Travails of Wall Street workers

[bigbadwolf]

Andy Schiff responds. And demonstrates the validity of Einstein's theory of relativity.

 

[Katrina]

But the banking lifestyle isn't appealing to me. I do not need a 6000 square foot house in Connecticut where I write a check to Exeter every month and drive a porsche. Those things don't make you happy- they just make you jealous of the guy in the Ferrari and the next door neighbors with the 7000 square foot house. And then when the financial rug gets pulled out from under you, you're stuck with a home that has a ridiculous heating bill and crazy property taxes even if you've got the mortgage paid off.

Having more money and a more modest lifestyle means you can afford to take more risks, too. To go do that startup or quit your job and get an MBA.

GoIllini - It is hard to live frugally when you hang out with peers making millions a year. you will be subject to a lot of ridicule , and it is possible that you may actually loose some of your rich buddies. Alot of times, people at those levels spend money really to show off and they aint even buying things that are useful to them.

I kinda like your views though, it feels more down to earth.

 

[bigbadwolf]

GoIllini - It is hard to live frugally when you hang out with peers making millions a year. You will be subject to a lot of ridicule, and it is possible that you may actually lose some of your rich buddies.

And this matters if you're "networking" -- i.e., you need a network of influential contacts. If you're at the top of the heap, or a self-made entrepreneur of any kind, maybe you don't need it (though from experience I've seen even entrepreneurs need to "network").

 

[Jayanthan]

And this matters if you're "networking" -- i.e., you need a network of influential contacts. If you're at the top of the heap, or a self-made entrepreneur of any kind, maybe you don't need it (though from experience I've seen even entrepreneurs need to "network").

Perception is reality!!!!

What people see is more important than what is, so show them what they want to see to fall in love with you. That's all it is.

 

[TATW]

funny guys trying to tell that appearance doesn't matter to them!

 

[GoIllini]

GoIllini - It is hard to live frugally when you hang out with peers making millions a year. you will be subject to a lot of ridicule , and it is possible that you may actually loose some of your rich buddies. Alot of times, people at those levels spend money really to show off and they aint even buying things that are useful to them.

I kinda like your views though, it feels more down to earth.

I dunno. A lot of folks on the trading floor are like me. VPs and Directors commute back to Jersey City and Hoboken every night.

I do think it's helpful to socialize on a certain level. $7/beer at a bar near work is money well spent.

It is probably much different in banking than it is in quantland and the trading side of S&T. Relationships and soft skills matter a lot more over there. But the thing is that saving money *early* gives you an advantage in the process later on.


I never got into banking for the lifestyle. I got into it to watch the accruals. To watch $100 turn into $110 the next year then $121, $133.10, 146.41, etc. (yea! pascal's triangle) I also have a lot of genes for longevity. So that either means I'm going to have to spend 20 years living in a very sad, depressed nursing home on medicare (if I'm lucky and it's still there), or I get to watch my dividends grow every single year and leave large sums of money to the Salvation Army or to my kids.

funny guys trying to tell that appearance doesn't matter to them!

Appearance matters to me, but only to an extent. Paying $350 (sale price) for a US or Italian made suit- like Joseph Abboud or Tasso Elba- is worth every penny after your first year as an analyst. The suit has a tougher build and a more athletic fit and the label indicates just a little extra class than "Made in China". In trading, people who wear Hickey Freemans aren't rich- they're stupid. And since everyone takes the train in anyways, nobody knows what car you drive or what house you live in. (That said, after you put a ring on, your wife knows which house you live in, and she is much more important than your coworkers and business associates.)

 

[bigbadwolf]

Paying $350 (sale price) for a US or Italian made suit- like Joseph Abboud or Tasso Elba- is worth every penny after your first year as an analyst. The suit has a tougher build and a more athletic fit and the label indicates just a little extra class than "Made in China".

Yes, paying several hundred dollars for a good suit usually works out better in the long term (provided you take care of the suit). Cheap suits are poor value.

On a side note, I was talking to a retired construction friend of mine earlier this evening. Apparently all the contracts were really being decided on the golf course -- so whether you like it or not, you had to sign up for membership of a private golf club if you wanted the contracts to keep coming in. Networking at a certain level costs money and requires you to maintain a certain way of living.

 

[GoIllini]

@bigbadwolf Ugh, I hate golf. Quintuple bogies on a par 3 hole for me.

Public courses are the way to go. Otherwise the firm should be helping to pay for your membership.

