Saying no to banking to follow a passion?

Would love to hear any stories of people who either wanted to pursue banking and decided to choose another path that they were more passionate about, or were in banking and quit to pursue a passion. Looking to hear both successes and failures, what drove their decision and where they are now (financially, happiness, etc.)

Comments (14)

Most Helpful
  • Business School in Research - Other
Jul 2, 2022 - 9:43pm

I was set to graduate undergrad in 2008/2009, when no banks were hiring. I delayed graduation a semester by doing an internship abroad to buy myself another recruiting cycle. While abroad, I decided that I wanted more life in my work-life balance than IB would afford and pursued a career as a college finance professor.

I'm currently in the midst of a two-month break from work. I make roughly $200K per year in my mid-30s. When my first child is born in a couple of months, I will get 12 weeks of paid paternity leave.  In what other career do you get Spring Break?  Although it saddens me to see the brightest young minds pursuing careers in finance instead of neuroscience or biomedical engineering or something else that truly adds value to society, I do enjoy helping bright young people understand finance. I also enjoy being the center of attention, and teaching affords me that opportunity.

Every now and again, I wonder what would have happened if I had successfully landed a job in IB, and I almost always come the conclusion that my failure at IB recruiting is the best thing that ever happened to me. 

  • Business School in Research - Other
Jul 4, 2022 - 12:57pm

The table below presents some relevant summary data on big picture things. Assuming you're teaching semester-long classes, Lecturers and Non-Tenure Track (NTT) Professors teach between 6 and 8 classes over 10 months (August to May), while Tenure Track (TT) professors typically teach 3-4 classes in one semester.  During the other semester and the summer, TT faculty do not teach and focus on research. The low end of annual credits is at the best schools, whereas the high end is at the worst. As you can see, the starting salary at each title has quite a wide range. The upper end of each range tends to be at top schools or in expensive locations (unlike banking, academics do an efficient job of cost of living adjusting salaries). The lower end of the range tends to be lower-tier schools (think and school with a ranking below 200th). Combined, these two tendencies result in professors working more hours for less pay at lower-tier schools compared to higher-tier.

Teaching, service, and research are the 3 responsibilities academics have; the numbers in those 3 columns present the rough % of time each position works on each task. Each range is ±10% depending on the school, though Lecturers and NTT Profs rarely get any recognition or additional pay for conducting research, so those folks spend 0% of time on research.

Title

Degree Reqd

Annual Credit

Starting Salary

Teaching

Service

Research

Lecturer

Masters

18-24 hours

$80-120K

80

20

0

NTT Prof

PhD

18-24 hours

$100-180K

70

30

0

TT Prof

PhD

9-15 hours

$140-250K

20

0

80

The process of getting a PhD is laborious. Typically, finance PhD programs are 4-6 years, with the first two years spent taking econ, statistics, and finance classes and reading the existing body of academic research to find what interests you. (Sidenote: The stats classes are a true struggle, and require linear algebra and a couple years of college calculus). The last 2-4 years are spent working on your research, and if you have a good advisor, co-authoring papers with them.  Some PhD programs require students to teach a class per year after the first two years.  Throughout your PhD (except when teaching a class), you serve 20 hours a week as Teaching/Research assistant for one of the finance faculty members. It is very much an apprenticeship model, where the students learn how to conduct research by assisting faculty with their research. The students tend to do much of the statistical analysis, while the faculty do the writing and direct the statistical analyses. While in your PhD program, tuition is free and you receive about a $25K per year stipend.

At most Unis there are three levels of Lecturers, NTT professors and TT professors.  For the professors, the progression is assistant prof, associate prof, and full prof.  Promotion to associate tends to happen after 5 years, and full professor after another 5-10, depending how aggressive you are in continuing your research agenda after receiving tenure. "Getting tenure" refers to getting the promotion to associate. In a normal year, all academics get 2-4% per year raise.  When going from assistant to associate or associate to full, there tends to be a 10%-20% bump in pay. Getting offers from other unis (or switching to other unis) are often ways to get additional raises. To provide a career salary progression example, if you assume 2% annual raise and only a 10% bump at the two promotion points, a TT prof who starts at $200K and takes 15 years to promote to full professor is making about $325K. My dissertation advisor also made about $300K-$500K per year as consultant/expert witness.

