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Morning Coffee: Banker who retired at 31 and lived frugally is back in fashion. Three Barclays' traders shared $200m

If you work in banking and you don't know about Joe Dominguez, you can probably live with yourself. After all, Dominguez retired from his Wall Street research job sometime circa 1970, and sadly died in 1997 - around the time contemporary first year analysts and summer interns were being born. Even so, today's youthful bankers might want to familiarize themselves with Dominguez' distinctive career path (or lack of it).

"Joe had retired early from Wall Street," says his former partner, Vicki Robin, who was interviewed this weekend by the New York Times. "People started asking us, “Why don’t you have to work?” We were free, and they weren’t..."

Dominguez wasn't just young when he retired; he was very young. In his obituary in 1997, the New York Times said he left Wall Street aged just 31 with a nest egg of $100k (around $650k in today's money). After that, Dominguez never worked (in a conventional job) again. Instead, he spent the rest of his life living off $6k a year in profit from his investments, setting up a chill community of like-minded souls, and broadcasting the tactics that enabled him to amass his lump sum in less than ten years' work. He and Robin also wrote a book, 'Your Money or Your Life,' which has just been reissued.

Dominguez' fundamental technique will as be familiar to today's Financial Independence Early Retirement (FIRE) advocates as to Charles Dickens' Mr. Micawber. - If you want to retire young, you simply have to spend (a lot) less than you earn. To achieve this, Dominguez advocated psychological and existential scrutiny. "When we go to our jobs we are trading our life energy for money." In a nine-step program, he also preached self-scrutiny and careful control of outgoings: "Did I receive fulfillment, satisfaction and value in proportion to life energy spent?" Dominguez was all about "enough:" recognizing when you've got it and avoiding overwork in order to get more. 

Dominguez' approach was a hit when he unleashed it in the '70s and a hit again when he and Robin's book was launched in 1992. "At first we taught a couple of friends, and it was 20 people in the basement of a church in Phoenix. Then, four years later, it was 400 people at a whack," says Robin. The original book sold 600,000 copies. The reprint may yet sell a few hundred thousand more. 

Even so, skeptics may question whether the average 30-year-old vice president in a bank could copy Rubin now. Firstly, bonuses in banking aren't as high as they used. Secondly, the contemporary options for generating a 6% return are mostly high risk, meaning you'd probably need a pot of $1.3m to generate Rubin's equivalent investment income for 1973. And thirdly, Rubin seemingly avoided the fatal (if you want to retire young) mistake of having children. Oh - and he also wrote a book that sold 600k copies and traveled America spreading his ethos. So, he was still working. - Just not 11 hours a day in equity research.

Separately, three bankers who almost certainly did not live frugally are Mike Bagguley, Eric Bommensath and Harry Harrison, Barclays' ex-heads of macro products trading, global head of fixed income and the non-core business respectively. The three men were paid a combined £160m ($200m) in salaries and bonuses between 2005 and 2011 according to Jay Merchant, a former Barclays trader who was jailed for 5½ years in 2016 for rigging LIBOR and who has been appealing his conviction.


After being remonstrated for a “stunning” lack of diversity in its upper ranks, private equity fund TPG has begun fast-tracking women and ethnic minorities to partner. (Financial News) 

Deutsche Bank's ex-head of global FX says the bank's FX division used to think of itself as an ‘intelligent flow monster.’ Since his time the bank has dropped from 1 to 8 in the FX rankings. To get better perceived, DB needs growing revenues; to get growing revenues, the bank needs to be better perceived.  (Screaming and Shouting) 

German bank supervisor Joachim Wuermelling thinks several banks haven't moved enough of their businesses to Frankfurt to comply with local regulations. He's not saying which ones they are. “EU business must be booked from within the EU 27.” (Reuters)

RBS still doesn't have approval for its operation in Frankfurt. (The Guardian) 

James Simpson and Ray Dalio were the only hedge fund managers to earn more than $1bn last year. Poor Ken Griffin only earned $870m. (Bloomberg) 

A list of the City of London's 25 sexiest solicitors has been published. (Daily Mail) 

Tiger Global cut its stake in Barclays. (Reuters) 

HNA cut its stake in Deutsche Bank. (Reuters) 

Patriotic millionaires just want to pay more tax. (New York Times) 

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AUTHORSarah Butcher Global Editor
  • An
    18 February 2019

    Looks like TPG has changed their policy after pressure from an investor who doesn't appear to have done his homework. Its a bit of a slap in the face for some of their male staff who will be held back. Its questionable if this type of discrimination is legal.

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