10 years in banking, tech, and consulting

Recently I've heard a lot of monkeys get caught up in the FAANG train. Was curious what all the hype was about, and dug up some compensation numbers comparing IBD with tech, consulting, and a couple other jobs. Looks like banking still blows everything else out of the water. So relax and get back to work.

https://docs.google.com/spreadsheets/d/1h1N6rrvLR…

 

Crazy thought but maybe people care about more than compensation when evaluating career opportunities? And the difference between IBD and tech, based on the numbers you provided (3.7MM and 3.5MM), is marginal. Easily worth the lifestyle tradeoff in the eyes of many.

 

Yeah absolutely. Have some friends who pursued tech and did Co-ops during college at FAANGs. They graduated and started making more than 150k base salary for ~40 hour work weeks. (40 hrs is normal during busy times they spike to around 60)

Also, they frequently talk about how their work environment encourages them to prioritize life outside work, which is def not the environment I’ve experienced in finance.

 

Might be wrong, but im assuming the two years of $0 in consulting are for B-School, shouldn't those be negative? idk you be asuming that school will be covered by the individuals company.

Buying tesla weeklies is literally free money.
 

FAANG is paying their first years $180k...is that the actual number? Because that’s phenomenal. Seems a bit unfair to take this right up to the Partner level for consulting and law and then stop there. Just a few years at the Partner level would even the playing field quite a bit with tech and eventually jump you well over.

 

Yes FAANG pays that much for first years (even more if you look at the top offers). Although keep in mind that the FAANG roles are also extremely hard to get and comparing the best offers at the top firms can be tricky (and not always a fair comparison).

Right now the top paying jobs (that hire a reasonable amount of people) that I can think of are:

1) HF (specifically quant/systematic, or prop if you count places like Jane street) 2) tech - but keep in mind that the structure of the contracts is different as they offer a reasonable amount of comp in equity that vests over 3-5 years. As an example some of the top offers will be $100-110k base, $50-75k signing and the rest in equity (usually $100k or so that vests over 4 years). The key here is whether they offer “refreshers” to your equity. And this is a “top” offer (I’ve seen a few higher but not many) many will be lower. 3) IB - you know the ranges here I’d say $110-160 4) consulting - usually around $100 all in

 

I've seen someone who was hired as straight out of college PM snag a 100k base, 50k signing, 200k bonus vested over 4 years.

 

Agreed - I am in a T5 CS/EE program and these starting numbers are right. Watching my friends who are going into tech, I would mainly say it’s the top 30-40% of people who have the opportunities to make over $150K their first year. Similar to banking prep, its the ones who supplemented school with hours and hours of LEET code to pass the coding tests for the big guys. On the other hand, it seems that for those that didn’t score the big name Google/Amazon, there are lower interview expectations for scoring a Boeing/Viacom/et other offer (still pays well, but ~100K).

 
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There is a nuance to your data in that you are comparing the upper end of the curve on these careers, and not what is "average". Also, some careers are the long game while others are not. Yeah if you want to have the most money by 32 don't do medicine or law due to the opportunity cost, but if you plan on actually working until your 60s things change. You also need to realize most people aren't falling above the curve. For every banker that makes it to director there is someone else who left and took a more lifestyle friendly, much lower paying position. So the ceiling is clearly higher in IB or law, but for the average Joe this isn't necessarily the case. Medicine you get hosed during your first 10 years but then can work lifestyle hours and hit high six figures... for 40+ years, even during economic downturns. You also can be a below "average" physician and still be guaranteed $300k for a regular work week. Does an "average" lawyer hit $500k? Hell no. The average IB does not make Director. It's not an apples to apples comparison, though I appreciate the attempt. Spine surgeons working hard make 2-3MM... but that doesn't mean they should be used as the exemplar. Just like a Director is also an outlier.

 

Totally agree with your points. I've added a note to clarify that we're looking at the high end of the curve here. Your point on long-game careers is also a good one. Unfortunately, variance in compensation packages is much more dramatic at senior levels and this data is also very difficult to come by. If you know of any reliable source for senior comp, please let me know and I'd be happy to add that in.

