also a trust factor in addition to exposure. They’re more likely to select someone who feels comfortable and confident in that industry, and that ties into exposure like you said.

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u/stretchypants88 9d ago

Hello fellow former consultant. I also didn’t have the same exposure to these types of roles when I was growing up, and my family still isn’t sure what my job is. Very fortunate to have fallen backwards into my career path. Cheers!

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u/mawhonic 8d ago

Yeh, I hear you. My siblings still explain my job to others as "he's a suit" lol

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u/DarthRoach 9d ago

Someone not from a wealthy background does not have the connections to get jobs and investments like you did.

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u/mawhonic 9d ago

I'm not sure if I understand you correctly, are you trying to convince me that I don't know my own background and am actually unknowingly a trust fund baby?

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u/[deleted] 9d ago edited 7d ago

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u/mawhonic 9d ago

Home country. Earning significantly less than PE in the states but comfortably in the six figure USD per annum.

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u/Famulor 9d ago

Six figures USD must be an insane amount to earn in a Third world country

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u/mawhonic 8d ago

Yeap. The LCOL makes it hard to consider offers from the higher paying funds based in Singapore or Hong Kong (at least before the protests).

You'd be surprised how low my networth is though, I'm still pretty young so I havent had too many years of crazy high income.

I started working at <10k USD per annum so the initial years were extremely slow accumulation. With the current salary, 2 years to my minimum FIRE at 4% safe withdrawal excluding any carry that might come in.

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u/aaxme 7d ago

What is PE?

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u/ironysmith 9d ago

Lol. Unintentional nepotism = racism/implicit bias. Equity and VC firms are majority white, and in-group biases reign supreme.

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u/[deleted] 9d ago

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u/Buckhum 9d ago

But yeah I don’t think it’s necessarily nepotism. More correlation than causation.

I would say nepotism is one big causal factor, though it doesn't explain ALL who ended up in investment banking.

Like what /u/mawhonic said, there's also the element of rich people knowing the industry and teaching their kids about this career path from early on. And so, these rich kids already know what to study + how to network & get internships as soon as they get to college. When it comes to getting fancy internships, this is when your parents' connections really come into play (and when nepotism really kicks in).

I know people in roles like that at top firms and they didn’t know anyone, but they did go to those schools.

These people are more likely exceptions rather than the norm.

...but what the hell do I know. Making a model of human behavior is really messy.

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u/RustyCraftyloki 9d ago

Just being admitted to those schools is hugely nepotism.

Not to mention you’re 77x more likely to be from the 1% at those schools.

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u/[deleted] 9d ago

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u/RustyCraftyloki 9d ago

The evidence in this is just overwhelming. You’re just parroting a feel good self deserving harmful cult of positivity meme that is celebrated in /r/GetMotivated . It’s not reality and it just breeds resentment. Americans have a religious like faith that with each new generation the poor run a fair race against the rich, and it is the brightest that succeed.

Maybe an insider story would be convincing if data isn’t your thing?

“It was difficult to avoid the conclusion that the strongest predictor of being admitted to a school like brown was not some abstract measure of accomplishment or intelligence, but rather, having parents with socioeconomic resources to acquire for you the childhood experiences that were a precondition to being accepted, from a decent k-12 schools to books at home to tutors and SAT materials to volunteer trips to internships.” https://popularhistory.tumblr.com/post/144918476295/on-college-reflections-10-years-later

The best defense a child who is lower scoring on cognitive tasks through adolescence and of a well off family from falling down the mobility ladder is a college degree. Do we want to prevent this downward mobility at the cost of also preventing the possible upward mobility of higher scoring poor students? https://www.brookings.edu/wp-content/uploads/2016/06/glass-floor-downward-mobility-equality-opportunity-hoarding-reeves-howard.pdf

You know people run at different speeds and you want the fastest person to win, but you also want the race to start fair. You don’t want someone to get a 70 meter head start. There’s also the uneven development of “merit.” You’d like an even playing field but some kids get to practice on the field on nights and weekends because of mom and dads money. And the pyramid of “merit” then gets molded over time with great investment, to mirror the pyramid of wealth. This is not a meritocracy at all. It’s a hereditarocracy. https://www.economist.com/briefing/2015/01/22/an-hereditary-meritocracy

