Next Generation Comp - Is it Worth it?

Was just reading a comment about models and bottles etc. and got to thinking about comp.

I'm doing ok (own my penthouse apartment, nice investment account), but I got into banking after the GFC, and the glory days of 2.0x bonuses for junior bankers were already gone. Senior bankers are still making enough to support their alimony, second wives, crippling addictions, and mistresses, but they aren't making 'Fuck-Off' money like they used to. It's almost like they only just have enough to support these habits. Listened to one MD complain that his three kids' tuition for private school is well over $100k/year, which means he needs to make almost $200k/y pre-tax just to pay for that, so between that and his other expenses, he can't leave banking for a corporate job or retirement any time soon.

Then I think about the next generation of bankers. You guys will always make more than the average schlub, but, between compliance making everything that's fun harder to do, and clients being dicks about paying the kinds of massive fees we want, comp is just going to get tighter.

Do you guys even feel like it's worth it, you're going to spend most of your 20s in the office, and by the time the payoff comes, it'll be much smaller. Some of you can go be the next Sage Kelly or Blankfein, but by definition, they are few and far between.

 

This is a question I wrestle with a lot, actually. It definitely doesn't seem to be the obvious choice anymore, to me at least. I'm still contracted in the military and I'm seriously considering staying in and using my degrees to get ahead on the advancement lists or doing some cool (but less paying) like switching into some intel agency or something. My dad was a banker in the 80s and early 90s before switching to corporate and he said it isn't worth it anymore.

"That was basically college for me, just ya know, fuckin' tourin' with Widespread Panic over the USA."
 

I guess one of the answer is doing something that you enjoy even if it is less prestigious and lucrative. As a student anfd after two IB internships I decided to not walk this path and I did a last internship in real estate and I am enjoying each second of it. Another answer would be the entrepreneurial path.

It is only my opinion as a 22 years old guy

 

Yeah, as a student, I relate to this a lot. I often question whether or not this path is even worth it, with the comp good but not stellar, and the hours so long. The last couple years, I've been following the r/entrepreneur sub-reddit, and trying my hand at starting a successful business, because I'm a creative person and enjoy every aspect of creating a business. After some successful entrepreneurial projects over the summer, where I hung out with friends while making a good amount of money, I've resolved that I'll probably work in finance for a couple years, for the network, and as a safety net, but I'm going to give entrepreneurship my best shot because I can't see myself happy while wasting away in a cubicle.

I mean, if you follow the proverbial path to success, as people on here define it, you almost for sure won't have a million in your account by the time you're 30. By your mid-30s, if you don't have student debt to pay off, it's definitely possible to save a lot of money. But personally, I'm trying to make money a lot younger, in my 20s, and I feel comfortable risking a bit more to do that, trading some security for a chance of greater reward and greater fulfillment.

 
Best Response

"Do you guys even feel like it's worth it, you're going to spend most of your 20s in the office, and by the time the payoff comes, it'll be much smaller?" You're completely missing the bigger picture.

Sure, you work a lot. Sure, to millennials today our 20s are more about instant gratification and experiencing life... but a lot of people in their 20s are idiots, and it's a time for experiences but also a time that you can get ahead monetarily. It's a lot easier to end up wealthy at 55 if you start seriously saving in your 20s, versus starting to save in your 30s.

Real life example for you... 2 of my best friends have vastly different careers. One friend works for a health care provider as an account executive. Hes 26 and makes $70k. Pretty average for a non-finance/consulting job in Chicago. He lives in a studio apartment, he works MAYBE 40 hours a week and 3 of his work days are from home. He goes on 1 vacation a year, generally to Mexico. He drives a 2014 Ford Fusion, he has a motorcycle, he golfs a few times/week but still only goes out on Saturday nights, and to the occasional happy hour. Pretty decent life overall. He recently came to me to ask for help with personal investments. Again, he's 26 years old with an average job and lives a solid life, but doesn't do anything crazy. He literally has $15k in cash outside of his sub $30k 401k. That's it.

Friend #2 is also 26 years old and is an associate at Goldman. I don't know his exact income, but it has been North of $200k since he got promoted 18 months ago. He works banking hours... 70-90 a week. He generally only goes out once every other Saturday. He lives in a 1br full amenity building with a rooftop pool, party area etc. He lives 15 min walking distance from his office. He does not have a car, but does golf early every Saturday before going into the office for 8-10 hours. He goes on 2 vacations a year - this year one was to Fiji in an over-water bungalow and the other was to an all-inclusive in Aruba. Both significantly better experiences than a Cancun resort.

