career in banking/finance = employee for the rest of your life?

Are any of you bothered by the fact that you're going to be nothing more than an employee for the rest of your life? Even if you make MD, SMD, partner, etc. you're still just going to be another employee.

Engineers can come up with a new product at a young age, start a company, and become a successful business owner (zuckerberg, jobs, gates, etc.) but it's not like you can just decide one day to create your own bank.

I suppose you could start a firm like Qatalyst or Moelis, but by then you'd be well past your prime and you'll probably be retired/dead by the time your firm becomes anything more than a boutique.

I like that a career in finance pays well, but is it too safe? Are there any opportunities for entrepreneurship?

 

"not like you can just decide one day to create your own bank" but I guess it's a lot easier to just go ahead and start another Facebook...makes sense.

Under my tutelage, you will grow from boys to men. From men into gladiators. And from gladiators into SWANSONS.
 
Flake:
"not like you can just decide one day to create your own bank" but I guess it's a lot easier to just go ahead and start another Facebook...makes sense.
It actually is. I'm going to stand up for the OP and admit that he makes a good point. Everyone on here chose to enter a business that is dominated by a few large players. Even private equity funds and hedge funds. If you want to make millions, your best bet is to go work for the best hedge fund or prop trading desk or megafund, NOT try to raise pennies for a new shop.
 
AstonMartin:

I like that a career in finance pays well, but is it too safe? Are there any opportunities for entrepreneurship?

Sure there are. Not in the western world though. People/Gov are broke and taxes & regulations are high.

Singapore would be a good place to start your own business.

 

also im pretty certain that the vast majority of young engineers go to work for large corporations? the sample here is pretty biased. People forget that most start ups fail / never receive funding.

to be successful as an entrepreneur no matter what the industry typically takes years and years of experience at an established company to get the network, skills and credentials necessary to be taken seriously. the "prodigies" that you mention are the exceptions to the rule.

 
deal_mkr:

to be successful as an entrepreneur no matter what the industry typically takes years and years of experience at an established company to get the network, skills and credentials necessary to be taken seriously. the "prodigies" that you mention are the exceptions to the rule.

Exactly.

You have to eat shit everyday for years if you're starting from scratch.

 
Best Response

If you read the Steve Jobs biography, you know that guy was a clown. He didn't really do anything amazing at Apple. He rode Wozniak's coat tails, stole some good ideas from Xerox (mostly because Xerox was retarded), abused some talented engineers Apple had hired to create the Macintosh II, and got really lucky that his terrible business ideas did not sink the company. I really had nothing against Steve prior to reading the book (didn't know anything about him), but I was astounded by how many obvious mistakes he made. Perfect example of right place, right time -- he got really, really lucky.

Gates, not so much, but he started programming when he was like 7 or whatever. You could say the same thing about Buffett -- he's an extreme example because he started very young and never stopped moving up the curve.

Point is, not everyone is lucky enough to catch a major revolutionary event in the economy (like tech in the early 1980s) or the next internet bubble or whatever. Finance is still a great profession relative to most of the other opportunities both in pay and in the interesting nature of the work (assuming you don't work in banking).

 
Ravenous:
If you read the Steve Jobs biography, you know that guy was a clown. He didn't really do anything amazing at Apple. He rode Wozniak's coat tails, stole some good ideas from Xerox (mostly because Xerox was retarded), abused some talented engineers Apple had hired to create the Macintosh II, and got really lucky that his terrible business ideas did not sink the company. I really had nothing against Steve prior to reading the book (didn't know anything about him), but I was astounded by how many obvious mistakes he made. Perfect example of right place, right time -- he got really, really lucky.

Gates, not so much, but he started programming when he was like 7 or whatever. You could say the same thing about Buffett -- he's an extreme example because he started very young and never stopped moving up the curve.

Point is, not everyone is lucky enough to catch a major revolutionary event in the economy (like tech in the early 1980s) or the next internet bubble or whatever. Finance is still a great profession relative to most of the other opportunities both in pay and in the interesting nature of the work (assuming you don't work in banking).

i just finished reading the steve jobs biography and i completely disagree. steve jobs was not simply lucky. yes, there was an element of luck and timing as there always is with successful businesses, however jobs was the one who first conceived the notion of a personal computer for the masses. was this one of his "terrible business ideas"? wozniak was a brilliant engineer but he did not have the business savvy to get his designs off the ground, let alone envision entirely new markets for them. jobs gave apple its direction, culture and ethos by making tough decisions that may not have been popular. granted, jobs did have issues with abusing those he did not see fit but the same is true of the most brilliant minds; they are always eccentric and somewhat flawed. it's one thing to be a talented engineer and get lucky or be in the right place at the right time. jobs actually conceived where the right place should be, then created it, time and time again.

