Wall Street Playboys - Advice from Real Wall Street Professionals
January 18, 2020 by Wall Street Playboys 75 Comments
Q&A is closed.
Commie Insider says
January 18, 2020 at 4:09 pm
What’s your system for sourcing, processing and validating information?
How do you battle your own cognitive biases in reasoning?
A detailed post on this would be fantastic.
Wall Street Playboys says
January 18, 2020 at 4:13 pm
This is far too complex to answer but will try two short ones:
1) tons of trial and error. We do 90% testing and 10% reading/learning since the magic happens in testing where you find a new way to succeed
2) The best way to avoid bias is by knowing you’re never going to be right on everything, we’re guessing you’re referring to investing. So we do buy stuff we don’t think will work just to hedge against being totally wrong.
January 18, 2020 at 5:21 pm
2. That’s very interesting. Do you adjust exposure based on how sure you are of the information or the expected return?
January 18, 2020 at 7:32 pm
Yes. that’s the game plan. Always take 10% of net worth and throw it into high risk items that you think might fail. So if you’re wrong, you get rich and if your assumptions were right you’re not broke.
January 18, 2020 at 5:49 pm
I m paying $2000/mo for a studio to live downtown. I was thinking of buying a house with the FHA loan (3.5% down payment, must live in the house for 1 year) after my lease end. Then renting out 2+ of the rooms out to cover all my payments with it. I don’t intend to stay in this city for more than 4 years though. Is this a better strategy than just renting?
2. I have a product in mind I want to sell to parents with kids. The problem is that kids don’t like brushing their teeth and don’t take care of them well so the parent has to pay up the dentist. My product helps motivate the kids to brush their teeth. Based on this market, what would be good traffic source (online/offline) to presell them this idea?
January 18, 2020 at 7:28 pm
1) sure if you’ve done the math right and are highly convinced it will work
2) We have no idea… don’t have anything close to that market
January 18, 2020 at 4:25 pm
What’s the biggest mistake you’ve guys have made and what did you learn from it?
January 18, 2020 at 7:40 pm
Biggest mistake by far was not selling an asset we lost interest in. Probably lost 50% of actual value. Lesson was if you don’t care about something anymore, sell the whole thing or pay a much much bigger price later.
January 18, 2020 at 4:30 pm
I’m 27 with about $20k+ monthly disposable income (post tax) for investments after expenses from business + stocks. Currently live in a city with a cap rate of <1.5%. Multi-tenant properties do not exist here.
My main investments are primarily in stocks and crypto. Will hit my FI number by mid 2021. Should I bother with purchasing physical property, REITS or just continue with the other two and buy an apartment/house to live in in a few years?
January 18, 2020 at 7:39 pm
In your situation would probably just wait and buy your own place when ready. Sounds like a headache in your area
January 18, 2020 at 4:35 pm
If you were going to allocate $1k-$5k for a new project (e-commerce site), what is the rough breakdown of how you’d allocate?
January 18, 2020 at 7:38 pm
If your funds are that low we would just start a time for money exchange website for now. Get to $50K and go the product route which is already outlined on this blog and the book
January 21, 2020 at 1:56 pm
Ok say I meet halfway. Judging from the costs on the Money Making Machine post I would merely need $10k for a site/sales page, and $5k to test demand. The $25k for product spending and $10k for miscellaneous seems like it could be funded with a card/WC revolver but one would only need $15k to get started right now testing an ecommerce product. Am I thinking right about this?
Ideally would like to avoid more time for money – have made a decent amount of banking and want to put the money to work so is $15k truly not enough to get the basics down?
January 21, 2020 at 2:04 pm
In our opinion it is not and you’re better off doing affiliate marketing making $100200K and then not worry about penny pinching for the real product
January 18, 2020 at 4:37 pm
College student interning in BB IBD this summer and graduating in May 2022. Given that I have no income and am aiming for m&a, what do I need to do to avoid getting screwed by this next recession?
January 18, 2020 at 7:37 pm
Nothing? You just need to be a top tier performer. The top analysts don’t get fired because they are too cheap. The Senior Associate/VP/Director layer usually gets fired.
Big biz says
You guys have former IB background so do you guys think current low interest rate environment coupled with accessibility of cash will cause increase of LBO activity which may cause us to slip into recession in 3-5 years
Yes, we think recession in 2021 is our current view. We have been long heavily equities through 2018 and now only buy crypto, cash, gold, real estate that can be fixed
January 18, 2020 at 4:46 pm
Graduated college few months ago and working as software engineer at ultra growth Silicon Valley startup (went from 40 – 170 employees in a matter of months).
