The Man Who Makes More Money Showering Than You Do Per Year

[Big Toe]

Morgan Housel
January 31, 2011
(All figures presented is in USD)

How was your 2010? John Paulson's wasn't too bad. The hedge fund manager pulled in a personal payday of $5 billion. This comes after his 2009 pay of $2.3 billion, $2 billion in 2008, and $3.7 billion in 2007.

Average it out, and the guy has made about $100 per second over the past four years. Every second. Of every day. Of every year.

Here's how Paulson's 2010 pay compares to other professions(in USD):

Profession
Average Salary (2009)
Time It Took Paulson to Earn This Much in 2010

Biomedical engineers $82,550 9 minutes
Computer hardware engineers $101,410 11 minutes
Elementary school teachers $53,150 6 minutes
Registered nurses $66,530 7 minutes
Surgeons $219,770 23 minutes
Family and general practitioners $168,550 18 minutes
Microbiologists $71,980 8 minutes
Firefighters $47,270 5 minutes
Police and sheriff's patrol officers $55,180 6 minutes
Petroleum engineers $119,960 13 minutes
Education administrators $80,140 8 minutes
Engineering teachers $92,970 10 minutes
Emergency medical technicians and paramedics $33,020 3 minutes
Average Goldman Sachs employee $430,700 45 minutes
President Obama $400,000 42 minutes
Total GDP of the bottom 10 nations in the world $1.4 billion 3.3 Months


Sources: Bureau of Labor Statistics, Reuters, CIA World Factbook, author's calculations.

As is well known, Paulson made his money first by shorting the housing market in 2007, then switching that bet around with huge bets on Citigroup (NYSE: C) and Bank of America (NYSE: BAC) in 2009. He's also long and strong gold, with big stakes in Kinross Gold (NYSE: KGC) and AngloGold Ashanti (NYSE: AU).

I don't think there's anything inherently wrong with Paulson's pay. If he isn't smarter than most people, he's obviously bolder. He's figured out capitalism, and good for him.

Still, I think this comment from Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) vice-chairman Charlie Munger sums the situation up nicely:

A big percentage of Cal-Tech grads are going into finance. I regard this as a regretfully bad outcome. They'll make a lot of money by clobbering customers who aren't as smart as them. It's a mistake. I look at this in terms of losses from the diversion of our best talent going into some money-grubbing exercise.
Paulson deserves whatever money he can make, but there's something tragic about our best and brightest -- the people who should be engineering airplanes and curing cancer -- choosing instead to trade derivatives and short financial bubbles.

What do you think?

[arthur]

Asset creators vs asset shifters. Those who create stuffs to advance the world have turned to shifting cash to other asset classes while getting a commission in between. Nothing wrong with these ppl as there exist an individual freedom of choice. Yet the movement of such individuals will create a reinforcing masses psychology that will be highly detrimental to the nation future.
Tat's why Obama wants to create a Sputnik movement right now and to raise the science and maths level among children. Its the Industrial prowess and technological superiority tat set the America from rest of world in the 20th century. They have world best technological and management universities yet decreasing no of native citizens wishing to study engineering.

[Zelphon]

Asset creators vs asset shifters. Those who create stuffs to advance the world have turned to shifting cash to other asset classes while getting a commission in between. Nothing wrong with these ppl as there exist an individual freedom of choice. Yet the movement of such individuals will create a reinforcing masses psychology that will be highly detrimental to the nation future.
Tat's why Obama wants to create a Sputnik movement right now and to raise the science and maths level among children. Its the Industrial prowess and technological superiority tat set the America from rest of world in the 20th century. They have world best technological and management universities yet decreasing no of native citizens wishing to study engineering.

SG also wat..

Who wants to be an engineer??

One of my biggest regret is to study engineering..

Low pay.. Poor Prospect and infiltrated by FTs...

Next time, I will slap my kid silly if he takes up engineering...

[yeokiwi]

Still, I think this comment from Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) vice-chairman Charlie Munger sums the situation up nicely:
A big percentage of Cal-Tech grads are going into finance. I regard this as a regretfully bad outcome. They'll make a lot of money by clobbering customers who aren't as smart as them. It's a mistake. I look at this in terms of losses from the diversion of our best talent going into some money-grubbing exercise.
Paulson deserves whatever money he can make, but there's something tragic about our best and brightest -- the people who should be engineering airplanes and curing cancer -- choosing instead to trade derivatives and short financial bubbles.
What do you think?

It's happening in Singapore too.
It is not only money. Even a renowned scientist could not even command more respect than a bank CEO.
And for a good scientist, he also has to learn how to invest or else he may have to face the possibility of living a destitute life in his "golden" years.

I was attending a seminar with a renowned scientist speaking of his experiences and research topics. It was pretty interesting but after 15 mins, I saw many students dozing off.. haha..

I felt sad for these scientists. They are not getting the respect from the society.