 
Ravenous:
If you read the Steve Jobs biography, you know that guy was a clown. He didn't really do anything amazing at Apple. He rode Wozniak's coat tails, stole some good ideas from Xerox (mostly because Xerox was retarded), abused some talented engineers Apple had hired to create the Macintosh II, and got really lucky that his terrible business ideas did not sink the company. I really had nothing against Steve prior to reading the book (didn't know anything about him), but I was astounded by how many obvious mistakes he made. Perfect example of right place, right time -- he got really, really lucky.

Gates, not so much, but he started programming when he was like 7 or whatever. You could say the same thing about Buffett -- he's an extreme example because he started very young and never stopped moving up the curve.

Point is, not everyone is lucky enough to catch a major revolutionary event in the economy (like tech in the early 1980s) or the next internet bubble or whatever. Finance is still a great profession relative to most of the other opportunities both in pay and in the interesting nature of the work (assuming you don't work in banking).

No way. You can't make billions by simply being in the right place right time. Your concluding this from a biography written by someone who has no knowledge whatsoever about technology or business.

And how about the Apple turnaround. Nobody denies that Steve was the one who turned around the company from what it was. The company was ready to sell out. And than Steve came back completely revived the company and turned it into what it is today. Yeah he may have been an a - hole sometimes or a clown but that doesn't belittle his accomplishment.

"Sincerity is an overrated virtue" - Milton Friedman
 
Abdel:
tlynch5:
Buffett > Gates > Jobs + Zuckerberg

Next.

Buffet got saved by the bailouts. No way he's better than Gates or Jobs.

I was going by personal wealth. But if you want it that way..

Buffett = Gates = Jobs > my grandma > everybody > my dog > Zuckerberg

I didn't say it was your fault, I said I was blaming you.
 

Buffett WAS one of the bailouts.

Banking/finance is a pretty common background for entrepreneurs in areas outside of tech. And there are plenty of asset mangement shops (alternative or not) that are successful at gathering assets if not delivering strong performance. Considering how small of a portion of analysts ever become MDs, your claim is completely ridiculous to be honest.

To be fair, IBD is playing it safe although not to the extent of a Big 4 job. But just because you want to be an IBD analyst doesn't mean you're stuck on the IBD-PE-MBA-PE-"greatness" path. You could also use the skills you learn to start a business, join a startup, join a L/S, event-driven HF... But if you couldn't think of doing that in the first place, I have a hard time believing you have the kind of lateral thinking it takes to launch a "disruptive" tech startup.

 

You always will be an employee, unless you become an entrepreneur. Even CEOs are subordinate to boards and shareholders. Even "Partners" in law firms and such are rarely free; the other partners/more senior partners can tell you what to do.

As GoodBread said, IBD is a reasonably common background among entrepreneurs. It gives you some degree of credibility versus every other Zuckerberg-aspirant, and hopefully you know something about how a company works after 2 years as an analyst.

 

you can sac up and start your own biz anytime you want. it is true that finance attracts a lot of nutless pussies that need to coddle the paycheck addiction, but that can be said of a lot of industries. finance pays a bit more though so the paycheck addiction is harder to kick.

 

Almost everything Jobs touched flopped. NeXT was an utter failure. LISA flopped. He missed the boat on software. The Mac had design problems. His approach to manufacturing capacity was insane (painting the machines rainbow colors which screwed up production, etc.). Almost everything shipped late and had performance issues. He was a pathological liar that exploited his investors, employees, and customers. Apple succeeded because it was one of the first movers in a long running secular bull market for PCs. That's it. The company survived its first decade plus despite Steve Jobs, not because of him.

The best part of that book is about half of the way through when Bill Gates states the glaringly obvious and says "Steve Jobs knows nothing about technology" or something to that effect. Jobs was good at marketing and media hype, that's true, but there is no way you can call him a visionary engineer. He wasn't an engineer at all.

