<p>well, the title says it all...i'm kinda laying it on the line here. my reason for asking this question is because i'll be transferring next year and most people at my school seem to be drawn into the world of finance. does a career like investment banking = $$$ ? i'm more of a quant guy anyway (physics major), so would trying to land a job in a hedge fund be a better bet for the $$$ ? any replies would be helpful, although i understand if i'm coming across as a little shallow.</p>
<p>What is filthy rich?</p>
<p>let's define it as having / earning a million+ before you're...30?</p>
<p>Bankers will not earn a million before they are thirty. Very few people will ever earn that amount. Granted, as a banker you can probably pull 500k if you're very good... but if you're after the money you definitely won't last.</p>
<p>How do you become filthy rich? Just choose a set of parents who are filthy rich.....it's the easiest say.</p>
<p>People who have done it include The Trump kids, Hilton kids, Bill Gates' kids, Steve Jobs' kids, Caroline Kennedy, Prince Wm, Prince Harry , kids whose parents are on the list of Forbes' richest etc.</p>
<p>so why is popular to go into finance from top schools if there aren't prospects of high salaries?</p>
<p>Sell drugs, I'm not kidding. Easiest way to make a million dollars. It's dangerous, but you don't have to go to school. Plus as a physics major, I'd say you would be one of the smarter drug dealers out there. You could save yourself the hassle and win the lottery, but that's not easy for a lot of people.</p>
<p>there are generally 3 categories of ways in which you can make a KILLING in this world. Mind you, university professors, lawyers, even doctors make a very good upper-middle-class living, but their pay is ultimately restricted by hourly/published rates. Those 3 categories are, in increasing order of likelihood:</p>
<p>1) Be the absolute best in the world at something that has value to the average american. Tiger woods makes a killing; the #15 golfer in the world does very well but probably can't afford a house in Greenwich CT. Tom Hanks makes a killing, but B-list actors (while they do very well) don't. The very top poker players supplement winnings with endorsements and have been making a killing lately, but the average pro, even a very good pro, merely makes a good living. Truly awesome stock pickers can make the best money on wall street, etc. You get the idea. If you can be the VERY BEST you can make a killing, but the odds of that are miniscule.</p>
<p>2) A career in the dealmaking side of the financial world. Join an investment bank in the M&A department, make associate, then make VP and MD (perhaps by your early 30s, or even by age 30 if you're really brilliant) and you will make a killing. Partners in decent private equity funds, etc. Go to a top business school and show your dealmaking ability and you'll get picked up by a shop that will know how to use you and reward you.</p>
<p>3) Start your own business. By far the most common. And possibly the most risky. But with some practice, good ideas, funding, and a TON of hard work, businesses succeed at rates that are not THAT depressing. And those who found and own the businesses that do very well essentially have no cap to their earnings. Grow a very useful business for a few years and then arrange an IPO, and you can cash hundreds of millions (note: very few do THAT well, but many more are bought out for millions nonetheless). It takes balls and ingenuity, which is something Americans tend to do better at than most, but is still rare. Many americans still prefer the comfort and consistency of a salaried job with a big company.</p>
<p>As for selling drugs, even the very top of the big syndicates barely make half a million per year, and the guys on the street barely make a living most of the time. Go read Freakonomics - most drugs dealers still live with their parents, with good reason.</p>
<p>My recommendation is, go read some books on entrepreneurship and find some ideas out there that would be good business ventures. Try a few, fail a few times, and you'll have learned more than a college could possibly teach you in terms of real world skills. You'll note bill gates dropped out of college to start a business (method 3), which seems to have gone ok. Of course, Warren Buffett is both the very best in the world at allocating capital (method 1), and also on the buy side of the finance world (method 2). So on down the line for most of the Forbes 400, you'll find few exceptions indeed.</p>
<p>A hedge fund would be nice, but it is a crowded field.</p>
<p>I would say it depends on your personality. If you like to make deals, negotiation, etc, then investment banking or private equity or whatever will work.</p>
<p>If you are an analytical, physics guy, then finance has a lot going for it. You can handle the math, and a science background tends to be useful when dealing with the real world (as opposed to pure math).</p>
<p>As far as having a lot of money before thirty, I would get the key courses and then get out in the real world as soon as possible (and stay out -- forget the mba).</p>
<p>Denzera's analysis is good. I will add that personality (in addition to luck, intelligence, high risk-taking and hard work) plays heavily in those people I've known who have done exceptionally well at a younger age. They have almost always been charismatic. </p>
