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November 23, 2013September 12, 2014

Book Review: Investing Demystified by Lars Kroijer

Can we invest our own personal portfolio in a sophisticated way, to maximize our risk-adjusted returns, without incurring high costs or having to be financial experts ourselves?

In his book Investing Demystified: How To Invest Without Speculation And Sleepless Nights, Lars Kroijer says yes.

Kroijer was a hedge fund manager who argues forcefully against hedge funds, because of their high costs as well as because most active managers claim an ‘edge’ on markets which they are unlikely to really have.

A priest’s guide to atheism

As he says in his introduction, the irony of his position is not lost on him. It “may seem like a priest writing the guide to atheism.”

As “Anonymous Banker” of course I am personally all in favor of finance folks criticizing, from their experience, the financial industry’s areas of high cost/low value-added.

We need the Lars Kroijers of the world to tell us that “simple is better,” “low cost is better,” “retail investors should avoid complex financial products,” and a better solution exists.

The author says that he designed his book as the grey Volkswagen, rather than the red Ferrari, of investing.[1]

Volkswagen_style_investing — Sensible, unsexy, rational: The Volkswagen way to invest

60-Second Version of Investing Demystified.

Kroijer helpfully offers a “60-second version” of his book – the 4 take-aways to remember:

We as individuals do not have an ‘edge’ in financial markets. We should invest accordingly.
We can construct a cheap and simple optimized portfolio using world-equity tracking indexes and the highest-rated government bonds. We can then choose whether to add a level of complexity by deciding about a) What % of the portfolio should be in our ‘risky’ equities bucket, and b) Whether adding some corporate bonds or risky governments bonds also makes sense
We need to think carefully about personal a) risk appetite b) Tax consequences c) non-investment assets and liabilities such as real estate, income, and debt
We should pay attention to investment and transaction costs as these matter a whole lot in the long run

I like Kroijer’s 4 lessons because they are correct, simple, easy-to-remember guides to personal portfolio construction that eschew hype. His VW will get you from here to there with minimal cost, minimal risk, and maximum performance.

I also like that Kroijer’s personal background and professional experience make his advice free of national bias. What he says about personal portfolio construction applies equally to a Belgian, a Brazilian or a Bostonian.

International perspective advantage

One advantage Kroijer brings to the typical discussion of optimal, low-cost, low-maintenance personal investing is that he’s a Dane by birth, a Londoner by choice and profession, and a citizen of the world. As a result, he solves the personal portfolio puzzle differently than your average American who has a US-centric view of the investing universe. He’s unmoored from a parochial investment approach.

This matters because:

Your dominant currency may not be the US Dollar.
Your tax regime may not be the US tax regime.
Riskless bonds in your portfolio may not necessarily come denominated in your home currency, or from your own national government.
The best, low-cost diversified mutual fund from Kroijer’s perspective is not a Russell 5000 index tracker therefore, but rather a whole-world equity market tracker. Only through a ‘whole-world’ index tracker, Kroijer argues, can you achieve the optimal point of an efficient frontier portfolio.

Recommendation

I would recommend this book to a friend who has a traditional “Left Brain” orientation with an accounting, engineering, or mathematical background, but who may never have studied personal finance up to this point. For that person, Kroijer’s vocabulary and engagement with portfolio theory will be quite gentle, because Kroijer never actually goes too far with technical explanations.

For the creative or non-technically inclined, however, Kroijer’s grey Volkswagen approach – and especially the peeks under the hood at the financial theory – may leave them a bit cold.

The practical, diffident, Dane isn’t flashy, and he isn’t trying to entertain. He’s just rational, right, and could help you get wealthy.

Please see related post:

Lars Kroijer on agnosticism over ‘edge’

Audio interview with Lars Kroijer Part I – On Global Diversification

and an Amazon link to his other book, Money Mavericks, Confessions of a Hedge Fund Manager

Please also see related post: all Bankers Anonymous book reviews in one place.

[1] The jacket cover confirms his sensible/boring/diffident approach, as the grey cover with block letters is unconvincingly enlivened with awkward rainbow-colored arrows all pointing in the same direction. It’s not the red Ferrari of jacket covers either.

