IB vs Trades (Electrician)
I was deadset on a path for finance and am now reconsidering, hoping to get some advice. Am headed to a low semi-target school, was super passionate for finance and learned the path to IB, grinding out a 3.8 was my plan and being proactive outside of school as well. Have been doing landscaping work on the side and this year since I’ve had minimal success (working 10-20 hr’s a week for myself, at ~$35/hr), have started to consider pursuing a licensed trade like electrician which makes $80/hr after 4 yrs, $100/hr after 6. Seems like theres a growing demand for them too. I discredited trades for a long time but it seems like they are an incredible option to earn some money, or am I missing something?Compiled a list of pros/cons of each, and was hoping to get your guys’ opinions on this. I understand this isn’t what you guys normally talk about, but could really use your opinions. Thanks a lot.
Ib:
-Similar/worse money with WLB included
-college experience will cost me $100k all-in, but would be super fun, will make friends for life
-college would be also be a tough grind to get 3.8 gpa, internships, etc…, but will make me a better person
-am interested in finance, not necessarily doing bitchwork in ib though
Trades, specifically electrician (safest health, high earnings):
-allows me to continue landscaping side hustle (can try to expand, into hardscaping, plowing)
-$100/hr 60 hrs/week is $200k+ at 24 yrs old
-salary has potential to scale similar to IB if I successfully expand businesses and delegate work, $500k-$1m+ at
Electricians in rural areas generally do not make 100 dollars an hour at age 24 unless they own the business. The electricians that my dad hires are a part of a union, quite a bit more experience, and live in a high cost of living state and they don’t get anywhere close to that. Second off I wouldn’t say the work life balance is any better either. Everyone I know who does that kind of work has some sort of mandatory overtime. I think whoever told you that is trying to take advantage of you.
https://www.bls.gov/ooh/construction-and-extraction/electricians.htm
No, I would be starting my own business. Which I'd start 4 years in, getting my journeyman's license which will give me 50-70/hr and then 2 years later with my master's, I'll charge 80-100+/hr. I am hoping for my landscaping business to grow exponentially in those 5-6 years, at which point I will start delegating work to focus on a 60 hr/wk electrician business. The combined income would equal or be greater to an income in high finance, but with the benefit of creating my own schedule. The biggest drawback I can't get over would be missing out on the college experience, not as much the going out but just the lifelong friends I'll miss out on, which seems to be the majority of older people's circles as they age.
I think you're barking up the wrong tree, here. This site is not geared to people with entrepreneurial instincts. It's filled (not unreasonably) with college kids and recent grads who want to make a ton of money as soon as possible, and who are looking, whether or not they admit it, for a path to a high guaranteed income but not any kind of independence/independent wealth.
This is not a place to ask whether or not to take risk. The answer is almost always going to be no. That being said, if you enjoy the technical aspects of being an electrician, think you're capable of running your own business, and are willing to take some real risk along the way, you may do much better than you would in finance and you'll have more control over your life to boot.
“For entry-level electricians, the average annual base salary is $49,100, or $23.61 per hour.
For intermediate electricians with 2-4 years of experience, the average rises to $61,500, or $29.57 per hour.
At the senior level, defined as 4-6 years of experience, the average is $66,600, or $32.02 per hour.
For electrician supervisors, with 7 or more years of experience, the median is $96,800, or $46.54 per hour.”
Thats median as well, without taking into account business ownership or union.
“Electrical work is a growing field. According to the U.S. Bureau of Labor Statistics, electrician jobs are expected to grow by 9.1% from 2020 to 2030. This is higher than the 7.7% growth rate projected for all occupations.”
“Only 16.7% of high school and college students say they want to work in construction — compared to 76.5% who want to work in technology.”
“The U.S. Census reports that the median age of all electricians was 40.9 in 2021, the last year that data is available.”
Electricians demand is only going to rise, with it wages.
WLB in a trade is exponentially better than IB. When you have mandatory overtime in a trade, it means that you have to work 10-20 hours more than 40 hours/wk and that's almost never on the weekends (you get 1.75x time for weekends). Clock in at 8, clock out at 5 or 6.
