Generally speaking, a hedge fund equity analyst’s bonus is paid out of the returns generated by the overall portfolio. If, in aggregate, the portfolio doesn’t make money in a given year there will be no bonus pool. It will not matter how great your individual stock picks were if the bonus pool is zero (or negative). Therefore, since you can never assume your bonus is a sure thing, do not live beyond the means your salary and savings can support. Following this guideline will help you avoid a great deal of stress somewhere down the line.
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