You guys know I’m the first to admit that a lot of people who work in the financial industry are weirdos (including me), but today I’m actually gonna defend my people.
I’m tired of people rolling their eyes at me when I tell them I work in finance –the hedge fund industry nonetheless. Most people think that if you work in finance, or on Wall Street, you have no soul. It IS possible to work in finance and have a soul.
I’ll tell you how I’ve accomplished this, but first I wanna share how I got here.
BERKELEY →SAN FRANCISCO→NEW YORK
I graduated from UC Berkeley in 1999 and then about a week later moved to San Francisco to work for a hedge fund research start-up company. I moved to New York with the same company shortly after, which was conveniently right when the internet bubble popped. We went out of business like most start-ups did; I was 24 at the time living in New York in an apartment that cost $1,600 a month. Help.Me.Rhonda.
I immediately started to pound the pavement looking for a new job. I remember calling someone at The World Bank in DC to see if they could meet me for a coffee while I was in town. I wasn’t “in town,” ever, I just pretended like I was so they’d meet me for coffee and maybe give me a job.
I had coffee meetings twice a day. I tried to get one new contact from each person I met with so I had a consistent pipeline of people who I was having coffee with at all times. I logged all my coffee meetings on a spreadsheet, including contact details, so that after I met with the lead they gave me, I could send them a follow up email to let them know how it went. I learned early in my career that people like to be helpful, and they like to be thanked.
In June 2001, about three months after I lost my job, I found a job working for “The Man.” The Man is a figure of speech that describes an authority figure; a lot of people who work in Corporate America refer to the company they work for as The Man. So all the feminists who are reading my blog, don’t get all nutzo on me for calling the corporate world The Man. Trust me, I’m well aware of the fact that a lot of women, and women who are moms, run companies.
Anyway….I joined a team as a hedge fund research analyst at an asset management firm. I took a 33% pay cut from my previous job; we were in a recession and I needed a job so I didn’t care. I moved from the upper-east side down to the east village to save $400 in rent each month.
nyctourist.com
I could barely fit two people in my studio in the east village–I didn’t even have a real fridge, it was a mini one like you have in college. Here’s a picture I took as you enter the front door of my apartment in the east village. Where’s my fridge? Oh, it’s under my SINK!!
The first summer after I got my job working for The Man I foolishly pitched in for a summer share in the Hamptons with a group of people. A lot of people who live in Manhattan do this because it’s like 1,000 degrees in the city during the summer. This was an aggressive move for someone who didn’t have a job just a few months before.
These weekends turned out to be pretty expensive for a 25 year old, I had no business being there, really. I always felt like I was on a massive budget and no one else was.
But after working for The Man for a little while, I got my first bonus and almost peed my pants when I found out the amount: $15,000. I had about $2,000 in credit card debt so I paid that off and then went and bought myself my very own first laptop. I just took a photo to show you the size of this piece of machinery (don’t ask why I still have it…..)
Life changed once I started working for The Man; I could spend guilt free summer weekends in the Hamptons, I didn’t have to worry about credit card debt, and the best part was the traveling I could now afford to do.
It was fun. Working for The Man made my life fun.
There’s a good reason to work for The Man, and I learned what it was at the ripe age of 25: the money.
I love being able to buy a cappuccino that costs $3.75 and not feel guilty about it, I love to buy people nice presents, I love to come home to my apartment in Santa Monica every day, and I love to travel. I’ve learned from traveling that experiences make me happier than stuff; but I like knowing I can buy stuff if I want to–I dare you to report me to the personal finance blogging committee; “STUFF” IS BAD, I know.
THE MAN→YOU→MILLIONAIRE→BUT AT WHAT COST?
The Man can change anybody’s life, not just people who work in finance. If The Man offers you a 401(k) and you start maxing out that account in your early 20’s or early 30′s, you’ll be a millionaire by the time you’re in your late 50’s (I can do the math for you if you want, just ask). And it’s not about making savy investment choices, it’s about starting to save early and letting your money accumulate, and compound, over time.
What most people don’t realize is that you can’t play catch up in your 40′s; it’ll be too late, unless you hit it big with your investments or in your career. Felix Salmon does a great job explaining, here, how you’ll have to be a superstar investor in your 40′s in order to make up for lost time. Who wants to spend time learning how to become a superstar investor? Index Funds and ETF’s work just fine, thank you.
People think you need to make gobs of money to have a secure financial future; you don’t. All you need is the discipline to max out your retirement account starting in your 20′s or early 30′s (at the latest).
As you can probably tell, I’m not one of those fly by the seat of my pants sorta girls when it comes to my finances; I like financial security and The Man gives me financial security.
