In 2025... Is High Finance Worth it Anymore? Thoughts from a Penn Student. [Serious]
Hey everyone, just looking to get this board's thoughts.
I'm currently an undergrad at Penn, and having serious doubts about accepting an offer in hand.
With AI and automation, and my general belief that there is no free lunch, I can't shake the feeling that the writing is on the wall and I should break from the herd.
Here are my beliefs and my observations from looking at my peers and friends a few years out of college.
[For top school students] The top school advantage, I believe has severely diminished for non-DEI, non nepo kids. This isn't to say that Ivy+ kids don't have a leg up in recruiting, just that opportunities and access to info for non-targets has largely democratized, leading to a much larger pool of talent that companies can pick from. Wharton kids with lower GPAs are routinely striking out, and my classmates are noticing that more of their peers at internships are from state schools and Canada. There isn't nearly as much of a premium on a top school degree anymore.
AI is rapidly becoming capable of doing financial work. Tools like Hebbia will continue to proliferate, and while there may be infinite demand for software in theory, I doubt this is true for finance, which has finite capital and deal flows. It's my contention that firms will continue to reduce headcount and increase carry for the top few. This, in combination with rising interest rates, will only pressure firms further to protect their bottom line and trim the fat in the coming years.
No free lunch and Efficient Market Hypothesis. One of the best posts I've ever read on this site talked about why mostly all careers are priced in. That is, you are making an exact trade off between time/WLB and money for whatever you decide to do. It's my strong opinion that high finance, especially in NYC, is increasingly not worth it anymore for most people who have equivalent or better options. When living through a period of massive global upheaval with generative AI, that will continue to rapidly accelerate, it might be better to leverage yourself while the technology is still new and firms haven't caught up yet. Knowing this, why would you sign up to burn all your salary in NYC anymore?
- Don't take it from me. In the past two years I've been at school and AI has came out:
- 3 friends have taken gap years or dropped out to build startups
- 2 have quit banking because of WLB, pivoted to tech
- Extensive chatter and worry about AI and career security, and more classmates opting to do their own thing entirely (create art, personal brands, social media).
My tentative conclusion: If you have a modicum of risk tolerance, technical ability, or desire for more than just a guaranteed income, consider something other than finance. I believe being an entrepreneur is the least priced right now since AI democratized access to skill and knowledge extremely recently. The cost of your labor as a finance professional is trending down, not up, and if you're like me and have zero career capital as of yet, you also significantly lack leverage.
Obviously, if you're coming from an unstable financial situation without a safety net, or simply want to climb the career ladder, this post is not for you. What do you guys think? Should I put my money where my mouth is?
The problem with being an entrepreneur right out of college is you have very little to fall back on. The odds of getting a startup off the ground are really low (especially in the highly crowded AI space), and it's hard to find high-paying full-time work if you're 2-3 years out of school and your only experience is an unsuccessful startup.
It's also a matter of risk tolerance. Everyone loves to think they are the next Steve Jobs dropping out and building something, but that's an extremely high-risk option. Very few people stay in IB... they go for the exit ops, whether in PE or six-figure WLB jobs that are hard to get without IB. That is a pretty low-risk path.
Spending two years in IB at a top firm legitimizes your resume... even if you go do your own thing right after, it helps immensely with your personal brand when it comes to raising funding and scaling.
IB is primarily a sales and relationship business. Let's be real, no one is paying IBs the big bucks for the janky model built by a 23 year old, they're doing it for the advice - same as when you're buying a home, you want a real person as your realtor to help you through the process. At analyst and associate, you're making that possible, but once you're 3-5 years into your career the feedback will be to get out of the model and talk to clients. I actually think coding / computer science type jobs are much more likely to be hurt by AI.
I agree with you that IB is great training ground for anyone with ambition. But I will continue saying this on this site because I think 90% of people here live and think in a bubble:
Entrepreneurship does not necessarily mean a high growth, high tech proprietary software startup. Let’s not forget that less than 1% of total businesses in the US are VC backed. There are many legacy industries people can start cash flowing companies in even in sectors with tons of competition because the incumbents are dumb old guys that have no idea how to leverage technology to pump margins and GTM.
If anyone is reading this and wants to take a risk on themselves, learn to automate workflows on n8n or similar platforms. Thank me later.
Elaborate, have background in automation for my firm but not sure how to monetize that in a freelance way.
I’m doing this
100% agree with this. Businesses large and small are fraught with operational inefficiency and this remains severely underappreciated
Not at UBs that’s for sure
You could and is you have a great idea go for it. Here’s a different perspective on reality.
