Key

Years
1
2
3
4
5
6
7
8
9
10
Total

IB
Tax Rate
47,500
0.3
47,500
0.3
155,000
0.5
155,000
0.5
155,000
0.5
300,000
0.5
300,000
0.5
300,000
0.5
300,000
0.5
450,000
0.5
2,210,000

Tax
IB Net
HF
Tax Rate
Tax
14,250
33,250
100,000
0.5
50,000
14,250
33,250
100,000
0.5
50,000
77,500
77,500
200,000
0.5
100,000
77,500
77,500
200,000
0.5
100,000
77,500
77,500
200,000
0.5
100,000
150,000
150,000
200,000
0.5
100,000
150,000
150,000
200,000
0.5
100,000
150,000
150,000
500,000
0.5
250,000
150,000
150,000
500,000
0.5
250,000
225,000
225,000
500,000
0.5
250,000
1,086,000 1,124,000 2,700,000
1,350,000

Basic
Bonus
Total Comp'

Total Comp' IB Assumptions

FA
Associate
VP/ED
40,000
80,000
200,000
7,500
75,000
100,000
47,500
155,000
300,000

Basic
Bonus
Total Comp'

Total Comp' HF Assumptions ($1Bln HF)

JPA
JPM
SPM
Principal
100,000 200,000
500,000
300,000
0
187,500 1,100,000 150,000
100,000 387,500 1,600,000 450,000

N>B>

MD
300,000
150,000
450,000

SMD
500,000
650,000
1,150,000

The sheets in this file although approximate can be used to input your own expectations and assu
The IB sheet and the HF sheet have hard coded numbers for expected salaries in the Investment B

www.instutrade.com/education/

HF Net
50,000
50,000
100,000
100,000
100,000
100,000
100,000
250,000
250,000
250,000
1,350,000

Reinvest

225,000
225,000
225,000
225,000
225,000
1,350,000
1,350,000
1,350,000 Total HF Wealth
5,175,000
6,525,000

own expectations and assumptions to map out a 10 year strategy for yourself. Feel free to change formulas and stress test the parameter
salaries in the Investment Banking and Hedge Fund Industry. These can be changed over time.

stress test the parameters.

Assumptions
Current Assets / Liabilities
Net Property / Equity Ownership
Property Loan / Principal
Property Value
Property Debt Service %
Annual Property Value Increase
Net Property Principal Paydown Rate
Current Savings
Cash at Bank
Stocks & Bonds Portfolio
Student Loan
Trading Account
Risk Free Rate

0
0
0
0.00%
0.00%
0.00%
0
0
0
-30,000
0
1.00%

Income
Net Salary
% Net Salary increase
Savings Ratio
Annual Savings
Investment Income %

0
10.0%
0.00%
0
0.00%

Inflation

3.00%

www.instutrade.com/education/

IA Net Property / Equity Ownership

Property Loan / Principal
Property Debt Service
IA Property Value
IA Property Wealth
IA Stocks & Bonds
IA Annual Salary
Savings Ratio
Student Loan (Linear Paydown)
Student Loan Amount Paid
Savings for Cash at Bank
IA Cash at Bank
IA Trading Account
Wealth

Years

Wealth
0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

10.00%
-30,000
0
0
0
0

0
33,250
3,325
-27,000
-3,000
325
325
0

0
33,250
3,325
-24,000
-3,000
325
644
0

0
77,500
7,750
-21,000
-3,000
4,750
5,381
0

0
77,500
7,750
-18,000
-3,000
4,750
10,023
0

-26,675

-23,357

-15,619

-7,977

It is more likely that you will save more from Year 6

If you get to MD by Year 10, you might be able to buy a studio Apartment in central London for cash
We have not included the numbers for the stock portion of the Bonuses because you may never receive it. If you want to include it

10

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
77,500
7,750
-15,000
-3,000
4,750
14,573
0

0
150,000
50,000
-12,000
-3,000
47,000
61,281
0

0
150,000
50,000
-9,000
-3,000
47,000
107,055
0

0
150,000
50,000
-6,000
-3,000
47,000
151,914
0

0
150,000
50,000
-3,000
-3,000
47,000
195,876
0

0
225,000
125,000
0
-3,000
122,000
313,959
0

-427

49,281

98,055

145,914

192,876

313,959

0
0

340,634
IA Wealth Change
340,634

ou may never receive it. If you want to include it, feel free to do so. It wont make much difference.

