Tech vs Finance? (Again)

Rising sophomore at a HYPS target. I'm at my very last moment where I need to decide which field I actually want to go to. I'm majoring in econ + math (or something else like that) so I could do either with my major, but I'll have to specialize a bit in my extracurriculars this year for one or the other. 

One thing I'm worried about is when I see a bunch of WSO people say something along the lines of, "I went into finance only because I was too dumb to go into tech". My parents raised me to be an engineer since I was like 5 so this isn't really exactly true with me. I'm pretty good at math, did competitive math stuff in HS, and I'm pretty good at programming as well. And I don't really mind doing either, in fact, I enjoy them. All of this isn't to be a narcissist or say that I'm better than anyone, it's just to say that I feel like I could make it in tech.

But at the end of the day, I don't want to do tech. I don't want to live in the Bay Area as just another Asian PM or SWE. I think that I find finance more interesting, more alluring, and more fun. Yes, I am sad at the thought of losing 2-4 years of my life to 80 hour work weeks. I am really sad about that, but I feel like I understand and could possibly learn to accept that. I want to do finance, but I'm afraid that I'm making the completely incorrect decision by going against the grain here. I get the WLB. I get that I will hate my life, regret it, and very possibly burn out in the first 2 years. But I'd like to take that chance. A burnt out I-banker doesn't have bad career opportunities.

From a compensation standpoint, I don't think people realize that the grass isn't really that greener. More than 90% of the people at Google never make more than ~$350k/year. That's a fact. The level above that is about 400-500k, and I mean, the odds making more than that are around 2%. On the startup side, there is a ~1% of one becoming a unicorn. Not something I would like to factor into my decision-making. And on the finance side, I don't think people realize that there really are a lot of great seats (relatively speaking, of course, because once you break into finance there are very few people qualified for the same seats as you). You don't have to go to MF PE or HF. I'm sure all those 3B fund size MM PE Principals and AM PM's do quite well for themselves, often in LCOL areas. And the ceiling seems to me to be way higher if I am able to be within the 5-10% who do get into MF PE or HF.

So I guess my question is if I should ignore what I want to do, Finance, and go to tech because everyone is telling me to? Or should I stick with finance if that's what I really want to do. Anyone else who chose finance over tech recently who can reaffirm my decision?

At the end of the day, I don't really think that it's something that matters. I understand that people can get to any seat from anywhere, and there usually isn't a clear-defined path like WSO makes it out to be. Also, I'm incredibly lucky to already be thinking about this and have some goals and somewhat of a plan, because I think about my parent's careers and all the opportunities they lost by just life happening.

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Comments (76)

Most Helpful
  • Business School in IB - Cov
Aug 18, 2021 - 3:49pm

You can always go into SWE @ FAANG after the 2 year stint you expect to burn out in (in IB). The process would be more difficult the other way around, especially if you want to move to PE/HF after your first 2 years. If you're comparing earning potential, finance wins long term but the WLB/Pay ratio is still top notch. But on a risk adjusted basis, finance is the way to go.

Btw, fuck what other people want you to do. If you want to go into finance, do it. If they look down upon it because of anything materially related, chances are you'll probably be in a better financial position than they ever were while working. Anyone that looks down upon your career choice can suck your nuts.

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Aug 19, 2021 - 7:05pm

Recruit into IB as an Eng/CS major... For being a "grad" student you seem to have incredibly limited thinking skills.

Array

  • Intern in PE - LBOs
Aug 18, 2021 - 5:16pm

Thanks for the advice! By "people wanting me to do something", I mainly meant the common recommendations towards tech on this forum. Not any RL pressure.

Aug 18, 2021 - 5:00pm

Your background has quant written all over it.  If you can pass difficult math and programming assessments then you can definitely get a job at a quant firm.  Do you plan on getting a masters?  That's definitely preferred if you wanna go that route.