He and I invest together so I know how much he has (at least in his investment account), and the part that makes banking worth it is that he's 26 year's old and, unlike our buddy in a normal job (that he loves) who only has $15k to invest, this guy has just over $250k. He can quit banking at 26 and get a normal job, save an average amount, and retire with millions if he's an average investor. My other buddy on the other hand, will have be creative and save wherever he can, if he stays on this career track, just to to have the opportunity to amass half of the retirement cash that my Goldman friend has... and this is only after 4 years of banking.

Sure, you're probably not going to be driving a Ferrari or own a multi-million dollar home at 30, but the opportunity to get ahead SO MUCH FASTER than the average career is invaluable. My opinion is that jobs with long hours and high pay in your 20s are worth it every time. Get ahead when you're young and then go do something different after you have that cash. 26-30 still isn't too old to be an entrepreneur or to find another passion.

 

The way I see it is in line with your last paragraph, you work hard now to truly enjoy life later on. I mean to be completely honest, what else do you think you should be doing? As a young professional, focus on your career and become a respected individual in your space and then it gets easier later on.

I would much rather party past 30 with money than enjoy average vacations early on. Probably an unpopular opinion, but let's be real, what else are you supposed to be doing at 7pm on a Wednesday? Minus exercise, I would rather work and be learning.

 
CreditGuy19:
The way I see it is in line with your last paragraph, you work hard now to truly enjoy life later on. I mean to be completely honest, what else do you think you should be doing? As a young professional, focus on your career and become a respected individual in your space and then it gets easier later on.

I would much rather party past 30 with money than enjoy average vacations early on. Probably an unpopular opinion, but let's be real, what else are you supposed to be doing at 7pm on a Wednesday? Minus exercise, I would rather work and be learning.

All really good points made in this thread, and I agree entirely with your post.

Not doing banking post-college is my biggest regret in life. Missed out on a ton of opportunities, and I'm now 5 years behind some of my classmates due to not doing banking. Working hard in your 20's and building up your career is the best thing you can do. No, you don't have to go out drinking every night since that's stupid, inefficient, and gets you nowhere in life. And when you're younger, you possess the physical stamina to pull off long hours. Top banking and MBB consulting ALWAYS pays off big time.

 

One note of caution: partying past 30 isn't as easy as you think. I'm 30 now and ~70% of my closest friends are married/soon to be married. It goes from "where are we pregaming tonight" at age 23 to "can I find someone who wants to go to a bar tonight?" at 30. And I live in NYC - I can only imagine it's worse elsewhere.

 

Probably one of the best WSO comments I have read. I guess it comes down if you as an individual are ambitious, Friend #1 sounds like a decent life, but if I was in that position I would be always thinking what if I pushed myself and tried IB/HF etc.

 

There is a misconception that you can’t work in finance while also having a great life. That is bullshit. Being able to go almost anywhere in the world and stay anywhere you want without worrying about money is awesome. Flying to Colorado for a last minute ski trip multiple times a year is fantastic. You can’t do this stuff making $60k a year.

 
EfferCore:
There is a misconception that you can't work in finance while also having a great life. That is bullshit. Being able to go almost anywhere in the world and stay anywhere you want without worrying about money is awesome. Flying to Colorado for a last minute ski trip multiple times a year is fantastic. You can't do this stuff making $60k a year.

One of the biggest lies ever told is that money cannot buy happiness.

 

Totam soluta aut rem earum nemo soluta saepe nostrum. Eveniet aut autem voluptate commodi dolores quasi non in. Velit voluptatem aut velit enim. Placeat occaecati dolorem repellat necessitatibus dolorem optio.

Commodi sit modi deleniti sunt et itaque ut maxime. Architecto quis architecto repellendus eum. Architecto et corrupti occaecati aperiam magni sit. Sit harum laudantium voluptates ullam aut. Quo omnis atque velit neque omnis dolores necessitatibus.

Sit praesentium voluptatum reprehenderit et perferendis. Vel distinctio omnis est ullam nesciunt quia. Velit nam est voluptatem vel et optio. Aut sapiente sit enim autem veritatis optio. Harum voluptas fugiat aut.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”