Transitioning from tech to a serious finance job (yes, you read that right)
I am currently a Senior Software engineer at Bloomberg with previous experience at Amazon/AWS and a startup. I am 27 YoE with an undergraduate degree in Electrical and Computer engineering from a state school.
*What are my options if I wanted to transition to IB or PE or some other area? *
From my experience, far more people want to go in the opposite direction. It seems strange why I want move into finance. I'll openly admit that the #1 reason is compensation. I am currently earning north of $200k, mostly in salary. However, in the absolute best case scenario (e.g. job hopping to Google), I will cap out at about $300k. It's a hard pill to swallow when you have family and friends in BB, in PE, in hedge funds and seeing them take home a life changing amount of money each year, far beyond what I could ever do. I don't think they are any smarter than me in terms of raw intelligence, but they are way better schmoozers then I could ever be.
I've looked at the MBA and MFE route, and both could buy me some mileage and a way in at great cost only to land back where I started in terms of compensation with the additional problem of starting my career from scratch.
Before you blow up what is by all measures an extremely lucrative career, take a step back and consider: are you truly dissatisfied with your work and the lifestyle it affords you, or are you only dissatisfied in comparison to the highlight reels of your friends in finance?
There will always be people who make more money than you, and many of them won't be smarter or more hard working than you. If you're just chasing what the other guy is getting, you're never going to get there because the goal posts will forever be moving.
To add to this slightly, the rat race doesn't end after you're in finance/IB/PE or whatever high paying role. If you're friends are VPs or associates or even MDs there will always be someone making more. You might say "I'll be satisfied once I'm making XXX (VP at Goldman salary and bonus) but once you get there you might say the big swinging dick above you is stupid yet makes a multiple of your income, and off you go again.
See, the difference is not that big between 200k- and 400k in terms of real spending power. There isn't THAT much you can't buy, it's just the quantity. However, the difference between 200k and 2M is huge. I have a few goals I want to hit and once I hit them, I am totally OK with dick above me making a multiple of that.
Two reasons why
i don't think I will be happy until I get past my checkered past. it cuts like I knife when people look down on you for not being like them. E.g. going to an Ivy league, growing up in a bourgeois part of long island, not going to the right Jewish sleep-away camp (it's a bigger deal then you think, so many people get jobs this way. My family couldn't afford it), etc. Having the right name helps to alleviate that.
I have certain financial goals I want to hit. None of them are stupid things like a 10000 square foot house in Hamptons while driving a Lambo with a model or other strictly materialistic goal.
Hello,
I had similar thoughts about 5 years ago, after months of thinking about it I decided to get into a business school. Let me share my views on software engineering issues and why I decided to go to business school.
Things that I found revolting in software engineering:
Presence of glass sealing for engineering roles. Once you get to SSE there's nothing left for you. Unless you're open to switch either to management role or into document-writing architect role.
What's even worse, is that all your previous experience is being wiped out every 4-8 years, depending on what you do. I see a lot of people in their 40s and 50s that do exactly the same work as I do, and they earn about the same.
Next big thing for me is the people you have to work with or for, especially when the company decides to put recent college grads into "project management" roles. Most of the people aren't really driven and only crave cozy middle class life.
Last but not least, is -- try to imagine doing same thing as today 30 years down the road. I just couldn't do that.
When I wrote down this list on paper and looked at it, I though about what my life would look like if stay where I was and followed normal career path available there. I got to the following:
Enjoy middle class life, spend time with friends. The only problem with it, as I mentioned earlier, is that technology goes forward fast and employers push you to new technologies and techniques. This results in constant rat race, spending evenings and weekends by studying how to do same thing with new set of tools. Also it devalues previous experience, so you're end up in competition with recent graduates who have most recent fancy technology behind their belt. Why would someone pay you for a 20-year old experience?
Grow and pivot into architect role. It's very similar to previous one.
Alternatively - pivot into management roles like development manager, technology director, project/product manager. These are achievable, but by their nature they are 100% manger roles. So 95% of your technical skills aren't really needed. The question then is, am I comfortable sacrificing all of it and switching to something, where I'm going to need skills I don't have?
Pivoting into finance from your role to a similar one in finance, like real finance. I though about it a lot. I figured two ways how to do so. One - getting advanced stats textbook and work through it then apply for quant positions in HF/prop shops. Or second one - go for SE roles in HF/prop shops in risk, execution, and so forth than lateraling to trading roles through connections within the firm. I know people who executed on both, lateraling is very hard. People aren't open minded enough for a change like that, really hard to sell them on idea.
Starting your own company as a consultant or developing product and selling it. Even if you going to use your skills that you worked so hard to get, eventually your job is going to be sales. Are you naturally good with sales and cold calling? Are you going to develop these skills in your current position? These are good questions to think about. I have friends who started their own businesses, lesson I learned from them - developing the product or service is relatively easy in comparison to making people pay for it.