But there’s been a cost to all of this for me.
BACK→TO→ME
I’ve put The Man before all my men, I’ve cancelled on friends last minute, I’ve cancelled on family last minute, I’ve killed way too many plants on my porch due to my crazy travel schedule for work, I’m not married, I don’t have kids, and yes, I’m well aware that having kids when you’re older than 35 is dicey, even if more women these days are having kids in their 40’s.
At the expense of the things I just told you about, I’ve worked hard to keep The Man happy, and I sure have.
But reality set in about a year ago and I started to ask myself “Is this really what I want to do the rest of my life?” “Is this IT?”……
…….I’m not sure, but I like the flexibility.
One of the greatest things about working for The Man in my 20’s and early 30’s is that it gives me the flexibility to try something new with my life and career in the future if I want to. Huh?
My money strategy is kinda like a mullet: business in front and a party in the back.
I’ve been all business during my 20’s and early 30’s (the front side), but I have the flexibility to switch to party mode for the back side of my career if I want to because I’ve been aggressively saving for my future for the past 11 years. This doesn’t mean I can stop working, it just means I’ve laid some groundwork with my 401 (k) which gives me freedom to take some risks if I want to.
There are all sorts of finger waggers who tell me I’ve sold my soul since I’ve spent so much time focusing on making money over the last 11 years at the expense of doing something that I love. Honestly, what I love right now is knowing that my mullet money strategy will serve me well for the rest of my life.
Why do the fingers waggers assume that I’m soulless if I’ve been focused on saving for my future?
Sure, there are things that I’ve given up as a result of my mullet money strategy, but overall, I’m happy with how I’ve done things, especially because I haven’t sold my soul to get here.
HOW TO NOT SELL YOUR SOUL WHILE WORKING FOR THE MAN
- Travel – After I’ve pitched to a group of people in a boardroom and they give me money, I feel important. Really though, I’m not important, and traveling has kept me in check. It’s easy to think that my career define me since I’ve been so focused on it. When I travel, I realize it doesn’t. My experiences and conversations with people defines me more than my career. Get out of your bubble and travel out of the country; bad days at work will become comical.
- Know Your Number – If you haven’t seen the movie Wall Street, your number is the amount of money you need to live off of if you had to walk away from your job and find a new one so that you don’t turn into Gordon Gekko. I don’t mean the bare minimum amount of money, I mean the amount you could be happy living off. You don’t need as much money to be happy as you think you do. Figuring out your number keeps you sane because everything else is gravy.
- Chose Your Friends Wisely – A lot of people who work for The Man are in it for the money and the financial security. That’s fine. Just weed out friends whose sole existence is to make money. They’ll drag you down. I’ve defriended a lot of people once I’ve figured this out about them because they weren’t good for me.
- Operate In 3 Year Increments With Your Career- It takes several years to get good at anything. If you’re working for The Man in your 20′s and early 30′s and still happy after 3 years of working for The Man, rinse, repeat, and keep on truckin. If you’re not happy after 3 years, re-evaluate and move on. Just always make sure you’re learning.
- Focus On What You’re Getting vs What The Man Is Taking – A lot of people I know feel trapped working for The Man because they like the financial security but they don’t like the thought of working for The Man forever. Remember my mullet money strategy– business in the front, party in the back; you don’t have to work for The Man forever. Focus on what you’re getting by working for The Man (saving for your future!) vs what you’re giving up by working for The Man, and plot your eventual exit if you want to.
For most people, the financial ground work you lay in your 20′s and 30′s will dictate how the rest of your financial life is gonna look.
Do you think my mullet money strategy is a good way to do it, or do you prefer the reverse mullet money strategy -party in the front, business in the back? I’m curious about what you think…..or just leave a comment saying “I’m Alive” to let me know you didn’t do a face plant on your keyboard while reading my 1,974 word post.
Amen sister. I think you are the female version of me. Love reading your stuff. Makes me feel like I’m not the only one wearing a mullet today.
yeah, not the first time I’m told I’m like a guy. Not sure what that says about my femininity but I’ll take it!
Or you can win the lottery
“You realize the odds of winning are the same as being mauled by a polar bear and a regular bear in the same day.”
did you read The Investment Answer. sounds like it. Nice.
KC, You continue to amaze me with your ability to “circle back” and relate things to real life situations rather than touting some dry finance theory that makes people’s eyes glaze over. Bravo! Have to run…need to set up my 401k since I’m nearing the end of my early 30′s.
