Large Paycut Worth It?

Associate 1 in S&T - FI

Hi all,

Is it worth taking a $110k paycut to leave S&T and pursue dream job (niche part of consulting)? I am 25 and have lost all interest in s&t. This new job pays lower but has more career upside for me. Alternative is going to b-school and trying to switch that way.

Comments (51)

Jun 23, 2020

Depends on how much it will affect your lifestyle and how much will this paycut hurt you in the long run (if you have any mortgage loan, education debt, etc.).

Jun 23, 2020

Yes - go sign the offer. You can go back to B-school if your dream job goes south.

Most Helpful
Jun 23, 2020

You just answered yourself - dream job. If it's really your dream job, do it. You'll make $$ in anything you love, in the long run. And if it's a little less $$, you will still likely find yourself very happy if you're simply enjoying life.

Think about staying at S&T if you are bored...it's like jail. So many people get stuck in jail because they have financial obligations. You're not at that stage yet.

Try it - you'll find a way back to S&T if you really ever need to -

Good luck, keep us posted

  • Associate 1 in S&T - FI
Jun 23, 2020

I am gonna walk that back a bit and say that the job will ** much better position me** to get to my dream career. I eventually want to start my own non-profit, and this would be a social sector strategy consulting job.

Jun 25, 2020

Bridgespan Group? Been eying the firm as well

Show me the incentive and I'll show you the outcome.

Jun 23, 2020

The pay cut matters way less than what it will leave you net. If you're going from roughly $200k to $100k, that's a lot easier than going from $140k to $40k

  • Associate 1 in S&T - FI
Jun 23, 2020

the cut would be from about 165k to 55k

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Funniest
Jun 23, 2020
Associate 1 in S&amp;T - <span class=keyword_link><a href=/finance-dictionary/what-is-fixed-income-FI rel=nofollow><abbr title=fixed income>FI</abbr></a></span>:

the cut would be from about 165k to 55k

Reading that almost gave me a heart attack.

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Jun 23, 2020

jesus

Jun 23, 2020
Associate 1 in S&amp;T - FI:

the cut would be from about 165k to 55k

That's pretty damn painful, man. Don't know if I could pull the trigger on that.

But, if you know you hate what you're doing, and you know the opportunity is actually your dream job and not just you thinking the grass in greener because you hate what you're doing - then there's more to life than money.

Jun 23, 2020

Definitely not worth it. Can you give us more info on what kind of consulting?

On 55k in NYC you will barely be able to afford an apartment that is very deep in Queens, on top of having around 3 roomates.

Having a passion is fine, but living day by day and barely making ends meet will take its toll. I know so many passionate artists and they're jaded as hell. All they talk about is not making enough money, they can never go out to eat because they can't afford it, can't have hobbies bc of no money, etc.

Going from your salary to 55k is going to be a tremendous lifestyle, and I strongly advise you not to do it.

Array

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Jun 23, 2020

What the hell kind of niche consulting pays 55k? Don't McKinsey analysts make like 100k out of undergrad?

  • VP in IB - Ind
Jun 23, 2020

Going to try to put this into context for you. You could work for 4 more months at your current job, then quit working the rest of the year (8 months) to pursue non-profit whatever volunteerism and come out at the same salary. Similarly, you could work for 1 more year and then take 2 more years off completely and come out with the same $.

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  • Analyst 3+ in RE - Comm
Jun 24, 2020

Maybe change your dream lol

Jun 23, 2020

why are S&T lumped together? aren't they like completely different jobs, skillsets, and more or less industries?

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

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Jun 23, 2020

Sales directly helps traders generate volume (aka trades).

Jun 23, 2020
BobTheBaker:

Sales directly helps traders generate volume (aka trades).

ok that makes sense. thanks. but as far as like "i do this for a living" or "i do that for a living" they're just entirely different things aren't they? isn't that like lumping construction and brokerage together?

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

  • Analyst 3+ in HF - Other
Jun 23, 2020

I once took a pay cut from 170k to 70k and I couldn't have been happier about it. However, my lifestyle only requires 50k and I was leaving for an opportunity with more upward potential and a less toxic environment.

The answer is very situational based. So it may not work for you.

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Jun 23, 2020

Even as an Associate, isnt 165k on the low end on S&T - if you are at a BB.
Thats usually A2 figures.

Array

Jun 23, 2020

In S&T, associates are the the equivalent of banking analysts

Array

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  • Incoming Analyst in IB - Gen
Jun 23, 2020

nope

Jun 24, 2020

If OP is going into the second Associate's year, then all in should be ~220k

Array

Jun 23, 2020

Sounds like you're leaving S&T either way. So the question is whether to take your dream job now or go to b-school first and invest $400-500k including lost income so you can acquire that dream job. Doesn't seem hard.

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Jun 23, 2020

"the cut would be from about 165k to 55k"

You could start your own nonprofit consulting firm, pay someone else $55k per year to do exactly this job, and still make $110k, rather than take the paycut yourself.

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Jun 24, 2020

Arbitrage.

