In a lot of ways, isn’t it becoming a sellout? Anyone at that level of smarts should be able to through the golden gates of banks like Goldman and understand they do mostly monotonous work like Powerpoints and Spreadsheets for long hours under tough bosses. That is the tough part, not the job itself.
So why do top engineering PhD from MIT, Stanford etc go on and become bankers?
Money, money, and money are the top three reasons. When you can retire at 35 with a net worth of $50 million I suppose that could be pretty tempting.
But that is the “golden illusion” I mentioned above. The “retire at 35 with a trophy wife and $50M” does not happen - atleast not anymore.
That is my main question - how do people so smart (engineers at MIT etc) be fooled by it? Sure, they might be making 15-20k more at entry level than what they would if they stayed in the engineering realm, but I doubt they have absolutely no network/experience that will keep them believing that they are going to retire at 35 with millions. Is the human race so easily fooled by a few bucks more? For an additional 20-25k you let go all that you have worked towards for 20-25 years of your life?
Nope, the talented quants are making LOTS more than just a 20k bump. It’s brutally long hours and the pressure is high, but the money is real.
This one goes out to @boneh3ad …
One of my classmates at MIT was tempted by “the dark side”. He saw the high potential for burnout or even more likely you’d slack off a bit and get replaced by a younger, more aggressive new grad. Your prospects for an engineering career would then be considerably reduced being out of it for that time. You could make a lot of money, but did you have the guts and the perseverance to survive. He chose engineering.
Some of the most interesting work I ever did was programming for a Fixed Income Analytics group on Wall Street. Lots of number crunching. Back then the money was great, but I’m not sure what it’s like now.
The downside was ruthless office politics - way beyond anything you find in an engineering company.
@baseliner Why do you think this doesn’t happen anymore? It’s not like the government cracked down in any way or passed any meaningful legislation after the housing bubble burst in 2008. People can and do still strike it rich on Wall Street, and even “failing” on Wall Street will generally still pay better than “making it” in engineering for a quant with a PhD from MIT or any other top school. That’s the unfortunate reality.
That said, I still have zero interest in that type of career. I got into engineering to understand and create things, not move money from one large pile (and sometimes small pile) into another large pile.
I think it doesnt happen not because of any govt regulation, but rather because of simple demand/supply. Everyone expects to become rich through getting into any Bulge Bracket, so they all rush in. From history majors at Yale to our engineering PhDs at Stanford – they all want in. I know someone very closely who works at GS, and while he does keep drilling into me that he makes more than an engineer already just 2 years out of college, he doesn’t make enough to be planning retirement at 35. He makes about 150k including bonus in Manhattan. That is definitely good for a 25 year old, but nowhere nearly “sky high” or anything like that. Also, the hours are ridiculous. I tell him his hourly wage is probably not high at all – he averages 75-80 hours a week dedication to work easily. You do the math. If an engineer takes 2 jobs (to make the hours match), he would probably make 150k too (especially in Manhattan)…
But yes, I agree – not the life for me. I enjoy running my ANSYS simulations, learning new things, and actually generate real intrinsic value to the world.
The salary boost is probably about that much, but it misses the fact that the majority of the pay for Wall Street quants is in bonuses handed out at the end of the year which can be multiples of the salary. For example, they might make $150k salary and get anywhere from $100-500k bonus to start. If they have the kind of personality that allows them to survive in the circus that is a trading floor, they will make many multiples of that after a few years of 90-110 hour work weeks.
Also, having worked on Wall Street makes you qualified to work in other money laundering schemes, such as hedge funds or venture capital. Either way the primary motivation is money.
Yea, in the long term the difference really does spread out, but I still say not quite enough for them to retire in their 30s…
Also, as someone who currently holds a PhD in engineering, that $150k is considerably more than I make one year out from grad school. I also work more than 40 hours per week.
I still doubt you work as many hours as these guys - also, are you accounting for the Manhattan factor?
The 30s are long term on Wall Street. If you strike all the right promotions your annual earnings will quickly become millions of dollars.
As a caveat, the average outcome is not anywhere near that impressive. But your next employer doesn’t need to know you aren’t in the top bonus bracket, and the company you work for probably won’t contradict you if you lie and say you’re in the “biggest bonus pool.”
I think you may be in for a surprise if you ever go to graduate school. I easily worked 80 hour weeks and that load hasn’t let up a ton in my current position.
Don’t forget that lots of wall street salaries are part stock option base. So a part of the salary is tax at a lower tax bracket. So the take home income end up being more than a person just making a wage salary of $150,000.