Does anything pay better than finance?
If we looked at jobs purely for monetary purposes, does anything beat out finance?
Engineers/hard science professions usually don't earn that much starting out and their salaries don't grow that much. Engineers with 15 years of experience could only be earning 150-200k. Heck, auditors probably earn more than many engineers. In medicine, you start working in your early 30s and very rarely do you break mid-six figures unless you're in a very competitive field (cardiologists for example).
If you work in IB, you start out making 6 figures and then once you're in your mid-30s you could be making millions as an MD or go the PE route and potentially earn more. This is extremely rare for any job except for Biglaw and top software engineers but neither of these pay more than finance in general. They pay equal to or slightly lower.
So is finance the highest you could go from a purely earning perspective.
This is such a WSO-type question
I'm genuinely curious, wondering what other career paths could lead to the same income as finance.
Technically, all of them. Rise to the top, entrepreneur it up, and target IBD level income. Not easy, but it’s technically possible in nearly every career out there.
The problem I have with this thread is, people should already know this. But we don’t because for some reason most people seem to expect that it’s structurally correct that a small handful of companies get to be billion dollar behemoths, leverage all market power, and there are few to no smaller players.
In actuality the world might function better on the consumer level if there was more parity across the board and a higher number of competitive players.
And, the fact that the main concern, at least on this board, is marginal pay, it’s distirbing. I don’t see enough interest in a field, and instead the focus is all on getting out of debt and making enough to not have to worry, which is only in the marginal pay increase from one field to the next.
In short, it’s disturbing that the world, this country, is set up so that even the middle class is struggling to feel sufficient under the mountain of net negative payments, especially when we’re living in some of the richest times in history.
senior software/hardware engineer at apple/facebook/google could hit 400k-500k after about 10 years...and then you either hit a comfortable ceiling...or you start a startup and try to get some VC money.
*not everybody is smart enough to be able to be a senior software engineer at these firms...and they are more selective than wall street (for good reason....they are "smarter"...but they make less money....so you could argue if they are really smarter...)
alas...these positions do not pay better than wall street front office...they should, because they are actually creating things of value...but they don't
new grads at those companies make $150k in total comp.
source: I interviewed at one and have friends in that world
The only reason we have companies the likes of FAANG is because of wall street front office. How is a debt or equity issuance or M&A not adding value? Providing companies with the means to grow absolutely adds value...
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IB is just a middle-man to the ultimate goal (e.g. issuing debt/equity, acquiring or being acquired by another company, etc.). You don't make the deal possible, you facilitate it, due to the inherent complexity of such transactions and, not insignificantly, due to SEC regs regarding how securities can be marketed and sold to the general public. And to the extent you can rely on the Fed as a final backstop if things go south, the bank's not even taking on real risk (unlike the tech company clients, who I doubt are considered TBTF by the government).
You may be "adding value" in the context of the current regulatory environment, which makes things needlessly costly and complex, but deals would still get done bilaterally if IB didn't exist.
Physicians break 6 figures in their sleep. Their fucking nurses break 6 figures a few years into the gig. Are you retarded?
MID-six-figures. Learn to read properly before calling people retarded it makes you look bad.
Physicians in private practice can make 7 figures easy. Forget the 300-400K, top physicians (and surgeons) make $1-2 mill easy.
If something did pay better, is that what you would pursue? Why?
Life Pro Tip: if you tie your self-worth to your net-worth, you're in for a hurting.
So, try to break down pay in others ways rather than a lump sum. Pay for hour? Finance is a joke. Friends of mine in IB UK make £50K working 100 hour weeks. Let's say you do 47 weeks of work (5 weeks off in Europe).
$50K/47wk = £1064/wk
£1064/100hrs =£10.6/hr.
Sure, you can be proud of your bigger lump some than most professions but I can guarantee that you're getting that kind of money because you're working like a dog.
Yeah exactly.
There are many ways to skin a cat.