Jessica gets 3 gold stars today, not because she’s complimenting me, but because she is going to set up her 401k
Nice post, K. I think that, in general, it would be a good thing if America’s best and brightest worked in industries that had a tangible social benefit. Engineers, doctors, scientists, nurses, artists, whatever. Most professions create something, and due to the value, earn money in the process. Finance has figured out a way to make money without creating value. I don’t think this makes the finance industry soulless and I am not one to talk because I work in Internet advertising, which in it’s current state is akin to digital junkmail (although that’s changing). I just think that on the whole we might be better served if the financial incentives were more aligned with those jobs that clearly make a bigger contribution to American society (teaching being a good example) than how to create a mathletic double leveraged ETF financial derivative that allows somebody to bet on the price of coffee. Follow?
Tom, I hear you, especially on the fact that we would be better served if financial incentives were more aligned with jobs that make
a bigger contribution to society, especially teachers.
But, saying the financial industry as a whole has figured out a away to make money without creating value, is a stretch. At the bare minimum, my friends who are wonderful teachers do ask me questions about their finances all the time, and I’d like to think that I’m helping them prepare for their future. So I hope that I’m creating some value
Working for the man? Liking stuff? Are you trying to get kicked out of the pf blogging community? Seriously, very good analysis. I like the way you think. Although as a 46 year-old, I’m depressed that I’ll never make up for that saving I didn’t do in my 20s.
I know…shoot me now, I’m in big trouble I’m sure
Eh, The Man can be good or bad, just like everything else in life. As you know from our conversations, I’m thinking about going to school for people who are working for The Man who would like to become The Man, so obviously I live in a glass house and should not cast stones. But I do struggle with this idea of how to make a difference or “add value” to something that’s a little bit, well, deeper than just helping a company get an extra cent on their EPS. Have you read the book by the former KMPG CEO? I think it’s a good book (because it’s not black and white on the whole life in corporate scenario) for corporate folks (or actually, anyone).
thx for the book tip, Chasing Daylight, about KPMG CEO….I just bought it. Sounds like a tear jerker but a good read. Too too many books to read, not enough time in the day.
I am ALIVE.. despite the Helicopter incident in Haiti..
I love your story, and the Mullet Money Strategy.. brilliantly put
I still have my first lap top from college. It has a Ralph Lauren sticker on it to make it look high-end and fancy… What a nerd!
I keep telling myself Im working for the Man so he can pay for my creative time I spend on launching my own endeavors someday so that
I dont have to depend on working for “The Man”.
I think its smart to save and invest wisely and at the same time go on mini trips so you rejuvenate yourself from all the time working “For the man”..
Lord knows you do not want to save every damn nickel and penny for that one big trip when your boobs have sagged to your knees and your too old to climb
that mountain and would rather take naps on vacation.
Kath I think you’ve done quite well managing working for the MAN. You have a wonderful home, great friends, you’ve dated enough not to settle and you know yourself and what you like. Kids can come later now (your healthy) and your managing the Man quite well by taking the time off
to see the world thanks to the Man… hey use him why you can.. hhehehe
Do you think if you were married with kids you would have stayed with a tribe in remote isle in fiji, climbed Kilamanjaro, belly danced in India, trekked in Iceland
all on a whim? These are all experiences that will enrich yourself as a future mother and wife.. Problemo is you need a confident man who can keep up with you :… hahaha
You know what bugs me..I think the cocktail conversations shouldn’t start with “Hi, so what do you do?”.. it should be “Hello, so what do you like to do?”. I am so over “what do you do” questions.
I am not defined by my job title or where I work.
I think next time we are together lets brainstorm… use what the Man has given us to launch our passions.
At the same time lets buy Lotto Tickets before our brainstorm.. you know my luck…. 9 people in 100,000 get bit by a tick then get lyme. : )
xo
Keep Bloggin..
Laroooooooo
Everyone meet Lauren, childhood friend who just dished my dirt.
Laroo, love the idea of we should say “hi, what do you like to do?” instead of “hi, what do you do”. I’m starting that tonight.
Hey there, am a friend of Jessica’s and Cami’s and I have seen a couple of your posts through FB. This one in particular really resonates and I love your approach to personal finance in general. I left the man almost 4 years ago to change careers and chose financial planning. My brother and I run a small CPA/financial planning shop; in fact I just opened up the RIA this past September, got my CFP, etc…building the biz one brick at time!
Everything you say is true: you have to be so committed to leave the man and the security of your paycheck; it takes a long time to be really good at something; a well thought out, persistent strategy, whether that be job hunting or in personal finance, will get you what you want if you start NOW!
Good stuff, thanks for sharing with the rest of the world! I needed a pick-me-up this week!