Eventually I decided that continuation of engineering career won't give me the time, resources, and fun that I want. So I decided that business school is a way to forward due to:
You'll get way more credibility for lateraling into other roles. You always can say that you learned about management, strategy, operations, etc. So management roles are open now.
You can take a lot of accounting/finance classes and recruit for IB/AM/consulting. Then go into PE, whatever.
You'll be more prepared to start your own show down the road.
Plus all other business school benefits, like alumni network and events. Maybe your schools has a VC fund that you'll be able to tap after graduation when you decide to build your own product.
You also might discover other opportunities, learn from other people experience. Like, people are joining PE firms as partners by being turnaround artists or operations wizards.
Thus, business school is going to allow you to, at least, mitigate most of the problems I identified above.
One more thing. If you worried that full time program is very expensive due to loss of salary, consider going for evening/weekend/executive programs...
I agree with most of your points on the technical paths with the exception that it's only about 50% true for tier-1 and tier-2 technology companies. These companies tend tend to treat their technical staff much, much better but you still run into the same issues sooner or later. Part of the trick is knowing what's a fad and what the real trends are; what are good general skills and what are resume fluff. You are right that technical skills devalue themselves quickly. In the long run, everyone becomes a people/project/product manager with the exception of a few luminaries who becomes principal engineering staff, but the vast majority of those already have a PhD in an area critical to the companies business e.g. Jeff Dean at Google. All the interesting hard-core technical work happens in the Bay area anyway.
My cynical view is that any job where the work and output are not obvious to the average person is going to have an uphill battle for mobility compared to your generic sales drone or business analyst.
The lateraling approach is an interesting one. I too have heard that it is possible but not practical. Very few people are able to pull it off.
I looked into evening and weekend MBA programs (hello NYU Langone) but I was under the impression that employers (and their recruiters) looked down on them versus their full-time counterparts. Then again, let's face it. The networking is the probably the single most valuable part of an MBA.
Dear Americus, I don't know if you still check this website or not. But, I wrote a similar list to yours and almost all my bullet points match with what you have written here. Incredible. From having to learn constantly, dealing with ageism, middle class life and hitting the ceiling early in your career, etc. Every single one of them. I come back to my list everyday just to remind myself I'm doing the right thing by applying to business schools. FWIW, I'm in my late 20s, but damn it's hard to do a career pivot. Especially when you have nice paying, and a cushy job. Does it matter what MBA school I go to? My goal is T15, but it looks like lots of people around here say HBS or gtfo. Anyway, I hope things turned out great for you.
Based on your current experience and background, your best bet to switch to finance is to get into a good MBA program. One that is a target for IB firms. You can go ahead and do your own search on WSO for which schools.
Something to address right off the bat: post-MBA PE without pre-MBA PE experience is highly difficult. So you not having pre-MBA IB experience, or even pre-MBA consulting experience (with a top tier MBB or OW type firm), will likely make it next to impossible. Not trying to dissuade you, just pointing out the low probability for your consideration. Of course, you could try for smaller PE shops post/during MBA, but again, it doesn’t make sense for them to go with someone with no relevant experience (and depending how small, you may make less than what you’re aiming for anyway). So just laying it out there - PE will be an extremely challenging avenue for you.
Now... post-MBA IB is a possibility. You could probably get some good looks from say a TMT / tech IB team given your background. And yes, over time, IB is lucrative. But there are a lot of things to consider. First off - a lot of people going into banking, eventually leave (sometimes a lot sooner than expected) - either because you can’t crack a certain title, or the hours really take a toll on your health / family life / social life / everything. Second, you yourself said you can’t schmooze as well as some friends in IB. Well, the higher up you go, the more banking is about sales and relationships. So if you can’t do that well, you’ll hit a ceiling (and it’s up or out in IB). IB isn’t rocket science, but you do need great soft skills to move on up.
I understand the annoying, gnawing feeling one gets when they compare themselves to their friends or peers who appear more successful. Yes, that can suck. But honestly... making north of $200k and with the ability to get to $300-350k+ is pretty damn good. I’m assuming your hours can be long, but you probably have more control over your life vs Finance friends. Grass is greener...
I wonder if maybe you can explore the root of your dissatisfaction- is it just money? Or is it a matter of feeling you want to get more out of your career? If it’s money, you could look at other things... given your background in software, you could look at investing some of your money (be an angel investor).
Another thing you could consider is VC. But I’ll just say right now, unless you make partner and/or get carry, it’s not as lucrative.
Heh. I've never heard of continuous 60+ hour weeks at most big tech companies (excluding Amazon). Sure there are quarterly crunch times, but those happen a few times a year and are expected. If anybody did that they usually a) were a new grad who didn't understand that the amount of work does not equate the right kind of work or b) it was self inflicted because the work was genuinely interesting or they did not want to go home.