If you look at just the business world there are paths to make $300k+ in any of these:
corporate management, finance, professional services (corporate law, consulting, big accounting, financial advisory, lobbying), entrepreneurship (real entrepreneurship not starting a private practice or contracting or small business but even in those it's possible), sales (headhunting, luxury goods, med/tech/pharma etc)
In the skilled/technical side:
software engineering, quantitative jobs (data science, analytics, economics, etc), design, film/media, academia and industry R&D etc..
On the "servicing people" side:
healthcare (medicine, dentistry), sales (e.g. used cars, insurance, investment advice, residential real estate etc), etc.
There are people making a lot of money in a HUGE array of jobs. Does that mean everyone is qualified or able to make that type of money? No.
Finance is just one field of many with its own barriers to entry and survivorship bias.
"Servicing People"
Nice
An important factor is also how difficult it is to reach those high-paying jobs.
If you're aiming for MD / Director / Partner in finance, you (in most cases) need to:
Then maybe, just maybe, you have a shot at MD.
And congrats, by the time you're MD (30's), you're earning mid 6 figures, probably in the highest COL areas in the world.
So while you're getting compensated, the chances of getting there are not good. And it's inherently a risky business, so who knows how long one lasts?
Compare that to dentistry (or something similar), where you work 7 hours a day, never run out of customers, and can set up shop pretty much anywhere you want.
This is completely inaccurate.
First of all, MDs earn far more than mid-six figures. Their base is most likely in the mid-six figures but finance is all about the bonuses. MDs at BBs or EBs earn in the seven figures.
Second, that whole list you made applies anywhere. Every job requires you to excel academically, work hard and engage in office politics (minus office politics if you're in entrepreneurship). You think dentists don't work hard to get their client base? Also, landing in the correct division or group doesn't impact your ability to make MD. And if you had the ability to get into a BB, chances are getting into a business school isn't on your list of worries.
Third, NYC isn't the highest COL in the world, don't even think it's in the top 10. Also, high COL isn't only an issue for people in finance. The legal world is in NYC, the tech world is in SF, the entertainment world is in LA. etc.
Fourth, IB isn't as risky as any other job in professional services. If you're bringing in clients you'll have a spot in your firm just like law, consulting, and pretty much any other job on the planet. In the finance world, IB isn't close to considered "risky business", if we were talking about hedge funds, then it'd be different.
Lastly, your whole last paragraph reeks of naivety. "Just become a dentist, work 7 hours a day and earn mid-six figures" far easier said than done. First of all, running your own practice is pretty risky contrary to how you describe it. In fact, private dentistry practices are declining because of all the practices that are opening. Many dentists are also in the negative when they first start their business so if it doesn't take off, they have to worry about repaying their debt, many don't even start making a profit until a few years after they open and that's only breaking even. You think everyone who opens a dentistry practice gets a full book of clients right off the bat? Also, how many dentists are earning the same amount of money as an MD? The answer is in the decimals.
Not hating on dentists, just saying that each job takes an amount of effort to get there and I wouldn't say becoming an IB MD and opening a successful dentistry practice, working 7 hours a day and earning mid-six-figure are far off from each other. If it was easy then everyone would be rich.
You missed my whole point. What are the chances of someone becoming a top MD at a top WS firm, versus becoming a dentist (or any other high-paying "regular" profession). The things you have to do to become a MD, versus becoming a dentist (working for someone else) isn't even on the same fucking scale.
Let's take Goldman Sachs, for example. 7% of their employees are managing directors - of those, around 65% started out as analysts or associates at the same firm - point us, you really have to be the best of the best to float up there, and it takes a lot more than just hard work. "Yeah but top talent goes other places too", sure, but the ratio still stands wherever you go - there's just a finite number of spots, and the majority will never reach those.
What happens with all the 40-something bankers that didn't get promoted to the top? They continue making a good salary, but not anywhere near as good as the top. And guess what, they may have worked just as hard as those reaching MD.
