By the time you are 40 - The long term finance career paths

I am interested in some statistics of the long term finance career path. What are your estimates?

(1) Among the first-year analyst class, the percentage of those who are still in finance at the age of 40.

(2) For those who went to PE after analyst years,by the age of 40, the percentage of those who became Partners or MDs, the percentage of those who are still in PE, and the median income.

(3) For those who went to HF, by the age of 40, the percentage of those who became PMs, the percentage of those who are still in HF, and and the median income.

(4) For those who stay in IB, by the age of 40, the percentage of those who became MDs, the percentage of those who are still in IB, and and the median income.

Comments (47)

Jan 19, 2013

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

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Jan 19, 2013
Oreos:

http://www.wallstreetoasis.com/blog/what-banker-ca...

Bankerella's data don't really have the information I am looking for.

Jan 19, 2013
HedgeKing:
Oreos:

http://www.wallstreetoasis.com/blog/what-banker-ca...

Bankerella's data don't really have the information I am looking for.

Well that's the best you're going to get sonny jim, next time i won't bother. jeeez some people.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

    • 3
Jan 19, 2013

I've always been curious about this, but I am skeptical that it would be possible to get hard data anywhere. The closest would be anecdotes from someone further along in their careers who has kept in touch with most of their banking class. Also any statistics derived over the last 20 years would not be as relevant for someone's chances today.

Jan 19, 2013
slowdive:

any statistics derived over the last 20 years would not be as relevant for someone's chances today.

I think this is a key point.

Jan 19, 2013

not sure about #2-4 but I believe #1 has been quoted around 3.50%

Jan 19, 2013

I think I speak for myself and many other banking aspirants when I say that I've always assumed life ends at 30 and therefore have never really thought beyond that point.

Jan 19, 2013
moneymogul:

I think I speak for myself and many other banking aspirants when I say that I've always assumed life ends at 30 and therefore have never really thought beyond that point.

AM seems to be the exception, where many actually stay long term and grow old. Maybe ER is too.

In term of the percentage of those who are 40 and still in it as a long term career, I think it goes like this:

AM, ER > non-M&A IB > M&A IB > PE > HF

But the short term payoff may be in exactly the reverse order. So there seems to be a negative correlation between the long term career and short term payoff.

My question then is this. Is the short term payoff actually the market's compensation for the risk premium of the long term career?

Jan 21, 2013
moneymogul:

I think I speak for myself and many other banking aspirants when I say that I've always assumed life ends at 30 and therefore have never really thought beyond that point.

Somehow I have the impression that many in WSO are youths who do not think about what they will be beyond 30, let alone 40.

Jan 21, 2013
HedgeKing:
moneymogul:

I think I speak for myself and many other banking aspirants when I say that I've always assumed life ends at 30 and therefore have never really thought beyond that point.

Somehow I have the impression that many in WSO are youths who do not think about what they will be beyond 30, let alone 40.

Even if one does think about where they will be when they are at age 40 when they are 21, they will almost certainly be wrong. Life happens, things change, and what you are concerned about changes.

At least 1/2 the people who start somewhere in finance either dislike it entirely or want to do something completely different within finance as they learn more through experience. Not to mention marriages, kids, health/medical situations, and deaths that can radically change your plans.

Jan 21, 2013

Nope, pretty common across Wall Street. Hit 40/45 and you're out the door. Jump into an industry, start a business, move to PWM, consulting, boutiques, MMs, etc. The ones that made a lot of money and saved it go golfing for 30-40 years.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

Jan 21, 2013

What you are describing is what I have seen as well. Working in this industry takes a toll on relationships and the body. I have seen grown men cry because they don't know their kids and their wife is banging somebody else. Think about how much stress you are exposed to on a weekly basis and then compound that over 20 years. A lot of people burnout and bounce to industry or teaching or golfing. Some people love the work and stay much later than their 40s. It would be pretty hard to deal with the stress if you have a modest lifestyle and enough money to retire; the golf course would look pretty damn nice.

Quid Spucatum Tauri Est? Illegitimi Non Carborundum.

Jan 21, 2013

Almost everyone I know on the hedge fund side is retired by 45. It is becoming increasingly common these days. Half the people I know at that age are retiring or have done so in the last 2 years. People make their money and GTFO.