Hang gliding is much more interesting. Instead of worrying whether the ball is going to land in the woods or bounce off a tree, you are worrying whether YOU will land in the woods or bounce off a tree.

 

[Andy Nguyen]

I dunno. A lot of folks on the trading floor are like me. VPs and Directors commute back to Jersey City and Hoboken every night.

I'm not sure why a lot of young people have the perception that everyone working on Wall Street pull in $500K salary, live in the city, go to the Hamptons on the weekend, have steak dinner every night?
Must be from the movies like Wall Street.
Majority of people in finance are just regular folks with a slighly above average salary and tax bracket.

So let's try to break the notion and myth that you will get rich when you go into finance by doing MFE. Quite often, the opposite is the case.

 

[bigbadwolf]

So let's try to break the notion and myth that you will get rich when you go into finance by doing MFE. Quite often, the opposite is the case.

Many of the prospective MFE students posting here seem to be suffering from the same misapprehension.

 

[Katrina]

I also have a lot of genes for longevity. So that either means I'm going to have to spend 20 years living in a very sad, depressed nursing home on medicare (if I'm lucky and it's still there), or I get to watch my dividends grow every single year and leave large sums of money to the Salvation Army or to my kids.

GoIllini - I think i have similar genetic makeup. I know your trying to be optimistic, but look at this picture. Your going to work for 30 years and if you have a long life say (95 years) you would have to support your self for another 30 years based on your working adult life. If you factor inflation, it is not realistic that it would happen. Your savings will last you 10-15 maybe 20 years at most.

I am not that pessimistic unlike others who will say that social security will disappear, i think it will be around in your lifetime, but payments will be so little you would then be paying your electric bill with it.

Yeah, i have lost sleep over living long life, it can be miserable if your not wealthy. Back in the old days only the rich lived longer lives. I am not trying to influence you in a bad way, but i think you should start smoking as that may help reduce life, it has some benefits. It also helps relieve some stress through out the day, and i am assuming your a quant and good with numbers. There are online calculators available that are pretty good at calculating ones age, based on variety of factors. Based on that you can decide if you wanna smoke one or cigarettes or a pack.

 

[bullion]

I generally offer fairly gloomy outlook about MFEs, yet I'm applying. So let's liven up the convo a bit with why we should do finance and how you CAN pull in 500k one day

1) finance has higher business cycle frequency. It literally rides on the boom and bust of ANY industry. So for example, if you only work in tech, then you'll miss a rally in real estate. But if you're in finance, you're riding off increase in transaction commission for any industry that needs to expand.

2) job variety. A lot of people don't know what they wanna do, so banks set up rotational programs. At least before you settle in a department and become a specialist, you supposedly have a lot of exit options as a generalist.

3) people interaction

4) better looking guys and girls. Appearance matters.

5) "prestige" - banks have certain institutional advantages, but in a nutshell they take money from person A to person B. so to win business, they pay a lot more money for marketing and corporate image to convince you just how important, smart, and amazing they are. In contrast, a lot of funds (regulatory reasons) and companies are like hidden gems. So everyone will remember your company if you work for Goldman Sachs (as a doorman) vs operate the largest ice cream supplier in the NYC metro area even if the ice cream man rack in a lot more cash

6) it's a desk job

Now, the secret to pulling 500k...

1) don't give up. The only reason Warren Buffett is rich is bc he lived long enough to ride through a few economic booms (10 years per cycle) and actually took advantage of them. So yes finance might be in a hole right now, but it's also a good time to flush out all the deadweight and give the industry a chance to refuel

2) always eye for new opportunities. Seriously, your desk job is not worth 500k. The reason your boss gets that money is for "supervising you"' aka takin a cut of your gain, and actively expanding new business. So if all you do is work, go to the bar, go home, and return the next day, you're not getting the money. Pay extra attention to your clients projects (and maybe build a startup that'll feed to that demand). Or meet up with new people in the city. It's that extra mile OUTSIDE OF WORK that'll make you rich

3) SAVE. Lesson uno for any new trader is risk management. You NEED a baseline to survive first before you can take advantage of new opportunities, so SET THE BASELINE LOW. Buy a suit, but drink less. Have socials, but don't smoke. And most importantly, find a girl who wanna save you money instead of ask for those expensive gifts!

 

[Barny]

What is the point to following Warren Buffet in this particular matter. you have money, if you don't buy some expensive toys and play with that. what is the point? What is Warren Buffet is trying to teach us through living in 500K house?

