Hi all, Was pondering a hypothetical situation, and wondering if I could get a few objective opinions: Take Jack. 29. Fairly successful in a non-finance field. $200k for an easy (albeit dull) 40 hour week. Passionate about the markets. Until now, decisions have been easy, but has come to a fork in the road... Path A - with solid credentials, foresight and intelligent marketing, he is confident he could earn a place on a top-tier MBA course (e.g. Harvord, Stanford...). Entry fall 09, exit age 32. Opportunity cost, $500k. Goal being to break into private equity or venture capital, and eventually make partner. Path B - he knows a successful self-starter fund-manager, who will informally coach him. He can rearrange his schedule to leave two weekdays/week free to daytrade. He can consistenly save %40 of his income. Goal being to emulate the mentor's success, eventually start his own fund, and steadily grow it to 9-figures. Which would be the more interesting, compelling and/or likely route?
This isn't particularly smart. A nine figure self-started hedge fund is admirable from a personal achievement perspective, but completely fringe and irrelevant in the actual finance world. The problem with going this route is that if this manager's methods end up being nothing better than decent luck or good connections to money, then your career is a non-starter. A mentor is only valuable around here on ET because most people are about as far from the business as one can get; In a proper hedge fund/institutional fund/private equity, you'll find that you will be well mentored and coached if you are hired into an investment role... which bring on the next point, A good MBA program will open doors (plenty of people here will tell you it won't make you smarter/nicer/better - but that's irrelevant). It'll get you into a good shop that will get you further. (It's worth noting that while we all exault the man who travels the path less traveled and succeed, often times it's less traveled because it's silly and unnecessarily dangerous, only fit for those who have no options otherwise
i say keep your $200k job,take the 2 days a week mentoring,IF you learn enough from this guy,you can make 5k a week on the side,IF U S economy hits the crapper,you will possibly lose your white collar job,at that point you have a backup career,college for 500k will take a long time to recoup that investment,the reason for college degree is for higher income,IF mentor works out you will have already gained that,saving the 500k investment,IF you do excel in the education area and secure a huge salary you will probably be working 70 hours a week,there will always be a lot of IF's
If you have an option for mentorship -- take the mentorship. I know how much people hate when I say this, but if you want/need the education, go to school online and take the mentorship as if it were the world's greatest paid internship. Indiana University's Kelley School of Business and Warrington Business School at the University of Florida offer some of the best online MBA option available. They're also top 50 MBA prorgams with large Alumni bases and excellent interactive delivery formats that encourage and REQUIRE interaction among students. The articles I have read on each of these programs indicated that the cohorts in the online formats are actually more close-nit than the on campus students -- go figure... International programs to consider: Warwick Business School Instituto de Empressa [Commonly referred to I.E.] Anyways, you cannot put a price tag on the mentorship... But you can do a cost analysis on school -- everything that I have come across has stated that it is better to deal with school and work -- part time or otherwise.
Really appreciating the responses so far. Drjmpc - have looked into all the MBA options, from EMBAs, to 1 yr European (i.e. IMD, IE), to 2 year European (IESE) to 2 yr American. Advice for career-changers is almost invariably to go with a full-time 2 year option, and as big VC tends to be based in Silicone Valley or Boston, there's a clear networking edge with US schools. Ammo - thanks for the advice. I'm actually based in London, and layoffs are very rare in my industry. Also, it's not just about the money. Part of the question was '...most interesting, compelling...'. Sjfan - manager is legitimate, has a long track record, and I've known him for a while. My real question is which would be more difficult/unlikely - a self-started fund that grows to a respectable size, or making partner in a venture capital/private equity firm - and equally important, which journey would be more interesting, compelling and intellectually stimulating.
I tend to agree. I would recommend Plan B, mostly because it involves saving 40% of an already excellent salary. Cash is king! Maybe the mentoring will help, maybe not. You should know within 6-12 months. If the mentoring doesn't work, you can still learn to trade on your own. It just takes longer. Even if you (er, I mean "your friend") never learns to trade, he could still retire at age 40 on savings alone. How many get that opportunity?
By legitimate, I don't mean whether he's a crook. Rather, what I mean is that does he really have some deep insight into the market. That's a question that you can't possibly answer (no one can; if otherwise, and you are able to judge what a good manager is, you can be the best fund of fund manager to ever exist).