Maybe in terms of hours alone. But people in trade jobs are actually out doing hard physical labor in the heat/cold for those hours. And they also have much less autonomy in their jobs, they must actually be working all that time whereas most white collar professionals just need to get their work done on a computer, and may not even need to go into an office.
Wtf is this post lol.
Do you want to work at the pinnacle of society and have the opportunity to break into any field--PE, HF, government, and least of which running any electrician/trade business to your heart's content--while networking with the future leaders of business, academia, technology, and government. Or do you want to mow lawns in some Midwest shithole for the rest of your life. Your choice.
Life is about freedom, chasing prestige (like you are) is anything but that.
Lol, do you not see “freedom” by your own words is clearly more feasible with IB?
You said the words yourself; you want freedom, then put your head down and work for a year, maybe two tops in IB and you just saved 5x what you would if you became an electrician. Annual compounding and investments should kick you off to a nice start just in time for recruiting to go work somewhere else that will set you up with a $200-250k all in (mindless) if not $500k+ going forward if you enjoy the work.
Your success in the other field is entirely fantasy driven. You said it yourself - “if and only if” you can “scale the business to 500k/1mm” like bro what lmao?
Of course you make a killing if you scale literally ANY career. Who makes decisions like that? Almost nobody. Because it doesn’t fucking happen, unless you have pen to paper and an actual plan / connections. Who throws away a sure thing as long as you keep your head down bc you figured you could make the same amount of money if you started a business and scaled it?
Lol. "Network with the future leaders of business, academia, technology, and government"? Where are you working? IB is numbingly boring, a grind to mental health, and provides little of value to society. The vast, vast majority of the people who work in it won't go on to be leaders in anything - you could just as easily argue that you'll network with lots of important people as an electrician as you repair their homes.
Banking isn't the pinnacle of society. It's a really good way to grind your way to a very comfortable lifestyle, if you're willing to always be at someone else's beck and call. OP may value his time more than you do and might be willing to sacrifice a few million dollars over the course of his career to keep control of it.
Hey man.
You have a good head on your shoulders, it's clear that you have a strong work ethic and a directly pragmatic lens on decision-making. It's also great that you have the trait of soliciting advice from others, never let that go.
The real thing to think about here is scale.
Your math on the trades is a bit optimistic but not too far off. Someone else pointed out how it takes awhile to earn the numbers you're bandying about, and the competition, the union aspect, and so on. One thing I don't see you mention is the longevity. You are not going to want to work 60 hours of manual labor at 40. Hell, at 30 you're going to feel it in your body.
The major advantage of white collar jobs is the return on your initial efforts you get. The scale of your income does not correlate linearly to hours worked. You work hard early on in a role like investment banking so that you can either progress vertically or get to a role in whatever flavor of investing most interests you. The further up the totem pole you get, the less you have to work to generate more income.
Then consider you get the benefit of access to the high-performing investment vehicles your firm ostensibly manages, because as an employee you can invest in the same funds your firm's investors are contributing to. This puts the person on this track yet farther ahead relative to their tradesperson analogue since one's earned money is generating better return.
Then consider the favorable tax treatment of that greater income (capital gains tax rate versus wage income or dividends -- though note that there's the qualified dividend designation which is attractive).
Yes, you can be an entrepreneur and hire a bigger roster to do the physical labor, but entrepreneurship is a ridiculous grind that is not for the faint of heart. The space you'd be operating in is also one that scales linearly: you can only bill for more hours by adding more workers.
Separately, there's the social capital aspect. There's nothing wrong with being a small business owner or tradesperson. At the same time, there's a reason college has been a dream in this country for generations. You better yourself by immersion in the unfamiliar. You meet new people entirely unlike yourself. You experience new ideas taught to you by people who've dedicated their life to specific topics. You (ideally) learn how to learn, which is an invaluable skill. You create an entirely different arc for your life story than you do by staying in your hometown.
This is what pains me when I see how the college process from admissions to graduation seems to have turned into so soulless a means to an end. It's "grinding", as you alluded to already. Get great grades because that helps you get the best internship because that helps you get the best job.
