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.
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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.
Wonderful. Gonna go show this to my parents so they can stop hounding me for not becoming a doctor.
Why work in finance when you can become a BUDDHIST MONK?
Exit opps: santori, nirvana
Sign me up
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
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.
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.
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.
I can't believe someone made a google doc on this. Just do what you love, the money will come. Some of the wealthiest entrepreneurs didn't have their big break until 35 +
I'mm 55. Most of my doctor friends (my age) make WAY more than these figures. Surgeons, OB/ GYN , Oncologist, Cardiologist. ALl of them upwards or into 7 figures.
Heck alot of my financial advisor friends make more than this.
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.
Best way to get seriously rich is to take risk, and best way to take risk is to have a cushion under you. So I see it as a two step process. Go make a little money first; any of these careers can get you there so might as well choose the one that will teach you what you need to know to make step 2 (betting big and winning) work out.
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.
This is a stupid thread.
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.