Don't come to Penn/Wharton to work in finance and make money
What are your thoughts on this crosspost from Reddit?
"I say this as a graduating senior going into finance. Seriously, if you are just coming here to get an elite job and are mostly or entirely full pay just… don’t. Go to your state school, have your parents put that in an index fund, and either it’ll make their lives way easier or yours or both. They will say they are happy to pay, because they are proud of you. Don't believe them. It is far more money than you think at 18, and you will find money matters far more than this prestige crap. The expected value of the (slightly) better finance or consulting job you will on average get is simply not worth the stress and the incredible amount of already-earned, already-taxed money you are going to spend for a school that so openly is just about making money, and isn't even a good value proposition for that.
This isn’t 1992 anymore. By far the most powerful industry employing people is tech. They care very little for this prestige nonsense- major in computer science at a good school (where you'll be one of the smarter ones if you got into Penn!) you’ll have a shot at tech, quant finance, whatever, certainly much more than a non CIS/math/whatever major at Penn. And if you are going to go to Penn to do traditional finance or consulting and are full pay just… don’t. It’s a trap and an ego trip, and I say that as a hardcore finance person. There is zero argument the NPV of a marginally better finance job you’ll get from Penn is worth that much money.
People are leaving IB and PE like crazy from the stress, and those are really the only way to even make the IRR come CLOSE to worth it, even ignoring the embedded misery, which you shouldn’t. You probably have a SMALL edge even adjusted for competition getting finance or consulting jobs but it’s small and just not worth it. And if you think coming to Penn is for intellectual reasons- there are people who find intellectual joy at Penn but it’s not the focus. The preprofessional toxicity is REAL. Ultimately most of Penn aside from that is just a show. And there’s NOTHING wrong with that- making money is serious. Half the poly Sci majors do try and transfer to Wharton, and there IS real depression from all the nonsense within Penn of people competing for miserable jobs just to feel like the investment their parents made will be worth something.
If you are paying much less than full price it’s different. But if you make enough to be (mostly) full pay- seriously, I wish someone had told me at 18 with that Wharton acceptance letter what this level of money really means. Penn isn’t Brown. You are entering into a net prsent value calc that just isn’t worth it unless you either get aid or your parents are so wealthy 240K is nothing. You want a finance exercise? Put into a calculator what 240K incremental difference of Penn to a good state school in an index fund will be in 40 years. And that’s without all the psychological harm the “prestigious” path of Penn will give you. I’ll be downvoted to hell but it’s worth it to me if someone like me who is 18 and naive about the cold, hard business of Penn realizes- if you are going to Penn to get a prestigous job and make money, which is what most of Penn focuses on, it just isn’t worth it.
You will realize quickly the administration is largely apathetic, and that mostly people at Penn are optimizing for preprofessional exit ops that, especially post tax, are nowhere near the amount of money this place costs. Please, don't fall for this shit. I'll be beginning my finance career shortly in a bid to make my parent's investment worth something- be smarter than me. Go to an affordable school, be smart about recruiting, you will get a good JOB- which is actually all that is Penn is about. Good luck- I know I sound cynical, but I really do wish I'd read someone on this very subreddit who said the brutal truth when I was choosing between a full ride at a state school and this, and made 100% the wrong decision.
Edit: And just for the record, this is for finance. For prelaw or premed, where the main point of undergrad is admission to grad school it makes WAY less sense because the competition to get a high GPA is detrimental. Med and law schools may give a slight bonus to elite schools, though this is very much in debate, but NOWHERE NEAR enough to justify the far greater competition for GPA, which is what med and law schools care about, to say nothing of the cost!
Edit 2: I want to be clear I didn't find Penn generally unpleasent or anything like that. It's just very apparent most people are there, rightly, with a strong sense in mind to get ops that will ultimately result in money. I did have friends I genuinely liked, and activities I enjoyed, of course I would have anywhere but I really didn't hate Penn- just wish I'd realized the true seriousness of what a financial investment it was."
What are my thoughts? Some addy poppin Ivy schmuck just learned about NPV and now can’t go 5 sentences without mentioning it
I think you missed an absolute massive point:
Someone may go into IB because they are intrested in it and they want too
yeah keep telling yourself that when you're formatting logos at 3am on your third all-nighter of the week
lmaooooo, nobody goes into IB because they like the work. or I guess more accurately, after the first six months, nobody likes IB anymore
I’d definitely go into tech over finance if I had a do over
You can always switch. I know someone who did a few years at MBB, Corp Strategy at a startup, then went through the same software engineering program I went through, and landed a job at a top tier company making ~$400k all in (and it’s a public company so the stocks are actually liquid).
They did a bootcamp and their first job as a SWE was at 400k?
