The amount of capital raised by a fund can determine personal wealth generation for the fund manager, with a $10 million fund potentially not being a significant wealth creator unless highly successful, while a $7 to $10 million total fund can lead to wealth creation through high returns.
The speaker discusses the potential income from investments made in a good fund, with a conservative estimate of tripling the initial investment over a seven to 10 year period, resulting in a profit of $36 million and a 20% carry fee.
The hustle and hard work required to get a $50 million fund off the ground could be your full-time job as a fund manager; on the other hand, as an investor, you can put a small amount of money into a higher risk asset class without worrying about doing the work.
The speaker discusses how investing four million dollars can result in ten million dollars of equity value without including the appreciation of those investments.
The speaker discusses the high cost of management fees, citing an example of a 2% management fee on a billion-dollar fund, which would result in $200 million over the life of the fund. The speaker's own fund does not charge any management fees.
Learn about how much money you can withdraw risk-free from your savings while continuing to grow your principle, and how to go to big banks' wealth divisions with a couple of million dollars saved, in this podcast.