Why Are You Worth Your Salary?

ptm24's picture
Rank: Senior Orangutan | 443

There are plenty of posts on here about whether or not IB or other finance jobs are "worth it." However, I haven't seen many posts on whether or not people on here think that they're worth all of the benefits that come from top finance jobs (high salary, great exit opps, etc.). What makes you think that you're worth it?

Comments (120)

Sep 5, 2018

I'm clearly not - but this is a really neat thread and I look forward to what others have to say

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Sep 5, 2018

Dude rn't u in college?

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Sep 5, 2018

Indeed, little nubbin.

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Sep 5, 2018

Penetrating insights and the ability to cut through complexity (TM) and bullshit. Also pretty good with excel. #modesty

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Funniest
Sep 6, 2018
Esuric:

Penetrating insights...

Two words in and I can already tell that your team absolutely loves you.

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Sep 5, 2018

I guess the sarcasm was subtle with me trademarking "penetrating insights" and ending the comment with "#modesty."

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Sep 5, 2018

In operations, higher pay for professionals is easy to justify. In other words, you move x times the amount of product with just a few hours worth of work, versus longer hours, less productivity for lesser-skilled workers.

No one really knows why finance gets paid so much, because finance produces nothing. The only indication that bankers can be paid a lot is that finance is the bedrock of capitalism. Any organization in this society relies on the services financiers provide.

Therefore, they're usually rewarded handsomely for their close guidance and kinship in executing on whatever strategy comes into play. Also, the financial sector is closer to capitalism, which gives it first proximity to our reward system. Finance pay is a direct result of the market's oversight of our social construct.

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Sep 5, 2018
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing.

https://media.giphy.com/media/xjve2iD3I5Xpe/giphy-downsized-large.gif

"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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Sep 5, 2018

https://78.media.tumblr.com/ef14430d5c3494f047df1df5c2220a5c/tumblr_n9fqjsKzDG1rplnd3o5_250.gif

"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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Most Helpful
Sep 5, 2018
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing. The only indication that bankers can be paid a lot is that finance is the bedrock of capitalism. Any organization in this society relies on the services financiers provide.

Finance is the bedrock of any advanced civilization. The period before finance was called the dark ages and the introduction of finance was known as the renaissance. Finance is what turns ideas into reality. The engineer, the architect, the doctor, the whatever the fuck has an idea, but he/she doesn't know if it's a good idea.

That's where finance comes in. It is the mechanism by which scarce capital, of which there are an unlimited number of potential uses, are allocated to their most warranted economic activities. By process of trial and error, the bad ideas are weeded out (do not produce at least required rate of return) and good ideas persist.

It's amazing to me that you're certified in banking and don't know this. A product of our nationalized education system, I guess...

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Sep 5, 2018
Esuric:
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing. The only indication that bankers can be paid a lot is that finance is the bedrock of capitalism. Any organization in this society relies on the services financiers provide.

Finance is the bedrock of any advanced civilization.

This is an opinion, generally speaking. The earliest civilizations had ledgers, accounting systems, IOUs, etc. The first banks, I believe popped up before the Renaissance, although I could be mistaken--I don't really remember this anymore.

Most of your post is an opinion, as much as you believe you have "penetrating insight".

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Sep 5, 2018
Esuric:
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing. The only indication that bankers can be paid a lot is that finance is the bedrock of capitalism. Any organization in this society relies on the services financiers provide.

Finance is the bedrock of any advanced civilization. The period before finance was called the dark ages and the introduction of finance was known as the renaissance. Finance is what turns ideas into reality. The engineer, the architect, the doctor, the whatever the fuck has an idea, but he/she doesn't know if it's a good idea.

That's where finance comes in. It is the mechanism by which scarce capital, of which there are an unlimited number of potential uses, are allocated to their most warranted economic activities. By process of trial and error, the bad ideas are weeded out (do not produce at least required rate of return) and good ideas persist.

It's amazing to me that you're certified in banking and don't know this. A product of our nationalized education system, I guess...

Lmao, I scanned over your post but could hardly get past the first line. Just wow. Tries to explain basic economics.. very amazing how dense and arrogant you are. You must trip over your own dick.

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Sep 7, 2018

Can the first two paragraphs of this be made into a poster?

Sep 6, 2018

Occasionally, I hear this sort of BS on WSO. If that's really what you think of finance, you should either quit your job or somebody should fire you for not having a fucking clue why you wake up in the morning every day.

This commentary is dumber than anything that could ever come out of a first year analyst's mouth.

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Sep 5, 2018
NoEquityResearch:

Occasionally, I hear this sort of BS on WSO. If that's really what you think of finance, you should either quit your job or somebody should fire you for not having a fucking clue why you wake up in the morning every day.