Recently received unprompted 20% raise after only a few months of work, grown into a key contributor/tech lead position and in very good standing with leadership.
2 paths from here:
1) Continue with company, renegotiate equity package and salary for more favorable upside at 1-year mark.
2) join Google/Facebook/Lyft where I can easily make $250k – $320k a year LIQUID upfront (publicly traded and rsu grant).
Which one do you suggest and why?
January 18, 2020 at 7:36 pm
No clue we don’t know what you’re worth. If you’re already a millionaire option 2 is stupid as it’s only $150-190K after tax. If you’re dead broke you might want to do #2 only if you have a side biz idea already up and running.
Based on this your real problem is that you only have one stream of income so that should be solved before anything else
January 18, 2020 at 4:48 pm
What do you recommend for TRT as we get older (30s-40s)?
Will this topic be covered in the book?
January 18, 2020 at 7:29 pm
Covered in third book… it’s incredibly obvious and easy but we don’t talk about it since it attracts what we consider to be low quality people most of the time
January 18, 2020 at 4:59 pm
I’m 40 and I’ve spent the last 20 years building an internet company. It was extremely stressful. After selling it, I have more than 15 million dollars and life should be great but the sacrifices were too strong:
1) I sold my company 3 years ago but I still have severe PTSD from the stress and don’t want to work anymore. At the same time, I’m bored.
2) It’s nearly impossible to be an employee after 20 years as an entrepreneur
3) My health has suffered from the stress
4) My dating life was nearly non-existant, I have the experience of a 22yo when women my age want to get married
Looking for advice.
January 18, 2020 at 7:34 pm
This is probably not the right place for advice… Just go out and socialize more and improve that part. You should probably see a professional
January 18, 2020 at 5:15 pm
Question on career advice:
Just wrapped up 3rd year as Associate at boutique – not e-boutique but my group has solid reputation in our space (Healthcare M&A). Got massive deal experience last year – was lead associate on multiple M&A processes including two of top three largest that closed at our firm – but got screwed on bonus at year end (all in comp $260 because “it was a down year”). Want to jump to another shop but if I stay I have decent chance of VP promotion and revenue generators eat 20% of what they kill at my current bank. My inclination is to get better offer, ask the higher ups to match it if they want me to stay, and see what they say (associate turnover is an issue so they might match, but probably won’t), but wondering if smarter to just shut up and try to get the VP role in order to get that 20%. Thoughts?
January 18, 2020 at 7:49 pm
If you can get the promotion stay. If you can’t then jump ship.
We’ve answered this about 100x on the blog, always choose the promotion so you can make your own money. Then jump to brand name shop after
If you’re not going to be promoted then bolt ASAP
January 18, 2020 at 5:18 pm
I’ve put more work into the blog (review site) but it’s easier for me to get excited about the real estate work. Pick one or do both?
Real estate project – has the potential to generate between between 2 and 10k per transaction. Realistic timeline seems to be 3 months to first deal. Currently have 1 serious connection looking for 3 to 6 deals this year. 7 less solid contacts.
Affiliate review site project. – website live with good content but have not been driving traffic yet. This strategy realistically could yield 600 -1k per month reoccurring.
January 18, 2020 at 7:33 pm
Unless you’re rich do both. If you’re not rich yet you don’t get the right to choose one
January 18, 2020 at 5:25 pm
What is your own preference with regard to short term vs long term relationships with women?
In Efficiency, you mentioned that both have their pros and cons, but I am curious about your personal take – what type of relations do you find more rewarding/fun/beneficial? (if you don’t mind answering from a personal perspective)
January 18, 2020 at 7:31 pm
not sure what you mean, if you want to have kids you have to choose a good long-term partner for a real family
That’s your choice. If you don’t want to have kids there is really no point in a long-term relationship
I want to move from Central Europe (already FI there given lower cost of living) to US after hitting ~$4-6M around 30yo. I’m looking for more ambitious and intellectual environment and nicer weather, but I’m worried about populist/socialist trends and cultural shock.
Any tips for someone basically starting with the blank slate (liquid $$$ and just a few connections around the country)? Let’s say I’ll be 50:50 between NYC (summer) and Hawaii/LA/??? (winter).
