Pay in tech and finance

College Majors Math/Computer Science Majors
41

At stuff he is looking at, it sounded like 50% plus odds looking at past history.

42

Same here and we know hundreds in tech and finance. Many who went off to do enterpreneurial things in their 30s which were highly successful ( tech in the mid 90’s was exploding). It’s actually embarrassing/would have been looked down on in our circle to retire at that age. Most went into VC for a few years then spun back out. No one I know who sat at home in their 30’s/40s’. Many “retired” at 50ish and do consulting or sit on boards. Some went into something else and often did very well. Funny thought though.
I can’t imagine my kids being wildly successful then just hanging it up. Just not how we raised our kids. I don’t buy the Forbes/INc Magazine articles where they describe a business where someone makes and sells a company in 12 months. Just usually takes longer and evolves.

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43

Same company with no titles?

44

Haha. I mean there are some light titles. But really not. Most people are individual contributors.

And you seem to have taken the retire word too seriously. It means doing something different, and not necessarily for money.

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45

I’ll start by saying I know nothing about biotech. But the question you are asking is also a general business trajectory question. The important thing when you are starting out is to work for a firm where you can learn a lot and take on growing responsibilities. Large firms can pay less ( often offset by better benefits) but you can often parlay the large company name into a firm which better fits your interests and career goals. It’s great to work at a company at the forefront of what is happening in your field. It will grow fast, you will have more opportunities and you will be able to branch out. Taking high pay for a small firm is a trade off. I’d wait and do that later.
Your interests are in a high growth field. Living and working in an area where there are lots of biotech firms (like Boston) can also be helpful. Also, I’d suggest attending networking events and conferences. You can make good contacts and find out what’s happening.
Once you are in the field continue to explore and talk to people with subsets that you are interested in. Maybe keep a couple of interest areas. Sometimes one area will move faster than another.

46

Sorry, I’m just more of a realist. When I was 20-25, I may have fallen for the no title thing. I actually worked at a company like this before doing my first entrepreneurial thing because it paid 2.5X anyone else. But my eyes were wide open and I hated every minute.I took it for the $. Stayed a year and a day ( by design so I could get the 401K benefits match).

The kids who start out as realists, IMO and are willing to work hard and take opps as they come along do well. I’d personally never hire someone who thought they were going to retire at 30. It would tell me a lot about their capacity for work. Sounds like your family believes there is a 10-15 year path and that’s fine. We were both very lucky and hard working in terms of careers and very established by 30. Still no way close to retirement then.

Anyway best of luck to him.

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47

Thank you. He is a hard working kid, and conservative in making assumptions. He consciously set aside startup paths, because he doesn’t believe in them. He spent a month at a VC firm in 12th grade and told me that it doesn’t make sense to invest in anything less than the largest firm in that space (within reason in terms of quality of management) because the returns of the underlying companies are power law distributed, and you can’t afford to miss that one Google that might happen. In that context, joining a startup is like a VC firm investing in a portfolio of size one. So – he/we are aware of risk / reward keenly.
I didn’t say he decided to retire in 10-15 years. I said he thinks if he spends 2-3 years at the firm, he will know enough about himself, and the space, to then “know” if he can retire in 10-15 years. Otherwise no harm, no foul. 2-3 years is not the end of the world. Something learned.

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48

You also need to look at where jobs are located. A tech job in SF or a finance job in NYC needs a high pay rate just to cover cost of living.

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49

I understand. We may be in the same state :slight_smile:

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50

Sorry but this is self explanatory. A 12 grader who works as an intern at a VC doesn’t understand the space at all. VC firms invest across the board in a lottery type play backed by research. They know not every firm will pop.

Again, sorry but VC’s who have 20 years under their belt often don’t understand the risk/rewards of every company in their portfolio/stream. This comment above seems naive, at best. unrealistic to me. VC’s often have decades of experience and insights that led them to be entrepreneurs and then on to VCs. The insights of a VC aren’t easily replicated. Certainly not by an intern. VC’s are smart, but more importantly they have relevant experience. A lot of this discussion to me seems highly improbable. Your son seems like a great and smart kid. As I said best of luck to him.

I’m still of the opinion that 99.999% of this 2-3/10 year plan is unrealistic. YMMV.

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51

My close friend who went from a senior position (top 20 in the firm) at a FAANG to a top 10 VC firm did not disagree with the statement that underlying returns are power law distributed. This is separate from whether VCs understand the companies in their portfolio or not.

It doesn’t matter if someone is a 12th grade kid or 40 years in the business – you can pick valid points in someone’s argument if the point is valid :-). Startup employment is poor risk reward was the point I was trying to make.

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52

Yes, I’ll agree to that in most cases. I was responding to the overall tone and interpretation of the post.

53

Well, for example, I had him read Asness’s leverage aversion and risk parity in 8th grade. So he is exposed to risk and reward early on. At this point in his life, 7 years hence, he has a different understanding of risk. He is asking questions like a) what is the Chernoff bound of a large sample of small bets? b) what is the effect of correlation on the bound? c) How correlated really are things that appear uncorrelated? d) how dependent is the income of this firm on industry structure? government regulation? e) Are they making money out of thin air or are they providing a service for which they are getting paid? f) what are absorbing states of the world for him personally and for the firm? g) who in the industry is competing with whom? Senior people in the firm display other skills that involve adversarial game playing with other people in the industry etc.