You are totally right that you are in control of your hours
It definitely happens at Apple in some post-MBA roles
To add
To add, I'm not a horrific schmoozer but I feel awful as a salesperson selling lies. I resort to outright lying as a cover. I've been told I have a polarizing personality or more politely, an acquired taste. You either love me or hate me. Case in point, the CEO at my startup would occasionally pull me in to a dry run of the fundraising deck because I was one the few people who were not afraid to publicly ask hard questions,
Would a CFA Level I help me in anyway? Bloomberg offers internal courses to get you 80% of the way there.
Polarizing personality (and not being able to control it or employ tact where needed) can be a disadvantage in anything client facing. I think when an advisor can pick times to inject honesty, it can be quite powerful with clients. But you need to be able to deliver things tactfully... and based on what you’ve said so far, my guess is you can’t (or at least, don’t). Again, higher up you go in IB, the more soft skills (and emphasis on sales and relationships) are valued. Even on the buy side (PE, VC), the ability to develop relationships is needed for sourcing and building a network.
No. CFA level 1 doesn't do anything except say “oh, he has a basic interest in finance”. MBA programs that feed into good IB firms is your best bet. If you have time for CFA, you might as well spend the time looking up websites like macabacus, blogs like M&I, or WSO to better understand what IB entails, valuation methodologies, and get a better sense of whether this is actually for you.
Technologist here who has also thought about greener pastures across the pond (mostly just VC though).
First of all, your 300K salary cap simply isn't true -- https://news.ycombinator.com/item?id=19393688 ; https://news.ycombinator.com/item?id=16811454
If you're a good developer and a good communicator, 300K is table steaks all-in comp for senior developers at FAANG. With tenacity, luck and politics, Directors at these organizations are easily clearing $1MM+ (L7-L8). You can find comparable salaries / trajectories at non-FAANG Sillicon Valley and NYC.
I don't even consider finance these days. What's my competitive edge? I have none. I would be starting at ground zero against a bunch of kids 6 years younger than me (I'm also 27) who are ready to grind.
You probably have tremendous mastery of algorithms, data structures and shipping production level code. Unless you genuinely dislike what you do, I think it would be foolish from a career standpoint to throw that all to the wind.
If you're hell bent on getting out of technology, I would consider softer pivots to the business-side and move from there: Product management, solution architecture, technical marketing and technical sales.
It's funny you mention that post on HackerNews. I read that exact post a few days ago. I don't mean it $300k is the absolute cap, just that it was what can reasonably be expected in the average case. I don't assume I will exceed that for the same reason I don't assume I will win the lottery. Most people do not go past that level even if I they wanted to. The competition and amount of work get exponentially harder.
I've looked at all of the above and unfortunately, the way the market winds are blowing, deep technical expertise is still valued although you will find extremes at both ends. For every Oracle sales rep who lands MM whales of deals, there are dozens if not hundreds barely making quota.
Don’t understand excactly why you’re trying to make the transition.
Compensation wise, yours pay/hours is way better in tech than it would be in finance.
Real wealth is generated through a business. Why not leverage your tech skill to build an asset during your free time?
I made the switch from finance to tech (summer analyst to full time engineer)
@kanon is spot on.
OP - It is a different mindset and skill your friends possess that got them to where they are now. It does eventually comes down to Sales/Relationships but I also think that you can probably earn a stronger ball-park value of $500k+ if you play your cards right at the big tech companies.
I have friends who left IBD with strong salaries for better hours work/life balance and overall intellectually stimulating environment (and flexibility to attend events, conferences, work-from-home, travel) while clearing excellent compensation.
Good luck on your decision, but suggest you do it thinking long-term wise.
Don't understand excactly why you're trying to make the transition.
Compensation wise, yours pay/hours is way better in tech than it would be in finance.
Making any decision from a comp-first perspective is doomed to fail. Particularly one that doesn't really pencil out (2 years of lost wages at $200k+ plus whatever MBA tuition costs for you, and then several years of being an Associate that washes out essentially with your current income, much much less on a per-hour basis?) You will easily be $500k in the hole and making up generously $50k post-tax for the first 4-5 years post-MBA assuming your pre-MBA career progression. That's also assuming you make it that far - the "polarizing personality" is a red flag; recruiting is an uphill battle if you are not broadly liked among your MBA class (including the year above you) and in general at the firms you interview at. Banking is very personality driven. In fact as you mentioned, "selling lies" is probably at the core of what sell-side M&A is...
If you become a Director/MD in banking, yeah you will start to make up for this decision, but don't take lightly how challenging that is, the burnout is very real (how many 80-100+ hour workweeks have you had at Bloomberg? How about responsibility for a P&L and travel 5 days a week with a family at home?) Compare that to a senior tech company position where you get equity, work life balance, and freaking smoothies in the fridge. I jest but only kind of. It's 10 PM on Monday in the office and the night is young.
"Comparison is the thief of joy." - Theodore Roosevelt
Suscipit eum est quidem iusto aut deserunt inventore non. Veniam consectetur placeat provident iusto sed.
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...