Anyway, the above comment from Munger came from Wesco Financial annual meeting.
There are more interesting comments from Munger.
http://www.fool.co.uk/news/investing/201...thing.aspx

[corydorus]

In singapore, there is no place for Development Engineering kind of work. Reason being alot of them can be done in China or Taiwan where there are many engineering companies giving very good rewards. Another is there are easier ways to make money in Singapore rather than to compete with them head-on.

Thus, there are not enough mass to push for higher level of engineering where we can groom Strong Scientists or Research Engineers.

The pressure for profit and tense culture, also means many of the local companies cannot afford to let this scientists have "Fun" for many years before somethings credible comes up. Most Management simply can't see employees lieing around doing their own things or having fun.

[arthur]

But does the alternative of over reliance on MNCs and services industries helps? Or importing second rated technologies and paying high pays for fat cats to teach the locals something in order to export something that other parts of world would soon replicate at much cheaper cost helps?

Again the key world isn't have fun, or not having a critical mass to build up a strong R&D mass but "innovation". We need to relook at our education system. Having a streaming system at PSLE will sieve out many late bloomers to "ITE" when they could have been another Sim Wong Hoo.

It is true our education system has been the envy of the world. But can this system propel Singapore to the next level in terms of competitiveness in this new century? We are facing ever closing of economic gaps from our neighbors up north and bottom south. Not to mention a Bipolar world between China and USA. What can we offer to the world that can guarantee our relevance to it?

Casinos and luxury properties? Even our highly regarded refinery industry is in danger of phasing out if the China-Asean transrail project goes through. Moving oil through pipelines is way faster than ships.

Having a reward system in place depending on the no. of students getting high PSLE scores not only creates ellitism among schools but also segregate the weaker students to classes with unmotivated teachers or out of schools.

Some of the best engineers of our time do not even hold a Engineering degree. Read up Bill Gates and Steve Jobs. Both develop world changing products bcos of their innovative minds and their foresights. How many Singaporean students at age 20 could have such foresight.

Temasek holdings proclaims they do not go for venture capital path but personally, I think this should be exactly the path they should instead of freely throwing $$ around only to lose or get stuck. Giving a chance to locals is definitely worth it.

[Big Toe]

Our "garment" need followers,people who conform to norms, they do not want innovators and leaders.
The focus is on productivity, not innovation. Innovation requires thinking out of the box and not adhering to the norms.

R&D in major MNCs in Singapore is a joke. Absolutely nothing innovative comes out.
Singapore used to design HP printers, now production is in Vietnam and a large part of R&D is done in china.
The only company who devotes some time for real innovation is 3M.

Singapore is a nice place, everyone wants to work for a large corporation.
Take a comfortable salary, stay mainstream, no alarm, no surprises, pray for a good bonus... ...

The alternative path is harsh. If you have a great idea or plan to have an innovative product or service, imagine the immediate consequence.
No fixed pay, no income, no guarantee of any success, will be sort of a social outcast. But that is exactly what is needed to succeed.
A passion and the determination to see it go through despite consequences. Trust me, most people will be scared of of hell if they don't have a regular pay. Conditions here have soften us. A nice working environment with relatively decent salary have made us unwilling to take risk and try something new.

Also consider this. Most MNCs here have no obligation to stay here. If country X offers a better deal and conditions are right, they will be gone in a blink. We need local innovative enterprises and it is definitely not happening.

[LionFlyer]

We need local innovative enterprises and it is definitely not happening.

No critical mass. I'm in the IT sector and had a long discussion with an ex-colleague about the state of our industry last year. The industry is largely dominated by SI (Systems Integrators) for the big government pie. SI don't create innovation; they just solve a problem. The mid and SME tiers are mainly local IT shops with specialized horizontals (eg, ERP, SAP, CRM) or verticals with fairly tight margins. Innovation do exist and there are many exciting startups; but there is a lack of long term goal. In fact, most startups look at acquisition by a major MNC as THE long term goal/exit strategy.

There are few if any like Peng Tsin Ong, with that sort of consistent track record of innovation.

[mikh]

Our "garment" need followers,people who conform to norms, they do not want innovators and leaders.
The focus is on productivity, not innovation. Innovation requires thinking out of the box and not adhering to the norms.

Yes. People who follow norms will create less problems.

The trouble is that the world has changed. While that may be recognized somewhat, implementation and change is something else as the implementors themselves were selected from the original mold. Like begets like. Also, many started by plucking the low hanging fruits, in the name of quick gratuity instead of setting the foundation for longer term success. Unfortunately after a while, short term fixes can be competed away easily. It's hard for a person brought up and trained in one environment to understand and champion another.

I wonder how many employed by Temasek might be well suited to the kind of adventurism and risk-taking for venture capitalism, whether you consider that as gambling or not.

[arthur]

I wonder how many employed by Temasek might be well suited to the kind of adventurism and risk-taking for venture capitalism, whether you consider that as gambling or not.

Don't even get me started on all the rumours I heard about Mr Chip Goodyear and Temasek Hldgs.

I mean he is cheap and has a good year behind (Ok that's a pun on his name ) so what can be worse off than investing billions into Citi & UBS and categorising them "long-term" investments while keep praying the prices will go back once again.