Getting tenure is a nightmare.  At tier 1 research schools, you need to get 4 papers published in A-journal publications within your first 4-5 years on the job.  The acceptance rate at A journals is less than 5% (probably 1%).  At tier 3 research schools, you need get 3-4 papers published in B-journal publications within your first 4-5 years on the job.  The acceptance rate at B journals is substantially higher.  If you do not get tenure at your first uni, you move to a lower ranked school and your 4-5 year tenure clock starts over.

I was on the TT path at a 50-100 ranked school, but quickly got jaded with research. Also, I was much happier the semesters that I was teaching than the semesters I was researching. So I switched to an NTT position at a higher ranked (top 10) school after 4 years rather than going to another research position at a lower ranked school. I was pulling 60-80 hour weeks and working 12 months when I was on the TT path, and I'm down to 40-60 hours per week for 10 months out of the year. 

In addition to the base salary above, you can teach "overload" classes and receive a 10-15% additional payment per 3 overload credit hours. It is easier to do this as a lecturer or NTT faculty member, because you don't have the research requirements.  So an NTT faculty member making $150K base could increase that to about $200K by teaching 9 overload credits.

Sorry for the ramble. A lot of lay people don't understand what goes on behind the scenes in academia or what the various job titles mean.  To answer your questions more directly:
The regulations we deal with are mostly just FERPA and Title IX training, which just requires us to press play on a couple of 30-minute videos, do something else while they play, and then take a multiple choice quiz that allows unlimited attempts. 

Because I'm an NTT Prof, most of my time is spent on teaching-related activities.  I'm in the classroom for 12 hours per week from late August through early May. Another 8 hours per week are spent holding office hours. Another 10-20 is spent creating/revising/updating my content to provide current examples. Tenure track assistant professors (non-tenured) typically don't do this, because they are scrambling to publish to get tenure.   Another 10-20 is spent grading.  Some weeks, I probably only work 20 hours. Others, I may work 60.  

I teach Corporate Finance to undergraduates. If I wanted to teach specialized courses, I could. I like teaching big picture corporate finance, because I think I'm good at dumbing it down so that students can actually learn it before taking the more advanced courses. I have taught advanced courses in the past (case-based). While I enjoy discussing more applied corporate finance like in the specialized courses, I think I add more value to students' education by teaching the basics.  It also takes a lot more work to prepare for advanced classes, so there's that, too.

Tenure track faculty members who are responsible for research interact with each other a lot. They go to weekly internal "brown bags" and external guest speakers to see research presented. I could go to these, but the research just doesn't interest me. I mostly interact with college juniors and seniors. Teaching at a good undergrad program, most of my students are solid and motivated. I've also developed a reputation of being a challenging professor, so there is some self-selection out of my classes by under-motivated students. Because I went straight from undergrad to PhD, I started teaching in my late 20s. When I first started, some of my students had older siblings who were older than me, so interacting with them wasn't difficult. In the last couple of years, the students I've taught seem to be more from a different generation than me, and relating has been a bit more difficult. We are united in the desire for them to get good jobs in finance, so we can always connect on that. Also, interacting with younger people so much makes me feel better able to stay young at heart.

Again, sorry for such a rambling post.  I tend to overshare.   

  • Analyst 1 in IB - Cov
Jul 4, 2022 - 11:05am

A college professor, getting paid $200k a year, questioning the value of investment banking to society, is the most blatant display of projection I've read in months.

  • Business School in Research - Other
Jul 5, 2022 - 12:38pm

LMFAO. Guilty as charged. I tell kids to read a textbook and help them understand what they've read. They could definitely do this on their own. Or pay WSO for some resources. I then assess what they've learned by assigning projects and administering exams. A bot could do this.