This commentary is dumber than anything that could ever come out of a first year analyst's mouth.

Fuck off moron. If you're that insecure about your job, you need to go do something else.

Also, if you don't understand the technical aspects (or just anything one notch up beyond 'basic economics') of how the market efficiently rewards productivity, and how that fits into my post justifying why finance gets paid so much, you definitely need to quit your job.

You're just one of the many suckers who are overly reactionary, sensitive, conservative cucks, who lack sound reason or critical thinking.

/rant

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Sep 7, 2018
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing.

This.
1000x this.
Finance produces nothing.
Rarely, it adds some value.

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Sep 5, 2018

Kudos to iBanked's answer. Now in terms of why I deserve my pay vs. others. I think too often people in the industry think they're god's gift and become insufferable in their own ways.

I think of myself as a doer in that I will get the job done, whatever it is; to this, flexibility is a must. I am a team player and don't lose my cool. I have interests outside of sleds and deals. I am not a social idiot, and can mold myself to the setting.

The above doesn't sound like much, but there are way fewer people who tick all those boxes. I don't mean this in a cocky fashion, but just having a level of self-awareness is lost on many.

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Sep 5, 2018
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing.

Cav21x:

Kudos to iBanked's answer.

hmmmmmm so you support and believe in working in an industry that you believe produces nothing?

what is this, JT Marlin?

https://thumbs.gfycat.com/ForsakenSmallFantail-size_restricted.gif

"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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Sep 7, 2018
Isaiah_53_5:
iBankedUp:

No one really knows why finance gets paid so much, because finance produces nothing.

Cav21x:

Kudos to iBanked's answer.

hmmmmmm so you support and believe in working in an industry that you believe produces nothing?

what is this, JT Marlin?

https://thumbs.gfycat.com/ForsakenSmallFantail-size_restricted.gif

Yeah, he's my father.

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Sep 5, 2018

my employer gets a higher return on their capital that they effectively loan to me than they can get in most other investment opportunities.

just google it...you're welcome

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Sep 5, 2018

PWM-
Finance is foreign to many individuals who have become successful in their respective fields. Many of whom would prefer to focus on what they enjoy doing, rather than try and navigate the markets and all of the options in front of them in preparing for retirement. That being so, I help them make sound decisions throughout their life that lead to a smooth retirement in the most tax efficient manor possible. They get to focus on what they love, and leave the rest to me.

Cultivating mass and wealth since '95

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Sep 6, 2018

For sure that's what you tell your clients when they see the fees you charge through the roof

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Sep 5, 2018

Actually this is incorrect, clients only very rarely (less than one per year tbh) complain about fees. If they do, I point them towards another adviser, I know my worth, and they should recognize it. If they don't, it's not my job to prove it to them, and I would prefer to allocate my time towards those that appreciate it most. To our clients, they would rather focus on what they love, rather than stress about the investment side of things. This could be their hobbies, their businesses, traveling, or something other all together. To them, the markets and plethora of retirement options are extremely daunting, and there are too many variables for them to feel comfortable in doing it all on their own. Basically, they are the captain of their ship, and I am the little GPS that keeps them going in the right direction and warns them should they veer slightly off track. To them, that service is well worth it. Not to mention my highest breakpoint fee is 95 bps tapering down to 70, which is relatively cheap compared to the market taking into consideration all of the services (taxes, tax planning, investing, estate planning, etc.) we provide.

Cultivating mass and wealth since '95

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Sep 7, 2018

Was that a mansion pun?

Sep 5, 2018

I'm not familiar with the term...

Cultivating mass and wealth since '95

Sep 5, 2018

A lot of stupid debate above. Do we produce something in finance? No. We're intermediaries offering a service: advice on how to link those who have capital with those who want it.

Why are finance professionals paid so well? Because the stakes are often very high, and the difference between bad advice and good advice could mean many millions of dollars. Hell, the difference between great advice and the best advice could mean billions. The market is happy to spend big on that service because the consequences are even bigger.

Sep 5, 2018
HighlyClevered:

A lot of stupid debate above. Do we produce something in finance? No.

https://media.giphy.com/media/jSxK33dwEMbkY/200.gif

"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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Sep 5, 2018

Not understanding your objection. It's a service profession. Is this semantics over "producing tangible goods" versus "producing value."?

Sep 5, 2018

Yeah, what this industry actually does, at a fundamental level, is "stupid debate."

Amazing to me that so many people voluntarily devote countless hours to a profession that they not only misunderstand but actually deride. What kind of person spends 90+ hours a week doing something that "doesn't provide value?" I thought millenials were supposed to be idealistic.