A lot of (young) people on this forum seem to believe that if you get into banking, you're destined for a top job if you just follow the road map laid out - and somewhere down the road you'll somehow make your mid 6-figures.
So with that in mind, young people / students should absolutely also consider other careers, that will pay comparably well in the long run, but without the added risk, and sacrificing your life to your job.
Let me just hammer this in one last time: There are (Absolutely) well-paying jobs out there that don't require the amount of dedication that top banking does - yes, the reward might be lower, but so is the risk. Discussing high-compensated jobs / careers without mentioning risk is a waste of time.
You should never pursue a line of work purely for monetary gain as you'll never come close to making as much as you can doing something you're passionate about.
When I fell into entrepreneurship/private equity I never did it for the money and I'm netting out low 7 figures at 25 now. My close partners and anyone else I know that's making great money young never did it for the money either. Yeah, it's nice, but you'll burn out way before you start doing well if you do it for nothing but raw cash.
FWIW, I work just as hard as when I was bleeding money and barely making anything as I do now and the only difference is that I have the opportunity to work along brilliant people and outsource all the work I used to hate doing to employees.
Shit like accounting/legal I no longer have to get overly tactical on which is nice. I remember sitting around putting together contracts because I couldn't afford a lawyer...do not miss that one bit...
The thing that pays the best is building a platform. Doesn’t matter if it’s in engineering finance pe etc. The mega rich built platforms.
Microsoft Facebook are platforms. Citadel is a platform other people trade on. Outcome Health before it was exposed for fraud gave the founder a 3.3 billion net worth in his early 30’s. Platform.
Basically build something others can build on. But it’s not an easy game.
Apples to apples? I wouldn't say entering finance is more lucrative than entering engineering when you control for everything.
Finance (I assume we mean the upper end of it . . IB, S&T etc) only recruits top students at good schools. So to compare, you should narrow the pool of engineers to a similar group. That alone narrows the pay gap significantly . . would be surprised if GS is paying that much more than Google to start.
Then you have to account for the fact that engineer promotions are probably a lot more likely. Goldman MD no doubt makes more than the comparable seniority at Google, but I bet a much higher % of Google entry-levels are able to get that promotion.
A fairer comparison is probably percentage based; if 5% of analysts wind up as MDs 10 years later, then take the Google entering class and see what the top 5% make 10 years later.
Also should be some accounting for hours, especially in this day with more and more lucrative outlets for free time (working on a startup or side hustle or whatever).
But it gets even more complicated because the upper end of finance become accessible to engineers later. Look at VC and growth equity partners, I bet you'll find almost as many former engineers as people who went the finance route.
I'll stop there but you get the point . . the more you control the more the gap shrinks. I'd actually bet engineering comes out ahead these days.
Criminals! Hackers, narcotics traffickers, etc...working 10 hours per week for high $7 figs...
Actually drug dealing is almost as overrated as finance when it comes to pay:
https://www.ted.com/talks/steven_levitt_analyzes_crack_economics?langua…
Lurker medical resident. The previous posters stating physicians can reasonably make 7 figures are full of shit. The official data used for negotiating is called MGMA and they have medians around 4-500 for surgical subspecialties, more for neurosurgeons, less for pediatricians. Only the rare exceptions make 7 figures and those are the guys who primarily have a good business sense but also work their asses off (or are high volume spine surgeons). I'm 27 and have excelled by all accounts but have a quarter-million in debt and make $60k for 80hr/wk. I'd rather be a plumber
Data Science, tons of really good jobs in many spaces like tech, business, finance, venture capital, etc. If you get the relevant programming skills [Python, R, etc.] you can really go far. You get a lot of respect in the industry and if you are someone who is about striking hot markets and opportunities then you basically write your own ticket.
Also on a side note, if you are past undergrad and don't feel like breaking in for graduate school for the skills you can self teach or find a boot camp for a heavily used language, learn how to program and the others ones come second nature. If you look hard enough you can even find some free ones...