For every student from the bottom 50% of income in one of the very selective schools, there are twice as many students from income groups north of 200k (an incredibly small portion mind you, nowhere near as large as 50% of the population lol). That is 400% more income minimally than those at the top of that bottom half range. https://opportunityinsights.org/paper/mobilityreportcards/

We’ve seen a monumental diversion of wages from the bottom 80% of households to the top 10%. That has come with much greater investment into those kids by parents, and that isn’t for naught. It buys results to a degree. https://i.imgur.com/mty0GFg.jpg

The avenues which were available for those born to modest circumstances to be moved into the upper parts of society have narrowed dramatically. And yet the scaffolding surrounding those born into families of means has been substantiated, whether or not that person is talented.

People frame things as not wanting to intervene to limit the elite of our population. But we're are already intervening. A typical elite college is receiving a subsidy of about $100,000 per year. The typical university student is getting around 12,000 per year. And at a CC it's about $2,500. So the elite students are receiving a subsidy of 40x more. That is an active intervention. We can simply start by removing that giant inequity intervention for those already massively advantaged. More than 90% of the benefits of 529 plans goes to the top quartile income families. A good majority to households with north of 200k of income, 4x median.

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u/[deleted] 9d ago

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u/RustyCraftyloki 9d ago

Lol. What a wild antievidence take. Just ignore all of reality like an economic antivaxxer.

Not to mention, for decades, a vast portion of the people that got admitted to top tier colleges did so because of legacy admissions.

But keep being focused on letting the idiots of our country succeed the most.

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u/RustyCraftyloki 9d ago

I had a friend entering portfolio management. First thing they had to do was seek out their parents wealthy friends to see if they could manage their money lol.

It was just egregious but of course I kept my mouth shut.

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u/123097bag 9d ago

High dollar real estate is exactly the same

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u/yoshkoshdosh 9d ago

Yup thats why many here are recommending doing jobs that others don't want to do, as those plushy jobs that everybody wants to do are reserved for the offsprings, nephews and nieces of the company founders.

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u/TaxGuy_021 9d ago

I work with the top three PE shops on a daily basis (Fuck Apollo) as a tax consultant. All of the folks I met and got to know come from stable middle to upper middle class families, but not one is from a wealthy family.

PE, and deal work in general, is hard work with tons of stress. If you have got life made for ya, I doubt you would choose to do deal work just for fun.

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u/RustyCraftyloki 9d ago

Those are massively different classifications if wealthy.

It’s also a bit of an inaccurate assumption. Wealthy folks love to brag about the education and work of their children. It makes the kids wealth seem far more deserving. These days kids don’t just get a fat inheritance. They get an education worth 15+ million and a red carpet walkway to a high paying career.

A massive portion of new wealthy is from ultra high paying careers. Labor based jobs. Not some aristocracy any longer bragging about how they don’t have to work. The brag is how hard and how much work they have.

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u/TaxGuy_021 9d ago

Have you done deal work?

Have you been dragged out of your bed by your phone at 3 am because some asshole in Japan demanded to see a truly asinine scenario within the model you have put in 100 hours over the last 5 days to build and they wont sign until they see it?

Have you ever had anything close to a complete mental breakdown over the font of your bullet points on page 69 of a 200+ page deck because you have been working 90+ hour weeks for months with no weekends?

Very few people who can avoid that kind of work and live a life of luxury ever choose to do that.

If you, or your children, have to work to live a live of luxury, you are not wealthy.

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u/RustyCraftyloki 9d ago

The evidence states you are overtly wrong. This guy writes quite a bit about it. He even labels these folks in a trap. https://law.yale.edu/yls-today/news/professor-markovits-meritocracy-trap

However, it's hilarious that you're complaining about making a power point. While I'm sure being paid absurdly to do so. It's almost ironic you don't see how ironic that is. It could be a meme made fun of in so many different places. PowerPoints. lol

​

Whens the last time you took care of a 14yr old girl who attempted to commit suicide while the mother is berating you to save their life and apologizing and thanking you at the same time?