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Sep 5, 2018

Should change so many to 3. Pretty sure the idiots above are outliers.

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Sep 5, 2018

I was calling the debate above stupid because I don't think your point can be argued - and also because it devolved into name calling instead of useful discussion. Finance doesn't produce tangible goods, but it does produce value. End of story as far as I'm concerned.

Sep 5, 2018

It is the sad state of affairs that undergraduates are convinced that making an iPhone game or optimizing Tinder is producing something of tangible value, while financing a pharmaceutical company or a railway or a real estate project is just smoke and mirrors and that banking carries neither meaning nor merit.

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Sep 5, 2018

It's relatively easy to justify your income when you have a revenue goal.

Sep 5, 2018

I produce returns, and I'm compensated with a percentage of those. This is not at all a judgment of those whose position doesn't enable them to quantify the value they've created, but when my clients realize a return on their participation in my deals, that's tangible and it's something I created with my knowledge and relationships (that I work systematically to hone and cultivate). Perhaps they could have earned that somewhere else, but they entrusted me to create that and I did. Like @Cav21x, I also consider myself a doer. A lot of you are very smart, reframe what you do a little more positively, if only for your own sake. And if no one else says it, have a great afternoon.

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Sep 6, 2018
Edifice:

I produce returns, and I'm compensated with a percentage of those. This is not at all a judgment of those whose position doesn't enable them to quantify the value they've created, but when my clients realize a return on their participation in my deals, that's tangible and it's something I created with my knowledge and relationships (that I work systematically to hone and cultivate). Perhaps they could have earned that somewhere else, but they entrusted me to create that and I did. Like @Cav21x, I also consider myself a doer. A lot of you are very smart, reframe what you do a little more positively, if only for your own sake. And if no one else says it, have a great afternoon.

This. Usually, in my case, my team and I (which I contribute a great deal toward opportunity/site selection, risk mitigation, upside potential, due diligence, closing, negotiation, etc.) have performed well in the past by way of returns and performance. So, we invest/manage our investors'/clients' money as-well-as-or-better-than our peers, and that performance justifies our compensation. Similarly, if we are talking about the brokerage side of things, one could argue that a good broker's value is that they identify two parties of the deal and facilitate/navigate through the deal in an advisory capacity. In some cases, this may involve heavy fiduciary responsibilities as well as participation in negotiations. This is why better brokers can usually command a bigger fee % than shitty ones, which are left with being a loss-leader as the only strategy that allows them to capture market share.

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Sep 5, 2018

A mix of technical skills, business skills, domain knowledge, public speaking and EQ keeps me comfortable

Sep 5, 2018

Because if they paid me less, I would move jobs

Simple supply and demand

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Sep 5, 2018

This thread is a shitshow.

In regards to the actual thread topic; I'm worth it for the same reason any stock is worth it's price; because someone paid that amount for it. Any other answer indicates a personal bias.

The reason undergrads are getting paid six figures are because banks need the smartest, hardest-working kids to make their materials, because those materials are needed by companies to understand/discuss large financial transactions, because those companies are willing to pay large fees for advice/underwriting.

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Sep 5, 2018

Why do banks need the smartest students? It seems that Finance isn't something such as engineering which requires specific rigorous knowledge. Banks pick from any major at top universities. Imagine google or facebook doing that.

Sep 5, 2018

If you were the CEO of a big corp, would you want the person doing the analysis for your deal (be that an M&A event, IPO or debt raise) to be an idiot? You know one of the most defining events to happen in an executives life.. Would they trust the work of someone who wasn't the brightest and best when it means literally losing billions in value?

By the way, Google doesn't really care what major you did if you can build stuff.

Sep 5, 2018

Smart is among the least of the attributes I look for in candidates. Ahead of smart I would put trustworthy, honest, diligent, self-motivated, curious, cooperative, etc. You need to be smart but it's a hurdle, not a measuring stick.

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Sep 7, 2018

Banking is more about relationships than finance skills. We work hard to make money for ourselves and for our client. Clients can go to any banker, but they keep going to the same people over and over because they trust their banker to execute and deliver value.

Cash and cash equivalents: $138,311
Financial instruments and other inventory positions owned: $448,166

Sep 5, 2018
DidntReadAnything:

This thread is a shitshow.

In regards to the actual thread topic; I'm worth it for the same reason any stock is worth it's price; because someone paid that amount for it. Any other answer indicates a personal bias.

The reason undergrads are getting paid six figures are because banks need the smartest, hardest-working kids to make their materials, because those materials are needed by companies to understand/discuss large financial transactions, because those companies are willing to pay large fees for advice/underwriting.

