The head honcho at one of the nation’s most successful hedge funds has admitted to sleeping 2,000 nights — the equivalent of roughly five and a half years — in his office, so he could “concentrate nonstop on work.”
Peter Brown, the CEO of Renaissance Technologies, recently shared the extreme lengths he took to build the giant hedge fund — which held more than $106 billion in assets under management, as of May 1 — on the Goldman Sachs Exchanges podcast.
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“For me, productivity-wise, it’s really fantastic being able to spend nearly 80 straight hours each week with no interruptions, except sleep, thinking about work,” the 68-year-old said — explaining that he’d work a very intense four-day week at Renaissance’s East Setauket office before flying home to Washington D.C. to spend “three more normal days” with his family.
“Of course, I really miss my family. But the freedom to concentrate nonstop on work while surrounded by my colleagues is hugely valuable. And the job is so demanding, I really don’t see how I could do it otherwise.”
Brown’s exceptional work ethic — which has him sleeping only a few hours a night — is hard to replicate, even for his most dedicated staffers. On the podcast, the CEO recalled calling a subordinate with a question at 1 a.m. — then realizing “he doesn’t make enough money” to call him in the middle of the night and offering him an immediate raise to soften the blow.
While the hedge fund lifestyle comes with its obvious financial benefits — Brown had a net worth of around $100 million in 2019, according to the most recent Forbes data — not everyone is cut out for the workaholic lifestyle. Here’s three ways to make your money do the hard work (so you don’t have to).
Save and invest for passive income
One easy way to put your money to work — before taking on the risk of investing in the stock market or other alternative investments — is to stash some cash in a high-yield savings account (HYSA). With an HYSA, you could earn more interest on your money and benefit from greater compound growth than you would with a traditional savings or checking account.
If you do want to invest, most people start by looking at the four basic options: bonds, stocks, mutual funds and exchange-traded funds (ETFs). They all have the potential to earn higher returns than a high-yield savings account — but they also come with more risk.
Buying and selling individual stocks takes a lot of know-how to pick winners and losers — and even wise decisions can end poorly.
Those who are new to investing often get their feet wet with mutual funds or ETFs, which bundle together a diverse portfolio of investments. These are generally considered less risky than trading individual stocks.
There are plenty of apps these days that can help you dip your toe into the investing waters.
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Maximize retirement accounts
Another efficient way to put your money to work is to take advantage of tax-friendly retirement accounts, like a 401(k) account, if your employer offers one.
A 401(k) retirement savings plan allows you to steer a portion of your pay into an account where you can invest and grow your money — and get a tax break.
If you don’t have access to a 401(k), you might consider opening a traditional individual retirement account (IRA), where you can contribute pre-tax income and grow it tax-free until you make withdrawals in retirement.
You’re allowed to contribute up to $22,500 in a 401(k) and up to $6,500 in an IRA in 2023.
Another option is a Roth IRA, where your contributions are taxed upfront so that your withdrawals are tax-free in retirement. Roth IRAs offer some advantages and flexibility compared to traditional IRAs, but they’re also subject to certain rules and limitations and you can face penalties if you withdraw your earnings too soon.
Get into real estate
Real estate is often considered a good long-term investment thanks to property appreciation. And you don’t have to sell it to see some of that return on your investment, whether that be through borrowing against your equity or generating passive income through renting your space out.
But getting a foothold in the real estate market is incredibly expensive between having to pony up for a down payment, property taxes, legal fees, elevated mortgage rates, regular maintenance and so on.
If you don’t quite have the capital to buy physical property but you’re still eager to invest in real estate, you may want to consider putting your money in a real estate investment trust (REIT), which are publicly-traded companies that collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.
There are also online crowdfunding platforms that allow everyday investors to pool their money to purchase property (or a share of property) as a group.
If you don’t want to make investment decisions on your own, some new online platforms can even help you invest in diversified real estate portfolios that will maximize your returns while keeping your fees low.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.