Career advice, please

T

thatscapital

Hi --

I'm currently an investment banker (1 yr out of college) and kind of hate it. I love the markets, have good intuition, and think I could be a successful trader.

The volatility lately has been driving me insane because I'm not allowed to trade, as I occasionally have access to non-public information. My firm also has a long mandatory holding period for the securities we are permitted to trade. So, I'm on the sidelines.

I want to quit and go for it -- but it's a huge risk. The biggest risk is that I feel like if I leave the work force, try trading for a year or two and fail or can't make a good living out of it, it will be difficult for me to break back into the corporate world -- i.e. how would I explain those 2 years? Because I make good money now (although who knows what will happen in the industry in the future...), I would have to be a pretty successful trader to make such a move worthwhile. This is why I'm wondering whether it's a dumb move. I think I'd enjoy it a lot more, though.

I have about $75k in cash I'd be starting with. I have read some of the posts here about people starting with 500 bucks, or 1500 bucks, or something insane. Realistically, I reckon I'd need at least what I have now to give it a shot, and possibly more to provide enough of a cushion and generate enough income to get by on. Thoughts?

Here are the options I'm weighing:

-- Go to grad school, and devote my summers, free time, etc. to learning trading, experimenting with small positions, and hopefully make some pocket money. If all goes well, become a full-time trader upon graduation.

The advantage of this is that it'd be an excuse to be out of work; if things didn't look like they were going to work out, I could just get another job.

The disadvantage is a lot of my time would be taken up with classes, school work, etc. and I so I wouldn't be able to fully devote myself to learning the "business".

-- Quit, just go all-in and hope for the best. I probably won't do this... seems too risky. But I would be able to completely dedicate myself to being successful.

-- Move to the buy-side by getting a hedge fund job (or trying to). This would bring me closer to the markets, give me some experience, I could amass more money, and then try going out on my own later down the line.

This is relatively safe but based on most of my friends' experiences at hedge funds I doubt I'd like it much more than banking.

Any advice is much appreciated.
 
I'd say the option you didn't list - staying with your job. IBs are an endangered species lately. From what I've heard, every IB recruiter is flooded with thousands of Lehman & Bear resumes. I wouldn't so easily give up what is being so desperately sought after.

You're right to not go it alone trading with only $75k, 3-4x that would be the bare minimum in my opinion. Finding a trading job for a HF in this current environment, with no experience, will likely be extremely difficult. If you decide to go back to grad school, it's better to wait until your first promotion. In all 3 cases, you're going to be sticking with your current job for quite awhile. So grin & bear it for a couple more years, study the markets, save up, trade the Asian session after work if you want to get your feet wet.
 
75K is not pocket change and you could start with that. Granted it will not allow you to make a living off of it, but it sure is enough to trade 100 share a pop o 1 car a pop in the futures market. Having that kind of $$$ you could test the waters and see what you are made of.
 
75k is more than enough to get started with. The way I see it is you're young, not really enjoying your job despite the decent income and if it all goes tits up (which your job might anyway) then you're still young enough and hungry enough that you can bounce back.

Go with your gut feeling on what you really want to do. Forget all this well, I got a good job rubbish, you can get another - yep, might not be easy, but you will.

You got good starting capital, you say you have good market intuition, just go for it if that's what you do want deep down.

If you were mid 30's to 40 then I would say no way, stick with what you have, but I really feel you're young enough to give it a shot and if it doesn't work out, well, life's a bitch, move on.

On the other hand, with the way things are, maybe sitting tight just for a little bit, let things settle down in the market or maybe even you get your hand forced and lose your job with a redundancy payment! That would be handy!!

Good luck with whatever you decide, but go with what you really want, not what others think you should do. If it doesn't work out at least you'll have given it a shot and know that it didn't work, rather than always wondering.....
 
If you are getting paid well why not stick with it for another year, then leave under the auspices of going to grade school so you don't burn any bridges. You can trade pretty much full time while going to school, so if it works out great, if it doesn't you leave grad school with a degree, two years of work experience and get back to banking.

75k is enough to start with but unless you are able to lose it and still live I wouldn't jump quite yet.

Remember that in this environment you are unlikely to find another job if it doesn't work out and you need to go back to work. Especially if you leave after only a year, it would look bad especially now.
 
thanks for the input, guys. JCVR, you're right, i would wait until my two years are up to do this.

i'm leaning toward the grad school option because it does seem pretty foolish to give up a high income for this with no backup plan. it might take a little longer to become a career trader this way, but probably worth the time for the reduced risk. in the meantime, i'll continue studying up and developing my strategies.

ryanturri -- i'm in NYC. send you a pm.
 
These people saying 75k isn't enough are insane. Some guy said "3-4x that is the bare minimum". WTF planet are you on? I started in the beginning of 07... put down 2k. 2k isn't enough, but 5-10k is. Jeez, just trade 100 shares at first, and cut your damned losses to 50-100 bucks/day.
 
NY08, the question isn't whether it's possible to trade that small an account, the question is whether it is possible to make a living doing it. If I started with 10k I would need a 1400%+ (non-compounded) annual return to match my current income, which is, to say the least, unrealistic. Therefore the point was that even if I am a successful trader I would need significant principal to earn a six-figure income without extremely high leverage.
 
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