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Jun 23, 2020

Assuming money isn't an issue - take your current dream job and work for a few years. If that nich doesn't bear fruit like you expect, then transition to business school -> different type of consulting/your new dream job. You're young dude, plenty of time to experiment.

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.

Jun 24, 2020

You don't want to hold yourself from pursuing your way (understood it dream job but unique steppingstone) for 150K... not with 25 no mortgage no kids... All upside potential ahead of you. By that I don't only mean economic, but also satisfaction and realisation. Redimension your career and goals. Then,if the path goes through it, assess "the package" (comp , work/life, satisfaction and realisation, etc.). Then decide. You seem to have a clear view of what you want to do and achieve. What's holding you back? Not sure going to b school will bring you significantly forward (and for the price in $ and time). Good luck, keep us posted!

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Jun 24, 2020

Are you changing cities?
Any debt?
Any kids?

If the pay cut means less stress, more family time, lower COL city, and the chance to work there and go to business school, I would do it.

However, I would think about where you wanted to be in 5-10 years. Can you become a senior/partner in that time and make more than the current six figure salary?

Jun 24, 2020

This must be very painful for you. You're bored in S&T and the seemingly-perfect job comes along, but making the leap will require you to take such a pay cut that it makes your lifestyle almost unsustainable. Ouch.

I'll start by saying that there IS NO DREAM JOB. Not a career as a doctor, or a software engineer, or a quant, or a sales trader, or an ibanker, or a PE guy, or a VC. These are all jobs, and come with responsibilities, hard work, pain and varied work/comp rewards. What you're contemplating needs to be carefully thought out in detail and in reality, without the dreamy goggles on. Psychologists call this the 'focusing illusion' in which one obsesses over an item or job or something, where you think you'll be happy if you just had this one thing. But it's definitely an illusion.

Let me ask some questions.

1) is there any way you can negotiate a higher salary for your dream job? Can you get metrics-based bumps in pay or one-time bonus payments? Is there some commission structure? Can you get yourself a more sustainable compensation for the work?

2) are you SURE that the consulting gig is your dream job? The grass is always greener. Once you make the leap you WILL find that the dream job is not as dreamy as you thought. It will come with hardships and pain. And your regrets will be even worse in this case, because once those hardships come you will look back at your former compensation and feel the pain.

3) Can you test out this new gig? Perhaps you can do some part-time consulting for them in the evenings, 2-3 hrs per night. S&T has good hours and I suspect you don't have a family to go home to. That leaves a few hours in the evening when you could work. This would be a good way to 'field-test' your assumption that this dream job really is the one for you. Maybe even give up your annual vacation to spend 2-4 weeks full-time in the dream job before going back and doing it part-time at night while you test out its suitability.

4) I don't think going to MBA is the brilliant solution you think it is. It makes sense for certain people under certain conditions, like those who are total career switchers or those who failed to properly launch in the first place. It can also make sense for those execs who are up-leveling their network and skills. But you have to be cognizant of the tradeoffs.

5) It's clear S&T isn't what you want to do forever. And that's fine. But you're making decent $ and building your career. If you take a leap of faith, it's taking a big risk. Try to de-risk this move for yourself. Tip-toe into this one before you burn your good existing life to the ground in order to grab a seemingly-perfect job that likely won't actually be perfect once you get it. I'm not saying don't explore it, and I'm certainly not suggesting you stay in S&T forever. But don't just take career gambles without testing things out.

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Jun 24, 2020
earthwalker7:

I'll start by saying that there IS NO DREAM JOB. Not a career as a doctor, or a software engineer, or a quant, or a sales trader, or an ibanker, or a PE guy, or a VC. These are all jobs, and come with responsibilities, hard work, pain and varied work/comp rewards.

First of all, thanks for the thorough post.

Also, on this part, the grass really isn't going to be that green. It will likely be extremely frustrating for you. Not only that, but you have de-valued yourself. Every job has a certain worth attached to each person and after dropping down so low, its going to be harder to jump back up again.

For the $$$ difference you could technically remain in S&T and start your own consulting firm and even pay for 1-2 associates to work for you if you want to get in that industry.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 24, 2020

Also, I have to add that this move may look like a 'you fucked up' move to a future employer. Be careful, bro. Even if you explain the situation as it happened, the future employer may think that you are leaving some things out to make a move such as this.

Finally, if you do make this move, I think it should be imperative that you are leaving with glowing recommendations if anyone ever asks to talk to your prior manager about this situation. They should say 'he/she was great - it was sad to let him/her go'. 'What an asset to the team.'

So bust your ass until the very end if you decide to switch, don't fade away.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jun 24, 2020

One my clients recently left an executive position at a F500 company where he was earning $750K to buy a business where he'll earn $200K.

Jun 24, 2020

But he'll be an equity owner, work for himself, and I presume sky's the limit if he can grow the business right?

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Jun 24, 2020

Yeah exactly - unlimited equity upside potentially.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 25, 2020
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Jun 28, 2020