Can you be a Baller in accounting?
First post everyone,
Just a question, can you be a baller in big 4 accounting or will I be forever doomed to the prospect of mediocrity maxing out at 600k/year?
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Yo.
No.
Yes.
LOL.
Ok, shits and giggles aside, don't do accounting if you want to get rich. It's a very stable, secure career and the lifestyle is really good, but don't expect to make tons of money. You have to look at it this way: "Am I adding value to the company, or am I a cost center?" Yes, you are technically "front office" if you're an accountant at a Big 4 but you're a cost center to your CLIENT. You aren't raising money through an IPO or revenue through M&A - you're fulfilling a function that the company only does to comply with regulatory requirements.
And dude, $600K/year in accounting would make you seriously senior to your colleagues. Partners make that kind of money - obviously not at B4 though (at the same time, don't expect to be at the top a B4).
Yo, OP. take notes from this response. All he says is the bloody truth. +1 to FSC.
Most people don't last long enough to make partner, or they just can't move up the ranks.
This is a silly question, but that said, the answer is arguably no (and don't expect $600,000 to be the default end point in accounting either).
Isn't CFO the ideal end point in accounting?
Partners at Big 4 are fully capable of making 1M+ a year.
Yeah, I phrased my response pretty awkwardly. Partners make that kind of money ($600K), but at Big 4 it's obviously more ($1MM+, as noted above).
However, as other users pointed out, making it to partner is a ridiculous journey on its own. It's like planning to make MD in IBD as an undergrad - you've no idea what you're in for, and it's an entire life away from where you currently are.
Thanks for the insight everyone.
Yes if you consider other factors besides just absolute compensation.
First off, partners at big 4 make between $300k to $1MM+ depending on market, seniority and line of service (let's assume audit since that's the lowest paying). You do have to invest an up front equity, but the firm loans it out to you interest free until you pay it off. While there's definitely more upside as an MD, I doubt the average MD is pulling in $10MM+. Mergers and Inquisition is saying $1MM - $3MM assuming you closed deals. On an average basis, the compensation isn't THAT huge of a difference.
Second, a significant portion of a bankers total comp is bonus. In a shit year with few deals, kiss your 7 figure bonuses goodbye. Let's not forget this year majority of a senior bankers cash bonus was capped, and stock bonuses came with a vesting schedule. Point being, comp as an MD is highly volatile, which isn't the case for a partner in Big 4.
it's way more difficult being an average MD because you're pay is tied to your deal flow, which is constant pressure. You're ALWAYS selling. Once one deal is over, you're competing again for the next deal. Audit partners hardly feel the same pressure. Once you have a client engage your audit, it's pretty likely they'll keep you on unless you royally fuck up. Sure companies switch audit firms all, but it's basically the big 4 passing companies around and around. Not to say there's no pressure to bring in business as a partner, but no where near what an MD is expected.
Lastly and probably most importantly, audit partners get a fucking pension plan....
Honestly, I'd rather be an average partner than average MD. By that age, I'd just want to chill the fuck out.
also keep in mind there are like a million levels of partners. during your first 5 years as a partner, you make less than a senior manager because of the equity you need to put in. most people dont have $500k cash lying around or are not comfortable throwing that all into a firm that can go bust as andersen did...im sure andersen partners never saw it coming too....
Not arguing with you that it's a pretty big up front check to be writing out. That said, the firm doesn't let you into the partnership unless its expected that by the time you retire, you'll get a positive return on your investment. Expected doesnt mean guaranteed, but I think it's a better investment than putting $500k into the stock market.
Point being, while bankers is seen as more "baller" at the surface level, there's much more to consider than just the newspaper headlines that bankers are unfairly and overly compensates.
Yeah I'm definitely feeling way less naive about the accounting profession right now. Being at the top end of your career and "possibly" earning that kind of money doesn't sound too appealing for all the ground work required to get to partner. Thanks everyone! I'd give out some "silver bananas", but I have absolutely no idea how to do that.
LOL really what you smoking
Sweet first post, bro.
JohnTuld has what it takes.
Not sure if srs, but feels good man haha.
So making 600k/yr is now mediocrity?....
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