Wages per Hour
So I found this article, to me it serves as a wake up call that we all need to be more open with how many hours we work and how much we make today, not how much we are going to be making tomorrow or in some distant "promised" future.
-Wage per hour: Are the long investment banking hours worth it? -
Article here.
I don't think we all went to top schools...etc so that we end up making 25$ per hour. I mean seriously
It looks to me like you are trying to find a way to make yourself feel better about your current salary. While your argument makes sense, your username leads me to believe that you want others to jump ship and have the same mindset as you. I doubt anyone enjoys the long hours, but I guarantee that their paycheck is still larger since they arent paid hourly. Just my two cents.
By the looks of your "track", all you seem to be concerned about are commenting/posting things regarding the relationship between pay and hours worked per week.
Will admit going into IB I was chasing the prestige, action, ability to work with the smartest, and fat paycheck for a 22yr old. If given the chance to do it again I would do it in a heart beat, for less money. BB IB on your resume will immediately put you in front of 95% of others when applying for jobs, it opens so many doors and I really do think that people who make this argument are just trying to find ways to relieve jealousy or justify a different route.
I honestly don't think it's worth it, especially as tax rates increase, if you factor in that the last 20 hours of work in every week are a lot more miserable than the first 20 hours of work in every week.
There are other jobs out there that pay the same for people who are smart enough to make it into banking. Apparently starting pay for developers at Google is now well into the six figures. Entry level quant jobs often pay $200K/year. Neither of these jobs require more than 50-60 hours/week and they offer great exit opps into big data consulting, logistics, and CIO gigs. However, some of these jobs are more oriented towards quantitative skills rather than verbal and public speaking skills, and some people may just be a better fit for banking.
And with taxes going up, exit opps have become less important. If the government is going to tax you at 70% anyways, it makes less sense to work like crazy for a $200K salary boost in two years that works out to $50K/year in take home income.
Learn to build stuff. Learn to enjoy doing work other people don't want to do but has to be done, to create stuff that other people want, and to find something you can do that other people can't do. People who can do that tend to get taken care of by the economy in the long run. (regardless of economic system, too.)
It's good to work hard, but it's not good to work pathologically hard for something that the government is just probably going to take away from you anyways. So find a job that pays well and offers intellectual stimulation where you can put in your 60 hours and hit the golf course or the beach on the weekends. And in the meantime, max out your Roth 401k before you spend the rest of your money. You're only 22 once.
I'd look for a culture in about five years where bankers make less and work less. In general I think most bankers work too hard and it's time for the work to normalize as the pay normalizes post-2008, as well.
Bigtech dev jobs are just as competitive as real-deal finance ones, and usually require more brainpower. Most new guys in that world work way more than fifty hours per week (spare me the "code smarter" line and anecdotal BS, as you know it isn't applicable to most people, even most new hires at Google or Palantir -- it's like advising someone to just "become a Rhodes Scholar" to pay for college). Also, even bigtech dev jobs peter out salary-wise when compared to finance (i.e. you won't be making $500k/year by the time you're 30 unless you're an actual gamechanger or you decide to go off on your own).
In short: the grass is always greener on the other side.
EDIT: I agree that finance is a miserable, shitty job in most respects.
Ha ha ha! Don't make me 'laffer'!
In any case, there are kids at your high school who'd pass the Google coding interviews and get hired. But they choose to pursue business in college instead. And instead of landing these relatively nice jobs in tech, they sometimes find themselves struggling with the political aspects of landing a job in finance and then advancing in their careers. There are people who went to random California community colleges working as developers at Google. The same probably can't be said for investment bankers at Goldman.
If you're a competent coder who can talk and work with people, you get promoted to manager or land a CIO gig at a smaller firm. And not everyone makes it to the buyside, either. At the end of the day, is it really worse to be earning $250K/year working 40 hours/week in California at 30 than it is to be earning $400K/year in Manhattan? Net of tax, the difference is $65K/year, and that's before we get to purchasing power parity of California vs NYC.How many bigtech devs come from places like UW Green Bay compared to MIT/CMU/Berkeley/etc.?
The path to wealth in tech is just as pyramid-shaped as it is in finance -- how many managers make $250k/year working 40 hours a week? How many UIUC CS grads are competent enough to end up at a Google or a Palantir? Why isn't UIUC's average starting salary $120k/year if bigtech dev jobs are so easy to get?
You'd be surprised how many people who went to top schools don't make $25/hour.
Not everyone who goes to UIUC wants to leave Illinois. It's a great engineering program but a lot of people are going in-state and I suspect the percentage of people who leave IL is smaller than the percentage of people who leave MIT or CMU for employers outside of MA or PA respectively. Some students simply have no interest in working for a Google.
Also engineering programs at schools like UIUC enjoy higher or similar salaries to most liberal arts programs at elite schools where students go into consulting and banking. So let's make sure we're doing an apples to apples comparison.
You have a good point that not everyone at a given school is cut out for Google, but not everyone at Dartmouth's Econ program is cut out for an investment bank or consulting either. I would just argue that engineers do their work during the four years of undergrad and have relatively nice lives afterwards. It's a minor form of IBD.