No way.. I don't believe that
I think the post is bullshit, on the U/Penn subreddit they basically got put back in their place...
I don’t mean to sound insensitive but who are these parents who make too much to qualify for financial aid but still don’t provide any support to their child? Especially when they raise that kid in a such a way where they get into Ivy League schools from presumably public high schools. My assumption is that these people are vanishingly rare but I keep seeing these sorts of posts here.
Kids graduating college today were born in in like 1999 or 2000 - it’s just shocking to me that someone who has had a decent paying job at some point after 2000 didn’t save money for their kid’s college fund. Cutting down this kid’s debt by $100k would be huge. Again I don’t want to sound insensitive as that’s a decent chunk of change but putting some money away 15 years ago gets you there a lot easier than you might think.
For whatever reason, every student I've interviewed and who's got accepted fits in the profile that you described (parents make too much to qualify for financial aid but are not able to provide support to their children). It's much more common than you think and I would say 30-40% of Penn undergrad fits this profile.
A family will not qualify for any financial aid if they make 250k and have a million dollars of assets outside their primary home, period. This is roughly the top 90th - 98th percentile of families in the USA. Most of the ivy league applicants/students come from this upper middle class background range. How could a family justify paying 400k for an education when they only have a million or two saved up and a 250k-300k income? There's just so many more of these families than those in the top 1% who can justify paying 400k for an undergrad education without worrying.
I don't know how common it is for these kids' families to own small businesses, but mine did.
Family business has 400k assets, 300k in debt. Family makes 100k on paper, father got a 20k distribution as an officer who works IB-type hours as a trucker.
Brown wanted me to pay 40k+/year because they considered the assets as our families' but not the debt. If we didn't own the small business, which classifies as a pass-through entity, then we would've qualified for full tuition.
This is probably more common than people think because success of family is the biggest determinant of a student's success; if their family isn't rich, their family at least is successful in a practical sense most of the time.
Worked my way up anyways. If any prospect is reading this, don't go into debt like that. Go to a good state school as long as you have a plan to stand out (there are usually programs/workshops).
Went to Penn. All fair points and largely agree with the post. 70-80% of the class would have had a similar outcome if they had went to a state school. But for the cream of the crop, the Penn brand helps and can put you at another level.
For the alumni in their 40s and 50s, there's a couple billionaires in each Wharton undergrad class, I would estimate maybe 3 per class (you won't see some on forbes) for the classes 1980-2000 who are self made. Good number more who are in the 9 figure range. Considering each wharton undergrad class has about 600 students, thats pretty decent odds of becoming a billionaire or a Centi-millionaire....
I believe a successful person will find success anywhere, regardless of which school they attend school (or even if they go to school). However, its so much more easier to raise for your startup, hedge fund, PE firm, or whatever as many LPs/investors went to Penn or an ivy also.
For all the "democratization" in tech, I still see the startups with Ivy/Stanford founders raising the most money (despite copying another startup's idea.)
Interesting post, I'll bite. As someone who applied to Wharton from Canada back in the day (and was rejected), I'm so, so, so happy that I didn't go there or any other tier 1 schools in the US that I crapshot. Reasons?
1. Crushing student debt (mentioned in the post already): I knew what I was going into and the crazy tuition amount, but what I didn't know was that even if you can get some scholarships, or internships to offset your debt - it would still pale compared to the amount of money that you have to pay. On top of that, competing against the best and brightest students in the world (or something like that) would make it really difficult for the average student to get good scholarships or good internships at companies you like/ that have good prospects. We can assume that we're going to be that average student, which means that you're essentially not going to pay off your debt any time soon. Even if hypothetically your parents are rich enough to pay for you with no expectations of any returns - what next? You still have to find internships on your own, study on your own, compete on your own, and then figure out what you want to do full time. If you can do that, great - but most students would probably not be in that situation and will have your parents' expectations in exchange for the financial assistance (even if they don't say it to you) and some financial stress at the back of everyone's minds in the family. Thus, there's a strong argument for something else to be done with that 240K (like investing it).
2. Return on investment: Yes, this is debatable and the Reddit post talks about this, but I think another way to frame it is simply - is spending 240K or however much money and going to Wharton (or any other tier 1 school) the best decision you can make? It's a hard question to answer for an 18 year old and I would have personally said "Yes" back then (not that my answer mattered since I didn't make it in). However, "It depends/ not really, no" is the answer I would give knowing what I know now.
