The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

The Entrepreneur's Forum for learning how to build wealth and financial freedom the Fastlane way!

Say "NO" to mediocre living rife with jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence. Join our forum with more than 70,000 entrepreneurs who are making it happen.
Join for FREE Today
Get the books
Remove ads? Join Fastlane INSIDERS
(Registration removes this block)

Career: Hedge Fund/Portfolio Management Vs entrepreneurship

andyzee

PARKED
Mar 17, 2011
4
0
Hi all-
I just finished reading "The Millionaire Fastlane " (just few pages left). It is probably one of the best books on the subject and I had thought about many concepts that the book clarified. I was a "sidewalker" not that long ago, transitioned into a "slowlaner" and I am on my way to "Faslane" NOW. The journey has started.
Anyhow, Demarco seems to be inclined more towards entrepreneurship, my inclination is towards stock market. He does mention that Fastlaners use stock market for "income generation" & not for "wealth building". Fastlaners do not do jobs (unless CEO and other executives, which also take years to reach to).
I have taken an "Entrepreneurship course" and done a reasonable study on the the topic. Entrepreneurship can build wealth, sometimes huge, but I think Wall street can control these IPOs/startups/public companies on a higher level regardless. Anyway, that's not the point. The point is: My passion seems to be developing towards "Portfolio Management (PM)" or "Hedge Funds (HF)" (more inclined towards the later). My ultimate goal is to earn millions, while enjoying the process. My HF/PM interest is not just based on "Do what you love" philosophy, but a simple matter of choosing a particular field versus other, while both leading you to riches. I think you'll agree that "Portfolio Managers" and "Hedge Fund Managers" can earn Millions. It might be a long road 5-10 years on more, but even the entrepreneurship is not a small journey for a beginner.
Another important aspect is that even if you make millions as an entrepreneur, you'll for sure need to develop your financial knowledge anyway to invest somewhere (Commandment of Control). This particular aspect gives me in an edge if I am in HF/PM versus entrepreneurship.
IN the HF/PM category, I might have to do the following:
1. Get an MBA and take a loan of ~100K.......this leads to parasitic debt.
2. Begin with Research analyst/associate "JOB".....This "JOB Profile" is obviously slowlane.
Both the items above violate concepts mentioned in the book, hence I am wondering how would you approach it? Do my dreams of pursuing a career in PM/HF converge with the Fastlane approach suggested by DeMarco. I am sorry if this has already been discussed/explored. I did try to search the forum, but could not find specific information.
Thanks.
AZ
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Paul

New Contributor
Mar 17, 2011
20
12
Instead of being the guy doing the hard work, you could advice people on how to invest. There are millions of people who are interested in investing and if you have knowledge that will help them make smarter decisions you can make money without having to work as a hedge fund manager. If you really know what you are doing, people will pay for your knowledge and they will pay a lot (recuring monthly subscriptions). I think you should really ask yourself if you want to end up being a hedge fund manager who is under lot's of pressure because he's managing millions/billions of someone's money with only limited possibilities to scale up his income or if you want to go into a business where you determine how much money you will make.
 

Rickson9

Gold Contributor
Speedway Pass
Sep 4, 2010
1,686
1,760
Canada
An individual that owns a successful hedge fund will make huge money compared to an individual who owns a financial advisory firm. IMHO.

Best regards.
 

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
An individual that owns a successful hedge fund will make huge money compared to an individual who owns a financial advisory firm. IMHO.

Best regards.

Seven/Eight/Nine/Ten figures more per year hahah :p

Anybody can become a 'financial advisor'.

To be a successful hedge fund manager, you need to be incredibly intelligent, with one or multiple degrees, a CFA designation, and a PhD wouldn't hurt.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Rickson9

Gold Contributor
Speedway Pass
Sep 4, 2010
1,686
1,760
Canada
To be a successful hedge fund manager, you need to be incredibly intelligent, with one or multiple degrees, a CFA designation, and a PhD wouldn't hurt.

I would disagree. I don't believe that great intelligence is necessary. Average is just fine. The CFA designation is just a regulatory hurdle needed for Canada. Again, it doesn't really help more than that. Just my opinion.

Best regards.
 

Paul

New Contributor
Mar 17, 2011
20
12
I was suggesting a financial advisory firm because it's easier to get started and easily scalable. I'm not saying andyzee can't be the next David Tepper making $4 billion in one year but as far as I know there is no fastlane way to become that successful as a hedge fund manager.