Assumptions
Current Assets / Liabilities
Net Property / Equity Ownership
Property Loan / Principal
Property Value
Property Debt Service %
Annual Property Value Increase
Net Property Principal Paydown Rate
Current Savings
Cash at Bank
Stocks & Bonds Portfolio
Student Loan
Trading Account
Risk Free Rate

0
0
0
0.00%
0.00%
0.00%
0
0
0
-30,000
0
1.00%

Income
Net Salary
% Net Salary increase
Savings Ratio
Annual Savings
Investment Income %

0
10.0%
0.00%
0
0.00%

Inflation

3.00%

www.instutrade.com/education/

IA Net Property / Equity Ownership

Property Loan / Principal
Property Debt Service
IA Property Value
IA Property Wealth
IA Stocks & Bonds
IA Annual Salary
Savings Ratio
Student Loan (Linear Paydown)
Student Loan Amount Paid
Savings for Cash at Bank
IA Cash at Bank
IA Reinvested HF Capital
IA Trading Account
Wealth

Years

Wealth
0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
50,000
5,000
-27,000
-3,000
2,000
2,000
0
0

0
50,000
5,000
-24,000
-3,000
2,000
3,960
0
0

0
100,000
10,000
-21,000
-3,000
7,000
10,881
225,000
0

0
100,000
10,000
-18,000
-3,000
7,000
17,663
450,000
0

-25,000

-20,040

214,881

449,663

0
10.00%
-30,000
0
0
0

It is more likely that you will save more from Year 6

Assume bonuses are paid onshore and Tax is paid (This doesnt have to be the case)
Assume Re-invested portion of Bonus' doesnt make any Annual Return - (more than likely you will)

10

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
100,000
10,000
-15,000
-3,000
7,000
24,310
675,000
0

0
100,000
25,000
-12,000
-3,000
22,000
45,824
900,000
0

0
0
100,000 250,000
25,000
150,000
-9,000
-6,000
-3,000
-3,000
22,000
147,000
66,907
212,569
1,125,000 2,475,000
0
0

0
250,000
150,000
-3,000
-3,000
147,000
355,318
3,825,000
0

0
250,000
150,000
0
-3,000
147,000
495,211
5,175,000
0

684,310

933,824

1,182,907 2,681,569

4,177,318

5,670,211

0
0

5,695,211
IA Wealth Change
5,695,211

Targeting 20% Net Return

Years
Annual % Return
Exposure Rate
Margin
Exposure
Optional
Months to 1mln
Trading Days to 1mln
Calender Days to 1mln

1
20.00%
5
25,000
125,000

2
20.00%
5
50,000
250,000
IB / HF

3
20.00%
5
100,000
500,000
IB / HF

4
5
6
20.00%
20.00%
20.00%
5
5
5
200,000 400,000 800,000
1,000,000 2,000,000 4,000,000
IB/HF
HF
HF
TP 1

63
1320
1890

Assumptions;-

1. 20% Return per anumn on a long / short multi asset portfolio

2. 5 times leveraged trading account - Margin requirement is higher in the United States for Retail Investors - Trad
3. (Tipping Point 1 ) = You trade for 2-3 years doubling your account each year. You can then either interview the

www.instutrade.com/education/

7
8
9
10
20.00%
20.00%
20.00%
20.00%
5
5
5
5
1,600,000 3,200,000 6,400,000 12,800,000
8,000,000 16,000,000 32,000,000 64,000,000
HF
HF
HF
HF

11
20.00%
5
25,600,000
128,000,000
HF

es for Retail Investors - Trading Accounts in United States have 35-50% Margin Requirement or 2-3 times leverage.
n then either interview the Investment Banks and Hedge Funds to hire you or set up yourself as a professional

Assumptions
Current Assets / Liabilities
Net Property / Equity Ownership
Property Loan / Principal
Property Value
Property Debt Service %
Annual Property Value Increase
Net Property Principal Paydown Rate
Current Savings
Cash at Bank
Stocks & Bonds
Trading Account
Risk Free Rate
Income
Net Salary
% Net Salary increase
Savings Ratio
Annual Savings
Investment Income %
Inflation

75,000
275,000
350,000
3.00%
5.00%
3.00%
75,000
0
75,000
1,500
1.00%

40,000
5.0%
10.00%
4,000
5.00%
3.00%

Use this sheet to input your own assumptions of the next 10 years of your life on the left hand side
The Assumptions include property ownership (Equity +Debt), Savings (Stocks, Bonds, Cash), your own trading account, risk fre
You should enter your assumptions and stress test the following;-

