“I went to Wall Street and my friends went into tech. Guess who made the mistake?"
Article below:
I could be working in Silicon Valley. I studied computer science at one of the top universities in the U.S. and most of my peers went into start-ups. Six years later, I’m a 27-year-old a quant on Wall Street and I seriously think I’ve made the wrong call.My mistake was crystallized when I went back to San Francisco for three days last week. Literally everyone I know there is working for a start-up and the contrast with Wall Street is immense. Everyone in SF knows someone who’s cashed out, who’s bought a “second home in the Bahamas”, some kind of car, or has just stopped working altogether. That kind of stuff is commonplace.
OK, it helps that my class graduated in 2010: my peers have been able to ride the post-Facebook IPO valuations wave. The companies they work for are mostly private, so the equity wealth has gone to the venture capital and private equity funds that backed their employers – and to them as employees. Banks and traders have been mostly locked out of this, it’s the 20-something workers who are cashing in (and out).
In the meantime, the sell-side is floundering. I’ve been paid less than $155k for the last two years and have been waiting for the kinda-good-times to come back to Wall Street. Sure, there are some upsides: I’m at a bulge bracket bank which is highly respected and has a wealth of institutional knowledge to tap. I get to work with cash sales and trading, derivatives sales and trading, exotics and prime brokerage. There’s a wealth of data and knowledge at my fingertips.
However, while I respect the institution I work for abstractly, being a junior quant/tech guy who’s had flat pay for three years in a stressful job in a stressful city isn’t my idea of fun. I’m starting to get a little tired of this, especially when I look at SF and see that everyone else’s net worth is multiplying.
The thing is that I knew finance would be a challenge, but I didn’t imagine that it would be like this. The low pay, resignations, and general pessimism are beyond what I imagined. Back in San Francisco, the gyms are filled with 20-somethings who’ve parked their Maseratis and Ferraris outside. Someone made a wrong choice, and right now it looks like that person was me.
Cry
First world problems.
I have a dual degree in Computer Science and Business Admin. I think about this choice everyday, and I do reckon on both sides of the spectrum that there is the perception of grass being greener. The only difference is, finance people think more about the tech business than the other way around. A lot of software engineers have no clue about banking, consulting, or buyside. If they did, I would imagine there'd be a lot of disillusioned tech people complaining about how they made the wrong decision in pursuing a career with limited upside -- seeing how the frat bros they graduated with are now making 700k at 30 years old as VPs at X bank while they've been making "only" 250k with 3% raises for the last 5 years. Or how the VC partners they work with are making tens of millions off carry when a founder would be lucky to get that in one liquidity event. On the other hand, finance people are particularly cognizant of the world around them and the industries they deal with as part of their job. The tough work environment pushes the standard banker's perspective outwards: whether that may be looking longingly at the buyside, consulting, real estate, or tech. This is also boosted by the media's glorification of high tech and startups. The past few years have been very good to the tech industry, comparable to the mid to late 90s for finance. A career spans 30 to 40 years, which is long enough for the market to equalize many times over and readjust how it rewards value. During this time, there will be several financial collapses, and several tech busts. I made peace with myself by just pursuing what I was good at. I got my CS degree for the challenge and prestige. I was good at getting grades in my CS classes but I don't like coding so the choice was obvious. The 'game' drew me in, and I wanted to be a participant. For other people, maybe the challenge to innovate and build within tech is what inspires them. Just do what you're good at, because it's the top 1% of either field that ever becomes anyone anyway.
Good post. I'm not saying banking is better than tech or vice versa-there are pluses and minuses of each and one is probably better for one person and the other better for another person-but there's definitely a grass is greener thing here. I'm also curious as to the article writer's job because he should be making more than that. If he's more of a tech guy than a producer who takes risk I'd completely agree that he should have, or still should, go to tech. Or do something similar in tech to what he's doing in a less expensive and less stressful place.
"Everyone in SF knows someone who's cashed out, who's bought a "second home in the Bahamas", some kind of car, or has just stopped working altogether. That kind of stuff is commonplace."
I like that everyone knows someone who's cashed out. Sure, with some degrees of separation they do but it's really not commonplace to make enough to buy a place in the Bahamas (people on the West Coast typically buy second homes in Hawaii or Tahoe btw). The startup world is really tough to make money. I forget the actual stats but a very large percentage of startups fail and even if they don't fold for every tech company that gets bought for tens or hundreds of millions or becomes the next unicorn, dozens or hundreds stagnate and get folded into another company or get sold and the VC's pref sucks out most of the money from founders and employees. And unless you're a founder or one of the first few employees your options are somewhat small. Check out the stats on what a non founder CFO or COO gets in options (2-4% pre-dilution) and think about what they're going to pay a 24 year old engineer. Yes you can make money, and especially if you happened to luck out and join Uber as an early employee (although time will tell what and when a liquidity event occurs) but most likely it's not retirement at 30. Does it happen? Yes. Is it anywhere near common? No.