You are clueless my friend. If you don't change your attitude soon, you will just be another member of the middle-class struggling to get by on $300k a year. I.e. pathetic.

Gollini - you are a legend - it's refreshing to find people in finance who have "figured it out" and realise that buying a porsche, spending $500 on a bottle of champagne every weekend and trying to impress people with your latest material purchase is actually a route to unhappiness rather than happiness.

The only benefit money brings is independence. This has been shown time and time again in academic study after academic study. Once you reach the point of independence additional funds do not make you happier.

I can tell you one thing that will make you unhappy though - working for a dickhead boss who you're too scared to piss off because then he'll fire you and you won't be able to pay the finance on your porsche or your 50" TV and your trophy wife who's only with you for the money will leave you. That truly will make you unhappy, and that's the situation you want to put yourself in by the sounds of things if you keep going they way you're going.

 

[Barny]

I generally offer fairly gloomy outlook about MFEs, yet I'm applying. So let's liven up the convo a bit with why we should do finance and how you CAN pull in 500k one day

1) finance has higher business cycle frequency. It literally rides on the boom and bust of ANY industry. So for example, if you only work in tech, then you'll miss a rally in real estate. But if you're in finance, you're riding off increase in transaction commission for any industry that needs to expand.

2) job variety. A lot of people don't know what they wanna do, so banks set up rotational programs. At least before you settle in a department and become a specialist, you supposedly have a lot of exit options as a generalist.

3) people interaction

4) better looking guys and girls. Appearance matters.

5) "prestige" - banks have certain institutional advantages, but in a nutshell they take money from person A to person B. so to win business, they pay a lot more money for marketing and corporate image to convince you just how important, smart, and amazing they are. In contrast, a lot of funds (regulatory reasons) and companies are like hidden gems. So everyone will remember your company if you work for Goldman Sachs (as a doorman) vs operate the largest ice cream supplier in the NYC metro area even if the ice cream man rack in a lot more cash

6) it's a desk job

Now, the secret to pulling 500k...

1) don't give up. The only reason Warren Buffett is rich is bc he lived long enough to ride through a few economic booms (10 years per cycle) and actually took advantage of them. So yes finance might be in a hole right now, but it's also a good time to flush out all the deadweight and give the industry a chance to refuel

2) always eye for new opportunities. Seriously, your desk job is not worth 500k. The reason your boss gets that money is for "supervising you"' aka takin a cut of your gain, and actively expanding new business. So if all you do is work, go to the bar, go home, and return the next day, you're not getting the money. Pay extra attention to your clients projects (and maybe build a startup that'll feed to that demand). Or meet up with new people in the city. It's that extra mile OUTSIDE OF WORK that'll make you rich

3) SAVE. Lesson uno for any new trader is risk management. You NEED a baseline to survive first before you can take advantage of new opportunities, so SET THE BASELINE LOW. Buy a suit, but drink less. Have socials, but don't smoke. And most importantly, find a girl who wanna save you money instead of ask for those expensive gifts!

What on earth have you written here, young chap? It sounds like you're trying to convince yourself that you're making the correct decision when deep down you know you're making the wrong one.

Here are some truths for you, in response to your points:

1) Who cares what business cycle they run off - the days of outrageous speculation are mostly numbered, my friend. No speculation = no colossal salaries = no riding the coat-tails of other industries.

2) There is little variety in what you do. You clearly haven't done much research. As a quant, you will be programming, day after day after day. As a trader, you will stare in front of a screen and watch markets and take calls from clients, day after day after day. As a sales person, you will send emails all day. Day after day after day. Are you getting the picture?

3) There are very few jobs on this earth that do not require people interaction.

4) Absolutely clueless here. Most bankers are ugly. Mainly small, spotty, skinny or slightly fat and geeky. There are very few women in the industry. Those that are, will either be geeks or women who work in the front-office who got there a) because of their amazing looks and people skills b) (and more likely) because you can't really separate their personalities from that of a man. There are very few of the a)'s.

5) There is no prestige in banking. The emperor has no clothes anymore. The world has woken up to what the investment banking industry is. During the financial crisis, if you would have told Joe the Plumber that you were a banker at a dinner party, you would have been kicked out. It is dirty, boring, immoral work which is only made tolerable by the vast sums of money one (could) can earn.

6) A plus for some. Let's see how much you enjoy sitting at a desk and behind a screen for 16 hours a day when your health and sanity pay the price.