I argue you should take classes that will be experiences you'll never get again. Like a philosophy practicum where you sit with the same 15 kids for a semester talking about what you read. Yes, you can read for the rest of your life, but I'll tell you right now, as an adult you're gonna be hard pressed to find enough people willing or able to spend time in a group setting like that. Like a cultural studies (East Asian, or Latin American, or whatever) or art history or music theory or something that will strengthen the small flicker of an interest deep within you such that it can burn steadily through the rest of your life.
And all of this makes you an interesting person who's open to new people and ideas, comfortable interacting in unfamiliar settings, with a habit of exploration and practiced curiosity. That pays dividends for the rest of your life.
I posit that you're doing college in a way that deprives you of its real value. This is like sitting down for a tasting menu at a Michelin star restaurant, eating an amuse-bouche, grabbing six more of the same thing, and thinking about skipping the rest of the meal. No! You didn't get to any of the eight courses, man.
Either path you choose, I wish you the best. Keep it up.
OP has a totally different outlook I agree when it comes to the value of going to college. I view college as an experience to learn from the best professors in their industry and network with future high-performers / trust fund babies. What you could do is pursue investment banking for 2 years then decide to start your landscaping business. You may come across a different perspective or learn something new to dominate your industry.
ehh i think you are off on a few things so ill try to lay down what I see.
Electrician work:
-upper middle class salary
-much better mental health
-will cap potential if dont start own company
-physical health risk
IB work:
-much better money from the start with incomparable potential unless you start your own company
-much worse mental health
-opens doors for PE and HF roles you will also understand investing better and likely have ability to be an accredited investor
-"rich friends" you will meet influential people who could help you our your children in unexpected ways
-again stating much worse mental health lol
I don't have any data on this but just going off a hunch. I would be willing to bet that at 40 years old the average owner of an electric services business makes more than the average person that went the IB track. If you have a good head on your shoulders and also know the trades you can make an absolute fortune owning your own business. Your competition is not typically the person that was deciding between being an electrician and doing IB.
The money can be good in blue collar trades. The main downside is that the work is more physically demanding on your body than white collar work. Although from what I hear around here, IB can be rough on your health. I think the more important downside is who your network is gong to include and would you have anything in common with them.
I wouldn’t really associate electricians with hard work especially after you get your master electrician.
My entire family has been in the trades with the exception of myself. Here is my perspective:
- You’re annual earnings sound a little high, or put better, they ramp very rapidly. I would allow for some conservatism on your assumptions there.
- On the landscaping side: it’s going to be very difficult to operate both simultaneously. At best you’ll have a crew mowing and running cleanups/installing mulch, but I’d say forget about hardscaping. Maybe plowing work in the winter if your electrical work slows. The family friends we have who own landscaping companies don’t do any mowing themself - it’s the one thing they can outsource without having to run quality control. But they do have to step in for bum employees who bail, which is extremely common.
- Instead of landscaping I would pursue a side hustle of buying and/or renovating properties for sale or rent. More overlap with electrical work, can be lucrative in the long run. Lot of levers here to pull to make it work (buy/renovate/live in home with roommates until paid off, find outside partner with capital to fund your efforts etc)
- The trades are riddled with people who don’t care about education, have low energy & low motivation, no big picture drive and no understanding of financials. If you are these things then you will not make what you are estimating you make. If you are the opposite of these things and can develop some business chops you can go far in the trades.
- Didn’t see you mention it, but you need to factor in debt for college if that’s required to get you to school. If you are hampered with $200-300k of debt, you really need to break into a high earning field to offset that asap, so the pressure to land an IB role despite being at a non-target is higher in that scenario.
- You haven’t mentioned commercial vs. residential electrical work so that makes me wonder how well researched you are on the topic. There are important distinctions between the two so need to ensure you have deep understanding there.
- Starting and running a successful trade business should be priority number 1, but it is not easy and there is certainly material financial risk. That said, take a $8mm revenue trade business, assume 10% margin and you’re at $800k annual earnings as a sole owner before reinvesting in the business. You probably have 30 employees all in at that point (these are residential only data points I’m providing). Goal should be to scale, perhaps expand into adjacent trades (ex Hvac) and sell.