 

Who cares if Steve Jobs was a great engineer or inventor or whatever? The point is that he was a successful entrepreneur. He saw opportunities and exploited them. He wasn't perfect and his companies weren't too, but I have yet to see anything managed perfectly. He was successful enough to afford to do some stupid shit and still earn tons of money and be remembered. Anybody who can make scores of idiots wait in tents in front of a store for days just to buy the new gadget you came up with deserves respect.

 

What can stop you from starting your own boutique IB or broker/dealer? I myself worked at B/D startup- it can be done. Trading related businesses have relatively few barriers to entry whether you are starting a prop shop, a mutual fund, hedge fund, or an HFT shop. I think you are just missing the opportunities around you. You can even start an internet or community bank.

And what is stopping you from learning how to do some programming and starting the next facebook? Most tech startups are started by guys who received little or no formal training, not guys who sweated it out at IBM for 20 years and then started their own company.

I think your perception is based on the fact that most people get pretty comfortable in this industry. When I was 23 and had not cracked 100k, I was constantly thinking of startup and "alternate income stream" ideas and followed through on a few of them with decent success. A few years later and my job can comfortably pay the bills, and I am no longer constantly mentally trying to figure out how I can make more money. Most MD's could take their experience and connections and start up their own shop. But when you are already taking home seven figures, and get to run your area fairly autonomously anyway, I understand why it doesn't happen more often.

 

Until there is a law stating that one must have a college degree or cannot have a criminal record, no one is stopping you from registering a business and making money.

Plenty of high school drop outs have made their millions in the construction/trades industry.

Working in Finance doesn't mean you're stuck their for life unless you choose to be (IE: getting married, starting a family, mortgage, etc)

The moment you buy into being poor ..ala having a mortgage or car payment, then yes you are more likely to be stuck an employee.

alpha currency trader wanna-be
 

not quite a syllogism, but whatever:

premise 1: "employee for the rest of your life" = the default employment status for almost every industry premise 2: for almost every industry, breaking that mold requires a conscious decision to do so conclusion: it shouldn't be any more difficult to be an entrepreneur in finance than it is in any other field

And I think that barriers to entry for starting your own finance-related business (i.e., "working for yourself") are a lot lower than they are for almost every other industry, excluding maybe some other service-based fields.

bortz911:
Flake:
"not like you can just decide one day to create your own bank" but I guess it's a lot easier to just go ahead and start another Facebook...makes sense.
It actually is. I'm going to stand up for the OP and admit that he makes a good point. Everyone on here chose to enter a business that is dominated by a few large players. Even private equity funds and hedge funds. If you want to make millions, your best bet is to go work for the best hedge fund or prop trading desk or megafund, NOT try to raise pennies for a new shop.
I agree -- but I think that the same is true of virtually every field. It doesn't matter what field you're in, entrepreneurship is almost never the easiest way to make millions.
 
premise 1: "employee for the rest of your life" = the default employment status for almost every industry premise 2: for almost every industry, breaking that mold requires a conscious decision to do so conclusion: it shouldn't be any more difficult to be an entrepreneur in finance than it is in any other field

I'm actually with the OP on this one--there are far fewer opportunities for entrepreneurship in finance than in tech. Try coming up with a list of successful/wealthy entrepreneurs. How many are in tech vs finance?

I'm sure there are bankers who've quit their jobs to start their own business, but most of those businesses are probably not in finance. Banking/PE doesn't really lend itself to entrepreneurship, unless you consider starting a hedge fund entrepreneurship...

 
abcdefghij:
Banking/PE doesn't really lend itself to entrepreneurship, unless you consider starting a hedge fund entrepreneurship...
this is where i was going. The guys that typically start and run their own successful hedge funds or boutiques were not poor, hungry 23-year olds in their suburban garages. cornwall capital excluded.

in fact, as has been discussed in prior threads, some would argue junior-level banking/analyst work is irrelevant, even backward preparation for the scrappy world of entrepreneurship.

 
abcdefghij:
premise 1: "employee for the rest of your life" = the default employment status for almost every industry premise 2: for almost every industry, breaking that mold requires a conscious decision to do so conclusion: it shouldn't be any more difficult to be an entrepreneur in finance than it is in any other field

I'm actually with the OP on this one--there are far fewer opportunities for entrepreneurship in finance than in tech. Try coming up with a list of successful/wealthy entrepreneurs. How many are in tech vs finance?

I'm sure there are bankers who've quit their jobs to start their own business, but most of those businesses are probably not in finance. Banking/PE doesn't really lend itself to entrepreneurship, unless you consider starting a hedge fund entrepreneurship...