<p>When some people hit the financial jackpot, they don't know how to keep their money. Wealth is a relative measure, and many people just don't know where they sit on the wealth scale. It's very important to live below your means -- in other words to save & invest for long-term wealth. Don't think of your job as your only path to wealth. You can view it as the way you generate income to make more investments. There are people who become multi-millionaires by middle age who become full-time investors. This is less exciting, but it is one of the most common paths. </p>
<p>You can also marry into wealth. </p>
<p>Try to think of it as wealth-building rather than filthy rich, and you'll have a better chance of keeping it. </p>
<p>Good luck!</p>
<p>Investment banking gives you eight years before you're thirty. $125,000 per year, bonuses included, is entirely not unheard of.</p>
<p>I disagree about selling drugs. I know a lot of drug dealers and most of them are pretty poor. There are very few drug dealers with the million+ dollar homes. I guess it depends what you consider rich. Many drug dealers think that if you have spinning rims you have made it.</p>
<p>very interesting post, denzera. now, are there specific interships available to undergraduates for M&A departments in investment banks? and what exactly is a private equity fund?</p>
<p>The best way to make money if you aren't Tiger Woods or J.K. Rowling is to learn how to invest.... think along the lines of intelligent real estate investing (or stocks if that's your thing, someone who's good can make a killing, even when the market is down). You'll have to be patient... you'll need to reinvest most of your profit, so don't go buying a Lamborghini after you make your first million, and you will probably lose money in the process of gaining the experience to be a good investor, so don't give up. </p>
<p>Following this advice, if you're good, you can make a multimillion dollar anual income... it may take you many years, but I know people who did just that. Another note, people who are "filthy rich" have a very different mentality than the poor or even the upper middle class (doctors, lawyers, financial analysts). Get into the right mindset, and you're off to a good start.</p>
<p>the problem with that statement is that if you are starting from essentially zero net worth, even the greatest stock investor in the world isn't going to acquire wealth that quickly. doing some investing on the side so that you get good at it is solid advice for later in your career, but when you are starting your career and looking for (essentially) get-rich-quick schemes, what I outlined are pretty much the real categories. investing is what you do once you HAVE the money. getting the money in the first place requires both financial discipline and a good, well-paying job.</p>
<p>p reepa - of course there are internships available to undergrads in banking and finance. the better undergraduate schools have good connections to most of the major financial institutions in the world, and through practice, networking, or just doing things with your undergrad career that prepare you well (i.e. major in economics, get internships, show interest in other ways), you can get them.</p>
<p>As for your other question,</p>
<p><a href="http://en.wikipedia.org/wiki/Private_Equity%5B/url%5D">http://en.wikipedia.org/wiki/Private_Equity</a></p>
<p>
[quote]
now, are there specific internships available to undergraduates for M&A departments in investment banks
[/quote]
</p>
<p>It's better to look at it as investment banking is a department within a firm. M&A IS investment banking. Thus, the department you will typically apply to is the investment banking department in which you will work on M&A's as well as other tasks.</p>
<p>Even the boutique firms usually do more than JUST Ibanking.</p>
<p>i'm aware that there are internships with finance firms, i just didn't know if there were M&A specific internships. sorry for the confusion denzera, but i think i have it straight now.</p>
<p>1M/year is like 99.95th percentile? Shooting for a goal like that will inevitably lead to disappointment.</p>
<p>Well it's better to aim for 99th percentile and slightly miss than aim for 80th percentile or lower and greatly miss. Ambition is usually a good thing.</p>
<p>btw: nice post denzera !</p>
<p>While I agree with Denzera that you have little net worth when you are beginning your career (and therefore probably wont make a lot of money), the younger you are when you start investing, the better. Start small, with one or two real estate properties or a few thousand in stocks.... this wont make you "filthy rich", but it will earn you experience which you can use when you start making serious cash. </p>
<p>The problem with beginning to invest later in your career (say, when you're in your early 40s) is that you have less time, and it takes a lot of time to learn how to become a great investor. Hell, it's not completely unheard of for someone younger, in their 20s per se, to make a million from investing (although it is rare). </p>
<p>Also, keep in mind that many successful investors are known to put "other people's money" into investments, so it is possible (if you're financially creative), to make a lot of money with little of your own, all legally. There is risk involved, so start small, and once you think you're ready, it's simply a matter of adding a few zeros.</p>