How would you do it if you were in andyzee's position?
 

jen

PARKED
Mar 2, 2011
28
0
34
In the hedge fund business nothing matters but balls. Balls to pull the trigger on a 50 million dollar trade with a days thought. Now thats balls.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
I would disagree. I don't believe that great intelligence is necessary. Average is just fine. The CFA designation is just a regulatory hurdle needed for Canada. Again, it doesn't really help more than that. Just my opinion.

Best regards.

I interpret 'average' intelligence as being anyone who hasn't at least finished an undergraduate degree. (So only highschool)

Yes most degrees are not a fair representation of intelligence, with plenty of dropouts or even people who have never attended university being much smarter than most of the people at university, but in the eyes of pension fund managers, university endowments, etc if you want their investment you need to have a degree or two.

As for the CFA, most if not 99.9% of hedge fund managers got a job as an analyst or trader at a hedge fund or other institution before becoming an actual manager.

Most serious analyst/trader positions that I've encountered demand a CFA designation. CSC completion in Canada as well.

Not so much for traders, but for analysts it would really be something to elevate a person above the rest of the talent pool.
 

andyzee

PARKED
Mar 17, 2011
4
0
I interpret 'average' intelligence as being anyone who hasn't at least finished an undergraduate degree. (So only highschool)

Yes most degrees are not a fair representation of intelligence, with plenty of dropouts or even people who have never attended university being much smarter than most of the people at university, but in the eyes of pension fund managers, university endowments, etc if you want their investment you need to have a degree or two.

As for the CFA, most if not 99.9% of hedge fund managers got a job as an analyst or trader at a hedge fund or other institution before becoming an actual manager.

Most serious analyst/trader positions that I've encountered demand a CFA designation. CSC completion in Canada as well.

Not so much for traders, but for analysts it would really be something to elevate a person above the rest of the talent pool.

RyanDrake, Paul, Jen & Rickson:
Thanks for your interesting comments & advice. I really appreciate it.
From my initial research on the subject matter, it seems that below are the qualities one needs to be successful in Hedge Fund/PM business.
- Exceptional analytical capability
- Exceptional creative ability
- Deep concentration ability
- Deep intestinal fortitude
This seem to encompasses everyone's comments. RyanDrake's comments are especially helpful to me and are in my favor. I already have a PhD in Engineering and have started to prepare for the CFA exam. However, I do not have any money to pursue an MBA. I already have a decent amount of parasitic debt including credit cards, mortgage, car payments (alas, I was a sidewalker) that enslave me to a job and do not allow me to spend as much time as I'd like to study further. Any further comments/thoughts would be helpful.
 

ChrisRempel

Bronze Contributor
Read Fastlane!
Mar 1, 2011
72
193
38
Victoria BC
I interpret 'average' intelligence as being anyone who hasn't at least finished an undergraduate degree. (So only highschool)

Looks like the marketing department at your local university has done their job well - gotta pay for all those professor's pensions somehow...

Most MBA's and otherwise "educated" young people I've encountered so far have trouble seeing the simplicity of supply/demand and the fundamentals of business. They're so caught up with legal structure, "making a plan" and looking corporate that they miss the forest for the trees.

That's why when it comes to forming alliances or actually working with people where they'll have a decision-making capacity, I look only at track-records. I could care less if they dropped out of school at 3 years old.

Like you, I'm generalizing, but that has been my experience.

Perhaps the best indication of "post-secondary intelligence", though, is when I put up job postings for part-time content writers, project managers, and so on - and get inundated with 40 resumes from people with 5+ years of "education" (and probably $80k+ worth of debt to go with it).

Seems their golden ticket didn't quite translate into the real world.

It's funny, but simultaneously sad.

The false perception of "accreditation = value" has enslaved and destroyed a lot of people, and it's all 100% self-inflicted.

How intelligent.

-Chris
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
You honestly have no understanding of what I wrote.

I'm looking at it from the viewpoint of PENSION FUNDS, AND UNIVERSITY ENDOWMENTS... which would be MY target market as a hedge fund manager.

These institutions will not invest BILLIONS of dollars with someone who does not at least have an undergraduate degree.

Why?

Because our society, predominantly slowlane as it is, puts great emphasis on post secondary education.

"The false perception of "accreditation = value" has enslaved and destroyed a lot of people, and it's all 100% self-inflicted. "

I've been on this forum for 3 years, and you think that I don't already know this?

"That's why when it comes to forming alliances or actually working with people where they'll have a decision-making capacity, I look only at track-records. I could care less if they dropped out of school at 3 years old."

Well, that's not how multi-billion dollar hedge funds operate. A potential investor looks at the background of the fund manager regardless of past performance.