Like.. Here's my list: the guys behind KKR, Blackstone, the original JP Morgan, etc. -- and the parents of a lot of my friends, a couple of whom you've probably heard of and the rest of whom started small hedge funds, PE shops, tiny M&A advisory companies, etc.

The point that I'm trying to make is that you don't have to be notably successful to be an entrepreneur. You can also be moderately successful and fly under the radar, or even not be successful at all. You have a lot of exposure to the creations of tech. entrepreneurs because you deal directly with their products; unless you're working in the finance industry, you're only going to hear about the superstar entrepreneurs who make it huge. It's kinda like saying you shouldn't go into music (note: you actually shouldn't go into music) because there can only be one Lady Gaga. It's true, but there are also a shit load of people playing in symphonies, at weddings, etc.

Also, there's a large barrier to entry confronting all potential entrepreneurial engineers: they have to actually produce something. Finance people just have to have the balls to go out on their own and risk having to return in shame to a PE firm/bank owned by somebody else. It's a service industry. As long as you have the skills, you are capable of creating a marketable product.

 

I'm just a college student and I don't know shit about wall street/ the finance industry so let me just put that out there first. But my uncle back in 1998 got his professional engineer license and started his own consulting company in northern virginia at the end of 1999, right outside DC. He does Mechanical, Electrical, Plumbing auto-cad drawings and consulting for architects, it's pretty basic engineering consulting, nothing too fancy. By 2003 he was pulling in almost 300 a year, and now in 2011(from what my mother has told me) it's probably close to 900-950, he's 44 btw. And his company isn't some large corporation, it's the definition of a small business (think 3-4 employees), in a modest office building in Northern Virginia.

Now I'm sure nova is definitely cheaper than NYC but it's still pretty expensive compared to the rest of America and he has everything, cars, house, spoiled ass kids, vacations, the whole 9. The point is that you don't necessarily have to be Zuckerberg or Jobs or a superstar to make good coin being an entrepreneur or starting your own business. And your company doesn't have to be a tech startup or anything revolutionary either. It definitely takes major balls but my uncle isn't anything special, he was educated back in India, no HBS, none of that shit. Plus I think the most attractive part of it all is that he doesn't answer to anybody really, besides clients of course. He goes to work everyday at 9 in his Quattroporte, leaves at 4:30, takes off whenever he wants, can go on vacation whenever, I think that's pretty cool. The reason I don't follow in his footsteps because Engineering bores the shit out of me, maybe it'll change one day though, who knows.

And again, I don't know shit about wall street/finance so I don't know how long it would take someone to get to that level, and what their jobs would be like. I don't mean to compare or anything but I just thought I should chime in with an example since I had one. Also, OP, I don't know if this was the right place to post this question, what types of responses did you expect?

 

I state, er aver, that ye24 is very insightful and dead on accurate. My time in banking was a complete waste, I make zero usage of my alumni network, and I don't do anything tech related, yet his description is my life (though I'm younger).

My friends that are getting close to managerial roles at banks and consulting shops are invariably still single, renting and unprepared for the costs associated with raising a modestly wealthy household, especially in a place like NY.

I rich, smarts, and totally in debt.
 

You can found your own boutique Quattrone, Moelis, Weinberg, Scwhartzmann etc. did; your own fund Romney, Cohen, Soros, Niedderhoffer all did. If you're a partner btw, you're an owner. Entrpreneurship often times sucks, often you fail and people forget the dot-com fallout but all remember Amazon, Ebay and the like it's selection bias.

 

many of the higher level jobs on wall st are essentially "running a business", even if you work for someone else. For example, running money at a hedge fund is essentially being an independent contractor...you manage your expenses, are really just responsible for making money, and arent really accountable to anyone as long as you make money. So if you define entrepreneurship as coming up with a new idea then obviously you cant do that in finance, but if you mean just running a business then yes that is something you can do on wall st at higher levels.

 

I dont know much about Wall Street, but wouldnt being an MD at a firm, be similar to being a governor of a state within a country? I mean you are in charge of what goes on in that region and you still have to answer to someone (President, Parliament/Congress, etc)? I would say that gives you a fair level of autonomy, you may not be SUPREME boss, but your not really a lackey anyway.

Or I may be completely wrong.

 

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Speed has never killed anyone, suddenly becoming stationary... That's what gets you. -Jeremy Clarkson
 

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