 

In addition to what PioJack stated (which is completely accurate), there's a lot more variability 10+ years out of your career. Above used medicine as a great example- spine surgeon vs pediatrician have very different lifestyles, in terms of compensation and WLB/ stress levels.

OP's thread was targeted to FAANG, which is not an entirely fair comparison. Software gives people the ability to stick with code if they feel so inclined. Normally they become Staff Engineers or System Architects if they choose that route. Others go the management route, which can change up the compensation narrative.

Then there's another comparison- if you don't find code fun, the money will never be enough for writing code all day. Why do you choose to be a banker? It's not 100% compensation, I'd guess. It's probably the highest risk adjusted compensation and you're likely competitive, come from an upper middle class to wealthy background, have a good education, and want that work to follow with you throughout your career. You're more business/ sales inclined than an attorney.

There's a large number (I won't venture to say most, but it's a substantial number) of software engineers who would do it even if it paid far less. A lot wouldn't do it for less money, but many would. Just another nuance to throw out there.

Lastly, there's quality of life but that's talked about enough so I won't elaborate on this point.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

It's way too early to suggest that tech offers a longer term, more stable career. In 2001, the unemployment rate of CS majors sky rocketed when the dot com bubble burst. I'm not sure how many CS/tech guys you know, but a large majority of them also do borderline meaningless work that could be cut out during struggling times. There are guys with CS degrees from top schools who do nothing but listen to Alexa recordings all day / spend a year implementing some obscure button that no one uses.

The tech hype is way too much these days. Won't argue with the quality of life and etc. though.

 

Yes, many doctors make into 7 figures, but how many are truly wealthy (e.g 50 mill +)? I know many late-career physicians who regret not going into business...

Asides from entrepreneurship, I still think finance is the best way to get insanely rich. Still tons of money being made in PE. Hedge funds will probably pick up again when passive investing returns cool down.

 

This is really good! Of course, variability goes into these numbers (the ceiling for all of these careers is far higher than what this snapshot shows depending on several variables) but as an average case picture this is honestly spot on.

My only qualm is that tech should be a product manager role and not a SWE role.. (realistically your prototypical SWE isn't considering Law, Banking, Consulting or Medicine as alternative careers).

Worth bearing in mind long-term compensation too - more likely to find a doctor/surgeon that is in their 50s or 60s still pulling in a strong income than you would a banker, lawyer, product manager or consultant. Ageism seems to be a big problem in prof services, finance and tech.

 

Thanks. I cross-posted this on Blind (tech-y WSO), and they also thought the Product Manager role was a better point of comparison. I'd definitely like to add that along with longer-term compensation, but the data was hard to come by. Will add it in if I find it.

 

Essentially there are lots of ways to make a great living. Will it be 500k/yr, 5M/yr, etc? That's almost exclusively a function of how good you are, timing, and luck (subset of timing). Focus on what you really want to do / what you're good at doing and with timing and some luck, the money generally follows.

For you younger members, it's not as linear as you think. Maybe the first few rungs of the ladder are step 1, step 2 but once you get into a menaingful role, it's about talent, timing, luck. And you don't get to make the meaningful money until you get to one of those roles.

To get there, you need to become a leader. Everyone else is replaceable.

Don't do finance just for the money, as you won't be the best in the room wihtout the passion and interest. You can make a good living, but you won't rise to the level required to make the dolalrs mentioned in this post.

Never forget there are tons of ways to make a lot of money. You could own a bunch of car washes and make a killing on cash flow and real estate. Do you really want to do that? Some will and some won't. Have a buddy who owns several restaurants. He'll make more than most of you IBers will ever realize. Operating company does great but the RE is worth millions. Lots of ways to skin the cat.

 

A family from my hometown founded a car wash company... Grew it to be the biggest independently owned car wash operation in the state. They sold it for upwards of 9 figures.

 

Undergrads entering markets roles assuming you're referring to S&T are less likely to move up the ladder than ever before due to the S&T industry shrinking, largely because of regulation and automation. Something worth considering.