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November 21, 2012

SAC Capital – Too Much Of A Good Thing

I covered the mortgage bond side of SAC Capital in the early 2000s, and I remember half-kidding, half-probing my client about Steven A Cohen’s seeming inability to miss. Back then Cohen’s SAC had put together a string of annual monster returns like no other hedge fund.[1] Cohen’s SAC Capital was the Mark McGuire of stock trading, and we knew enough to think the home run records of 1998 looked mighty suspicious.

My client was one of the nicest and most straight-forward men I ever worked with, and his team of bond portfolio managers were really not the beating heart of SAC’s fund, which at its core was a high volume, stock-trading firm.

My client honorably defended his employer Cohen, marveling at his ability to stand in the middle of his trading floor in Stamford, CT and synthesize all the trading inputs and react unerringly with his ‘feel’ for the markets.

SAC was known then to produce an inordinate amount of volume on the NYSE for just one fund,[2] making Cohen’s fund the top equity client for a number of broker-dealers who earned extraordinarily high commissions on his stock trading. The implication of high volume like this, at the time, was that a top client like SAC could command top coverage from the Street.

According to the honest way of looking at things, this meant SAC might receive a phone call,[3] tip-off, or access to the Street’s best research ideas, first.

According to the dishonest way of looking at things, this meant SAC might get information that nobody else had access to, possibly – unethically – the client-flows of rival funds, or – illegally – straight-up insider information.

With yesterday’s accusation of one of SAC’s portfolio managers, we have what some believe to be the first major chink in the armor of Steven Cohen’s code of silence around his trading success.

This has got me thinking again about hedge fund cheaters and too-good-to-be-true results.

The first investing lesson of the Madoff scheme was this: If your hedge fund manager is flawless, if he never endures a down month, if he beats the competition month after month and year after year, then he’s not a genius, he’s a crook. Real investing sometimes involves losses, and sometimes involves volatility. Fake investing by contrast offers you steady, non-volatile wins every month. Until all the money’s gone.

The second investing lesson of the Madoff scandal was that investors will look the other way with their own crooked hedge fund manager, if they think it benefits them. Investors turned out to be wrong about Madoff (he wasn’t cheating on their behalf!) but many people inside the financial community have long wondered if SAC fits in this category of acceptable cheaters.

Insider trading is a kind of ‘everybody wins’ cheating[4] that investors hope benefits them, so they are willing to not ask too many questions.

Steven A Cohen’s unrivaled success over the years brought the unwelcome attention of securities crime prosecutors long ago, as the Lance Armstrong of the hedge fund world.

As we learn more about Cohen’s proximity to insider trading, the parallels with Armstrong hold. Armstrong enforced a code of silence among his fellow riders for nearly ten years at the top of the cycling world, as who wants to be the first Judas to admit the whole operation depends on cheating? Too many people’s livelihoods depended on maintaining appearances and not asking questions.

Cheating on the kind of scale of Armstrong, or the SAC scale, however, involves so many people that eventually a few can be peeled away to talk to prosecutors. Based really on a gut feeling, and on no particular personal knowledge of the situation over the years, I wouldn’t be surprised if Steven Cohen eventually gets his 7 Tour de France titles taken away as well.

[1] With the possible exception of Jim Simonds’ Renaissance Fund, but that managed no outside money.

[2] This was ten years ago, and SAC was alleged to generate 25% of equity commissions on the NYSE. These days, its all run by Skynet so I can’t believe any one fund could have that kind of influence.

[3] Back when, you know, people used phones. It’s all so quaint.

[4] It’s not really ‘everybody wins,’ it’s just that winning is concentrated in the hands of a few interested parties with quantifiable benefits, while losing is diffusely shared by the entire system of unknowing, losing, participants. Kind of like tax loopholes.

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November 15, 2012

SHHHHHH…Please Don’t Talk About My Tax Loophole

I wrote last week that one of the great lessons of the recent Presidential campaign, for me, is how little we as a country understand income tax policy.

Since we’re about to engage in a crash course in fiscal policy[1] it’s worth focusing on the loophole of carried interest.

Both Presidential candidates referred in the debates to closing income tax loopholes, yet both were deathly afraid of mentioning anything specific, such as the egregious carried interest income tax loophole for hedge funds and private equity funds. Romney skipped it because his entire Bain Capital career benefitted from it, and Obama skipped it because he’s derived a healthy portion of campaign funding from the same industry.[2]

Industry-specific loopholes like this always prove notoriously difficult to close, because benefits accrue to an intensely interested, knowledgeable, and well funded group, while the general public has minimal to no knowledge of the loophole, no voice at the table, and only earns a very diffuse benefit by closing the loophole.