Issa whole shitshow. Glad so many tuned in

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Sep 6, 2018

In the white-collar high rise positions (finance, exec mgmt, law, etc.), salaries are justified based on the amount of accountability you [should] ultimately have. A lot of times this doesn't work out and corporate execs can get out for making debilitating decisions or financiers make horrible investment advice, which makes this point a sham.

This question is rooted not in how much finance typically makes, but how disparate it can be to other careers, especially in the early stages, it's a baiting question by nature, thus this thread descending into another WSO abyss.

Instead of justifying why I should earn my salary, Here are 2 professions that reward the 'front office' roles so damn much that it really hurts the profession:

  • Medical profesisonals
  • Professional Athletes
Sep 6, 2018

Please explain yourself re: professional athlete pay hurting the profession. Might as well do the same for medical professionals while you're at it.

Sep 6, 2018

I'm with Bob on this one - I don't get why two of arguably the most difficult (on average) career tracks to get on shouldn't have out sized compensation. Think of how important a doctor is to a hospital or a private practice - a good or bad one can make or break a department/practice. Especially when you look at the risks/stress/effort involved in this field to get to where they are, it's pretty staggering. With pro-athletes, there are very few people who can do what they do to the level that they can do them. With the amount of revenue/interest they command, it absolutely justifies their comp packages. Even if LeBron makes a shitload of money for the Lakers, he's going to drive several X times that in merchandise, TV, ad and ticket revenue for the organization and league as a whole.

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Sep 6, 2018

125K - accidentally selected Finance in the drop down menu instead of a Forestry degree

What concert costs 45 cents? 50 Cent feat. Nickelback.

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Sep 6, 2018

I'm worth a hell of a lot more than my salary, thus my salary is not my only form of compensation

Sep 6, 2018

The god given and man envied mastery of Bullshit.

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Sep 6, 2018

Knowing how to use Excel and Powerpoint to dazzle people with bullshit is a critical skill any organization needs to get their hands on OPM. Someone can have all the operational experience and business savvy in the world, but if their presentations and models look like someone over the age of 50 or under the age of 10 (those are equivalent for this purpose), no one will give them that sweet, sweet capital they need to keep Ray Dalio's economic machine running.

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Sep 6, 2018

I'm worth it because I take it up the *ss while wearing a smile every single day

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Sep 6, 2018

Amen brother

What concert costs 45 cents? 50 Cent feat. Nickelback.

Sep 7, 2018

I'm worth it because it's not a lot. Bam.

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Sep 7, 2018

There are a few reasons why people in Finance earn good money:

1) Especially for those who are working in the Finance/Treasury teams of corporates, you have close/direct access to the company's money, and therefore it's important for you to be remunerated highly to remove any incentive to steal that money you're dealing with day in day out.

2) For those in the business of sourcing capital for others, you're the equivalent of a sales person in any other industry. You're bringing in the business and therefore you get a cut of that new revenue. Why does your bank get that high commission/fee in the first place? Because that's the market's view of the price to get $x amount of capital.

3) For those investing for others, that's also the market's view of the price of getting them a certain targeted return on their investment.

4) For those doing any detailed structuring/modelling, you're providing complex solutions not unlike that of engineers and lawyers. So you're worth the money.

In most cases, Finance acts as the enabler for production - the main driver for the economy.

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Sep 7, 2018
PE.CorpDev.Guy:

In most cases, Finance acts as the enabler for production - the main driver for the economy.

respectfully disagree most emphatically

Sep 7, 2018
ptm24:

There are plenty of posts on here about whether or not IB or other finance jobs are "worth it." However, I haven't seen many posts on whether or not people on here think that they're worth all of the benefits that come from top finance jobs (high salary, great exit opps, etc.). What makes you think that you're worth it?

I'd say the previously high pay of finance was excessive and almost certainly participants were over-paid, and we're generally not worth the money paid.
But now, I think the party is over.
At least, that's my experience out here in Asia.
I was a VP2 at a bulge bracket, and got 200k salary, 40k bonus, 8 years ago.
Now I'm in PE, Sr. Director level, running a group, and get 200k, no bonus.
Not sure how that jives with US levels, but there you go.

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Sep 7, 2018

Because if they could get away with paying less, they would. Your value is what someone's willing to pay.

Now if they ever find out a scrub could and would do my job for less, it's another story. But that's generally true of anyone not working at NASA.

Sep 8, 2018

kinda sad to equate your worth to an annual number and shit
do you factor in interest payments from that ill ass high yield capital one 360 money market into that?

heister:

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

Sep 9, 2018
Comment
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Sep 9, 2018