7 ms·

Yes, quite. I have a friend who was only 26/27 and took home 325,000 USD as his bonus. Another is cagey about what he earns but it's stipulated he earns more t

by yomly 7y ago

Yes, quite. I have a friend who was only 26/27 and took home 325,000 USD as his bonus. Another is cagey about what he earns but it's stipulated he earns more than the number above. Meanwhile another friend at a different hedge-fund had a budget over ~20k USD to decorate his personal office at work. The excesses of finance are absolutely still alive and well but somehow the buy-side has managed to escape the public eye (presumably because they're mostly private)

corporate_shi11 7y ago
Why do you call these "excesses"? What would not be excess?
- yomly 7y ago
  my usage of the term "excesses" was in the context of an article about "Bonus Culture" itself a topic in the public eye. So less a term used as a value judgement and more a term with contextual meaning in this topic (IMO). Presumably these organizations have worked out that they can afford to pay their staff this and that it is profitable to do so, in the same way that FANG can pay their engineers pretty well too. Meanwhile, the median US household income is $56,516 for two adults...
  - xorfish 7y ago
    They didn't get the money by performing well. They do it by convincing people that they performing well. Even thought that 98% will not outperform a basic cheaper index fund with skill.
    - pnako 7y ago
      That's a bit of a meme. Not entirely wrong. But the people who have hedge fund money know how to read the fine print about returns. The goal of hedge fund is to reduce volatility and/or to generate uncorrelated returns. Some people are ready to pay a premium for that (in the form of under-performance compared to an index). Hedge funds are more an alternative to fixed income than an alternative to equities, if you think about it.
    - tomatocracy 7y ago
      I think the key part you missed is that the statistics of this sort are usually quoted net of fees (which makes sense from the perspective of the investor). So it's evidence that fund managers take an unequal share of their outperformance, not that they don't outperform the market/benchmark (of course, not all do that either).
      - xorfish 7y ago
        Measuring the performance of hedge funds is quite difficult. You have to account for survival bias, reporting bias and hidden risk.
- adrianN 7y ago
  20k is pretty much a year of minimum wage work. That's a lot of budget for decorating an office.
throwaway-fjobs 7y ago
Just out of interest, knowing these people personally: what are the kinds of tradeoffs involved in these jobs that pay so extraordinarily well so early in one's career? Is it a case of spending your 20s 8am-10pm in the office, no weekends, no vacation, etc? Or, if not, then what's the path into a job like this? Are they simply 0.00001% level brilliant people, lucky, well connected?
- dav43 7y ago
  Right place, right time, right skills, and sometimes the right connections.
  - texasbigdata 7y ago
    I hate this argument. It's such an excuse. I have 5 friends in that bucket. And none of them had the "right connection". Some are immigrants, some are minorities, some were dirt poor and came from nothing. But all of them had some of the highest drive and grit and sometimes intelligence out of my friend group. These guys would have done well in absolutely any industry. 8 to 10pm x 7 days a week would be an absolutely pleasure. It's hard to convey how hours longer than that weigh on you with multiple back to back subsequent years of "service". But finance isn't special. 27 year old top attorneys make 300k. And suffer similar pain. Even in consulting like BCG comp is not as high but you get weekends off. But you're still elbow to elbow with ambitious people. But heres the rub. I did the math once. My calculation showed there were 4,000 private equity professions in the US. Maybe that's changed. That's an absurdly small number. How many bariatric surgeons are there? Like when you compare these very small knifes edge type quantities, sure, you see excess. So finance used to be 7% of GDP, up from 4%, so for a period you had the ratio of people to GDP skewed so smart people rushed to normalize it. And it normalized. Now you see the equilibrium hit. But that doesn't mean sometimes the equilibrium is high. There's no 28 year old making 500k in silicon valley? Or spending 20k decorating their office? Like it's just a matter of perspective. Sorry for the rant. But the connection thing drives me crazy. I'm sure the silicon valley guy has really hard to obtain skills and didnt network at a bar into his top engineering job. Edit: didn't mean for this to be combative. I've long believed humans are sort of fungible. You take a partner at an accounting firm and throw him in a consulting firm (and somehow roll back time) that same person will sort of get to the same spot. I believe when you're 14 or 16 or 18 or 20 and you sort of pick what you want to do you are so impressionable that it ends up being partly passion and partially luck.
kamaal 7y ago
>>had a budget over ~20k USD to decorate his personal office at work. These sort of perks are common in senior management in several software companies as well. Especially if your job involves some sort of client/customer facing responsibilities. Indian IT outsourcing firms give their top management a very lavish budget to spend. Typically 5 - 7 star hotel stay, business class travel, thick daily per diem to spend and the best meals money can buy. Plus they also get paid to spend what it takes to impress clients to win contracts. Office furnishing budget etc. I even know one person who bought a fairly expensive bose sound system, and even took it to his home over time. No one really audits these things, and money once given is large aggregated in a group by statement in a report somewhere, and since its already sanctioned, no one cares how its spent either. This is one of the biggest motivations for me to move into management as a career upgrade.
- lonelappde 7y ago
  You can often be happier more easily by learning to enjoy life without extravagant luxuries instead of fighting in a rat race for expensive baubles.
  - kamaal 7y ago
    May be in a first world country like the US, the country from which I come from(India), things like these make huge difference to a person's lifestyle.
    - goobynight 7y ago
      How does something like a sound system help you more in India than the US?
      - bobbydroptables 7y ago
        It's not a sound system. It's round the clock house help in a country like India. A driver (instead of working your way through mind numbing traffic every day, twice a day), a chef, a maid, etc. It's buying real estate to secure your family's future for generations instead of living hand to mouth. It's sending your kids to good schools or doctors in the West as opposed to hoping to scrape together enough cash to educate or send them to doctors at all. It would be really hard for a first world person to understand how big the chasm is in less privileged parts of the world. You do not want to be on the wrong side of the wealth divide. It's not about speakers.