There are no (I've been researching hedge funds/working with people in the industry for over 5 years) managers who possess only a high school diploma. This is how this industry works. Hedge funds are unlike ANY OTHER investment vehicle.

I've not been brainwashed by the marketing department at my university. This is simply the reality of the industry.

Also, who cares about "$80k+ worth of debt" when you're making $20M-$1B dollars a year. I can easily name you a dozen contacts of mine that landed jobs as analysts with hedge funds after completing university and their CFA and make well over $1M USD per year from the start. This is how it works.
 

Rickson9

Gold Contributor
Speedway Pass
Sep 4, 2010
1,686
1,760
Canada
I interpret 'average' intelligence as being anyone who hasn't at least finished an undergraduate degree. (So only highschool)

Yes most degrees are not a fair representation of intelligence, with plenty of dropouts or even people who have never attended university being much smarter than most of the people at university, but in the eyes of pension fund managers, university endowments, etc if you want their investment you need to have a degree or two.

As for the CFA, most if not 99.9% of hedge fund managers got a job as an analyst or trader at a hedge fund or other institution before becoming an actual manager.

Most serious analyst/trader positions that I've encountered demand a CFA designation. CSC completion in Canada as well.

Not so much for traders, but for analysts it would really be something to elevate a person above the rest of the talent pool.

I have to respectfully disagree.

My friend who runs a $1.5B fund has grade 12 education. He didn't go the job route into owning the fund (accounting, auditing, analyst, etc.). He sold. He convinced people/institutions/insurance companies/endowments to buy into his fund. He was an entrepreneur. He got the CFA designation when it became mandatory.

Again, I don't believe intelligence has much to do with it. Having created a fund myself this is my opinion.

We just agree to disagree. If you believe that it requires certain things, then you are correct. If I believe that it requires other things, then I am correct. What we believe is our reality.

Best regards.
 

ChrisRempel

Bronze Contributor
Read Fastlane!
Mar 1, 2011
72
193
38
Victoria BC
There are no (I've been researching hedge funds/working with people in the industry for over 5 years) managers who possess only a high school diploma. This is how this industry works. Hedge funds are unlike ANY OTHER investment vehicle.

So you've been working with people in the hedge fund industry since you were 13?

You might want to adjust your profile information if you're not actually 18 years old.

Also, who cares about "$80k+ worth of debt" when you're making $20M-$1B dollars a year. I can easily name you a dozen contacts of mine that landed jobs as analysts with hedge funds after completing university and their CFA and make well over $1M USD per year from the start. This is how it works.

That's great - for them.

But something tells me it takes more than accreditation to land a $1M/year salary. And we all have "contacts" who have conquered the world in some form or another. But in reality the only bragging rights that count is the stuff you've actually done.

And usually it's not as "easy" as you may believe.

And when you're not yet making $3 Trillion a year as a starting salary, yes, $80K in unsecured debt is a very big deal.

These institutions will not invest BILLIONS of dollars with someone who does not at least have an undergraduate degree.

I'm pretty sure they also won't invest billions with someone who has no track record. Just a hunch...

Look dude - I'm not here to pick fights, but at the same time I don't take it lightly when somebody labels highschool grads as less-intelligent than someone with a degree.

By the time most of my peers graduated from wherever, I was already buying up real estate and doing high 6-figs from intellectual property. Even so, I don't say that I'm "smarter". It was a choice, and one that ended up profitably.

You may well go on to start earning crazy $$ working for some hedge fund - that's great, all the power to ya.

But until then...

I wouldn't knock the "highschoolers" out there. You might just end up working for one when you're working for a prestigous hedge fund...

-Chris
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

valuegiver

Contributor
Read Fastlane!
Aug 18, 2010
343
68

CommonCents

Silver Contributor
Speedway Pass
Apr 14, 2009
1,170
820
MN
The best way to start w/out traditional degrees and wall st track is to network your butt off with rich people. Come in from the sales side. The hardest thing for most funds is raising money. Many managers are not sales people, they are investors. Two different animals. They pay people well to raise money in performance fees.

As far as being a fund manager yourself, if you can raise the money yourself(friends/family etc..) to start you will need less qualification. If you can't your best bet is doing the traditional track IMHO. The degrees and experience are necessary barriers to entry. There are tens of thousands of experienced people w/ advanced degrees. The industry will use those credentials to weed people out. People are conservative. They don't look for reasons to do business with you. They look for reasons to not do business with you.

Obviously there are always exceptions but for me, I'd rather not reinvent the wheel and try to buck the odds.