But the quant lifestyle is much closer to STEM than finance.  If you wanna be out making deals and not churning out code, go into a more conventional finance role

  • Intern in PE - LBOs
Aug 18, 2021 - 5:15pm

I don't really want to go to grad school, at least right out of undergrad. That's why I'm leaning away from quant. If I went to grad school, I would definitely attempt to pursue academia instead. There's a few kids who land quant roles out of undergrad but not sure if I'm that smart. I don't know if you mean SWE or trader at a quant firm as well, since that's something quite achievable out of undergrad, but trader seems really risky, like HF except you don't have the IB/PE background so if you blow up, you're done. Also, I often see people touting these 300k or 400k starting salaries and whatnot but I've never seen anyone dive indepth into the career trajectory of quants/HF-SWE's/traders and where you end up 10, 20 years down the line doing that stuff. Also, like I said, not really interested in SWE, whether it's at a HF or FAANG.

Aug 18, 2021 - 11:57pm

my comments keep double posting sorry

Interested in code, market mechanics, and trading strategies!
  • 2
Aug 18, 2021 - 11:57pm

A few thoughts (also check out my comment below!):

You definitely don't need the advanced degree to get into quant developer roles! Just learn all the markets / derivatives vocab words and have a basic understanding of the math, then you're good to go! The QR guys need to REALLY know the math (they have the big degrees), but if you want to be a dev/SWE you're fine just knowing the lingo.

For career trajectory - many of the big HFT/market making firms are notorious for being a "revolving door" aka you're in for a year (sometimes less) or two MAX and then off to the next. That's very possible if you don't absolutely love the work, however if you find it enjoyable you can stay much longer! The space is very new and there aren't 20 year career-long paths carved out because much of this stuff hasn't been around for anywhere close to that time. You get to be a pioneer of sorts =D very cool stuff!

Interested in code, market mechanics, and trading strategies!
  • 2
Aug 18, 2021 - 11:57pm

my comments keep double posting sorry

Interested in code, market mechanics, and trading strategies!
  • 2
  • Intern in PE - LBOs
Aug 21, 2021 - 2:11pm

I have a relative at a quant HF and if you go to HPSM or Caltech you can actually get a Quant Researcher role out of undergrad. My relative says following firms recruit for the QR role from the aforementioned schools for sure: Citadel, DE Shaw, Tower Research, and probably few others. I have another relative who recently finished his QR internship at Citadel and went to Stanford (with a degree similar to yours), so it's definitely possible.

Aug 18, 2021 - 10:40pm

I personally like finance more than tech. Follow your passion - do what you want to do. It sounds like finance should be your route. If I were you, I'd look into EB PE VC HF. Good luck - have fun.

"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

Aug 18, 2021 - 11:19pm

This sounds like a good plan if he wants to be a quant.

"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

Aug 18, 2021 - 10:57pm

I concur with the above that this has quant written all over it. There are a lot of misconceptions on this forum about what quant actually looks like, especially on the buy side. I work at a strong firm in an alpha research role straight out of undergrad, and I did an IB internship my junior summer (got offer, liked finance, but not the group / kind of work I was doing). I wasn't a superstar coder (zero formal experience), didn't do competitive math, and went to a semi target - the notion that you need to be a math genius to make it is absurd.

Feel free to PM me.

"one for the money two for the better green 3 4-methylenedioxymethamphetamine" - M.F. Doom

  • 3
Aug 18, 2021 - 11:42pm

We are the same. My parents raised me to be an engineer, I studied engineering, but I loved finance and found it very intriguing. I had enough programming chops to take myself in either direction. I found my home right in the middle. Quant Devs make simply okay money at banks, but their more elite HF & HFT(market making) counterparts make around double the average IB or Tech first year.

IMO the problems you can solve as a algo trading developer are SO much cooler that what you solve as a FAANG SWE. It's making a small statistical component of a black box that drives global markets vs. deploying an API that's used for a login button or something. Depending on how fascinating you find markets and the math behind derivatives pricing and how deeply you desire to create REAL value with your code vs. creating mobile phone applications/distractions, you may want to consider the middle ground between traditional Finance and Tech.