Sam
Hi Samantha I had no idea about your financial planning business, very cool. Would be interesting to write a post about how you organized your financial life before you made the leap of faith of not working for The Man, will start stalking you soon for the details. thx for swinging by….
Nice essay. I thought it was really great. Two things:
1) I spent a couple days in that studio in the east village and thought it was the coolest pad ever. You are more of a risk taker than you think, moving to NYC.
2) I think people tend to over value options or flexibility. So many of my MBA friends would do jobs they hated because it gave them a lot of options, but then when we discussed those options, it was obvious would never pursue them. Don’t over value paths you will never take, that will lead you to sub optimal decisions.
Scott -love it that I’m now writing “essays” on my blog. That’s what happens when I go on vacation and don’t write for a while. brain dump.
Yeah, I generally think that some people are risk takers and some people aren’t, a lot of people talk about ideas and options and never make it happen. I have thoughts on the correlation between people who get MBA’s and risk taking, to discuss later
Hellooooo Kathryn! I often fantasize about working for the MAN … really, I do. I think about money “magically” appearing in my bank account on the 5th and 20th, about not writing a thousand dollar check every month for health insurance for my family of three (more benefits of working for the MAN, right?) … But then I am brought back to reality, usually on a Thursday afternoon while I am out of the office and I remind myself to be grateful for my 25 hour work week.:) With that being said, your mullet strategy is fantastic for us self employed folk too. THANK YOU for your insight and inspiration.
…..you’ve got a 25 hour work week and you’re supporting your family…. don’t ever work for The Man…. you’re on to something. Seriously. Great to hear from you friend!
I’m not sure what kind of hairstyle it is that I have since I didn’t really start saving until about 7 years ago, am now 45 and think I’ve got my “number”, or close to it anyway. Maybe whatever that Kate plus 8 chick has?
In hindsight, I agree with you though that the mullet strategy is a good one. But then I’m a “passionate accountant”.
I don’t really think of it as “the man”. Ultimately, companies are made up of people – and I like to be part of the trend to make companies asshole-less. I think of it as a really well paying volunteer gig in a way. If I can make people’s working lives more fun and with less headaches, I think that’s a worthy goal.
Jacq, love it that you mention Kate G, I had a picture of her at the end of this post, in relation to the reverse mullet, then took it down.
So, there was one thing that intrigued beyond others mostly because it connected with me: what’s your number? I know you will put it out there because you have been quite clear about the willingness to put stuff out there. As a way of prompting the answer, I have had a number for years and years based entirely upon seeing the same scene in the same movie. It made me not want to be the schmuck flying first class and only making $400K/year like anyone else who absorbed that scene.
But, as someone quite you senior (well, 6 years your senior) I have seen mine first rise, and now fall as I reassess life. I suspect, it will continue to fall, not due to a total lack ambition, just because my goals in life are shifting. Anyway, it is around $50M at the moment. Mark Zuckerberg, I am not. So, enough with the ponderous preamble; what is yours?
I might need to revise my post, when I say “Know You’re number” I mean your salary that you could live off of, i.e. your salary that would be less than what you’d get while working for The Man, but you could still be happy. Unless I misunderstood you…. and $50m is your number. If that’s the case, you can pay for everything for me next time I see you.
You write well, as usual Kathryn. I learned a lot I didn’t know about you! I liked NYC. I was there too.
I got very little sleep, so my brain isn’t able to contribute anything profound…
In any event, I agree that there is a lot of good in finance: i.e., your example about investing over time, and starting at a young age. I think some bad seeds give finance a bad reputation occasionally. Finance/investing/economics definitely have their place and purpose in society. People just want to throw a shoe at someone when they’re upset. Good Job!
E – yes have had plenty of shoes thrown at me as I’m sure you have… but I’m ambidextrous so I can cacth them on both sides. Didn’t realize you were in NY too!
Kathryn,
I totally dig your blog. I am a personal finance geek and am trying to implement my own version of the mullet strategy. One thing that complicates my version (and probably many others) is student loan debt. Maybe a post on how student loan debt figures in would be interesting to your readers?
My wife and I made the decision to aggressively attack our grad school debt first and foremost (though we do both contribute up to our respective companies’ matching amount for our 401(k)s.) We’re less than six months from paying off our student loans and will have done so in just over six years since we graduated (not bad for 20 year loans totaling in the low six figures.)
Once we’re done, we’ll shift those funds every month and begin plowing them into our 401(k)s. So, we’ll be a bit later than we would have liked but hopefully we can still qualify for mullet status!
Adam – your Mullet badge is in the mail, for sure.