Side note: thank you for changing my life 180 degrees in just 3 years: I fixed my life in all areas (social, money, physical) from the position of being total loser to the 1%. Net worth in 2018 (26yo) 3x, 2019 (27yo) 10x, in 2020 going to the next level of my career (increasing ownership -> bigger equity) and starting second business.
January 18, 2020 at 7:47 pm
sure 1) join high end gym, 2) spend a lot going to restaurants and bars – nice ones get friendly with staff, 3) go to golf course/tennis/coutnry club, 4) go out 3-5 days a week at top tier places.
If you have no friends after that you’re basically a mess ha!
Guy from twitter says
January 18, 2020 at 5:42 pm
Hey guys, what is your outlook on online biz in the supplement/vitamin space given that white hat advertisers are getting their account bans despite following Facebook’s guidelines to a T. Is it necessary to play the account game or get big enough to secure a FB that can pre-approve ads/ensure compliance?
If you are converting well and successful we would play the account game
January 18, 2020 at 5:48 pm
Regarding the effects of new or unconventional monetary policy on asset prices, a notion outlined in the paper “Class in the 21st century: Asset inflation and the new logic of inequality” (https://journals.sagepub.com/doi/10.1177/0308518X19873673), should I YOLO and buy (leveraged) real estate now or keep waiting for a correction? Would your answer change if I told you I have access to mortgages in a W. European country with 100% financing for only a short window (then I move back to the US)?
January 18, 2020 at 7:30 pm
We have no clue as we’re definitely not going to read that whole article
As usual get 2 streams of income before you do anything leveraged otherwise you’re playing with fire
If you have enough passive income to cover all interest expense forever, then go for it
January 18, 2020 at 5:56 pm
-software engineer, 2 years out of school, work for an OK small company in non tier 1 city (lower COL)
-got a big raise from where i was to 85k/yr, also have small amount of equity (~10k a year at the original valuation which starts vesting this year and continues for 2 more).
-however comp is unlikely to move more than 4%/yr since not much upward mobility at the company.
Since my comp is OK but not great, do I
1) spend 1 year-1.5 years getting good at coding interviews (low retention from school) and try get a job at a FAANG company to make 1.5-2x current comp?
2) do I make do on the current comp and start the biz (career on back burner)?
Goal is to get to the first million within 8 years. Feel like I should go for the FAANG and get settled in the career as it will be harder to move the longer I wait, but would love your thoughts if you have any.
January 18, 2020 at 7:45 pm
You can easily do both, just keep applying for the top firms if you get it you get it
All free time for second stream of income. There is no chance and we mean 0% you can’t interview and start something on the side.
January 18, 2020 at 8:41 pm
Understood. Thanks for the answer and enjoy the fights tonight.
Tax Man says
January 18, 2020 at 6:21 pm
1. In an earlier Q&A you said that after age 25 you need to go the MBA route to get into IB. My question is why this is the case? I am attempting to get into IB from a non-traditional route by transferring from transactional services accounting, but I am about to turn 25 and I am deciding whether to keep going down this path (because I am heavy synthesis intelligence) or just to quit and try switching to software sales
2. If not yet in a good career with high cash flow, how do I prioritize my income between the following three options: student debt, side business, and emergency fund (how many months?)
January 18, 2020 at 7:27 pm
It is just how the industry works, they require you to either have been an analyst before or have an MBA. Its always better to go analyst to associate and skip the MBA.
The reasoning = who really knows honestly. But it’s just how the space works, you might get lucky, but trying to switch from a non-capital markets business to banking as an associate and skipping analyst isn’t easy without an MBA
No clue on your career, that’s your call
2) just focus on a real side business, if you’re smart you shouldn’t have a ton of debt because you made smart financial decisions early… so won’t change net worth
January 18, 2020 at 9:26 pm
Hoping I can ask a clarification/follow-up on both questions, if not will wait until next Q&A no worries.
1. I see now what you are saying about having to get an MBA. I’ve also seen you in the past recommend against ever getting one or even going the CFA route. Does this mean you recommend against IB completely if you don’t get in right during/after undergrad? (even for those heavily weighing towards synthesis intelligence?)
2. Thankfully my debt is pretty low, even though I am currently in a time for money job my yearly salary is much greater than my debt load. I will make the minimum payments for my debt and put the rest towards starting something. My follow up question is if I should follow the emergency fund advice from triangle investing (6 months in checking, 6 months in CDs before anything else) even if I am in just a job and not a high cash flow career? Or if I should go more risk on given that I am behind (and if so how many months to have saved)?