Look up market maker firms (find what NYSE Arca is and who participates, look up what the CBOE LMM program is and what firms are involved) to find who you should apply to. Personally I think the market making space is most interesting due to the disgustingly high speed / low latency things are occurring at now vs. the much more methodical macro-indicator models larger HFs develop. Feel free to PM me if interested - I'm obviously very passionate about the space lol

Interested in code, market mechanics, and trading strategies!
  • 3
Aug 18, 2021 - 11:42pm

Idk why my comment posted twice

Interested in code, market mechanics, and trading strategies!
  • 2
Aug 18, 2021 - 11:46pm

Quick addendum: I found my spot in this space with ONLY an undergrad degree. If you are wildly passionate about the space it shows! No Masters / PhD required!! Just know your stuff and get excited about the work and they WILL hire you! Good luck!

Interested in code, market mechanics, and trading strategies!
  • Analyst 1 in IB-M&A
Aug 19, 2021 - 1:16am

What are the exit opps like for a quant dev, especially if one is underperforming and ends up getting fired?

Aug 19, 2021 - 8:08am

Comment double posted again ug

Interested in code, market mechanics, and trading strategies!
  • 1
Aug 19, 2021 - 8:08am

You can easily stay in banking / finance in general and switch to a more back office roll like tech infrastructure or cyb sec if you can't hack it as a front office dev (quant dev). If the whole idea of working for a bank is soured because of that kind of an experience, your skills are still more than adequate to take up a well paid C++ in literally any other industry with the experience you've gained by that point.

I don't think the "exit opps" discussion is nearly as narrow for tech as it is for IB. If you really wanted a lifestyle change you could take yourself to the West Coast and go get involved with a startup for all I care lol the tech skills are highly transferable as opposed to super niche Excel monkey ability

Interested in code, market mechanics, and trading strategies!
  • 2
Sep 23, 2021 - 8:32am

I can play the oversimplification game too! 

What do quants do all day? Tweak numbers (oh sorry I mean parameters) in a model to make the money machine go brrr faster. 

If you think the only problems to solve in tech are making login buttons work you're sorely mistaken.

Found another doozy: "REAL VALUE" yes, the value of tweaking when an algo should buy or sell. How exciting! Gonna revolutionise the way the economy works! Get over yourself man. 

Array
Sep 23, 2021 - 8:55am

Sheesh, I'd argue that generating returns for a teacher's pension fund so public servants can retire after decades raising our children or for a large health insurance fund so it can pay out claims to those in need has much more value to society than designing candy crush or a snapchat filter or the Like button, but I guess that is only my personal opinion...

Interested in code, market mechanics, and trading strategies!
Aug 18, 2021 - 11:56pm

I'm a banker and most of my friends make 500k all in at fin tech and AI startups with 9 to 6 hours and weekends free as well as 3 weeks paid time off.  I wouldn't join FANG as you wouldn't be engaging with life changing technology but that is my opinion. Honestly just focus on what you find more entertaining - diminishing marginal returns with each 100k after 400-500k comp. 

Aug 21, 2021 - 12:20pm

Can you give more details on those friends in fintech? I'm curious about what roles they have, how many years of experience, and the breakdown of that 500K figure (how much is base, how much is bonus, and how much is stock).

  • Research Analyst in HF - Event
Aug 19, 2021 - 12:57am

STEM major here. Didn't go into SWE because it's boring and menial. If you truly enjoy analyzing companies, macro, industries, etc. and want to develop sharp commercial acumen and sensibility, then go straight to the buyside. Not any of the quant stuff but pure fundamental bottom up equity l/s or liquid credit shop. Should not be that hard if you're coming from a top school. Money mgmt is a competitive industry, but way more dynamic than sitting there trying to debug or close jira tickets lol. Probably easier money in other places, but once you're making 200k+ out of college, nothing matters more than enjoying what you're doing and enjoying your life.

Aug 19, 2021 - 11:11am

Intern in PE - LBOs

On the startup side, there is a ~1% of one becoming a unicorn. 

My guy, it's more like a 1% chance you will have a semi-succesful startup, let alone becoming a unicorn.