Jan 21, 2013

If they stay in industry, they often go to smaller firms, but yeah, it's usuall make your money and GTFO

Is this a more recent cultural shift? My perception is that people tended to stay in industry longer in generations past.

Anyone?

Get busy living

Jan 21, 2013

It is a cultural shift. It's tougher to make money in general, the market is way up, regulatory scrutiny is increasing, and fees are decreasing. Now is a great time to retire if you have enough money.

Jan 21, 2013

I have it on good authority it's been that way since at least the early 90s

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

Jan 21, 2013
D M:

I have it on good authority it's been that way since at least the early 90s

That's true but it is getting worse. The avg retirement on the street has always been low but people are dropping out en masse now. I know at least 10 fund managers that have retired in the last 24 months, a few of them nine figures successful. Time to do something else.

Jan 21, 2013

Ah I gotcha. Damn that is a little crazy. I can't say I'm too surprised, lots of MDs/VPs can't have done particularly well during the crisis and they need places for the young guys to go.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

Jan 21, 2013

There was once a PDF file somewhere written by some guys from various bank explaining the lifestyle of bankers. It somewhere said that the people who didn't manage to exit by 40 are the ones going from bank to bank, on the spiral down from tier to tier, or sth along those lines. Does anyone know that text/file?

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

Jan 21, 2013

This is actually the file I was talking about. Talks about retiring in there, incl what I paraphrased.

2566651-Wall-Street-living.pdf

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

    • 1
Jan 21, 2013

Thanks for the share, SBed...

one thing is, if it's an illegal download, take it down :-p

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

Jan 21, 2013

Honestly, I have no idea if this is an illegal download or not. I dont think so though, but if anyone knows for sure, please let me know.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

Jan 21, 2013

Wow, great find!

Get busy living

Jan 21, 2013

;) SBs greatly appreciated ...

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

Jan 21, 2013

You do realize that the farther you go up the ladder there are fewer jobs at each step right?

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Jan 21, 2013

@Matrick

Lol Lehman and Bear are still on the lists - a bit dated but a decent guide.

Calm down.

Jan 21, 2013

Yeah, true. I think a lot of stuff is still applicable though. I agree though, slightly outdated...

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

Jan 21, 2013

This is something I have been wondering for a long time and I never had a good answer to. Do people actually retire in their 40s?

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Jan 21, 2013

I have asked this myself and here is the general sense I get in terms of a class of 100 analysts by years:

After analyst program / 5 years / 10 years+ (100 Analysts starting out)

After Analyst Program
25 - Hedge fund analyst
25 - Private Equity / Mezz / Private Investments
20 - Business School
10 - Business Development
10 - Associate promote
10 - Associate promote to another group (DCM, ECM, Industry Coverage)

5 Years Out
20 Hedge Fund - Many guys will leave for bschool, some will come from PE as a 'hybrid' - still tough to keep a role like this.
20 PE - Again interchange able as the MBA candidates might get a role or many just got out of their MBA programs and join a FoF or some role similar
5 - Associates promoted to VP - Again tough and many will eave
5 - Associated promoted and moved to another group (DCM to LevFin, etc)
30 - General industry - many will leave and do something entirely different and unrelated, tech startup, go back to motherland to start a businss, etc. Everyone has their own reasons but this is a very natural time to make a switch.
20 - Stay in finance but a different role such as IR, fund raising, corporate banking, Asset Management, management

10 years out
5 - Will remain in IB related role
10 - Will be partners or PMs at PE/HF
25 - Will continue to be in the finance industry
50 - God knows. They moved on with their lives and have nothing to do with finance.

Hope this helps.

    • 1
Jan 21, 2013

great post

Jan 21, 2013

nvm

Jan 21, 2013

+1 workerbee - very helpful response

To the starving man, beans are caviar

Jan 21, 2013

Managing Director

Jan 21, 2013

if you decide to stay after bschool, then it probably means you actually semi-love your job. You will stay in there until you get caught doing insider trading

Jan 21, 2013

become a partner, senior md, start your own shop, many options..

