Posted by: admin | October 1, 2008

October 2008 net worth update

*Note: net worth as of first day of month, i.e. October figures are as of October 1, 2008.

Summary: September was a down month, at a bad hit of -6%, or $6,175.  Most of the losses were a result of a decline of my investments in the stock market, which given current events, it seems like everyone is down.

Investments: The Revenue Direct & Sedo balance are the earnings owned to me from my domains, which currently earn me ~$3,000 per month income.  These earnings are paid 2x a month on the 10th & 25th to my Etrade checking account.  The balance shows $1,500 because that is what I am owed but have not yet been paid (once I am paid this amount is transferred to my Etrade checking account).

Credit cards: I accidently overpaid my Southwest Visa credit card, and now have a $236 credit.  My Chase Cash Plus Rewards balance is a 0% balance transfer deal, which I used to finance the purchase of my domains.

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Responses

  1. doing a little math it looks like you make ~75k annual pretax (@40% overall tax rate). is this really how PE pays?

  2. CUnit 2k5,

    Good guess, how did you arrive at that number?

    I won’t say exact figures, but my yearly base salary is very close to that, and I also get an end-of-year bonus of between 70-100% of my base.

    This is typically how PE pays, although at the larger firms in NYC & LA that manage more money in their funds, their compensation can run $90k base + >$90k bonus.

    The big kicker in PE is to become an officer (VP or higher in title), and then you get a % of the carry, which is a portion of the profit your firm makes off its investments. So lets say your $300 million fund has an IRR of 10% over a 10 year period (very low for PE funds), your fund is now worth $360 million, or a profit of $60 million. Of this, your firm gets 20% carry (also known as % of profits, standard rate), or $12 million. Of this, lets say you get you get 5% of the carry, you personally now get $600k. Not too bad, also considering you get very high base salary and usually PE firms make much better returns, which would translate into more bonus for you.


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