If you don’t know what carried interest is, then you’re not particularly close to anyone in the hedge fund or private equity world. Frankly, that is the way we in the investment world would like to keep things. You – in the dark. Us – avoiding taxes.

However, as a recovering fund manager dedicated to a fearless moral inventory of all things financial, I’ll explain what you’ve been missing by telling my story.

How I tried, ignorantly, to forgo my right to an awesome loophole

When I set up my private limited investment partnership – also called, inaccurately, a hedge fund[3] – my attorney insisted I set up not one additional Limited Liability Company in Delaware, but rather two. I tried to resist him, saying I felt most comfortable with just one new business entity.[4] I was so averse to two new entities that I asked another attorney for a second opinion. He told me the same thing. I needed two entities. I asked my accountant. His response was, of course, “two entities,” and complete puzzlement at my resistance. Clearly, they knew something that I didn’t. That something is the awesomeness of the carried interest loophole. Needless to say, I got the extra LLC.[5]

Two types of income require two entities

Why did my attorney and accountant insist I create a separate entity? Because that separate entity can collect payments in the form of ‘incentive allocation,’ also known as ‘carried interest,’ which is taxed advantageously, at the same rate as long-term capital gains[6] rather than as ordinary income. Here’s how it works.

If you set up a traditional hedge fund[7], first things first: you’ll want to charge the traditional “2/20.”[8] Embedded in this short-hand lingo of “2/20” for hedge fund fees are two types of income.

With the two types of income, you need the two entities to keep the income tracked separately. Entity #1 collects the “2,” which is taxed like regular business income, and Entity #2 collects the “20,” which collects your totally awesome income at a lower tax rate.

The “2” refers to an annual management fee of 2% of assets under management. On a small/medium-sized hedge fund of, for example, $500 million under management, you will collect $10 million in management fees per year. The purpose of this money is to pay for rent, staff, overhead, technology, research – in short all the things you need to do as a fiduciary for the proper care and feeding of the client’s money. This management fee income will net out with business expenses, and may or may not ever generate “profit” for the manager. In some fundamental sense, it’s not supposed to generate profit; hedge fund managers are fine earning zero profits from management fees since the $10 million is taxed like ordinary income at 35%, which is, as you know, kinda lame.

The “20” refers to the incentive allocation, meaning specifically that 20% of all annual gains are retained by the manager, in entity #2, as ‘carried interest.’ Here, the hedge fund manager takes full advantage of the loophole. If the $500 million fund has a gain on investments of 10% this year, fully 20% of the $50 million gain on investments – that is to say $10 million – gets earned by the hedge fund manager’s entity #2 as the ‘incentive allocation’ or ‘carried interest.’

At this point, that ‘carried interest’ gets treated at the rate of capital gains, a 15% tax rate, rather than the 35% taxable rate of ordinary income. Often, by design, the hedge fund manager leaves the entire 20% incentive allocation inside the fund for it to grow long term. The manager only owes $1.5 million in taxes (15% of $10 million, at the capital gains tax rate) instead of $3.5 million (35% of $10 million, at the ordinary income tax rate). As a result of the special tax treatment for ‘carried interest,’ the small/medium hedge fund manager in our example keeps $2 million more than he otherwise would have been entitled to keep. That’s a good deal, for him.

And that’s just one year.

And that’s just for kind of a small hedge fund.

You can imagine the bigger, scale-able results available for when a John Paulson-type fund manager scores big by shorting the subprime mortgages market in 2007 (probably saved about $740 million in taxes with the loophole) or buying gold in 2010 (probably saved about $980 million in taxes with the loophole)[9]

You can also see why my attorneys and accountant insisted that I set up a separate entity that could take advantage of the tax loophole for carried interest. My keep-my-life-simple approach made absolutely no sense in the face of potential millions in tax savings year after year. And they knew that.

Is carried interest deserving of special treatment?

Is there anything special about ‘carried interest’ that justifies the preferred tax treatment?

Proponents argue that because much of ‘carried interest’ stays invested inside of hedge funds, still at a risk of loss, that additional risk justifies the 15% preferred tax rate.