January 18, 2020 at 10:28 pm
1) CFA has nothing to do with banking, unless you can get an MBA without debt it is usually never worth it so pretty much. No offense but these are basic questions you can answer yourself. Will you make enough to offset the debt load within 2-3 years? We have a formula in efficiency, if not then you don’t go to banking and you start a biz…
2) Always have an emergency fund of 6 months no matter what if you get into an accident etc. You’d go into credit card debt which would wreck your finances forever.
John Matrix says
January 18, 2020 at 6:33 pm
My rental property is slightly cash flow negative in terms of rent minus mortgage minus HOA, but mortgage and HOA are tax deductible. Couple related questions: is it worth it to pay down mortgage and refinance to get the rental property in the black, and do you count tax deductible costs when doing the math on a rental?
January 18, 2020 at 7:25 pm
This is up to you our preference is to remain in the black. So we’d try to get it at least a few bucks in the green, say $100-200 a month at minimum
Your choice though
January 18, 2020 at 7:01 pm
Hey, I wanted to know if you guys have a kind of ranked, best bang for the time hobbies list. I always think of the benefits of doing activities. Currently on acting school for fun, besides my *ahem* medical school for career. I’m especially interested in the ones that will make me better at interacting with others
January 18, 2020 at 7:24 pm
This is somewhat covered in the book. Gold and Tennis are easy ones, if you don’t have money go with tennis a good rich person sport for the right connections
I’m in tech, big company with nice growth. I’m close to the max top salary+bonus for my position in Europe, so kind of hit the ceiling. I have perks like biz travels all paid etc (as you mentioned lately), and managed to negotiate some remote work in which I of course work on my own biz idea.
I’m now regularly getting offers from good startups in series A/B rounds, like 15-20% base salary increase, with a higher responsibility position, where I would be among the first 100-200 hires, in some cases with company shares included in the offer (but of course a small %, not what the founders and the first 50 hires have).
I still always answer no because I have no idea if I would be able to work on my biz as much as I’m able to do now, but I’ve been tormented by the temptation lately, and wanted to know your opinion.
January 18, 2020 at 7:44 pm
Easy one, if you’re set for life money wise then go ahead and swing for the fences when you find a good one worth joining. If not set for life, just ignore them and build up more streams of income.
Fuck the Cold says
1. What the hell do you do in your 50s+? After you’ve experienced everything, made enough money to fuck off, and just above everything that life can throw at you — covered in the book, yeah?
January 18, 2020 at 7:43 pm
No clue as we’re not that old. From what we’ve seen a lot of golf, more traveling and house parties
Red Herring says
January 18, 2020 at 8:06 pm
Any go-to strategy for negotiating with biz partners for larger equity ownership of a highly-profitable business, when you are responsible for the success?
Know you’re not a fan of partners if unnecessary, but in my case they were. In other words, what may be an effective strategy to get a larger share of the pie when you’re the one making it bigger?
January 18, 2020 at 10:33 pm
You just have to prove that you’re the most important piece in the group. That gives you more power to ask for a higher percent. Once you’re signed up though… you’re done
That’s why we’re against 50/50 partnerships, chances of it being 50/50 value delivery is basically 0%
If you’re the most important you should be the CEO and get the highest equity stake
January 19, 2020 at 2:16 pm
Already been signed up for a while. Suppose it’s time to exert that same hustle on a new venture where I’m 100% in control.
Thanks for the input.
January 18, 2020 at 8:09 pm
Once you begin leveling up, what kind of luxury wearable items would you prioritize purchasing solely with the intent of getting more indicators of interest from women without drawing too much attention from men/masses (assume you’re fairly well off and don’t go crazy with the spending).
January 18, 2020 at 10:32 pm
Yeah this is already in the product
January 18, 2020 at 8:29 pm
If you were forced to put a time period on it, when roughly do you see AI/automation outperforming talented individuals in the highly creative aspects of running an online business?