The ingredients for a successful start up are typically a problem to solve, a technical means to solve it, a network that wants to buy your solution and capital to execute on it. The unfortunate reality is that without any business experience you likely don’t really have any of these. The average successful start up founder is 45 years old per HBR. Most successful start ups aren’t the next Apple or Facebook. They’re small, practical point solutions to resolve inefficiencies in a specific market. You can evolve from there and add things as you grow, but you need a problem that needs to be solved and a way to solve it. You can really only do that if you understand a specific industry in-depth and identified what is needed. You then need a network of people eager to buy this solution from you (rarely you’re the only one to have thought of it), which can be for all sorts of reasons such a trust, reputation etc.
Fresh out of undergrad you need to learn how to be a professional and learn basic professional hygiene / conduct. Finance is a pretty good but very painful school for this. There are other ways too such as large corporates etc. or joining an established start up. Overall I think something like the following is a pretty ideal path:
Execute on the plan
I think if you stay longer than this in Finance you probably get too comfortable / opportunity cost becomes too high and you won’t quit. An alternative way to look at it is as follows for any 10 year ‘pre founder career’
- Finance: allows you to do a start up in an industry that doesn’t attract the capital it should or with high price arbitrage (ie, roll ups most likely)
-Tech: pretty obvious. Point solution for something that was low priority / non core for your company
- Industry: industrial or services focused start up to solve point solution
OP, this is the most important point. What do you think are the chances of your three drop-out friends succeeding? I have a few college-aged friends who are doing startups, and it's almost laughable how USELESS their products are. Startup founders tend to believe they are more impressive than they actually are because they are "building something".
I suggest working at a company and learning as much as you can. The deep industry knowledge you build from this will be more useful for something entrepreneurial or even a secure job than anything else.
I may be delusional but I’m at an ivy and all my friends are pretty smart people and I’m of an equivalent level of intelligence and they’re all getting into YC and have decently successful startup already.
I think that statistic is a bit misleading because with the new AI revolution kids in their young 20s are really succeeding at a high rate.
Don’t bold rising interest rates as if there is a single G7 country that’s in a hiking cycle right now. Even with the presumably inflationary effects of the Trump tariffs (which have yet to materialize in the hard data), the market is still pricing 50 bps of cuts this year.
Interest rates aren't rising lil bro
Some of my younger friends are delaying their college graduation due to unemployment. They can't even get a single interview for any job.
The graduates I know are underemployed, meaning they serve in jobs they don't want to do or are overqualified for. No changes in sight, again, no interviews.
Our latest intake from last year were almost exclusively from ivy league schools. It's like non-ivy grads don't even get invited any longer.
We hired so many AI staff with the focus on eliminating permanent headcount. Almost all of our services can be outsourced, automated or replaced by something. There will still be humans in the future; but fewer.
Startups: well, some people simply aren't made to be entrepreneurs. Running your own shop is a great idea and plan, but it doesn't always work out.
OP gets it
AI is coming for your commodity trading as well lil bro
https://www.zerohedge.com/personal-finance/these-are-best-college-degrees-finding-job-us
Accounting is the only finance-related subject I can see in the list.
High finance is still great. Plenty of areas where the market is not efficient and you can make great investments. Also, don't go become an entrepreneur. You are young with little knowledge, no skills, and no capital, so the only business you're capable of starting is one that isn't very good, and the world doesn't need more of those.
My advice: go get a job, start reading widely and educating yourself, and get some skills, you'll figure it out later.
Also, all this stuff about AI eating the finance industry is a joke. Don't listen to it.
See ya on the streets in 2 years lil bro
It all come back to one and one path only — long/short
Why
Most people that are wired to work in finance aren’t really good quality meat for the entrepreneurship meat grinder.
I’m an entrepreneur, make big boi bucks with 8 fig nw etc and don’t recommend it unless you are unemployable.
A few years in something like IB is great. You can do whatever you want after. I like ex IB kids because they know how to work a lot with good rigor.
How did you start in entrepreneurship?
Bump
AI is not even remotely capable to take any jobs from juniors at this point. As others have mentioned, most other careers are vulnerable to AI adoption. This is entirely irrelevant and should not be considered by anyone considering an entry level finance role.
You mention interest rates, again irrelevant. They were 20%+ in the early 80s and well above 5% in the 90s and 2000’s. Business still got done.
Finally, you mention risk as a key consideration, a fair point until you suggest entrepreneurship (the riskiest career option there is) as an alternative.
The fact remains that high finance offers some of the best risk-adjusted returns at a low barrier to entry for those willing to work hard, though this has diminished somewhat post-GFC.
If you have an offer, I suggest you take it.