We discuss things at home without regard to age. And you have a valid argument only if you bring data to the table. If he is going into this profession, he needs to ascertain for himself that earnings are dependent on one or more of a)skill he currently has, b) skill that is trainable, or c) ability that is not trainable, but he inherently has. I don’t need to convince him of this. This part is obvious. If that doesn’t work out, he will leave.

10-15 year paths depend on whether someone is giving you access to leverage, how early in life are they giving you this leverage, how much leverage it is, whether you can do something with that leverage, and whether they will give you tight attribution to the outcomes.

54

It’s great he’s learning all this. And I am outside the normal opinion and believe that young kids can learn and understand a lot at a young age. That being said, no 12th grade kid reading any book or talking to anyone with experience is going to be on the same level as a person with decades of experience. Even if they are an intern. I’m not arguing how they are getting paid or anything at all about startups. You made some naive observations, I pointed those out.
I think many kids think they have a degree and they know as much as someone in the field for years. Some people actually accumulate knowledge for decades. And the fields you are speaking of tech and finance, have people whose knowledge is impossible to replicate in a class. In technology, many people can reference the entirety of the 1990’s (some go back to 1980/1970’s). Why is that important? Well they have context. And they might take a piece of knowledge from here and another from there. It’s the same in finance. We have a family member for example who works for a leverage buyout firm. He structures deals that often take decades to put together and usually fall through. The numbers and complexity of the deals is staggering. Though he and I have nearly the same education, his knowledge in that field is decades deep and highly specialized in a subgroup which he works in. Can I do what he does by reading some books and talking about it? Not at all. it would take me at least a decade to get the background to work even closely at that level. Even then I don’t have the 40 years of context to know the pitfalls.

It’s fine if you want to ascertain that basic knowledge is enough to understand entire markets/fields and make broad assumptions. Knowing what you don’t know, IMO, is a sign of intelligence. This is esp true in knowledge fields, IMO. Those who fail fastest are know it alls rather than learn it alls. YMMV. I think your assumption of being rich in 3-5 years is a pipe dream. I honestly hope it comes to fruition but as I said, I’m a realist so I don’t go for bravado when facts and expertise are widely available.

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55

To pay off the very large student loans that people on these forums would have cautioned against taking?

Of course, that may be more of a factor in some other professions like medicine, where medical students chase the residencies in the highest paying specialties because they are looking at how to pay back $400,000 of medical school debt.

56

I wonder how much of the forum demographic that complains about not getting college financial aid for their kids at $250k+ “middle class” income that they can barely make ends meet on (leaving no savings for the kids’ college) would be able to live happily ever after on a $70k income.

57

Perhaps students should approach their fist employers much like they (should have) approached their college applications - opportunity and fit?

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58

I often find myself explaining what happened in the late 1990s to young people. To them it’s ancient history and “this time will be different” because technology has changed so much. Unfortunately for them the laws of physics haven’t.

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59

Yes, it is important to consider fit and happiness rather than just look at the highest salary. For example, the Goldman Sachs working conditions survey at https://fd-binary-external-prod.imgix.net/JHxu13NMxHm3PvR1NCk1YL3z5Pw.pdf?dl=Arbeidsomstandighedenonderzoek+Goldman+Sachs+(pdf).pdf was linked in another thread. Some highlights are below.

  • Work Hours Last Week: 106 hours
  • Mean Work Hours Per Week: 98 hours
  • Rate Mental Health Before and After Job: 9/10 → 3/10
  • Rate Physical Health Before and After Job: 9/10 → 2/10
  • Rate Satisfaction with Firm; 2/10
  • Rate Satisfaction with Work Life: 2/10
  • Rate Satisfaction with Personal Life: 1/10
  • Has Work Negatively Impacted Relationships?: 100% Yes
  • "My body physically hurts all the time and mentally I’m in a really dark place.”
  • "Being unemployed is less frightening to me than what my body might succumb to if I keep up this lifestyle.”
  • "There was a point where I was not eating, showering or doing anything else other than working from morning until after midnight.”
  • “What is not ok to me is 110-120 hours over the course of a week! The math is simple, that leaves 4 hours a day for eating, sleeping, showering, bathroom and general transition time. This is beyond the level of ‘hard-working’, this Is inhumane / abuse.”

This sounds like a nightmare to me. While the salary may be good, I can’t possibly imagine taking a position with experiences described in the survey. In contrast, I enjoy working as an engineer in tech. I have always enjoyed solving tech problems, and over the years my position has moved gradually towards emphasizing the tech activities I especially enjoy, and deemphasizing tech activities I do not. It is by no means the highest possible salary position in tech, but it’s also important to consider whether you’ll reasonably enjoy what may be the majority of waking hours on weekdays or will be living in a nightmare for a few years, with hopes of getting out ASAP and retiring.

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60

If you are earning $4,000 per week while working 100 hours, that’s only $40/hour. Not really good pay.

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