by yomly 7y ago

corporate_shi11 7y ago

Why do you call these "excesses"? What would not be excess?

yomly 7y ago
my usage of the term "excesses" was in the context of an article about "Bonus Culture" itself a topic in the public eye. So less a term used as a value judgement and more a term with contextual meaning in this topic (IMO). Presumably these organizations have worked out that they can afford to pay their staff this and that it is profitable to do so, in the same way that FANG can pay their engineers pretty well too. Meanwhile, the median US household income is $56,516 for two adults...
- xorfish 7y ago
  They didn't get the money by performing well. They do it by convincing people that they performing well. Even thought that 98% will not outperform a basic cheaper index fund with skill.
  - pnako 7y ago
    That's a bit of a meme. Not entirely wrong. But the people who have hedge fund money know how to read the fine print about returns. The goal of hedge fund is to reduce volatility and/or to generate uncorrelated returns. Some people are ready to pay a premium for that (in the form of under-performance compared to an index). Hedge funds are more an alternative to fixed income than an alternative to equities, if you think about it.
  - tomatocracy 7y ago
    I think the key part you missed is that the statistics of this sort are usually quoted net of fees (which makes sense from the perspective of the investor). So it's evidence that fund managers take an unequal share of their outperformance, not that they don't outperform the market/benchmark (of course, not all do that either).
    - xorfish 7y ago
      Measuring the performance of hedge funds is quite difficult. You have to account for survival bias, reporting bias and hidden risk.
adrianN 7y ago
20k is pretty much a year of minimum wage work. That's a lot of budget for decorating an office.

throwaway-fjobs 7y ago

Just out of interest, knowing these people personally: what are the kinds of tradeoffs involved in these jobs that pay so extraordinarily well so early in one's career? Is it a case of spending your 20s 8am-10pm in the office, no weekends, no vacation, etc? Or, if not, then what's the path into a job like this? Are they simply 0.00001% level brilliant people, lucky, well connected?

dav43 7y ago
Right place, right time, right skills, and sometimes the right connections.
- texasbigdata 7y ago
  I hate this argument. It's such an excuse. I have 5 friends in that bucket. And none of them had the "right connection". Some are immigrants, some are minorities, some were dirt poor and came from nothing. But all of them had some of the highest drive and grit and sometimes intelligence out of my friend group. These guys would have done well in absolutely any industry. 8 to 10pm x 7 days a week would be an absolutely pleasure. It's hard to convey how hours longer than that weigh on you with multiple back to back subsequent years of "service". But finance isn't special. 27 year old top attorneys make 300k. And suffer similar pain. Even in consulting like BCG comp is not as high but you get weekends off. But you're still elbow to elbow with ambitious people. But heres the rub. I did the math once. My calculation showed there were 4,000 private equity professions in the US. Maybe that's changed. That's an absurdly small number. How many bariatric surgeons are there? Like when you compare these very small knifes edge type quantities, sure, you see excess. So finance used to be 7% of GDP, up from 4%, so for a period you had the ratio of people to GDP skewed so smart people rushed to normalize it. And it normalized. Now you see the equilibrium hit. But that doesn't mean sometimes the equilibrium is high. There's no 28 year old making 500k in silicon valley? Or spending 20k decorating their office? Like it's just a matter of perspective. Sorry for the rant. But the connection thing drives me crazy. I'm sure the silicon valley guy has really hard to obtain skills and didnt network at a bar into his top engineering job. Edit: didn't mean for this to be combative. I've long believed humans are sort of fungible. You take a partner at an accounting firm and throw him in a consulting firm (and somehow roll back time) that same person will sort of get to the same spot. I believe when you're 14 or 16 or 18 or 20 and you sort of pick what you want to do you are so impressionable that it ends up being partly passion and partially luck.

kamaal 7y ago

>>had a budget over ~20k USD to decorate his personal office at work. These sort of perks are common in senior management in several software companies as well. Especially if your job involves some sort of client/customer facing responsibilities. Indian IT outsourcing firms give their top management a very lavish budget to spend. Typically 5 - 7 star hotel stay, business class travel, thick daily per diem to spend and the best meals money can buy. Plus they also get paid to spend what it takes to impress clients to win contracts. Office furnishing budget etc. I even know one person who bought a fairly expensive bose sound system, and even took it to his home over time. No one really audits these things, and money once given is large aggregated in a group by statement in a report somewhere, and since its already sanctioned, no one cares how its spent either. This is one of the biggest motivations for me to move into management as a career upgrade.

lonelappde 7y ago
You can often be happier more easily by learning to enjoy life without extravagant luxuries instead of fighting in a rat race for expensive baubles.
- kamaal 7y ago
  May be in a first world country like the US, the country from which I come from(India), things like these make huge difference to a person's lifestyle.
  - goobynight 7y ago
    How does something like a sound system help you more in India than the US?
    - bobbydroptables 7y ago
      It's not a sound system. It's round the clock house help in a country like India. A driver (instead of working your way through mind numbing traffic every day, twice a day), a chef, a maid, etc. It's buying real estate to secure your family's future for generations instead of living hand to mouth. It's sending your kids to good schools or doctors in the West as opposed to hoping to scrape together enough cash to educate or send them to doctors at all. It would be really hard for a first world person to understand how big the chasm is in less privileged parts of the world. You do not want to be on the wrong side of the wealth divide. It's not about speakers.