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u/TaxGuy_021 9d ago

You just cant read can you?

What you have written here is as irrelevant to what I said as Greek mythology.

I'm saying nobody who has enough money to live a life of luxury without having to lift a finger will do deal work.

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u/RustyCraftyloki 9d ago

And that’s like, your wrong opinion bud.

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u/MrMudPhud 9d ago

Yeah I generally meant upper middle class, not "my dad is worth $50M+" wealthy.

The prototypical "going into PE" guy at my college (private, top 10) went to a private school, paid full tuition, and lived in a nice apartment right off campus financed by their parents.

The "fuck you" money people were different and usually kind of fucked up, tbh. One of them lived with me, three guys in a 2 BR apartment. He'd spend $50k on horse racing and then come home complaining that you owed him $5.62 lmao.

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u/TaxGuy_021 9d ago

Yep.

Doctors/lawyers/accountants/etc. parents with a household focused on achievement and making a ton of money is the background most of the fellows I met have.

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u/fullretard6969 9d ago

I work in private equity and come from an upper middle class background, but nepotism had nothing to do with it. I just worked hard, got into a good college, and worked in investment banking for a few years before going through the traditional recruiting process to win my PE seat.

And to answer OP’s question I’m an associate at a PE firm and make $350k before carry, which is profit sharing from the investments we make.

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u/chaiscool 9d ago

Tbf PE / VC are created by successful people from big banks that wanted their own business.

Most boutiques even have exclusive partnership with a particular bank as they bank don’t want to lose their clientele

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u/ttuurrppiinn 9d ago

Their parents being Stanford MBAs is usually a good, slightly more specific criteria.

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u/Captain_-H 9d ago

I went with an incredibly driven finance major who had parents that were also wealthy, driven, and work in finance. ¯_(ツ)_/¯ probably start the search in the honors section of a major university’s business school

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u/[deleted] 9d ago

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u/Fish_bob 9d ago

You heard the man. She’s driven and she’s wealthy.

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u/creations_unlimited 9d ago

Lol 😂 I have no awards to give you. But yea! That is the question

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u/SpindlySpiders 9d ago

Almost no one runs a PE firm as a teenager.

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u/Careful_Strain 9d ago

That's way more than 6 figures

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u/RyVsWorld 9d ago

Yup. Way more

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u/swallowed_by_the_sky 9d ago

Yeah but his allowance is six figures

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u/FuzzyJury 9d ago edited 9d ago

I married an heir of someone who runs a private equity firm/used to be c-suite with a big bank. Husband and I met as broke grad students (or I guess, I was the broke grad student, didn't realize he wasn't at first). Husband also is now a high 6-figure earner in his own right via tech. Would recommend. Though I have to say, it makes all of my career efforts feel somewhat unnecessary except in so far as they bring me fulfillment, which has been a weird existential dilemma I never thought I'd have.

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u/RyVsWorld 9d ago

Jesus. That carry is probably insane

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u/thewonderfulpooper 9d ago

Can someone define what a private equity firm does for me. I'm a loser

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u/mawhonic 9d ago

So you know what the stock market is? That's public equity, companies are available for trading shares to anyone.

Private equity buys and sells company shares when they aren't public. (Though sometimes they're public too)

Imagine your local mom and pop store. Fully owned by that family but they'd decide they want to open another location, they sell 50% of the current store to a neighbour to get the cash and then use the cash to expand. That's effectively private equity. Just take it way way bigger and think 9 or 10 figure deals.

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u/chaiscool 9d ago

Torpedo / takeover companies and insert their own execs too.

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u/sir_weebalot 9d ago

Aww don’t be so hard on yourself. You’re a wonderful pooper!

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u/thewonderfulpooper 9d ago

Haha thanks!

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u/wanderer779 9d ago edited 9d ago

Like 99% of all active asset managers they underperform the market and pay themselves a ton to do it (which is one of the reasons why they underperform).

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u/Boredguy32 9d ago

Nice, is she single?

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u/therealvanmorrison 9d ago

So…eight figures?

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u/BidensBottomBitch 9d ago

The real financial advice is always deep in the comment thread....

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u/MisfitMishap 9d ago

That road might get some people into jail.