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Secrets Of Career Success Often Lie In Paying Dues

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The Tampa Tribune

Published: September 30, 2007

Mama, don't let your sons and daughters grow up to be doctors, lawyers or even plumbers.

Let them be hedge fund managers instead.

I'm not steering my children down that career path - not yet, anyway. But a recent report that showed how much dough top hedge fund managers rake in sure made me wonder about future job openings, starting salaries and college-degree requirements.

In case you missed the study, released before Labor Day, the Institute for Policy Studies and United for a Fair Economy offered some eye-popping data on the average salary of managers of hedge funds and private equity firms. Among other things, according to the report, the 20 highest-earning fund managers pulled down an average income of $657.5 million last year. Talk about cash cows.

Put another way, these big-time breadwinners earned 22,255 times the average annual pay of the typical American worker. They also enjoyed the usual accouterments (country club memberships, corporate jets and other benefits) last year to the tune of $438,342, on average.

I can understand why so many people would be shocked and appalled by this income inequality. After all, hedge fund operators are the current scourge of capitalism - being blamed for the breakup of once-stellar companies and the loss of thousands of jobs while getting rich on merger mania and financial wheeling and dealing. Or so the thinking goes.

A Change Of Heart
The popular perception is that most hedge fund managers are bad, bad, bad - hardly role models for the younger generation.

However, after reading a newspaper account of the study, I came to a different conclusion about these Wall Street cowboys.

My question was this: How can my kids land one of these jobs someday?

Seriously.

Indeed, that led to a lively discussion with my wife and our 15-year-old, who was within earshot, about success, making a mint in America today and what it takes to land on easy street.

(An aside: I have nothing against people earning an honest paycheck, even big ones - that's the capitalist way.)

My wife and I didn't talk in great detail with our high schooler, but our conversation focused on topics the study apparently didn't explore - the amount of education and motivation required to land a top job with an investment firm, the number of resume-building learning experiences it takes before hitting the big time, the willingness to take risks and the stomach to ride out losses.

No Easy Climb

Let me give you one example. A buddy has a good friend who is a big-time money manager on the West Coast. According to my friend, this manager is smart - hired right out of college to be the personal assistant to a Silicon Valley chief executive. He then parlayed that job into a position with a major investment firm, making money management decisions for one of the largest tech companies in the country. At this point, he's running a $1 billion fund, lives in a big house and has a big income.

Was it easy? No.

Was he always successful? This guy made some bad choices early on, according to my friend, and lost a bundle of clients' money. It took him more than a year to recoup those losses.

Sure, it's nice to pull down nine-figure salaries. But the climb is often more strenuous than it seems for the Wall Street whiz bang; the third-generation family business owner who inherited a fortune and the task of keeping the company afloat; or the developer of the latest, greatest proprietary software system.

If there's a final point, it is this one, which I've made before: Look for opportunities with your children to shed light on the workplace, economics, poverty, affluence and the fairness of our tax system. Don't lecture, and your conversation doesn't have to be wrapped in complexities and controversies. Help your children get grounded in the money values you are trying to teach.

I don't know that my teen soaked in much of our family discussion about hedge fund operators. But perhaps a seed or two was planted in his mind about the smarts and motivations necessary for success in that or any other type of job.

From my chair at the kitchen table, those were even bigger issues than debating whether it was good or bad to be a millionaire 600 times over.

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