Also, you might wanna try going the quant route. Much more interesting, much better pay, much better hours. If you're a math wizard, don't waste your time moving boxes in PowerPoint.

Sep 23, 2021 - 8:38am

Nah, they're correct. Just talking about startups that have been funded. A funded startup has about a ~30% shot of exiting and a ~1% shot of exiting as a unicorn. The universe of all "startups" (which let's face it if they're just fucking ideas with no team / commitment and no funding they're not real) probably dilutes those odds a bit. 

Array
Aug 19, 2021 - 11:51am

Just do tech PM or SWE, and then after a few years, you're qualified to join start-ups with equity. Of course, there is 1% chance of them becoming successful, but I'd argue that if you are picky about finding a tech company with a great product, the odds are better than that. 

Aug 19, 2021 - 7:44pm

I think the easiest way to "double-dip" here is to position yourself like you're going into tech by taking the relevant classes but join a finance club or two at your school. When looking for internships you can say that you're interested in startups and software engineering, but you're interested in seeing things from a macro level business perspective rather than a micro level that a software engineer would see. Then say that with all these things in mind your interest is to work for a tech-specific boutique or TMT group of a larger investment bank. Many groups have one or two "technical" guys who finance bros like me lean on to help explain specific terms or understand the business more and I think this is where you would fit in great. This isn't just for TMT. I've heard of guys like this in P&U, NatRes, HC, Life Sciences among others and FWIW this isn't independent to IB or even the sell-side.

Array

  • 2
  • Intern in PE - LBOs
Aug 19, 2021 - 8:51pm

Thanks for the advice. NGL, this might sound elitist or snobby but I don't really want to try and put a foot in each camp and end-up half-assing both things. If I choose finance, I'd rather go all in, do the relevant internships, and land a buyside position out of college or a top IBD group. SWE is honestly easier to land while half-assing things IMO, so I might still be able to land it even focused on finance. Honestly, I'm not really interested in the tech-focus of a TMT group or something, but that is a path I see a lot of technical majors from my school going to so it's something to consider. Like you said, it seems to be a thing in all verticals, I have seen a lot of healthcare people with a bio/chem background.

  • Investment Manager in HF - Other
Aug 19, 2021 - 8:15pm

You should do what you want, but you are being very broad. What does going into finance mean? You say you want to do finance, but what about it? Finance is an incredibly broad field, what about it excites you? HF? M&A? S&T? PE? Running out of abbreviations…

Based on your background I would have suggested HF, but is that what you are looking for? 

Also, not trying to knock you, but it seems pretty weird for a sophomore in college to be telling people things they don't realize about comp and how the grass isn't greener. I'm pretty sure most people (especially those with experience) do realize. You have some of your numbers and probabilities wrong, you can't assume that someone with your background is going to have the same probability of reaching a certain income point as just the general distribution. 

  • Intern in PE - LBOs
Aug 19, 2021 - 8:47pm

Firstly, I don't know what excites me specifically. I really enjoyed interning at a long-only HF this summer, and did not really enjoy interning at a large tech company in SWE last summer. I enjoyed the investment process. I enjoyed doing due-diligence on companies and really getting to understand business models and verticals. I was really impressed by how smart and perceptive my PM was, and I would love to have that sort of investment acumen one day. So I think I know I want to go into investing, but I don't really think I as a student can really understand or comprehend the difference between the process-oriented, deal-focused work of PE vs deep fundamental analysis in SM HF or long-only AM vs distressed work at a credit fund vs managing beta neutral strategies at a MM HF.

And yeah, me telling you guys about comp is mostly a coping mechanism because I want to go into finance and not tech lol. But everyone on this thread is telling me to go into tech as a quant anyways :/ I'm sorry, I don't want to tell you guys stuff you already obviously already know, I've just seen a lot of people on WSO talk about how easy it is to make 600k-700k at Google and it's just not true. I don't think my probabilities are wrong though. The Google stuff is spot on, 90% of engineers stop at E5. As for the VC stuff, Reputable-VC-backed startups have ~1% chance of becoming a Unicorn. There's a  .00006% statistic commonly given but it's based on outdated data and includes pretty much every company in the world.