  • Analyst 2 in AM - Other
Jul 4, 2022 - 6:48pm

Thanks for the write up, definitely not something ever seen on WSO that clarifies the academic route. Question: it seems a good chunk of business school professors are ex-industry / current industry and teaching on the side, as opposed to being a PhD / academic. Do you know how one goes about getting a job like that? That's a long term goal for me but it's unclear how that actually happens.

  • Business School in Research - Other
Jul 5, 2022 - 12:52pm

Schools love to hire people with a background in industry, so you could definitely land a teaching gig. Oftentimes, people do this at their alma mater (see the former and future director of the IB Academy and UIUC).  The only problem is that you tend to be in the lecturer/instructor category unless you get a PhD, which can cap your salary, especially at schools with rigorous salary guidelines from their Board of Trustees.  Some professors leave industry and get a PhD (the pay cut to a $25K a year stipend has got to suck). Others get lecturer positions and get a PhD while working as a lecturer. With the PhD, you can get into the clinical professor position and get the higher salary. Others built enough wealth while in industry that the salary doesn't matter, they do it because they want something to do in retirement.

  • Summer Associate in IB-M&A
Jul 8, 2022 - 11:36am

Was a neurosci and finance in undergrad. I think this is one of the grass is always greener on the other side. During every neuro test, Id study for 40 hours a week and had almost no life. It was so incredibly stressful. Maybe I work alot now but the stress is not the same and it is no where near as complicated. 

Jul 2, 2022 - 10:02pm
misterfriedchicken2022, what's your opinion? Comment below:

Not sure if this counts: Years ago, I made a conscious decision to quit New York/investment banking and move to another city/firm with better work life balance, despite having the opportunity to stay in NYC and making (probably) 2-3x what I'm making now.

The catalyst was that I fell in love and was due to marry my now wife. When we were dating in NYC, I never once had dinner with her from Mon-Thurs and - for me personally - it was unacceptable that I couldn't do such a basic thing (weekday family dinner) that millions of families do on a daily basis. I made a personal judgment call that the NYC banking lifestyle was toxic for my future marriage and decided to leave.

I am still in the financial services industry today (now on the buyside) in a firm/city with significantly better work life balance and am much happier. We also have a baby now that I love spending time with every day.

So I guess you could say that the "passion" that drove me to leave banking was: family.

Funniest
  • Prospect in IB-M&A
Jul 3, 2022 - 8:22am

Left my role as an associate at a BB to become a cashier at the local McDonalds. Hourly is pretty much the same, and I get all the free food I want. Hard to pass on this gig. Edit: Clearly the joke was not well received

  • Research Analyst in HF - RelVal
Jul 4, 2022 - 4:22pm

Was always interested in markets and wanted to go the IB route because I figured it was the most reliable path towards working in public markets. Landed a junior year summer analyst position at a BB but realized I didn't really like banking or even fundamentals-based investing all that much. 

Wound up at a small macro fund out of school and spent the next 18 months working for shit pay, regretting my decision (no exit ops to larger funds), but learning a lot doing things I was pretty interested in. Got lucky and found a mentor who thought I had potential and I'll be starting at a much larger fund, doing far more interesting work, and earning multiples of my previous compensation. 

I'm thankful every day that I was able to make it work and get to do something that I'm obsessed with.

  • Intern in IB - Gen
Jul 4, 2022 - 5:01pm

I'm at the start of my career, but I had scopes set really on IB for like 2 years, got into a top MS Finance program, landed a boutique internship and did pretty well and had good middle market interviews. I just saw other friends and alumni mostly barely living day to day in the industry and decided to pursue a corporate role instead, looking at maybe pivoting into ER. I plan on rotating between internal offices and living throughout the world: Europe, Asia, and US. The life experience is worth much more to me than a bigger paycheck if the paycheck doesn't allow me to live how I want. 

  • Associate 1 in IB - Restr
Jul 4, 2022 - 6:37pm

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