The funds they manage don't outperform the market. But a young guy can manage a huge amount of money. Managing a hedge fund of $500 million or more, is not unusual. You typically collect a fee for that. One million dollars is 0.2% of that, out of a fund that typically earns lets say 5-8%. So zero-point-two percent is peanuts in that world.

And most of those guys work for companies that manage a hundred billion dollars or more.

That environment is intensely competitive to break into. The movie "Pursuit of Happyness" gives a good idea what it takes to become a stockbroker. Helps a lot if you come from an affluent background, have an Ivy League education in finance, and can prove you are a numbers/math genius. Or a demonstrated history of making large profits in investing in your past. Many are superb gamblers, having memorized the odds in Poker and can count multiple decks of cards in Blackjack. Most routinely work 80-100-hour weeks, are intensely driven, have failing marriages from neglect. One of the least nurturing work environments you'll ever encounter. It's pretty brutal.

Some start their own hedge funds, basically owning their own company at a very young age. Very difficult to do successfully. Have to live and breathe investments, show a track record of profits, and have the sales skills to convince people to invest with you. People have to have confidence in you.

Alternatively, being a con artist works too, for a while. Ponzi schemes are popular. Fool people into thinking you're a genius investor who will make them gobs of money. Live high for a while, but eventually you crash, and crash hard. Hollywood loves making movies about that.