Now for the $500k..

You won't make it. The industry has changed.The days of making $500k 5 years out of college are long gone, and if it does happen it will be reserved for the very lucky, and very fortunate few, not an MFE grad unless he somehow manages to become either of those things which is very unlikely.

Now, I don't mean to be rude, but you've written a load of rubbish and clearly don't have a clue about the industry you're aiming to get into, that is after you've blown $100k on tuition for an MFE programme. Do your research, or you'll end up like all those other MFE grads who blow $100k on an education and then don't get a job. And please stop trying to give the rest of advice, it's a little cringe-worthy to read.

 

[Jayanthan]

Barny !!! Appreciate your comment
I am not sure, why you came to that conclusion (I am clueless)? If you are worth of billion bucks? Why shouldn't you buy some of your favorite toys like expensive cars, big mansion ( in different countries), yacht and so and so forth??? What is the point of just having money. This is your one and only life, why don't you live your live to the fullest. ( Larry Ellison, Sir. Alan Sugar, Richard Branson, ........)

 

[bullion]

Barny I agree with everything you say, but I still think business girls are hotter than technical/IT ones on average....

Much like my previous posts, I KNOW I'm not being accurate. I am speaking regarding finance in general, and I am purposely spinning things to offset all the negativity you, bigbadwolf, and most current professionals all share. In fact, I said

I generally offer fairly gloomy outlook about MFEs, yet I'm applying. So let's liven up the convo a bit with why we should do finance and how you CAN pull in 500k one day

I know things are tough out there, and I agree most applicants are unrealistic/misinformed. Having worked as a trader, I share your cynicism. But there are still infrastructure undeveloped and markets yet efficient all across the world, and these new entrant might still make a name for themselves with a spanking new wallpaper from Princeton or Berkeley. These applicants all have different goals and plans, and their age/background may open different doors with a MFE than what average American Wall Street guys get. They don't need to work as quants. They don't need to work in banks. Heck, I know graduates who start doing prop trading in their basements. I am applying to MFEs to pursue a hybrid career outside of traditional quant space, and universally dismissing other people's viewpoints seems a bit arbitrary and outside of your expert domain.

It's ok to not share my humor. It's GREAT to educate. But it's not fair to be slamming people's dreams and hopes just because we hate our jobs.

 

[Jayanthan]

We love to hear your experiences. It doesn't matter good or bad. We welcome everything.

 

[bigbadwolf]

( Larry Ellison, Sir. Alan Sugar, Richard Branson, ........)

(Lord) Sugar and (Sir Richard) Branson both quit school at the age of 16 or 17. Likewise, the deceased (Lord) Goldsmith, who used his poker winnings as a teenager as seed capital.

 

[Barny]

Barny !!! Appreciate your comment
I am not sure, why you came to that conclusion (I am clueless)? If you are worth of billion bucks? Why shouldn't you buy some of your favorite toys like expensive cars, big mansion ( in different countries), yacht and so and so forth??? What is the point of just having money. This is your one and only life, why don't you live your live to the fullest. ( Larry Ellison, Sir. Alan Sugar, Richard Branson, ........)

This is what you're not getting. Living life to the fullest does not entail blowing all your money on material goods. Fair enough, Buffett can probably afford whatever he likes and not jeapordise his financial security. But he chooses not to.

Buffett gets pleasure from sitting behind his desk reading company financial statements. That's it. He recognises that - he recognises that a big house, an expensive car, a yacht - do not make him happy. The thing that makes him happy is analysing stocks. Why get sucked into the materialism trap when you know it's not going to fulfil you?


This is particularly important when you're on a middle-class wage and are not super-rich. The super-rich (Branson, Buffet et. al.) can afford a bit of materialism and it makes no difference to their lives. The middle-class can't - yet they get sucked into the trap which makes them miserable.

When you earn $500k a year, you are on a very, very nice salary. But you are not rich. And you can either choose to use your $500k to fund your phony lifestyle which basically consists of trying to impress other fake people with the purchasing of material goods, or you can use your $500k to make yourself truly happy - by making yourself financial independent, and being your own boss for the rest of your life.

I feel sorry for people who earn $500k a year and moan when they get a $50k cut to their salary, because it shows they didn't get it in the first place - they should have been frugal and saved their money so that a $50k salary cut didn't affect them whatsoever.

 

[Jayanthan]

Barny , Nice explanation. Thanx mate