Being an expert in some alternative investment area is probably the quickest way to gain entry. There are new opportunities w/ the tightening of credit etc...distressed asset sales...folding banks...financing legal firms/lawsuits/settlements...cashing out annuities etc...
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

CommonCents

Silver Contributor
Speedway Pass
Apr 14, 2009
1,170
820
MN
One other thing. Sometimes I get the impression here that higher education is dang near evil. LOL. The fast lane is a mindset in which you already have and others don't. Getting an MBA or your CFA, CTA etc..credentials won't brainwash you into a corporate drone. You will look for and see opportunities that others won't and that will set you apart. Credentials and education can be important tools and stepping stones to achieve what you want. Your drive and mentality will use those tools to make something great happen!
 

valuegiver

Contributor
Read Fastlane!
Aug 18, 2010
343
68
Getting MBA especially will cost you a lot of money. For most people, this means going deeper in debt. Thus, there is a need for them to 'make use' of their MBA to get a corporate job in order to pay the debt. As we all know, MBA jobs usually translates to long working hours doing a lot of Excel spreadsheets and PowerPoint presentations. Being in that kind of environment will occupy your mind fully and drain your mental energy that you don't have the luxury of time and energy to go Fastlane.

One other thing. Sometimes I get the impression here that higher education is dang near evil. LOL. The fast lane is a mindset in which you already have and others don't. Getting an MBA or your CFA, CTA etc..credentials won't brainwash you into a corporate drone. You will look for and see opportunities that others won't and that will set you apart. Credentials and education can be important tools and stepping stones to achieve what you want. Your drive and mentality will use those tools to make something great happen!
 
G

Guest3722A

Guest
Forbes - Steve Cohen
Forbes - James Simons
Forbes - George Soros
Forbes - John Paulson
Forbes - Abigail Johnson
Forbes - Ray Dalio
Forbes - David Tepper
Forbes - Bruce Kovner
Forbes - Dirk Ziff
Forbes - Daniel Ziff
Forbes - Robert Ziff

Well, this is a start. Not all of these guys run a fund, some just invest in but you can get their educational backgrounds from the links and further research more if ya like
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
Forbes - Steve Cohen
Forbes - James Simons
Forbes - George Soros
Forbes - John Paulson
Forbes - Abigail Johnson
Forbes - Ray Dalio
Forbes - David Tepper
Forbes - Bruce Kovner
Forbes - Dirk Ziff
Forbes - Daniel Ziff
Forbes - Robert Ziff

Well, this is a start. Not all of these guys run a fund, some just invest in but you can get their educational backgrounds from the links and further research more if ya like

Funny thing how the vast majority of the wealthiest managers have BA/Bs, MBAs, and/or PhDs

Thanks for the link :)
 

Rickson9

Gold Contributor
Speedway Pass
Sep 4, 2010
1,686
1,760
Canada
I have to respectfully disagree.

My friend who runs a $1.5B fund has grade 12 education. He didn't go the job route into owning the fund (accounting, auditing, analyst, etc.). He sold. He convinced people/institutions/insurance companies/endowments to buy into his fund. He was an entrepreneur. He got the CFA designation when it became mandatory.

Again, I don't believe intelligence has much to do with it. Having created a fund myself this is my opinion.

We just agree to disagree. If you believe that it requires certain things, then you are correct. If I believe that it requires other things, then I am correct. What we believe is our reality.

Best regards.

My friend doesn't do many interviews but here was one. He banks a mil a month.

"He has only a grade 12 education and used to labor as a Bell Canada repairman. He has never worked for a big bank or a mutual fund company. He largely shuns the Courvoisier-chugging Bay Street set. But if you're searching for the best mutual fund manager in Canada, you'll find it difficult to avoid quiet, shy Francis Chou."

It's a bird, it's a plane no, it's mild-mannered Francis Chou | poweredByMoney | Canadian Business Online
 

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
I thought he was a hedge fund manager.

There are 1000s, if not 10,000s more mutual funds than hedgefunds. I'm not a fan of mutual funds by any means (and will never work for one, invest in one and/or start one), but good for your friend. Shows that anything is in fact possible with enough drive and hard work.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Rickson9

Gold Contributor
Speedway Pass
Sep 4, 2010
1,686
1,760
Canada
I thought he was a hedge fund manager.

There are 1000s, if not 10,000s more mutual funds than hedgefunds. I'm not a fan of mutual funds by any means (and will never work for one, invest in one and/or start one), but good for your friend. Shows that anything is in fact possible with enough drive and hard work.

You're right. A hedge fund is even easier to start than a mutual fund and he would have made even more money, but that's life. Either way a fund is an awesome way to make coin.

If a person can sell, the world is their oyster.

Best regards.
 