But typically much of that ‘carried interest’ left in the market could be liquidated and taken out by the hedge fund manager anytime.[10] (You know what else is risky? Having a job, with a salary, that you could be fired from next week, but you have to pay a much higher tax rate on that salary. That’s pretty risky too.)

Other proponents of ‘carried interest’ argue that tax policy should incentivize the accumulation of our economy’s scarce investment capital, basically the Ed Conard argument for lower taxes on wealth and investments.

In my opinion, that’s bunk. Capital is not that scarce for any truly innovative segment of the economy. Most hedge funds and private equity investments offer little value-added as innovative engines of the economy. I know that’s my hypothesis, not a provable assertion, but I’ve seen enough on the inside to know – these hedge funds are not the engines of innovation you’re looking for.

At the end of the day, the ‘carried interest’ money is treated better than salary money because it’s been earned by a special class of people – hedge fund and private equity fund managers – who are much more influential in the political process than the average worker. Full stop.

All of this is why I wrote last week that I would appreciate it if both sides of the political aisle would just stop lying to us about fiscal policy and loopholes and treat us like adults. I’m ready to be pleasantly surprised. But I’m not going to turn blue holding my breath.

[1] Thanks to the overheated discussion of a completely politically synthetically created crisis known as the Fiscal Cliff.

[2] Don’t be overly misled by some of the anti-Obama rhetoric from titans of the hedge fund industry like Omega’s Leon Cooperman. Despite Cooperman’s choice comparisons to Nazism, or Dan Loeb saying Obama’s treats them like ‘battered wives,’ hedge fund and private equity managers know that Obama’s been all talk and no action when it comes to what they really care about. Which is the carried interest loophole.

[3] A pet peeve of mine as well as for many people in the industry, the use of the term ‘hedge fund’ to describe what is better described as a ‘private investment limited partnership.’ ‘Hedge fund’ implies something that has no relation to my business. I did no hedging.

[4] My reason at the time was that as a small business, I wanted to keep things simple. A new entity meant the additional cost of entity creation and maintenance, a separate set of accounting books, a separate set of tax returns, etc. Boy was I wrong about the potential costs and benefits, as I’ll explain below.

[5] Here’s a handy rule of thumb for non-financial people: Whenever you see a company or business situation with lots and lots of separate business entities, you can be confident there’s tax avoidance going on. It’s possible there’s also an attempt to shield the principals from bankruptcy, but it’s either that, or tax avoidance. Anyway, just an FYI.

[6] See my earlier posting on tax rates for different types of income.

[7] Or private equity fund, but for the purposes of this illustration I’ll just refer to a ‘hedge fund.’

[8] Industry folks, bear with me, as you already know this, but the non-financial types don’t: Insiders refer to hedge funds not as an asset class but as a compensation scheme. The “2/20” is why.

[9] I’m assuming his reported gains of $3.7Billion and $4.9 Billion respectively, the largest portion of which would be in the form of tax-advantaged incentive allocation.

[10] Admitedly less so for a private equity manager, whose investments tend to be less liquid.

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July 24, 2012July 3, 2013

Interview: What the %#@! is a Fund of Funds?

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Please click above to listen to full interview.

I spoke with an old friend Trevor, a former Director of Research at a Hedge Fund of Funds. In college, a mutual friend of ours imaged a radio show named “What the Fuck Do you Do?” in which he interviewed people in jobs that nobody else understood the name of, or the function of. This interview is in that spirit. He spoke about the business, lucking into one of the best bosses in finance, and then leaving it all. This interview is also in the spirit of Trevor himself, a recovering banker trying to figure out what’s next for him.

What is a Fund of Funds?

Trevor: Hi my name is Trevor and I used to be the director of research for a fund of funds.

Michael: Trevor, thank you for agreeing to be part of Bankers Anonymous. I’m wondering when you said you’re a fund of funds manager, what percentage of people that you ever talk to, who you identify yourself as a fund of funds manager say, “Oh, I know exactly what that is,” or do people have no idea what you’re talking about?

Trevor: People have no idea what I’m talking about.

Michael: What do you usually say?

Trevor: And it’s usually a stultifying opener when I say – people say what do you do and I say, “I work for a fund of funds, fund of hedge funds.” Three-quarters of the time there’s a blank stare and then one-quarter of the time people actually ask a follow-up question about what it is. But the topic of finance generally sends people running away from the conversation. So I usually lie now when I tell people what I do.