- There is a massive amount of consolidation going on in the trades, mostly on the commercial side and a lot of it executed by PE (there are a number of deals you can look at ex Wrench Group, ServiveLogic). You will undoubtedly face more competition from institutional backed operators. However, as a close family member always reminds me, it really only takes two guys and a truck to operate an HVAC business, so competition will always be fragmented in that regard in the trades.
I sometimes wish I became something like an electrician, seems like it's always going to be in demand so you can do your own things easily and the lifestyle seems amazing
Honestly, do a year or two in trades and see if you like it. Don’t completely write off finance/business (or whatever major you may discover an interest in). Find a quality community college and do your generals after trade school then transfer to a better school if you wish. The core business classes will help with establishing a business and can be done at night. Be wise with your money and you will graduate without drowning in debt. One of the wealthiest people I knew growing up was a plumber who took over a company that serviced commercial real estate. The rest were white collar professionals. Don’t think for a minute that being a successful tradesman doesn’t have any stress, I guarantee that it does. You’ve been given the right to life, liberty and pursuit of happiness. Go on your pursuit, you never know where you end up.
Our company developed a multifamily property last year. We work with an elevator engineer. Someone that basically specializes in elevator installations/repairs. We used his company which literally consists of him and his son. They doing quality work but theyre a small shop, but they contract with Kone and Schindler. The installation and mechanic fee they charged us was $241K. There is no material cost on their end...just labor. So him and his son pocketed that much for about 2 weeks worth of works. I spoke to him and he mentioned hes literally tired of making money. Theres a very small pool of people that do what he does, but because of that major firms keep coming to him. He got offered $440K for one month worth of work in Dubai and turned it down because he didnt feel like being away from him wife. He mentioned he was looking to retire and have his son take over because he is simply just exhausted. At this point this guy is turning down millions a year because he wants to take it easy.
Often times, people on this forum look down upon these professions, but I'll tell you they are the future. We do GC work ourselves on deals and we cannot find qualified labor, but if I put an ad out on indeed for an analyst, I get 20 resumes in a day from decent applicants. So to the OP, more power to you man, nothing wrong with these professions, I respect anybody in them.
That's wild
I know people not quite as successful as this, though similar, but college kids will almost never believe it
Go the trades route. Finance is overrated. “Prestige” is overrated. If you’re not attractive it doesn’t matter if you are in “high finance” you will literally just work yourself to death with little no happiness. Trades it is
Tons of MD's are regulars at the rippers.
Seems like you could always go back and become an electrician if that's what u want. Pursue what is going to make you happy, but don't discount the value of college. Also keep in mind the difference between manual labor and working on a computer, what that means for your health long term etc.
Starting this off by saying that the trades are needed in society and I don't look down upon them at all.
I'm surprised that people in this forum are perpetuating the myth that blue collar trade jobs pay just as much if not more than IB or other white collar jobs when they don't. Go to the BLS website and compare the wage data for any finance job (credit, real estate, FA's, investment banking) or even software engineering and compare them with the highest earning blue collar jobs. Finance and SWE pays more in all of them. Skilled trades may make more than college grads at first, but that's because they hit a ceiling very quickly and will not progress further.
https://www.bls.gov/oes/current/oessrcst.htm
Blue collar tradesman are generally insecure about their intelligence and earning capacity, so they just flat out lie or greatly exaggerate how much they earn like including 40 hours of overtime as their normal yearly earnings. Then they point to the guy who owns a successful business and will tell you that earning $500k-$1mm is normal in the trades when that is really the people owning their own business. Well meaning kids like OP get sucked into these lies and think they can make $200k at 24 with the trades and their "side hustle" or just run a multi million dollar business like it's nothing. Not to mention that the chance of career ending injuries in the trades are high and manual labor breaks down your body over time. There's a reason if you ask any tradesman (who doesn't own a successful business) over 40 what you should do, they will tell you to go to college.
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