The salaries I see here--they're too low.

I'm a little confused, but I've never actually worked in finance so please don't mock my stupid questions too much. Or go ahead, but just be funny about it.

So I read on another post on WSO about working 80-110 hour work weeks to get paid $120k. Also on a couple of posts here and on other WS related sites I've seen all-in compensation on the low end in the low six figures. This is far from the millions you read about in the mainstream media, such as the recent column in the New York Times by that "wealth addict" asshat, and I can't imagine it's the norm.

Or is it?

Outside of finance we have these huge expectations for financiers at the big hedge funds (Tudor, Tiger cubs, Citadel, etc.) to be raking in $300k starting as a jr. analyst, and financiers at smaller funds (

Can someone explain this? Is it just that bankers make less than people outside the industry think?

Also, why don't people quit to trade their own money--or is this very common? For instance, the guy working 80-110 hours for $120k mentioned above gets about $25 per hour. That's shit pay. Is the point of working in finance to hold out, tolerate a few years of low pay, to break into the ranks of the millionaires? Or did 2008 just decimate compensation to the point where pay-per-hour has gone down the toilet? Or all of the above?

If anyone could educate me on all of this, I'd be really grateful.

Comments (25)

Jan 21, 2014

The hours are a lot better at the VP and greater level. I think @"CompBanker" said that he was working about 50 hr/wk as a PE VP. The hours are a lot better in PE than IB. @"Aaron Burr" retired from IB to work in PE.

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Jan 21, 2014

remember that's 120k straight out of college at 21/22 years old, increases exponentially from there

Jan 22, 2014

at what age does it start to taper off?

Best Response
Jan 22, 2014
bit:

at what age does it start to taper off?

According to @FutureTrader66, exponential increases - so conservatively speaking, expect to be a billionaire by age 30.

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    • 6
Jan 21, 2014

Analysts are not suppose to make millions. They are suppose to move up the ladder and enter better positions, whether it be upper level IB, senior management at a F500, hedge fund, PE, etc.

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Jul 17, 2019
teddythebear:

Analysts are not suppose to make millions. They are suppose to move up the ladder and enter better positions, whether it be upper level IB, senior management at a F500, hedge fund, PE, etc.

Not sure how you're senior management at an F500, at a hedge fund, or in PE and not making millions in your 40s and 50s and beyond.

"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

Jan 21, 2014

So, you think that being a "financier" is some all encompassing term, and that a single data point on comp and hrs/week is sufficient to conclude that "financiers" are underpaid?

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Jan 21, 2014

Sounds like a troll. Quit to trade their own money? You really think someone out of college (with probably an average net worth of zero or less) can make > $120K/yr day trading? Anyway, I think you greatly overestimate the abilities and opportunity cost of the average student going into finance.

Jan 22, 2014

The point is to learn. Your getting out of college with an attitude that's a mixture of cocky, scared, and excited, you don't know shit period. Doesn't matter how many times you've done a re-run on Rosenbaum IB, or how many lbo models you've designed with online courses, your skills are basically next to nothing, even less if your on the investing side. On top of this wonderful realization, you're making six figures right out of college, and you call that low? The reason people in this industry have ever made money is due to the value they add, nobody's paying you shit for your Wharton Undergrad, they'll pay you for the value you add, and as you move up (read up on the new PM post) you hopefully pick up skills that translate to added value over the course of a few years. I think it's been mentioned several times here that real, and I mean real (High six figures/Early Seven) figures are made with at least 10 years of solid experience in this field. It ain't easy, and not everybody can do it, and it's definitely not a "fast" track, but if you can bear through all the hell that will rein down your ass, you'll do pretty damn good.

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Jul 17, 2019

That is such an exaggeration. I interned at a ~2bn PE shop recently and can assure you I was a productive as any 2nd year analyst there. And knew more excel than most of them (eg I know vba, they don't). For sure I should have been paid more than I was.

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Jul 17, 2019

@speculative_attack lol yes, because that's all there is to PE is knowing VBA.

Jul 18, 2019

If that's true, that PE firm should disband the analyst class. The way you characterize the fact that you "know more excel" than them shows that you just don't get it - excel is a tool to help analyze and it's not a contest on who can use VBA quicker than the person next to you.

    • 1
Jul 22, 2019

So why are you working in consulting if you were the equivalent of a PE associate as an intern?

Jan 22, 2014

120k right out of school---while all of the lawyers, doctors, phds are borrowing that much to go to school.

I've come to realize that banking exists with the mindset that things will always get better, brighter, easier, shorter hours, better pay, exit ops, exit ops, and exit ops.

I suppose this mindset becomes more true depending on long you can stick around.

    • 1
Jul 18, 2019

put my comment in wrong place - whoops!

Jan 22, 2014

I like this guy. My comp should be higher!

But on a serious note, you do realize that $120k for your first year out of college is almost 2.5x the median household income in the U.S., right?

    • 1
Jan 22, 2014

Relevant username, OP.

Jul 17, 2019

Today it is usual, bro. Just take it for granted and try to improve your income in different ways. Freelancing can be good.

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Jul 18, 2019

It sucks at the junior level. After 6-10 years, make VP/Director, 200-250k base + bonus is not bad.

Jul 18, 2019

$120K does seem low. Most first year analysts in our group make about $160K all in. There's not a huge variance for talent, but there is some (80-100% bonus). For 2nd, 3rd years, it can get up to $210K all in.

Jul 18, 2019

When you get to a senior level of any industry, including starting your own business and growing it, the income could / should be significantly more than that 120k. Also, in many fields you'll work your ass off to accelerate your career, grow a business, etc.

Don't think about $25 / hr for 100 hours /week being crap pay. Focus on learning as much as you can. It's actually great pay compared to the entrepreneurs who start with nothing, work their tail off, and maybe succeed down stream. It's great pay compared to the med school student who makes rounds for 100 hours a week for NO MONEY. It's great comp compared to the law school student who's blurry eyed from reading court cases for 80 hours a week for NO MONEY. They all get paid quite well later and so do the IB analysts whether or not they stay in banking.

    • 1
Jul 19, 2019
Comment
Jul 22, 2019