Great stuff, Cico. I have loads of respect for your dedication to your blog – hats off to you and keep it coming. I am alive, and I am way late on my response, so this will be a test as to how long you keep your window for comments. I have a couple questions.
I’m curious, what type of job lifestyle constitutes working for “The Man” in your opinion? I don’t work in finance. And though the company I work for is indeed a for-profit business at the end of the day, I don’t necessarily work in “business” either and I don’t make boatloads of money. However, I do feel myself getting more tied to my job because of the paycheck (and the perks that come along with being a 12-yr veteran). Is that enough to fall under the category of working for The Man?
Also, how can I tell that how much I’ve saved so far in my 401(k) is putting me on the right mullet path so that I might not have to work for The Man for my whole life? I *think* I’m doing alright in the savings dept, but wish I had more peer comparison to make it relative. Sidebar – I am constantly put off by the secrecy of one another’s salaries, bonuses, savings, how much houses/condos are bought for (or how much rent is) and so forth. I don’t intend to be able to say, “Oh nice, I have $XXk more saved than so-and-so.” But, I do wish I could get some honest, impartial feedback. Do you know of any sites that post what the average person in given age and work experience ranges has saved in 401(k) accounts? Just looking for a thumbs up/down from an outside source…since it seems to be a taboo topic amongst friends (for the most part).
P.S. While I write this, I am currently looking online for flights to Brussels and Amsterdam. #K’s-No-1-how-to-not-sell-your-soul-advice.
Hi Megs, heck yeah, you work for The Man for sure!
I’m laughing…I totally know what you’re saying….no one talks about how much money they should be saving…..Good thing you did so everone else can mooch off your question!
The short answer is: ideally you’ve made it to the low six figures in your retirement account by the time you’re in your early/mid 30′s; so around $100,00 to $150,00 in your 401k.
Here’s the long answer…….I’m working backward to show you what you’ll need and how to get there.
If you want to retire at 64 and live off about $50,000 per year in *todays* dollars, you’re gonna need about $ 3.5 million saved when you’re 64, assuming that’s the age you retire. Next time we meet for drinks I can show you how I did this on my calc, yes I carry calculator with me
The funny (but not really funny) thing is that $50,000 per year today is really $140,000 per year when you’re 64, because prices have been rising on average of 3.5% per year, so your money is gonna be worth less in 30 years. So the calc I did for you really means you’ll actually be living off of $140,000 per year when you retire, in future dollars (but that’s the value of $50,000 today).
So…..you’re gonna want to focus on that $3.5 million (assuming 50k per year at retirement is a realistic number)
I’m not sure how much you have saved in your 401k right now, but if you’ve got around $100,000 or $150,00……you’re already at 2.3 million or 2.7 million when you’re 64 (again, can show you on the calc). BUT in the calc I assumed you’re putting the maxiumum amount in your 401k each year going forward from here, ie $16,500, so make sure you’re contributing enough each month. Take a look at your pay stub, you should have about $687 per pay check that’s going to your 401k (assuming you’re paid 2x per month, this gets you to the $16,500 each year).
I know, you’re thinking you’re gonna be about 1 million short ($3.5 million – $2.3 million) even if you contribute the maximum to your 401(k)…that’s where saving beyond your retirement account comes in.
You should be saving 20-25% of your gross income. So if you make $100,000, you should be saving $25,000 each year. $16,500 of that is in your 401k each year, so you’ve got $8,500 that you should be socking away outside of your retirment account, ideally invested, which we can talk about!
oh man…head is spinning….must get back to royal wedding gossip news and booking next vacation. Amsterdam? Nice! I back packed with my bro there after college…….
Ahh, you are awesome. Thanks for your thoughtful response, research and advice. I really appreciate it, Cico.
no probs Megs!
If only I’d known that the mullet was more than just a fantasticly attractive hairstyle (and ladies, it’s not just for the boys, you know… ) I wish I’d had some of this advice before I neared the ripe old age of, ahem, 40. What’ve ya got for us old farts? I guess at least I married well, huh?
Fantastic post Kathryn! So, what’s next for you? Your path sounds similar to mine. I too, am an aggressive saver, which has been a blessing due to the optionality of doing whatever now.
When is the leap of faith going to be taken?
When does working for the Man get too boring after 11 years?
S
Well the good news is I haven’t been doing the same thing for 11 years, I’ve hopped around a little bit with my role. But yes, same industry. Given all the sh——t that has gone on in the last 11 years, I feel like it’s been 20 years.
TBD on next move….I’m sure you’ll hear about it on this blog. That’s usually where people start to unravel, I’ve noticed. Which isn’t a bad thing.