DeletedUser394

Bronze Contributor
Read Fastlane!
Mar 24, 2008
0
483
None has PhD. JD is not really a PhD.

FFS!!!: Forbes - James Simons

'MIT grad started his career as a theoretical mathematician; taught at Harvard. Got Ph.D. from UC, Berkeley, then broke codes for U.S. Department of Defense during Vietnam.'

Prefers hiring Ph.Ds instead of MBAs

From Wikipedia: 'James Harris "Jim" Simons is the son of a shoe factory owner in Massachusetts[6] and received his B.S. degree in mathematics from the Massachusetts Institute of Technology in 1958[1], and his Ph.D. degree, also in mathematics, from the University of California, Berkeley in 1961[7] at the age of 23"

Anything else you need to help clarifying?

I wonder why arguably one of the most successful hedge funds in the history of the world is run by a man with multiple degrees from various prestigious schools, and who seeks out people with PhDs. It's a dang mystery!

I also am confused as to why 9 out of 10 of all the largest hedge funds in the world are run by people with degrees. I just can't fathom why...

Sick of being attacked in this thread, when all of my main points (that main street views people with degrees as generally being more intelligent, EVEN THOUGH THIS IS NOT TRUE IN MANY CASES) (that most of the top funds are run by people with degrees) are completely valid and proven right.
 

InMotion

Silver Contributor
Read Fastlane!
Speedway Pass
Mar 18, 2011
858
567
Not to rain on your parade, I wish you the very best I really do, however alot of people on Wallstreet have been working there for years as traders want to get into the hedge fund biz; I think wallstreet is full of money chasers by definition. If you want hired on Wallstreet at this level you really need to impress some bigdog that can get you on; but dont take my advice find someone who can fill you in. Most of the hedge fund firms will laugh you out of the office unless you have a math or business degree from a top 5 school. Wallstreet is insanely competitive but if you are talented, can make people tons of money, and can show the right people that you can do it, you can score BIG; it is very political. Might try getting on at a firm first then work connections like there is no tomorrow, most of the very richest managers say that they can train you to make money but they arent going to just do it for anyone. just my 2 cents.
 

andyzee

PARKED
Mar 17, 2011
4
0
Thanks!!

Sick of being attacked in this thread, when all of my main points (that main street views people with degrees as generally being more intelligent, EVEN THOUGH THIS IS NOT TRUE IN MANY CASES) (that most of the top funds are run by people with degrees) are completely valid and proven right.

Hi RyanDrake & everyone else-
I started this thread and really appreciate yours & everyone else's comments in the thread. They are very valuable to me as I start on this journey. I do have a PhD, & I hope it'd help. Also, I don't think that having a PhD makes me any more intelligent than a high school drop out. If it helps me with an entry, that's great, if not, I'd acquire the skills that are required.
Thanks again for everyone's inputs,
Best regards
AZ
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

365

Contributor
Feb 10, 2009
165
36
NYC
I wonder why arguably one of the most successful hedge funds in the history of the world is run by a man with multiple degrees from various prestigious schools, and who seeks out people with PhDs. It's a dang mystery!
While it's true that Renaissance and its army of uber-phds make big coin, it's hardly evidence that having and advanced degree or phd is a prerequisite to run a successful hedge fund. Perhaps to run a successful quant fund.

I also am confused as to why 9 out of 10 of all the largest hedge funds in the world are run by people with degrees. I just can't fathom why...
Before founding or joining a fund, most worked either in trading or investment banking. So pretty much by default that's an undergraduate degree and in some cases an MBA (for those who didn't start in trading or on Wall St). Phd for all the quants and that's it. You may not need a degree to be a successful investor, but you may need one to enter Wall St - which may be beneficial if you are looking to achieve scale (and make it on the Forbes list). But I think you got the credentials/prestige thing figured out already..
 
D

DeletedUser2

Guest
Seven/Eight/Nine/Ten figures more per year hahah :p

Anybody can become a 'financial advisor'.

To be a successful hedge fund manager, you need to be incredibly intelligent, with one or multiple degrees, a CFA designation, and a PhD wouldn't hurt.

Naw, you just need to know how to hire the smart guys, the ones with Phd's and other alphabet soup titles,

The Hedge Fund just needs to be able to clearly state his vision for the strategy and get people to place money with him/her. :)

Phd's are a commodity, not THAT hard to hire for the right price and cheap compared to the fees you could earn off their brilliant work
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

Must Read Books...

must read books
Download FREE and share!
Download
Explore books recommended by MJ DeMarco and other members of the Fastlane entrepreneurial community.
Fastlane Bookstore

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top