Tech case: I went to a university that's specialized in CS. Suppose you went to Waterloo, 6 co-ops (internships) of 4 months each. If you're slightly above average you should be able to get a place at FANGS by the time you're full time. You paid say around 7K per term*8 terms = 56K in tuition (https://uwaterloo.ca/finance/fee-schedule-canadianpermanent-resident-un…). However, in each of the 6 co-ops you would average say 35/ hour on the low side, high is ~50/ hour averaged across all 6 co-ops (https://uwaterloo.ca/co-operative-education/about-co-op/co-op-earnings). $35*40 hours per week*52 weeks /3 (for 4 month co-op) = 24K roughly speaking. Not only will you graduate essentially debt free from all your co-op earnings (talking purely tuition, not including personal expenses, rent .. etc.), but you'll have a great resume, and you're already at your "exit" pretty much, making close to 200K pretax USD. If you're exceptional you'd be at Citadel/ doing quant trading and making a lot more, probably 300K-400K USD pretax. Then, let's say tax is about 50% non-progressive rate to keep it simple:
Tuition cost: -56K
Co-op earnings total: 24K*6 = 144K pretax, say taxes around 30% on the individual co-op term earnings of 24K, so 16K left*6 terms = 96K after tax.
Out of university not including any other expenses you'd have made a gain of about 40K.
Full time salary: 100-200K after tax using 50% tax rate, recurring cash flow YoY (until IT saturates/ something horrible happens).
I know multiple friends who have done this, and man is life good. But they also suffer a bit from lifestyle creep, so it's entirely dependent on how much you watch your wallet. Also living in NYC/ tier 1 cities and having expenses here and there will probably cut your total net gains/ savings by another 50%, which puts us down to 50-100K after tax recurring cash flow YoY with no debt. This is still better than -240K debt with salary of 100K+ right out of college but HCOL city and tax, putting you at closer to 50K net after tax recurring cash flow YoY.
IB case: Again, suppose you went to Waterloo. This time around you did AFM (the only business-y program) instead of CS/ soft eng/ something related, or Laurier Math/CS double degree or even their BBA if you're super strong. You do your co-ops, and maybe get a solid IB position third co-op (4-5 in total instead of 6 for the business programs) at a Big 5 bank or a satellite EB in Canada. I've seen strong candidates do this, it's definitely possible but pretty damn hard. You don't graduate debt free but you come fairly close. Tuition would be at 10K*8 = 80K, more expensive than the tech tuition. Earnings would vary, but say average $60K co-op finance/ IB salary total (hourly data doesn't work here, we'd be working 80 hours and getting paid the same salary)/3 (for 4 month co-op) = 20K roughly speaking.
Tuition cost: -80K
Co-op earnings total: 20K*4 = 80K pretax, say taxes around 20% on the individual co-op term earnings of 20K (lower tax bracket so lower rate), so 16K left*4 terms = 64K after tax.
Out of university not including any other expenses you'd have made a loss of about 16K not including any other expense, which isn't horrible.
Full time salary: 100K + bonus (50%? of base). => 150K pretax, say 40% off of this so 90K left. If you live downtown Toronto that's also going to cost you, so 2K*12 = 24K gone, giving you 66K leftover after year 1. However, your year 2 onward salary would increase because of bigger base and bonus as associate, but it wouldn't increase significantly for the next 2 years until you make VP or jump to PE or AM. 3-year exit I can see 150K base + bonus, which after tax would give you 100K. However, from a debt perspective you'd be in the green after your first year, vs needing to take 2-3 years to pay off your debt if you had gone to a tier 1 school with 240K in debt. Consulting would probably be very similar to this case.
If you're looking at the US, there's really just a couple changes but the overall idea remains the same: 1. you would not have co-ops but internships, and probably fewer so it's harder to pay off all your debt at once, there's good opportunities but you'll need to work on it alone more (like the UofT/ Western internship model vs the Waterloo co-op model) 2. you can still go to a target/ semi-target instead of a prestigious school to save money, and then network/ work hard to get whatever role you want to get, be it tech, IB, consulting, finance, or something else. 3. international tuition is double the domestic for non-Canadian-PR students
3. Future prospects: Reputation does matter, but when all candidates I'm interviewing are from Penn MBB consulting/ IB/ whatever industry in strategy/ finance, how are you any different than everyone else? The competitiveness does not change, and the industry will just become more and more saturated every passing year. You still need to figure out ways to differentiate yourself from your peers/ the competition. At some point the reputation is eroded by the saturation/ competition, and you'll need to learn a new skill/ many new skills to differentiate yourself. At the end of the day, the ROI of learning a new skill to differentiate yourself is most probably going to be higher than the ROI of prestige past a certain point.
Side comment: based on what we see above, business is a lot of BS, and tech helps a lot with class mobility based on our discussion here with the lower cost + higher reward (for now).
^Everything above is an illustration of what I personally think so let me know if I made a mistake somewhere. Happy to hear what others' thoughts are.