I think if you read this the other way, the value of state school degrees for smart and motivated kids who have a genuine interest in finance has increased threefold with the democratization of information over the last decade. I love my job and wouldn’t want to do anything else. I think people reveal their hand when they think fields like consulting, tech, law, medicine are possible alternatives that kids should take if only they had the right combination of pay, prestige, lifestyle, and a recruiting process just hard enough to give you bragging rights but not so impossible you strike out. Nobody says this stuff about HF because only absolutely autistically obsessed guys end up breaking in and staying in that industry. Banking and PE used to be more similar where you needed to be either obsessed or come from a certain background. Now that the Wharton kids need at least a 3.5 too it’s not worth it? If you’re discouraged by changes like this then you probably didn’t want to do the job in the first place. But if you’re coming at it from a point of genuine interest in certain markets or investment strategies, then it should be impossible for you to imagine yourself doing anything else. I cover tech and know that I would be deeply unhappy doing GTM or product management even for a big startup. So take advantage of being a college student and try out multiple things because now is the best time to do it rather than spinning out into a wasteful MBA when you need to pivot in four years. There is definitely something to be said for trying to stay ahead of the times, but man they had rice futures traders in 16th century Osaka this industry will always be around for those truly afflicted with a love of the game. Cheers bro
Is everyone from Penn like this? I swear to god the worst analysts I work with are all from Penn. So fucking annoying
My two cents: You have literally no idea what you are talking about. Ivy League doesn’t / shouldn’t buy you shit other than a half inch head start, and a lot of people actually prefer state school kids in banking anyways. All my best analysts are Big Ten kids. So I guess my advice is, transfer to Penn State.
I like where your head is at, but I think you're being presumptuous here. IB is a good starting ground which might be what people are looking for out of the field. Exiting to other high finance isn't even always the goal, as graduate school is opened up. I will also say that it is hard to really pin point anything down as what you should do instead. If we look at high paying fields, law and medicine might be the some of the best for security against AI (maybe? b/c nobody can tell the future anyways). Why is compsci any better than IB when looking at AI taking jobs? I think you are right to say that IB should not have the same allure as it did in years prior, but I think your assessment of it is too quick to jump the gun.
has "came" out? are you really a wharton student?
Even if you're a successful entrepreneur... then what? Do you really want to be an Elon or Zuckerberg who had one good idea then had to buy respect from actual serious people?
Look at the way even Trump would look at Elon when he was tweaking during press conferences. Tech bros think they know everything about the world when the nature of their industry is one that tries to leave them behind every 5 years.
Yet another post from someone not in the industry and blaming DEI and Nepo and a whole other slew of BS. Once you get in the industry you realize nobody gaf about these things and care about your work product. Tighten up bud
Ok dude, but it's the morons in HR who give us the list of kids to interview. Yeah, no one in front office cares about this, HR cares about lot. The problem for a lot of these kids isn't the interview, it's getting HR to screen them.
On generative AI: it's basic mathematical fact that every time a model has to choose a token to output, the set of all tokens which would count as correct is a tiny, tiny fraction of the set of all tokens which are weighted. For each point you have a decision 'node', if you want to think about this in terms of trees, and there will necessarily be some probability of error, (1-e). Hence, if your generative AI model has to output n tokens your generative AI model has an error rate of (1-e)^n. No matter how small you pick e, that's an exponentially increasing error rate. Corollary: the more demanding tasks you ask of a generative ai, the more tokens it requires, the poorer its training is/uncalibrated weights, the worse that error rate gets.
We're not going to be replaced any time soon. Generative AI is a very poor model for reaso ing. It can't really do deduction or pattern matching. I've tried giving it some basic formalism and simple problems about rings, fields, and groups and it really struggles. There's certain conditions, for instance, which you just can't get it to learn and understand, likely because it's weights are misaligned on some of these problems. Generative AI functionally operates as a memory simulator - its very good at memorizing not so good at deducting or applying rules (there was a recent paper from apple about this).
Now, if tomorrow there's a paradigm shift and we're able to implement models which are capable of deductive reasoning on their own then we're (everybody, not just finance) in trouble, and not just from the perspective of the labor market.
Est tempore in aut eius. Odit non labore culpa consequatur officia pariatur sapiente. Enim iste beatae sit voluptatem sapiente soluta vel. Beatae consequatur sit enim rem quis ipsum mollitia qui. Iusto nam et sint.
Culpa dolores est hic debitis. Eligendi inventore autem et. Distinctio quo qui fuga fugit odit.
Ullam sint dolorem error pariatur culpa aspernatur. Non dolor quis nesciunt consequatur iusto cupiditate repellat.
Labore laborum et aut distinctio. Inventore asperiores quibusdam ea exercitationem rerum. Aut consectetur ut aliquid iste enim. Nobis rem delectus eos debitis vel.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Minus quia officiis sint et nam quos. Ea deserunt et officiis. Nobis nisi amet ut magnam maiores et. Rerum beatae sequi sint mollitia natus. Nostrum qui minus consequuntur ab vero est amet. Quod fugit voluptatem aperiam repellendus incidunt quia ea. Ea ratione aut reprehenderit vitae. Praesentium suscipit rerum inventore cum incidunt pariatur neque.
Voluptatem laborum voluptatum repellat illo consequatur. Deserunt doloribus dolore illum harum. Sed voluptatem sequi neque enim.