What do I do — Intern in ER
As I head into the final few weeks of my internship, I’ve been contemplating how to proceed. I wasn’t sure I even wanted to pursue finance until after my sophomore year of university (CS major at a Penn/Columbia/Brown), but I studied hard, leveraged my network, and landed an ER role under an impressive analyst at a MM in NY that is still somewhat up-and-coming in a banking sense, but is actually quite good for research.
I‘ve been getting excellent feedback, and in the event that I do get a return offer, here are my considerations.
Pros:
• People are excellent — my team is somehow both well-regarded and (relatively) laid back, other interns are a great time, and I’ve been treated with nothing but kindness and respect
• WLB — I’m probably working 50-60 hours/week, and that’s after asking at every opportunity whether there’s more I can help with — I haven’t gone through earnings yet, but there’s something to be said for working hard but also seeing the light of day…a luxury not afforded to my friends in IB
• Work Itself — Nice mix of modeling, writing, and presenting…and even a bit client facing as well! Definitely a learning and growing opportunity, and something I can see myself doing
Cons:
• Progression — I’ve read and heard mixed things about ER progression — that you’ve kind of seen it all after a couple years, and that exits are both highly competitive and much more limited than IB…and coming from a MM firm that’s known within finance but not “brand name,” it might be a bit harder to compete for some of these looks without a lateral/BSchool setting me back a couple years
• Salary — I don’t mean to be greedy, and I know that pay isn’t everything, but let’s be honest, we’re all in finance here. It does matter to me, and probably all of us. It’s not bad by any means, probably would be ~$135-155K first year working, but seeing S&T a notch higher, IB and FAANG clear $200, PE out of school brush $250, Quants even more…I guess I just have this thought that I might be able to be earning a bit more elsewhere, especially given my Ivy/CS background
My options, if I get a return offer:
• Accept it: Likely, given that I do genuinely enjoy the job and culture, and that it is a bit risky to reject an exploding offer on the brink of a recession, to say the least — and, in a long career, 1-2 years won’t close and doors if I feel this way then
• Decline it and search within finance: Probably foolish, though less so if I have clear reason to believe (due to multiple final-round interviews at the time, etc…) that I’ll have an offer I like more
• Decline it and pursue SWE or Grad School: I am a CS major, and so SWE is an option, though again, no guarantees in recruitment there…and, I don’t think I’d enjoy that work as much, as this is more varied and interesting. Grad school is an option as well, maybe for quant, but again, risky given the process
Thoughts?
Your decision hinges on your end goal, and solve it backwards. It's one of much better first jobs out of college. You need to figure out what you want to do 5 years out and decide what path you want to take. If you want to start a tech company, probably better off doing SWE.
I have heard this pay argument 1,000 times: even MBA students think like that all the time. Starting pay is one factor, but duration of employment is another. Too many make decisions based on only the first year salary (hopefully now you no longer wonder why MBA students end up doing investment banking or management consulting) - if you end up doing ER for 5 years vs burning out of IB for 2 years and do corporate for another 3 years, I imagine the total earnings (without NPV that number) during that 5 years is not that different. And I am not even factoring lifestyle differences in the first 2 years. If happiness and WLB don't matter to you, you can stop reading by now anyways. If they do, read on.
First few jobs out of college you should focus on the relevant skills, not just pay. It's more about what your first years of work experience can position yourself when you start to specialize later in life.
It's very easy to make a point to you because you are an Ivy leaguer: your massive comparisonitis gets worse because the degree of success for your peers is much more divergent than a class of students coming out of non-target - some will be company founders (and only care about wealth, not a bit about salary), some will be mid-to-senior level finance people (the "working stiff flying first class" type), some will take a laid back life making steady pay checks. So comparing will only drive you crazy as your life goes on.
End of ramble for now.
All good advice, thank you. Yes, I do value WLB and happiness, and I don’t want to “sacrifice” my 20s for some idea of what my 50s might hold.
As far as working backwards…it’s tricky, because I really just don’t know where I want to be yet. There’s this pressure at school as well to know it all — you have kids 1 year out of high school knowing with conviction that they want to do M&A at Goldman, and that was never me. I never had a solidified plan, and still kind of don’t. That’s why I found finance so late.
For all the people who don’t really know where they want to be, I see why IB is so appealing — the exits have such breadth, even if the job itself is rough. It’s not that I don’t like the common ER exits — seems like HF or AM, or simply becoming an MD in ER, which all seem great — it’s more that I just don’t feel 100% ready to commit. And so, I’m just not sure I can say confidently where this is “setting me up” for what I want to do or not.
I don’t want to be a coder my entire life. That seems too one-dimensional. At the same time, I really do enjoy my work, but often feel like I’m pushing the boundaries of neither my technical skill set nor earning potential, once grad school opportunities are factored in.
Sounds like being a product manager might be a good fit for you.
It’s worth noting that the absolute pay difference between ER and other jobs is far less after taxes as income above $100k is taxed quite heavily. I wouldn’t worry about pay like Dick said, after all if you get to where you want exit wise the pay will the same then.
This makes sense, thank you. I guess what’s tricky for me is that, as much as I’d like to heed the “work backwards from where you want to be in the future” advice, I don’t know where I want to be in the future…at all.
It’s not that I don’t like the exits, it’s more that I’m a 20-year old who knows almost nothing about them, or about what I’d like to do with my life. That’s why I’ve placed such a premium on optionality.
I also want to add that in terms of salary the numbers you’re throwing out there are during peak profit years. The way things are going I’d be concerned if I’d even have a job in IB/PE tomorrow. I don’t know too much about sales and I might be wrong but that it clears more than $150k would be surprising to me. Frankly even $155k sounds high for ER at a MM. Also in my opinion tech is coming back to reality and without all the equity cash thrown around I’m hesitant to see it as a good option. Perhaps I’m too pessimistic but if you’re in a good ER team covering a relevant sector then that seems like a much safer bet than the alternatives.
Most importantly, you need to know where you want to end up. No point of doing ER if you’re wanting to go into PE for example.
Makes sense, but what if I simply don’t know where I want to end up?
I’m not at all gunning for PE, but do I want to become an MD in ER, or strive for AM or LO HF? Maybe. I don’t know — I’ve never done it.
That’s why I place such a premium on optionality.
Solid thoughts. One thing: S&T pay is NOT above research at most banks. Leverage that if you would like a bit of a salary boost and feel comfortable negotiating.
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