You can get a good paying job at an established tech giant and get paid well and maybe your options will make you some money depending on their strike price and what happens to the market and that particular stock by the time you can exercise them, but unless you're an exec that's not going to be FU money.
Like I said, I'm not saying finance is better than tech or consulting or whatever else but the grass isn't necessarily greener.
Can I just point out the obvious? This guy is obviously not in IBD, as evidenced by 155k annual income 7 years into the job. And flat pay several years running. What are we talking about here?
My mouse isn't working properly, get that guy in here to fix it.
.............................................
What's even more amazing is that this guy thinks everyone in SF is making bank and retiring at 27. Of course, none of his friends did....just 'other people'. Suddenly, 5 guys out of 10,000 is 'everyone'.
That's exactly right
But hey, he works at a BB
So true, Maybe he should check out "Silicon Valley" on HBO (don't work for them, lol, just like the show)
This startup stuff is really getting out of hand. Like, I get that finance isn't a cakewalk, but almost all startups fail. Around 90% of startups fail. That means that if you go start some tech thing there is a 1 out of 10 chance that it will survive. You don't just land in the magic land of San Francisco, shit out some app with a few lines of code while you're on the toilet one day, and start bathing in piles of money. That's not reality.
South Park summed up many people's mentality towards the startup scence. https://cdn2.vox-cdn.com/thumbor/dufh2PRWWDvDtzBoafSrDT1rl_I=/cdn0.vox-…
Startups aren't a get rich quick scheme. Most fail, then quite a few flounder around mediocrity, and a small percentage make it a point where people can afford a house in the Bahamas. Of course, everyone "knows this guy" who has a house in the Bahamas, so they will one day too. Selective bias at play, I doubt he is taking into account his classmates who went into tech, struggled, and are now surviving on a diet of ramen noodles.
I love that episode!
Not true, there's an app for that!
https://itunes.apple.com/ca/app/toilet-finder/id311896604?mt=8
^^This.
I believe there is a Charlie Munger quote that goes something like: 'In order to get what you want you have to deserve what you want. The world isn't yet crazy enough to reward a whole bunch of undeserving people'.
I'm sure many people working in start-ups are deserving of being immensely rewarded financially for the risk they take on; however, I'm also sure many are not. If many, many of these people are being rewarded in such a manner, which we have established is not the case, then it would probably be reasonable to assume that we are in some sort of bubble. We could be regardless but the point is that the "new" tech world has its pros/cons just as the finance world does. Neither of those worlds is going to arbitrarily make vast numbers of people wealthy for no reason.
False. Look at Neel Kashkari
At this point, does it matter? You're in a better spot than most. Get over it and move on. Life is too short for this kind of shit
I'd just move to the West Coast in a similar IT role if possible.
Well isn't that a restricted POV. Wrong assumptions based on a small data set. lulz
I bet anybody working on Wall Street 'knows' someone with a house in the Bahamas as well.
Seems like you are unhappy with your current job though. You can still move to SF?
I'm taking all of this startup and tech talk as the signs of things getting bubbly, it's like every week there's a new person lamenting finance in favor of tech.
no one's job is perfect
no one job is the holy grail
millionaires are the exception, not the rule
don't expect to get any sympathy on a FINANCE forum
/rant
If you think every person in tech is cashing out you're crazy. I know plenty of people, both ops and engineers, who don't even make six figures and have close to no equity.
Is their work life balance better? Sure.
Is that relevant if you're not working banking hours? No.
........
You act as if you will never have the opportunity to break into a start up and the move is impossible. I know lots of lawyers, accountants, consultants, PhD's that were able to jump into a start up and do exactly you are wishing to do. Stop wishing and whining, go do it if you really want to.
Dude, you have an extremely unrealistic view of what Silicon Valley is like. Not that different than people from Kansas who have an image of 23-year old analysts at Morgan Stanley doing coke off of a supermodel's backs 6 nights a week.
That said, if you're a programmer there are probably more opportunities in tech than finance for you. At tech companies the programmers tend to be the stars, unlike financial firms where they tend to have more of a support role.
You clearly never met models & bottles AJ.
Tech's for nerds!
Thank god this thread got posted again. I really thought we hadn't covered it the first 10000000000 times.
New accounts, and particularly student accounts, should be banned from posts that include the words "Silicon Valley" "Start-up" or "cashing out"
LOL you sound like me ten years from now. Chill out on us guys. The Tech or Finance struggle is real.
I'm just going to say I've seen more than a fair share of SF "tech companies" (read app devs) get tons of hype that turned into about $10.72. Tech companies are just as much if not more about luck and timing than anything else.