1) If you're bright enough to get into a school like UPenn, 99% of the time you are NOT paying the sticker price. The financial aid these top, private institutions provide to their students are some of the best. Who the hell is taking out $100k+ for student loans in undergrad, is that even allowed, lol? I feel like people over-inflate this number to make their case, for whatever reason.
2) "Just go into tech, bro." I hate this echo-box so so so much. Please take a look at a respectable computer science curriculum (especially the mathematics) and ask yourself honestly if you have the inclination and passion to pursue it. People on this forum complain non-stop about dealing with menial tasks like formatting pitch-decks, editing PPTs, etc. Have fun de-bugging and writing code, you literally wouldn't last a day.
3) "Just use that tuition money to invest in the stock-market." Investing is always great, but if you forfeit the opportunity to attend a school like Wharton and go to a significantly less ranked institution just to invest the extra money you think you're saving (I'll get to this in a second) then I really hope you ain't picking your stocks because that's some seriously terrible rationale. Also, nothing is guaranteed, your money can be stagnant for a decade, we've been in a expansion cycle for quite a while now, don't assume that money is going to be banging out 25%+ YoY; also don't forget about taxes and inflation. Everyone is comfratable with the idea of being a long-term investor until the market takes a down-turn; reminds me of the $TQQQ euphoria which magically came to a halt as of the last few weeks. You need an insanely long time horizon when it comes to this. Why base a 40-50 year decision off a 4 year one?
4) Going off the previous point, your career/salary trajectory and opportunities coming from a highly ranked institution blows others out of the water. There's no need to calculate NPV, IRR, etc. Just ask yourself, would you rather be making $150k out of college in a high end investment banking gig or $70-80k working an entry level financial analyst gig (No, FA is a great role and 70-80k is a great salary for a 21 year old, put your pitch-forks down). Don't forget you have tons of mobility as an Ivy league student if you decide finance isn't for you, there are literally History majors from Harvard working on M&A and S&T desks.
I appreciate this post, though, because being 18 and deciding on college/major/money/career is not easy, I don't miss that stage one bit. I'll say my POV is coming from someone who took the echo-box of saving money too seriously and went to a lower-ranked school and regret it; who gives a damn if you saved a few 10K. If you have the motivation and inclination to succeed at a top college (which you most likely do if you got in), then just go to it. The connections you make with classmates and peers around you alone that you drink beers with on the weekend are going to get your much further in life than people at an SEC school.
I will never take anyone with a HYPWS degree telling someone else not to get one seriously. If it was that much of a wasted investment they would’ve dropped out midway through and went to that state school that’s such a better trade off. Please.
https://freopp.org/is-college-worth-it-a-comprehensive-return-on-invest…
Penn's finance program has the second highest ROI, 4.35 MILLION, out of any college and major combination in the US, second only to CS at Caltech I doubt you can that kind of money by going to whatever college gives you a full ride. But I'm not an expert by any means.
lol based on the "just invest your tuition in an index fund" line I'm like 99% sure I know who this is. This guy's a senior who didn't get a return offer from Google (his fault entirely) and got into a huge argument with a wharton kid last friday. He's always been super insecure especially about not getting into M&T and now he's screwed for full time, so not surprised that he's crusading against penn/finance
The bigger problem is the boomers allowing college to get so expensive. Duke was $4,230 in 1980 or an inflation adjusted $14,759. Today it’s over 60k. Why are we paying 4x more?
https://library.duke.edu/rubenstein/uarchives/history/articles/statisti…
Trustees have done a shit job of prioritizing something hugely important to today’s students which is keeping costs down. No one needs 5,000 deans, deanlets and assistant vice provosts.
I think you are missing the point of an elite education it is not about the grades you make but the hands you shake and the name recognition. I did not grow up rich by any stretch. I went to an Ivy (not HYP) because they gave me the most money otherwise I would have gone to a state school with instate tuition. I was stupid and double majored in a hard sciences because everyone told me not to major in a liberal art.
I shit you not graduated with a perfect 2.0 from undergrad. There is some context and why my grades declined which some of it was my fault and some of it was I should have been taking 18 hours a semester. I knew I wanted nothing to do with my major but I was too deep in to change. I had done an internship at a PE firm for a year and a half (Had a friend of mine talk about his PE internship and saw an internship on our career board and applied. I went to that interview and I bs'ed like a mofo) and applied to T3 Master of Finance and I still got accepted right out of undergrad with an awful GPA. My grades in my MSF where a lot higher. I still got a job right out of my MSF at MBB. The reason I was able to do these things was the name on the degree and the major. I majored in a hard science at an Ivy. Had I gone to a state school and had a 2.0 I could not have gotten a job at Burger King regardless of the major.
I told my partner at my MBB that I had a perfect 2.0 in college after I was hired and he did not believe me. He broke out laughing after I showed him and he gave me a high five and said that's the coolest shit he has ever seen.