Salary pay cut when changing careers?
I wanted some advice on a career change I am working towards - I am an engineer and want to move into either Asset Management or investment banking, also open to management consulting. I've completed both a masters in electrical engineering and recently completed a masters in Finance from Harvard extension school . My question is - for all of you who might have made similar career changes - did you take a pay cut when making the change? From all I've looked into at glassdoor it looks like I might have to do that if I'm starting off as an analyst. (I was making 6 figures as an engineer).
Could someone help me with this question? What are good careers in the financial services that would best leverage an engineers skill that are not back office? I discussed with an MD at AIG recently and he said that portfolio analytics at fixed income places would be good. Problem is AIG is not hiring and he also said I should definitely expect a pay cut. Does anyone have experiences to share here?
The reality is you don't have any finance experience so why should they pay you for your otherwise irrelevant credentials? They can find a fresh graduate with a econ/finance/engineering degree and pay them a fraction of what you're demanding. It's the nature of trying to switch careers this late in the game.
Thanks - I'm reconciling myself to the fact that most likely I will have to take a pay cut. If you dont mind me asking (since I noticed you work in fixed income AM), what are some of the major FI AM firms? I would think maybe engineering is valued at a fixed income analyst position because of the quant and analytical skills required.
Have you tried IB MBA Associate roles? Not sure why you would want to start as an Analyst when you have a Masters.
Yeah I've applied to associate roles too - that is online with no luck yet, but then again online applications can be demoralizing sometimes, you have no idea where they end up! Networking alot through linkedin - messaged ALOT of people - have not made the connection yet. Just trying to figure out how I can best leverage my engineering skills and finance education to make this move. I'm really into both the macroeconomics side of global currency and stock markets as well as the financials of individual companies (as I've invest in stocks on the side) so I'm open to financial consulting too. Are AM firms 'easier' to break into compared to IB, you think?
AM firms are easier IMO, but it is a shrinking field with the DOL regulation and more roles require programming and coding skills. Best of luck on your search.
Paycut for potential career switch? (Originally Posted: 01/22/2014)
So many people on here state they are looking to make a career change either into finance or out of. I am looking to make a change from an operational role to a more analyst/trader type role. Tough to do no doubt but I've come across an interesting opportunity that should take me that direct. Problem is there is a paycut involved. I'm living in a high cost of living city (think NYC, Chicago) and this would take me to a more low cost city (Pittsburg, Cleveland, etc). but the pay cut would be roughly 25%. If you use a cost of living calc I would be making out but there are those fixed costs like student loan payments and car payments that don't change with location.
Now they do have profit sharing and bonuses which if they're maxed out would take me to where I am now for the year but you can't count on that. After working so hard to get raises it's tough to give it back even if in the long run it might pay off.
Just want to hear some of your experiences with having a decision like this and if it paid off in the end.
If it's what you want to do, I say go for it. I was working in IT (Hate it) and wanted to switch into finance. I took a paycut of more than 30% to be in the industry so I would be able to work my way in. In the end it will be worth it. Money doesn't buy happiness!
Make the switch to what you'll enjoy.
Negatives to switching: Immediate 25% cut in base Have to move
Positives to switching: Much lower COL In a more prestige role In a position that you'd enjoy more Can meet (and in future exceed) current earnings potential
I say go for it
chicago isn't a high col city
Fuck yeah it is. Maybe not compared to NY or SF, but it's pretty high. I lived there for ~7 years.
To the original poster, make the switch if you can afford it financially. I recently took a 20% cut to move into a FI analyst on the buyside, making the transition from a finance role at a F500 company. I actually enjoy going to work now, and am much more motivated. Best of luck.
I transitioned from an FT role into an internship because the new area interests me exponentially more. Not regretting it thus far.
I'll say it a hundred times: it doesn't matter worth a shit what you're making at your level. Don't hesitate. Especially if your daily work responsibilities would be more interesting and make you happier.
I can't understand how people keep focusing on top level numbers, the only number you need to look at is your net income...you are taking a pay cut but your cost of life is also expected to be lower...what's the big deal here ? Just take this job if you like it...
Do it. Switching from BO to FO gets exponentially difficult every year you get older.
Listen to all the advice above.
I'll act like the Ghost of Christmas Future, here to warn you - I stayed in accounting way, way, way too long. I'm trying to switch and it's not easy. Go do what you think you'll enjoy.
I think you gotta do it. Unless you're supporting a family, you're probably going to net out to a 10% loss of relative income but you're earning potential skyrockets and you've got a seat at the table. And that's what matters, a seat at the table.
Are you seriously asking this question?
Why would you not take the new job? Make a list on a sheet of paper of pros and cons of NOT taking the job. The only pro would be that you don't take a cut in pay. Everything else will be a con. And don't you forget to write this con first: the possibility of never getting an opportunity to move to FO.
Do you have another FO offer which pays high? If not, I totally fail to understand why you asked the question. I mean, really?
Pay decrease to move into consulting (Originally Posted: 08/01/2013)
I am curious to hear what people think about taking a step back in pay to transition industries. I have been trying to break into consulting and finally have an offer but the starting salary is less than I make now. The consulting industry offers much better future compensation than my current industry. I am having a hard time accepting that I will have to take a step make to take two steps forward.
Has anyone else made this decision?
Factor in happiness level, career development and career potential and then make your decision - don't base everything off of salary.
This, 100%.
EDIT: Also, terrific signature quote from a terrific movie
It's one of the best movies - that line speaks so much to life in general.
Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.
how much lower are we talking about? 10%?
4% actually. I was expecting an increase during negotiation and they came back firm on the original number so in my mind I felt like it was much more.
A career is like poker, all the money is at the final table.
If you can make more down the road, you'll never even remember the minor hit at the beginning.
Have pride in the fact that you've been trying to break into a great (and ultimately lucrative) industry and pulled it off, man. Good shit
It's all about the money, screw happiness. However, this means future money not just present. Go with whatever has the best career outlook.
Thanks for the encouragement! That is a good way to look at it.
Congrats on the accomplishment! Don't interpret the pay decrease as an insult. Pat yourself on the back and go buy yourself a whiskeycigarsteak dinner.
Oldie but a goodie. Give credit to yourself where credit is due.
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