Finally, I don't think as a college sophomore I should be assuming that I'm better than the general distribution at anything. Google is like the top 1% of engineers from all colleges across the U.S. I don't think my background is really that special to merit assuming that I could make it past where 90% of people fail. Finance is less meritorious imo, but still filled with really smart ivy grads just like me, who I'd be competing with.

  • Investment Manager in HF - Other
Aug 19, 2021 - 11:12pm

It looks like you want to do investing so you should pursue that path. You enjoyed that role and didn't enjoy tech, easy decision. 
 

You are still wrong about your figures, but not worth it debating with you. As someone with 15 yrs experience and seeing the numbers on the tech and finance side, you are making assumptions and using figures I wouldn't. 

Aug 20, 2021 - 9:42am

If you really like an investing, why IB? ER, AM & HF are more aligned to what you want to do so why not recruit for those out of undergrad? I'm not denying IB is the best route into PE and has the best analyst comp, but you're also giving up 2-4 years of the prime of your life away which you mentioned discourages you. Also if you're not specific to debt equity/products Corp Strat/Corp Dev is worth looking into as well. They too hire entry level analysts.

Array

Aug 19, 2021 - 11:40pm

Do what you like. The truth is, as uncertain as opps might seem for you in the moment, your odds of making $500k+ are very high in most fields you go into if you want to push for that type of salary, are willing to put in the work, and have some social skills. Coming out of HYPS, the main limiting factor on your earning potential will be ambition.

Aug 20, 2021 - 1:32pm

I graduated in Mechanical Engineering and now do Private Equity. I think there are a few things to take into consideration. Apologies if it's a bit lengthy...

If you truly like finance, go with your gut and do that. Doing a lot of work for something you love is truly much easier than doing a little bit of work wishing you were doing something else. You mentioned 2-4 years of hell, and while tech may not be 80 hour weeks, as you get higher up in tech there is a lot of work. It's been my understanding from friends that do it, the more senior you get, the more work you have by having more responsibility, and now your knowledge for solving problems. While in finance (unless you're an IB for life, or have a PE firm that doesn't have any work life balance) as you get older and very senior you start to get a bit more freedom, and the heavy lifting becomes less.
Personally, I like finance way more than technology. I always felt in engineering there is eventually cap with salary (like you mentioned), and what you learn is never applicable to your life / future financial stability (outside of salary). Learning in finance about valuing companies, investing, running companies, etc. allow you to use all the money you earn to make sound investments to set yourself up for even more financial stability.  Also, exit opportunities in tech usually lead to more tech. Exit opportunities in finance can open up a world of possibilities (and as mentioned above, can always go finance to tech relatively easily, but not vice versa). 
You learn more in 2 years of banking than you will anywhere else, and you hold much more responsibility than you will as a junior tech employee. 

TLDR: Go with your gut and do what's best for you. If you're leaning towards finance after educating yourself on both fields, you know yourself best. Don't second guess yourself. 

Hope this helps

  • Associate 2 in PE - Other
Sep 18, 2021 - 10:04am

OP Its true that most people at Google don't make >350k, but realistically thats what a VP in a middle market fund would make - taking into consideration the number of roles at Google / large tech companies (anything from ops, marketing, finance) vs. the number of VP roles in MM funds available, I'd say the tech role is a better risk-adjusted position.

Of course the above assumes you're ok with both roles and does not take into account the better work life balance outside finance roles.

  • Intern in PropTrad
Sep 18, 2021 - 10:21am

Have you considered Quant/Prop trading at places like Jane Street, Optiver, 5rings, Citadel securities etc? They mainly hire undergrads have excellent compensation and culture/hours are more akin to tech than finance. Your starting comp would be higher than BB/EBs and if you can get multiple offers you can negotiate to crazy high starting comps.  

Sep 18, 2021 - 11:52am

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Array

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