

My 2009 adjusted gross income will be in the 8 figures. Ask me anything. - matt1
http://www.reddit.com/r/IAmA/comments/991kc/my_2009_adjusted_gross_income_will_be_in_the_8/

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jakarta
I call bullshit.

He says he is 24 and at a well known quant fund. I know a few people who work
at some of these places and at 24 you simply would not get the risk allocation
to be making 8 figures.

On the other hand, if he was managing capital himself, on his own, anything is
possible. But it does not seem this way from what he has said.

~~~
iamamonkey
> I call bullshit.

Reasonable. Mine is a highly unlikely story.

> He says he is 24 and at a well known quant fund. I know a few people who
> work at some of these places and at 24 you simply would not get the risk
> allocation to be making 8 figures.

We're not a well-known quant fund. In the hedge-fund circles, we're known for
non-quant trading, but not especially as a quant shop.

> On the other hand, if he was managing capital himself, on his own, anything
> is possible. But it does not seem this way from what he has said.

I'm not managing my own capital, it's the fund's capital. That said, they do
pay me enough that I don't want to run off and try to start managing my own.

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pwnstigator
Nearly impossible. No financial firm is going to pay a 24-year-old that kind
of salary, so it's only possible if he got it through bonus. Traders get
bonuses based on P&L, usually around 10% if they're senior. Let's say 10%.
Then he made 9 figures for his firm... but no firm is going to let a 24-year-
old take enough risk to generate a 9-figure P&L.

I'm calling bullshit.

[Update: Well-executed, and he's clearly smart, but his story is incredible.
No one hires a 24-year-old to start a desk. This is probably one of XO's
finest.]

~~~
nostrademons
He said AGI, not salary. AGI includes bonus and all other forms of non-
capital-gains compensation.

FWIW, one of my classmates graduated in 2003, worked for one of the big-5
financial companies for 3 years, then left with 4 friends to start a hedge
fund. They had a $3B book when they started. If I assume normal 2-and-20 fees,
that translates into an 8-figure income at the age of 25.

There's a lot of money chasing skilled people in finance. If you've got the
credentials, some of it will find you.

~~~
pwnstigator
Of course, but bonus is based on P&L, and no one's going to give a 24-year-old
enough trading freedom to run up the kind of profit that would justify an
8-figure bonus.

Starting a hedge fund is different-- if you start a hedge fund, you can make
that kind of money-- but <0.001% of people under 30 have the kind of
connections needed to get investors.

~~~
iamamonkey
> Of course, but bonus is based on P&L, and no one's going to give a 24-year-
> old enough trading freedom to run up the kind of profit that would justify
> an 8-figure bonus.

My risk limits and capital have been increasing that allow this. Previous
years were much lower.

> Starting a hedge fund is different-- if you start a hedge fund, you can make
> that kind of money-- but <0.001% of people under 30 have the kind of
> connections needed to get investors.

Actually, it's not that different. The labor market is reasonably efficient.
If your employer thinks you can run off somewhere else with a low barrier-to-
entry (another fund or start your own) and can make 10 times as much, they'll
up their pay to prevent you from leaving.

Of course, non-compete agreements throw a wrench into the "efficicent labor
market" theory, but it's correct to a first approximation.