Michael: What’s your backup answer now, zoo keeper?

Trevor: I raise bees, African honey bees which produce a very spicy variety of honey.

Michael: Awesome. I know what a fund of funds business is more or less, although I’ve not worked at one, but is it easy to describe what that means?

Trevor: It is. It is a collection of funds run by other people managed by the fund of funds operator. Usually I give people the analogy of mutual funds because most people know what mutual funds are. The business model is if I was going to create a fund of mutual funds, so instead of you investing in mutual funds directly and picking ten mutual funds, you could invest in Trevor’s fund of mutual funds and by investing in my one fund you get exposure to however many underlying mutual funds I choose to put in the portfolio.

The fund of hedge funds is the same idea but instead of underlying investments being in mutual funds, the investments are in hedge funds. That’s usually when people freak out because they’re like “Oh my god, hedge funds; now you’ve lost me. Aren’t those all terrible?”

Michael: Are you part of the evil hedge-fund world?

Trevor: Yeah.

Michael: I’m familiar with that, where people hear fund of funds and suddenly there’s a blank stare and everybody’s like “Oh my God look shiny object over there.”

Trevor: And, to interrupt you, then the smart people say, “Oh, so that’s an extra layer of fees, so basically you pay fees to the hedge funds and then I pay fees to you, and then there’s multiple layers of fees. So it’s not really a business, it’s just a set of fees.” That’s what the savvy, cynical, smart people usually observe right away.

Michael: The classic criticism of hedge funds themselves is they’re not really an asset class but a compensation scheme. As a derivative of a hedge fund you could be a compensation scheme on top of a compensation scheme.

Trevor: Yes.

Michael: But having been in the world, do you think the added expense is worth it?

Trevor: The firm that I worked at launched multiple products going back over the last twenty years and their long-term results easily beat the S&P500 with better performance characteristics, as net of all fees.

Michael: Performance characteristics: Volatility, Return, what else am I worried about – draw down I guess; how much did you lose in a bad year?

Trevor: Yup, and then one more which is correlation to the index. If the index is going one way the fund of funds is not necessarily having the same pattern. So there are fund of funds which have been able to outperform the broad-based market net of all fees over a five, ten, fifteen, twenty-year time frame.

Michael: And your fund did that?

Trevor: Yes.

Michael: So post-credit crisis in 2012 is the world different for fund of funds?

Trevor: I think there will always be a need for fund of funds because institutional investors want access to alternative investments and part of that is access to hedge funds. A lot of those programs don’t have the resources to research hedge funds, and invest in them, and monitor them. So if you’re a 200 million dollar endowment for a secondary school or small university,

Michael: Basically, tiny.

Trevor: And you allocate twenty percent to hedge funds, so you have 40 million dollars going into hedge funds. And of that, you have half of that going into long/short equity hedge funds, you can’t hire the staff to adequately research and monitor it. So middle-sized endowments will always have a need for a gatekeeper to help them.

Then a lot of larger institutions often hire funds of funds to create a starter kit and they will put together fund of funds for the larger college endowment, and then the endowment will eventually take it over once they’ve learned the ropes.

And the last category that’s probably never going away is if you’re a high net-worth individual but you’re not super, ultra-rich, you can’t afford to create your own diversified portfolio hedge fund because they generally have a one million dollar to five million dollar minimum, so if you, say, only have ten million dollars to invest and you put twenty percent in hedge funds which is two million dollars, you can invest in two hedge funds, maybe, which as everyone knows you don’t want to take on concentration risk in really any asset class. So the high-net individual but not ultra high-net will always need a fund of funds to create a diversified pool.

Michael: Is that essentially the customer base of your business, medium-size endowments and high but not ultra high-net worth individuals?

Trevor: When the firm first launched it was mostly high net-worth individuals, which I think is if you go around to your friends and say, “Hey I’m starting this business, will you invest?” And then over time they generate the track record and credibility, their shift was towards institutional clients. The current composition is ninety-five percent institutional and five percent individuals.

Michael: I’m sorry, ninety-five percent institutional and five percent individuals?

Trevor: Right, so the shift over time was dramatically towards institutional money meaning pension plans, charities, endowments, foundations as opposed to individual investors.

Michael: I obviously know you quite well and I know you have a mathematical background but can you describe what it’s like to work for a fund of funds? What’s the main skill set that’s useful?