This is a troll thread for sure
To the OP, wrong forum to post if you are a junior quant ( or something close?). You will get more sympathy and career advice from wilmott or nuclear phynance.
http://wilmott.com/messageview.cfm?catid=16&threadid=74563 ( Tech Vs Finance - 2009)
http://www.wilmott.com/messageview.cfm?catid=16&threadid=94519 ( From quant developer to tech company- 2013)
A majority of my friends are in startups in both the NYC and SF areas. One friend worked 5 years struggling (3 people living in one room and maxed out cards) just to get seed funding of $1MM. Another had the entire management team shaken up by potential investors and is now fearful of losing his own job. On the other hand, I have a client who got $100MM in funding for a medical startup. BUT, he was already well connected, so it's not easy as a 24 year old coming up with an app that lets you measure your dick without a ruler, cashing out for $700 trillion dollars and buying a LaFerrari and walking on water.
Seriously, tech isn't the most stable job scene out there and seeing as how risk averse most IBD- PE/HF track minded guys are, being a director at a startup where you're constantly looking over your shoulder at investors would make you throw up your lunch from last week.
The notion that all tech guys are rich and whatnot is about as true as the notion that all bankers are stuck-up assholes: it's not.
I've lived in the Bay Area most of my life. Many of my friends are in tech. Maybe 1 makes more than $80k, and all but one of them work for Facebook/Apple/Twitter-type companies. The one that didn't made probably $30-40k and lived with 10 other people while he lived here.
As they say, the grass is always greener on the other side.
I don't think this is something to beat yourself over. You couldn't have known how things would turn out. I've talked to former entrepreneurs who are still quite rich but made several millions individually in a few yrs pre dot-com years in startups before they were wiped out. That could've happened too. 2012 wasn't a stable year. 2014, this year, could've been bad too.
I also know people in IB who make 600k/yr now who started from about the time you did as mentioned in your post.
Also, 155k/yr is quite a lot, at least to me. It's certainly enough for you to have greatly increased your net worth with some good investment management. I think anything over 100k is sufficient for you to have enough savings to put them really to work. After 6 years, you could've also bought a Maserati even without very high risk, high return investments.
I don't get why this argument is even happening. You'd have to assume that you have the opportunity to move into either, which for 95% going into either field isn't true. Can a finance kid work in tech? Probably not. Can a tech kid work in finance? Yes, it's pretty easy to learn, but the vast, vast majority don't.
I don't think many (or any) person that knows themself well is going to find a passion for banking and tech. It's apples to oranges, so do whichever you have a passion for.
You definitely need a limited edition Apple t-shirt, then you can go to SF and cash out http://www.leveragedsellout.com/2014/04/obsolete/
+1
Talked to a higher-up guy at Kleiner Perkins about a year ago: he considers himself (and same goes for his peers) 'successful' if 3 in every 100 investments make significant (or even positive) returns. Which means 3 out of every 100 ventures might (might) be one of these 27-yo Ferrari guys. Major selection bias from what I can see, definitely not "everyone I know" back in the Silicon Valley is cashing out in their 20s as a millionaire.
I feel for this person in the fact that it sucks to work a job that you don't like. Now that I've said that, it is difficult for me to express any other form of sympathy. Sympathy is in the dictionary between shit and syphilis, I make less than what you pay in taxes as an Paratrooper in the Army, you actually make more than most Generals/ Admirals in the military. Yet you won't hear me wimper and pout, because my choice was exactly that, MY choice. So if you are looking for career advice or options got it, but if you are just upset at your 6 figure station in life, suck it up buttercup and drive on this isn't the Soviet Union you can change jobs, location, countries, etc.
Best of luck sir, a simple Soldier
This is gold. Also thank you sir for your service
bump
There's more positive skew in tech than in finance. If you really want to be a billionaire by all means do tech, but if you "only" want to be worth $30 MM finance is probably a better bet. Also, don't get me wrong, but the good times don't last forever. There was plenty of the sort of shit you described going on in New York in 2008. At some point people are going to stop paying for companies that will never turn a profit.
a really good friend of mine did electrical engineering from a top 10 school. went to nyc and worked in IT for a bulge bracket. 2 years later, moved to the west coast for a programming job at a Fortune 500 company. if you think you made the wrong decision, and you have the education, there's no reason why you can't make a change.
Age 22: "One day I'm going to be a tech or PE billionaire." Age 26: "One day I'm going to be an MD." Age 30: "One day I will be able to afford a 600 square foot condo in Manhattan." ((Reality))
Welcome to life, my friend.
I also think we all have this tendency to assume everyone around us makes double or triple what they really do. (BTW, if you think I'm worth what you think I earn and if you're looking to hire a quant... )
Quant vs. tech seems like a slam dunk for tech. You're gonna get treated as a second-class citizen in your field and the pay probably isn't much better. But if we're talking tech vs. front-office BB/HF/PE, well that's an entirely different story.
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