Creative aspects in this case are things like:
high converting copy, creating high CTR ad/images, niche selection etc
January 18, 2020 at 10:29 pm
Not sure we already do that now? No one smart pays for models they use AI based models for photos now unless they have a real brand like a Kardashian
Probably takes about 10 years for significant disruption across the board (rough estimate)
January 18, 2020 at 8:52 pm
how long does diet trends last? looking to sell keto electrolyte powder and wondering if trend will die soon before something else comes along:
IE: All the products i see with “keto in their name”
January 18, 2020 at 10:31 pm
Depends but generally around 1.5 years max. Some last a few months, but generally a year for a year fad. Things like raspberry ketones and mangostene (we forget the names) are very short lived
January 18, 2020 at 9:30 pm
Currently running a bing campaign to an affiliate product, (health niche) on the brink of making a profitable campaign after lot of trial and error – I have a page that converts but seem to get garbage traffic time to time (bots/spam). How to go about fixing this? Seems like obvious answer is different traffic source but probably gonna run into same issue.
Besides traffic, what could I spend on regarding my affiliate site for better results? Starting to understand that income from my day job is better spent on my biz as opposed to investing it where I am net worth wise.
January 18, 2020 at 10:27 pm
1) you should definitely try other traffic sources that allow you to target better. No matter what you’ll get a large number of bad hits, if you’re closet to the green you probably only need a few more tweaks to be set
2) Ha! Yes you are 100% correct, if you got something going keep spending on your site until it converts. Then when you make too much money that you have a massive balance each month, then you go and invest it in other things. Only thing that matters is fixing your design, copy and the traffic source. So not sure how to help as your direction is correct
January 18, 2020 at 10:49 pm
Hopefully not too late. Bought both books so hopefully can ask 2 questions? 🙂
1) What’s your skin care routine / most effective you’ve used to stay looking youthful? (You talked about egg whites back in the day I think?)
2) what’s the best way to get a mentor who is crushing it in online business? I have nothing to offer these guys with my loss making “business” 😂
January 19, 2020 at 1:40 am
1) depending on your income bracket, you should have a solid diet, a professional skin cleaning at least every month, and specialized washes for your skin type. See a dermatologist
2) No clue, mentors aren’t useful for anything in our experience
January 19, 2020 at 5:19 am
2) You made a post about a top down approach recently. Was that more about relationships than mentors? It’s difficult to study someone from afar in my experience
January 18, 2020 at 11:02 pm
Question: why are you guys keeping and adding a lot
of cash in your cash asset class when the value of cash is dropping, inflation keeps increasing & the Fed keeps printing it? Thank you
January 19, 2020 at 1:44 am
We are just buying crypto and hoarding cash for a potential recession, we’ve got enough dollars in other asset classes so it doesnt matter anymore and want to get a cash balance that is ready for when prices become more reasonable (opinion)
Sure we aren’t making money on cash, but it doesn’t matter when you already have 7 figures in multiple other assets
Playing a different game
January 18, 2020 at 11:42 pm
Full time consulting after following the advice in Efficiency, low 6 figures profit for 2019.
Looking to start my product business now, but the consulting is still taking about 8 hours a day.
I’m going to spend the first 2 hours a day minimum working on my product biz, but do you guys have any advice for making the transition to a product biz smoother?
January 19, 2020 at 1:43 am
You should reduce your consulting hours to 6, take the hit up front since you’re already making a lot. Can probably charge 5-10% more and then that frees you up for the product
Sales Student says
19 y/o college student.
Found out through numerous tests I have no talent, so I’m looking to into sales (got a cold calling job) and put my soul into it (also got decent at copy through sheer effort, not talent).
I know you guys mention that anybody can acquire above sales skills, but is it possible to become *talented* starting from scratch?
Or will I have to lower my expectations of what can be achievable? I’m not looking to be comforted, just want the truth.
January 19, 2020 at 1:42 am
Tests don’t say anything first of all. So doubt it means anything,in fact our test scores are horrific.
The best way to get money if you really don’t think you can do one of the three careers in efficiency is going to be real estate
January 19, 2020 at 12:22 am
Not a question, just a remark (that‘s why I don‘t bother searching my PP TX ID:
There are no more posts on Facebook announcing new posts on the blog. Would be nice to have them again.
Thanks for your great content and I wish you a successful and healthy 2020!
January 19, 2020 at 1:39 am
Yeah its locked unfortunately
January 19, 2020 at 1:07 am
Have strong desire to write, run and test ads for income, but not yet at 50k disposable for the product route . . .
What would be my best bet? Affiliate, dropship? (Prefer to skip time for money service site if main requirement is to execute very well on copy)
January 19, 2020 at 1:41 am
Affiliate or time for money exchange based on your current line of work just to get the money needed for the biz
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