Why is investment banking still attractive to younger generation if 40% of comp is stolen by the big theif aka the government?
Suppose your all in comp is 200k-40%= 120,000. That isn't so attractive anymore especially if you're living in NYC or SF. You might get a refund but that's still very high
Name a job besides investment banking that doesnt require higher education besides an undergrad, offers great exit opps to PE or corporate roles, pays 100k out of school and offers fairly fast and structured promotions.
Programming. All you need is a sexy GitHub profile.
99% of programmers will never break 500k yearly comp. People mention stock options but they only receive these periodically over a few years, it's not like they get an all-in bonus like finance professionals. There are posts on CS forums of programmers themselves saying that they've never met someone earning over 400k or people asking if it's possible to earn 300k without being some senior guy at Google. Secondly, there's no high paying exit opps in the CS world. You just work toward getting into a top tech firm like Google then staying there. Lastly, good luck getting promoted at a company like Facebook, Google or Microsoft.
And so less money is better? I didn’t do IB because of the hours, I never once considered “nope, too much money, my marginal tax rate will be too high”.
I guess I missed he memo where other jobs don’t get taxed
I don't want to rain on anyone's parade, but you do know that most bankers don't make 500k. The VPs and MDs do (and much more) but they are a small fraction of the total. Those that go to the buy side typically don't make partner and make the millions because those guys never leave. Supply and demand. You just don't automatically move up like you do from analyst to associate in IB (assuming you're good).
Clearly you make more than almost everyone right out of UG, but that's meaningless from a long career perspective. Most of the time you're out of there in a few yrs.
A Big 4 guy who makes half of what you do right out of UG in audit but moves into corporate finance and becomes a director, a CFO, a business unit leader at a large company, an X will make more than most bankers ever make. Lots of ways to get there. Hope you're not doing it just for the money because that will happen if you're good regardless.
I'll bite here. A few responses:
1) Becoming CFO of a large, public company is astronomically harder than making VP in banking. The saying around our office (this was coming from MDs) was you make VP if you survive being an Associate "with a pulse."
2) At multiple BBs, you do now automatically make Associate from Analyst as long as you're not bad... not if you're good.
3) If you're a top bucket second or middle-bucket third year analyst (let alone an associate), you make more than a middle-market CFO and most middle-market CEOs.
4) A "Business unit leader at a large company" will not make as much as MDs, who are your counterparts at that level. Moreover, your point of supply and demand is actually applicable here too, maybe more so! There's only one CFO, one product head, one head of corp. dev, etc. whereas their are multiple MD spots in banking, and all of those corporate positions are highly competitive.
TL;DR: banking gives you more money as an early twenty-something than anyone out of college should ever have. I agree it shouldn't just be about the money. Banking forces you to learn about something (an industry, transactions, whatever) by spending an absurd amount of time around it, and that's useful. The ridiculous focus on technical skills puts you at an immense advantage for the rest of your life when using PPT and excel. It gives you a mentality of getting stuff done no matter what time it is, what day it is, or who you have to talk to, that just doesn't exist other places.
Happy I did it for those reasons.
200,000 - 40% = 199,999.60