Trevor: I think everybody approaches selecting managers differently and there are places that run Monte Carlo simulations and all sorts of back testing and modeling and then there’s people on the totally other end of the spectrum who just meet with a manager and think, “I like that guy.”

Michael: More a feel on what’s a good manager or good investor.

Trevor: Yeah, and both approaches probably work fine, as long as you do the one that makes sense to you. Our firm fell somewhere in the middle where we did a lot of number crunching and we would look at past track records and look at when managers had losses how did they respond to those losses. Hedge funds generally have access to leverage so when the economic environment deteriorates does the manager double down to take on more risk in hopes of making all this money back quickly; or if they have losses and a bad environment do they reduce exposure and risk and crawl back slowly? Looking at quantitative information to assess how a manager responds to risk and how much risk they take on.

Michael: So it’s a mix. It doesn’t sound like rocket-science math.

Trevor: No, there’s some standard deviation and draw downs but probably high school level math.

How Do You Get a Job at a Fund of Funds?

Michael: In 2002 you were not in the financial world. How does one get a job at a fund of funds shop?

Trevor: I think it’s a strange path. Probably very few people coming out of college have heard of this industry. So I happened to get into it by a sequence of events where my uncle had worked for a guy who ran the company and he hired me to do some software programming. Then I joined running operations and gradually made a transition to the investment side while doing the CFA program. It was a very idiosyncratic route.

Michael: The work environment was somewhat idiosyncratic also?

Trevor: Yes, I think I worked for one of the nicest people in finance, certainly shocking and refreshing to find someone who is very principled and fair and entertaining. I remember an early conversation where the boss said, “You know, I’d really like to take Fridays off in the summer, but if I take Fridays off what am I going to do about all the employees? Maybe they can work half a day. Oh fuck it, just everybody gets Friday off.” But that was also tempered with if you made a mistake he would come down very hard on you. It was very high expectations but it was a very fair environment.

One great memory which is that my boss used to come into my office and he would say, “You know, when I had my first consulting job, my boss would come in and he would say, ‘I’m going to give you six months to work on this, and if it turns out well you get full credit. And if it goes badly, you’re fired.'” And I’d think ha-ha that’s great, good story. He told me this anecdote maybe three or four times over the course of two weeks, and the fourth time it dawned on me; those are the rules. If it goes well, I get full credit, and if it goes poorly, I’m fired.

Walking Away From It All

Michael: Okay, you’re no longer fulltime with the same fund of funds and as I understand it you’re interested in other things. Why would you do that?

Trevor: Great question. A friend of mine told me he would come up to New York and shoot me if I lived there for more than five years.

Michael: So it was fear that drove you away.

Trevor: At year eight I was getting worried that would actually happen.

I love spending time out of doors and I love farmers markets and I love a slightly slower pace of life. It’s very hard to achieve that in New York where your apartment can be very small and dark unless you’re extremely successful. People don’t generally host dinner parties or hang out in their apartments which I think is why I think a lot of the public spaces in New York are so great. Peoples’ existence in their own apartments is not a great hosting venue. But all that being said, I wanted to move out West and have access to the out of doors.

Michael: While maintaining your anonymity for this program, we’ll just say you’re in California, somewhere in California. They’ll have to try to find you. I think I’m hearing you say actually when it came down to money versus friendships you found the friendship part more compelling. This sounds very un-banker-like of you.

Trevor: Certainly I would rather have more money than less money. I did have this idea I would work hard and save up money for a while and then leave and do something else. I’m in the process of executing that transition and certainly some days I wake up and I think what an idiot; if I had stayed and followed the traditional succession plans, I’d be a gazillionaire.

Michael: But even making the choice to leave and get into a different mode of life, it’s still hard to think: “Wow, but I could have had this money!”

Trevor: I think it’s hard to take a path where you’re relatively senior and successful and basically go into another industry or set of interests where you don’t have any credibility or expertise necessarily, but you think it’s a more satisfying and rewarding way to spend your time. I’ve discussed this with my former boss and he wisely wrote back and said, “Money means nothing if you are unhappy.”

Michael: Wise words.

Trevor: If it’s a calling that’s good for you, and there are certainly plenty of people in finance who genuinely enjoy it. Then I think it’s a great career track. But money corrupts and it’s an industry that can lead people to stay working in it when they don’t get a whole lot of meaning out of it.

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