I feel like finance isn’t as “prestigious” as it used to be
Might be an unpopular opinion, but it feels like finance doesn’t carry the same prestige it did 10–15 years ago.
With tech, startups, and even content creators making serious money, the appeal of grinding 80–100 hour weeks seems weaker than before.
Curious if others feel the same, or if this is just online noise.
not as prestigious because not as much money. I'm sure it'll be just as prestigious when we're back to the days of VP's clearing 1M+ TC in pre 2008 dollars.
But will those days ever come back?
Obviously I'm biased here, but these are my two cents. Understand that if you don't work in finance the world doesn't cease to exist, and yes the industry has become saturated over time. The fact that there are more McDonalds than PE funds is a crazy statistic. But the value proposition for finance is (i) reliably churning out millionaires, (ii) an amazing learning experience into business functions, investment process, etc is still unmatched, and (iii) providing junior level comp that allows you to almost live relatively like your parents did in the 60's when you could buy a house for a nickel. Some other thoughts are as follows:
A) You will be in the 1% of your age group if you work in the finance that "matters" to this site.
B) Tech has become EXTREMELY oversaturated in the last few years as less junior tech roles are becoming available and AI continues to cut the need for more developers.
C) Startups - For every 1 start up that becomes something there are 10,000 that fail, or if they DO get bought out by Google you as a employee will not see all that much (unless you're a day 1). If you make your own business thats different, but its still very likely to fail until you start getting some solid MRR / ARR metrics. Also there are only so many GPT wrappers being sharted into existence before the words "AI" are decretive to valuation multiples.
D) Content Creators - Millions of people try to become them. And while OF can bring some solid returns if you're hot and a woman, your hometown OF girl is still the equivalent as your 2015 soundcloud rapper who dropped out of Highschool to drop mixtapes. The probably of becoming a twitch streamer, youtuber, etc. should be treated with the same probability as becoming an actor or famous celebrity.
This certainly shows that finance ain't what used to be. Yeah, it's a decent way to earn money but not the way to the wealthy.
Yeah I'd agree with that. You will make enough money that you will never want for anything within reason. But inorder to be ridiculously wealthy you need to be the owner of the cash flow generation.
I mean you can still make ridiculous money at hedge funds etc but yeah it’s rare. Even partners at Goldman barely clear 50mm nw
OP - as someone with 10+ yrs experience in IB/PE (now VP in MM PE) would 100% agree with this. I think it’s due to a few factors, but the biggest one is probably stagnating comp over the last few years (decade?) whilst the cost of everything (especially housing) has continued to rise.
Ie you will frequently hear from boomer MDs (and just looking here on WSO) how great things were in the mid-2000s - some VPs were making close to $1m a year which would be absolutely unheard of today. Which is crazy given we’ve had two decades of inflation in the meantime, and housing costs have gone up dramatically.
I started in IB in 2012 so wasn’t around for that period, however the next big boom was in PE 2010-21. With low interest rates and PE firms still recovering after the financial crisis, if you joined in the early 2010s you could get promoted and make serious bank - now the big PE firms are massive and much more bureaucratic, and higher interest rates has made returns more stagnant, so carry is worth much less these days.
I mean you read stories on here about IB analysts in NYC struggling to find affordable places to rent, which is just frankly ludicrous. Likewise there was a thread on here recently about how in London even as a midlevel associate/VP in your 30s it can be hard to pay the mortgage on a family home.
So yeah basically IB/PE is no longer a “guaranteed path to getting rich” and is much more like a middle class corporate job. You won’t have a mansion or live like a baller even in your 30s - yes you’ll be very comfortable, but in London or NY you’ll likely just have a nice apartment. Is that worth sacrificing 60-70hrs of your week, every week for decades? I think it’s even harder now as with social media you can see stories of someone making millions on crypto or influencing overnight (of course there’s a massive selection bias there, you don’t see all the failed influencers etc).
I will say that the hours in IB/PE have gotten much better since the early 2010s, when working 80-100hrs was just routinely expected. But that’s also come with stagnant comp unfortunately whilst the cost of housing is just insane now. Plus whilst hybrid/remote working is definitely a positive, imho it took away some of the fun of “being in the trenches” with your colleagues every night, going for drinks regularly etc.
And whilst IB hasn’t been anything like Wolf of Wall Street since the 90s, at least in the early/mid 2010s there was more a culture of partying as an analyst/associate, going out to get drunk etc. I still remember nights when the MD would put down his card for the team at a super fancy bar and we’d rack up a $1000 bill. These days however there’s more sensitivity (rightly or wrongly) about the risks of getting everyone drunk, and with Gen Z drinking less it seems now everyone wants to have a couple of drinks at most and head home. So yeah much more like your standard corporate gig happy hour.
Anyway sorry stream of consciousness over. But yeah in summary I agree IB/PE isn’t what it used to be. Frankly in the US I think you could live an equal (if not better) quality of life taking a regular corporate job paying say $100k in a LCOL, low tax state - and work way less hours.
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