"too good to be true"

See my WSO Blog

Jan 21, 2013

Live in the Present. Focus on what needs to be done today. Live one day at a time. Only focus on what is the next step. As Analyst: move to Associate role. As Associate: move to VP role. Don't think too far ahead. The world is changing really fast as you also need to be ready to change along with it.

I only believe in a few things: 1) be good to those who love you and spend more time with them, 2) build your own power base with stakeholders: family, partner, mentors, peers, mentees, industry contacts, friends, 3) constantly expand your network and build quality relationship, 4) always update your skills and learn new ones, 5) stack sizable cash (1-2 years of expenses with no debt).

"I am the hero of the story. I don't need to be saved."

    • 2
Jan 21, 2013
Human:

Live in the Present. Focus on what needs to be done today. Live one day at a time. Only focus on what is the next step. As Analyst: move to Associate role. As Associate: move to VP role. Don't think too far ahead. The world is changing really fast as you also need to be ready to change along with it.

I only believe in a few things: 1) be good to those who love you and spend more time with them, 2) build your own power base with stakeholders: family, partner, mentors, peers, mentees, industry contacts, friends, 3) constantly expand your network and build quality relationship, 4) always update your skills and learn new ones, 5) stack sizable cash (1-2 years of expenses with no debt).

Very true, and my last SB+ to you sir!

From my personal observation (I'm a bit longer in the industry than most of the posters here), and lengthy discussions with colleagues, with time priorities change for many, and go exactly in the direction you mention. It is currently my case as well.

Focus on your life and quality time, family and "stakeholders", your interests + opportunities, making a decent living and your priorities (e.g. a load of cash, if this is your goal).

You should always aspire to make more out of your life (including career/activity), which is good and tackle it with drive and energy. Avoid stubbornly fixating in a specific "career/position" or worse envy anyone, as it can only yield to frustration.

Now to OPs question in a simple example: the successful entrepreneur is looked upon by the start-up guy, the start-up guy is looked upon by the PE guy, the PE guy is looked upon by the I-banker, the i-banker is looked upon by the corporate banker, the corporate banker is looked upon by the retail banker and so on...

[Edit: By no means I'm suggesting everyone should follow this path, or be an entrepreneur -ths is just an example and a thought-. Walk your path aspiring to have a genuine notion of why you are doing what you are doing, and aspinring for something better for YOU, not for the sake of the "traditional" path]

Jan 21, 2013

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How many times does this have to be explained?

    • 2
Best Response
Jan 21, 2013

Yeah, as someone who has been around the industry for a while and is older than most of the posters here, I can tell you that:

1) Go to target
2) Break in
3) Go to b-school
4) ???
5) Profit

is patently false. There are plenty of washouts both before and after business school, including people from TOP targets (it's kinda gay when people capitalize top like that).

The real path is this:

1) Break in any way possible
2) Learn to invest, whether HF / PE / AM
3) Profit

That's it. It doesn't matter where you went to school or what you studied as long as you break in. Some paths are easier than others, but once you're in, all that matters is making money. If you can consistently make money, people will throw money at you and you can do just about anything you want. You have to love the work to get to that level. If you can't make money, then you're not going to do well regardless of the degrees. In baseball terms, some people can hit a 100 mph fastball and some can't, that's just the way it is.

    • 3
Jan 21, 2013

To answer the question though, a lot of people who are successful retire at 35 or 40 and do other things. Those who truly have a passion for the work keep churning, often mentoring up and comers while they themselves make huge stacks of cash. After a certain point, maybe $20 million or whatever your number is, you do it because you love it, not because you can realistically use more money.

Jan 21, 2013

I spent 10 years in banking more or less going straight through (first 2 years were something different). I am now leaving to start a company.

A few of my friends that feel like the have peaked at their PE funds (logjam of more senior people ahead of them taking all of the carry) have left to join portfolio companies as the CFO/Head of Corp Dev/Head of Biz Dev. For a high profile version of this exit, take a look at the CEO of Vail Resorts.

Another friend who want banking -> HF -> co-founding another hedge fund as a junior partner is now founding his own HF.

The general trend as you move forward in your career at a more senior level is to take on a role where you can be in charge and help run things/make the important decisions.

Jan 21, 2013

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Jan 21, 2013
Jan 21, 2013