In any case, the median salary of HBS graduates 10 and 20 years later is $250K. In other words, career advancement is for folks earning less than about $200-300K. To argue that business and IBD is the only way to a reasonably nice life is perhaps overstating the case for business. Perhaps people gush about exit opps from IBD a little more than from other areas because they're so thrilled to get out of the hundred hour weeks.
IBD/Finance is a great choice but it's not the only choice anymore if you like money. Our economy needs smart people working in tech, engineering, government, insurance, research, and other places. Today, the economy can afford to compete with finance, at least on tech and engineering salaries.
I guess that's what I wanted to emphasize here. You can have a nice life in finance or business without doing IBD, and you don't need to go into business to earn decent money these days. There are so many options today for a quantitatively bright person who wants to work reasonably hard and have a reasonably successful career. IBD is a path to success, but it's no more guaranteed than any other route and we do college kids a disservice by having them get too focused on it.
The best thing we can do for college kids living on dorm food and ramen noodles is to condition them to be OK with merely a $100k/year lifestyle and then get them focused on doing something they can enjoy and find sustainable for the next 45 years.
Studies show that you don't need to be a billionaire to be happy or have a meaningful and fulfilling life.
I agree with a lot of what has already been posted and I understand the viewpoints of the others.
My point in posting this article is that I want all Investment Bankers to start using websites like WallStreetOasis.com, salary.com, Emolument.com and to post their salaries and working hours. Then to start reading books on how to negotiate higher salaries. It is a damn shame that big banks make so much money using our skills, yet they pass on so little of the money/profits to us.
and yeah, if you are a computer programmer, they don't care what school you went to or what your GPA was, all they care about is your raw skill. And yes, a good programmer is several orders of magnitude more productive than others, some of which decrease the value of their company by writing such crappy code that it takes a lot of time to maintain due to its errors, whereas others write code that does not have to be managed/fixed so much.
I am always puzzled reading this kind of thing.
When you go shopping, you pay with dollars, not with dollars per hour. If you want to consumer better/more products, you need to maximize absolute value (dollars).
Your friend makes $50 USD per hour? Ask him why he didn't make $110k right from undergrad then, when young Analyst did with his $25/hr.
And of course I am not mentioning experience, prestige, etc., as even on numbers argument about salary per hour is pretty stupid.
The prestige of being an investment banking analyst?
In the long run of things, not prestigious, but compared to what most other 22 year olds are doing... I'd say it gives you a leg up on that relative to peers
Laffer has a point, and my arguments here definitely shows some of the bend in the curve, but I don't think 70% is above the peak. Privatized parking meters in Chicago won't shut down and go home. Google and Amazon won't shutter. Landlords won't stop renting out apartments. The economic rent in the system will still pay taxes, and I think that's what is missing here.
Standard microeconomic theory dictates that individuals maximize their utility with regards to consumption and leisure = hourly wage is (relatively) more important than yearly wage.
But this most likely doesn't apply to finance guys as leisure is not very important. IB is attractive because it is competetive, tests your skills and dedication and carry a high prestige level. If you go into IB to get a "nice easy life", you're obviously in it for the wrong reason.
Everyone always makes the comparison to Tech jobs etc, the problem with that I would say is that a majority of people in IB would struggle to do their job, which is why they get paid what they do. Basic IB is not really difficult work, it's long and gruelling but the concepts are pretty simple.. less so with some (not all) of these tech jobs.
Can't seem to get reply to work... sorry for the added post.
This article just reaffirms what 99% of people on the site that are actually in the industry would have already agreed on. Investment banking is not worth it if you are only in it for a high paycheck straight out of college.
On the other hand, if you like career security that can be added by having Investment Banking on your resume, the future earnings potential, the network you gain, and reputation you immediately earn as an intelligent person and a hard worker, or any of the other numerous benefits that can't be calculated into a figure like this, then it might just be for you.
Oh, and one other point, some of us actually enjoy what we're doing. That doesn't mean we have to enjoy every second when we spend 2 hours fixing a broken model, but most of us worked our ass for this job because we actually, wanted it.
OP, the Bureau of Labor Statistics claims the hourly wage for a plumber is $25.46, so if that is your mindset, you should stop wasting your time on this site and hit up trade school.
For me personally, I would do a BB IB stint for free. I think that's how much its worth it for me. Gaining the deal experience, working with people who are as hard working as you are and getting a lot of responsibilities from day one are all things that will be valuable throughout your career wherever you go.
I don't think anyone should ever do IB for the money.
A top tech student, meaning from top school with major in CS from a good school will generally fetch 110- 120k base + sign on + stock options, which can total greater than 150k. By age 27 they are making clear over 200k a year in stock and salary. This website is old fashioned. The cream of the crop in any industry will be making stupid amounts of money, why work 100 hour weeks? This is not to mention that a ton of hedge fund jobs are becoming technical, they want coders. Not sellers.
Top CS grads make $120k all-in, not salary.
False. If you are working at google, facebook, palantir, two sigma, Jane Street and you went to stanford/harvard/mit/uc berkely then you are making 150 all in.
Also by 27 you're like... a 2nd or 3rd year associate if you stay in banking. You'll be making a lot more than $200k. I completely get this argument btw, but from the pure numbers perspective that you're laying out, it's not a valid point.
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