1. Enter zero's for every year in the IA Trading Account i.e. assume you do not have a trading account and do not know how to
2. If interest rates go back to 2007 / 2008 levels (Risk Free Rate) - Outside of the U.S. this will increase your Property Debt Ser
3. Reduce Annual property Value Increase.
4. Reduce how much you pay off of your mortgage each year - Net property Principal Paydown Rate.
5. Enter the value of your savings (Cash + Stocks and Bonds)
6. Enter your salary and a reasonable assumption for salary growth. 5% is well above average wage growth for the last decade
7. Reduce Investment Income - 5% is well above average Long term Annual Rate on U.S. Treasuries, UK Gilts and Dividends
8. Increase inflation - stress test the notion that the real inflation rate is not what the government reports and is much higher.

What you are doing here is stress testing your real wealth (Inflation Adjusted) for the next 10 years.
You need to ask yourself the following questions. If you dont like the answers do something about it. Trading is one way to

What if property prices dont go up by as much as I think?

What if I fall on tough times and I cant pay my mortgage?
What if Interest Rates double? Can I still live?
Why do I have Cash in the Bank earning Nothing? Maybe I should use this to trade / invest / start a business.
Why am I not Trading ? And getting a proper trading education so I can make consistent returns from the both up and down m
What if my salary doesnt go up by as much as I expect.?
What if I dont get any investment income or very little. Can the money be used / invested better elsewhere?
What if the government is lying about the real inflation rate? Maybe I should account for higher inflation?

www.instutrade.com/education/

IA Net Property / Equity Ownership

Property Loan / Principal
Property Debt Service
IA Property Value
IA Property Wealth
IA Stocks & Bonds
IA Annual Salary
Savings Ratio
IA Cash at Bank
IA Trading Account
Hours Per Week
Wealth

Months to 1mln
Trading Days to 1mln
Calender Days to 1mln

Years

Wealth
75,000
275,000
8,250
350,000
75,000

83,250
266,750
8,003
357,000
82,248

91,253
258,748
7,762
364,140
97,630

99,015
250,985
7,530
371,423
112,908

106,544
243,456
7,304
378,851
128,092

75,000
40,000
10.00%
0
25,000

76,500
40,800
4,080

78,030
41,616
4,162

79,591
42,448
4,245

81,182
43,297
4,330

50,000

100,000

200,000

400,000

150,000

208,748

275,660
1st Half

392,499

609,274

63
1313
1916

s of your life on the left hand side

ngs (Stocks, Bonds, Cash), your own trading account, risk free rate as set by Central Bank, Salary, an assumed growth in salary (%), an amount you save e

e you do not have a trading account and do not know how to trade and run a portfolio making an inflation adjusted 20% per year on a 5 times leveraged
Outside of the U.S. this will increase your Property Debt Service % - This is the interest rate on your mortgage.

t property Principal Paydown Rate.

h. 5% is well above average wage growth for the last decade.

m Annual Rate on U.S. Treasuries, UK Gilts and Dividends
rate is not what the government reports and is much higher.

tion Adjusted) for the next 10 years.

ke the answers do something about it. Trading is one way to exit entrapment

use this to trade / invest / start a business.

o I can make consistent returns from the both up and down markets?

money be used / invested better elsewhere?

ybe I should account for higher inflation?

10

113,848
236,152
7,085
386,428
143,192

120,933
229,067
6,872
394,157
158,218

127,805
222,195
6,666
402,040
173,179

134,471
215,529
6,466
410,081
188,085

140,936
209,064
6,272
418,282
202,947

147,208
202,792
6,084
426,648
217,773

82,806
44,163
4,416

84,462
45,046
4,505

86,151
45,947
4,595

87,874
46,866
4,687

89,632
47,804
4,780

91,425
48,760
4,876

14,925

800,000

1,600,000

3,200,000

6,400,000

12,800,000

25,600,000

1,025,998

1,842,680

3,459,330

6,675,960
2nd Half

13,092,579

25,909,197

25,575,000
IA Wealth Change
25,732,697

TP 2

142,773

Tipping Point 2 = When you make your first Million from trading - (63 months)

in salary (%), an amount you save each year (Ratio), Income from investments and infaltion rate.

20% per year on a 5 times leveraged trading account.