 
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Undergrads entering markets roles assuming you're referring to S&T are less likely to move up the ladder than ever before due to the S&T industry shrinking, largely because of regulation and automation. Something worth considering.

Yes you need to be increasingly better and less easy money. It's life. And no it's not that much due to automation, but to stagnant layers above.

 

This is a stupid thread.

  1. You make 90% of your life's money in the last 10% of your career. You should compare the last ten years for these career paths to make sense.
  2. Business is the only way to get into hundreds of millions+ bracket. If you become a CEO none of these paths matter. One term as CEO is enough to make more money than any of these careers.
  3. If you want to make this kind of money you have to work your ass off. You will have years when WL balance is good and for a few years it will suck. If someone says you can make this money while always having WL balance that's a myth.
  4. In any of these careers you"ll only make it to the top if you are really really good. You"ll compromise on something else in life. You can't get it all always.
  5. My point is focus on the inputs. Become the best professional and pray you have good genes.
 

Nice summary from compensation point of view. But if you take into considersation of lifestyle and work fexibility. I think you will come to a different conclusion.

 

I think everyone has correctly identified the work/life balance bias between all of these jobs.

The one thing that I always think of during these types of thread that hasn't been mentioned is, out of the 4 professions listed above, I'd say the intellectual bar is lowest for being a banker (not to insult all the finance people on here). If you go to a decent school, do slightly above average in your econ/finance classes, and have ok social skills, you probably have a good shot at ending up in some form of investment banking if you want to.

I don't think the same could be said for medical school, law school, or even being a top programmer at a FANG (even though maybe this is the closest comp). I'm sure people on here know the people they went to school with that went onto a top med school. It takes a ton of grinding as well as being pretty smart to get top grades in a pre-med program and then kill the MCAT. While I'm sure some people in finance have the drive and intellectual horsepower to do that, I've certainly met many who don't. Same goes for law school. The LSAT is a pretty tough test, somewhat learnable for sure, but your average bro isn't getting a 170+. I don't know about you guys on here, but I think of myself as being a decently smart guy, but doubt I could be a top student at Harvard Med (or even get in for that matter).

My point being, being a doctor is the cushiest long term, but it has a pretty high barrier to entry in my opinion. Law is next, followed by software engineering, followed by banking. Given the earning potential in banking and the relatively low entry barrier, I think it's pretty well adjusted. The big tradeoff is hours, but that's just part of the game.

 

The barriers of entry are different for each profession.

Law has probably the highest barrier in terms of prestige and raw intellect. You can only get into Wachtell or Skadden if you went to a T5-10 law school, which in itself means you went to a top undergrad with top LSAT scores.

Finance also has a high barrier in terms of prestige ("target" school is a thing) although the intellect part is probably less compared to the other professions (you can get an IBD job as a literature major).

Medicine is at the top in terms of intellect (GPA and research is the only thing that matters). Obviously where you went to school does make some difference, but it doesn't make or break your placement. It's much better to be top 1% of a state medical school vs bottom 25% of HMS. Also, Medicine is less concentrated, there are top tier hospitals spread across America.

Tech is lower in terms of intellect compared to Law/Medicine but higher than Finance. It used to be higher but these days the demand for programmers is so high you have people who just do a coding bootcamp and Leetcode all day and can get FAANG or elite unicorn offers. There is no such thing as prestige in Tech. Obviously schools like Stanford/MIT/CMU/UCB place well, but it's more because the talent is there in the school. There are equally as many state school grads who get top tech jobs.

 

I appreciate the idea here, but there's an obvious lack of nuance in here. I'm in S&T and count me as one of the people considering business law, but you cannot compare the comp for Skadden (1,700 attorneys), Cravath (600 attorneys), Wachtell (260 attorneys). First year base for Skadden and Cravath is $190k and Wachtell is $195k. First year bonuses at Cravath are $15,000, whereas Wachtell is notorious for their huge bonuses, giving first years around a 50-60%. Just not comparable and depends what firm you're at.

 

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