Choosing the right major is hard. Choosing a career you will enjoy and be successful at is even harder, especially in a down economy. Not too long ago, going into finance was a no-brainer. Who wouldn’t want to graduate from college and earn a great starting salary with an even better bonus?
Now, with shrinking compensation pools, attrition, and a negative public opinion of the financial industry, is going into finance still the right career choice? That depends on what you want to get out of it.
When I started at UBS in 2005, I didn’t know what a French cuffed shirt was, never had a shoe shine, and had no idea what to expect. On my first day, I sat down in front of three computer screens and was told to start answering the phone. I also made a lot of coffee. Several years and a few promotions later, I went from working in a small office in White Plains, New York to working in a huge office in Chicago and living in a doorman building on Lake Shore Drive across the street from a golf course in one of the nicest neighborhoods in the city.
By the time I left the industry, I had left UBS and returned to New York to work for Bank of New York Mellon. I had a great quality of life, but I wasn’t happy. I didn’t feel like I was building anything meaningful. That’s why I decided to go back to school to finish my degree and go into journalism. Money didn’t buy happiness for me.
The average financial analyst, the most entry-level position, makes $70,000 a year. Compared to the median household income in the United States of almost $52,000, that’s an excellent salary. But, what most people aren’t prepared for is what it takes to earn that nice paycheck.
Analysts work anywhere from ten to fourteen hours per day, sometimes more. They have almost no social life and get no respect. It’s a thankless job working for ruthless managers. Depending on whom you work for, you could be a glorified intern or work on actual meaningful business. Where you work also plays a huge role in that as well.
Though fewer college graduates are going into finance, competition is still fierce. Why fewer graduates are going into finance isn’t exactly measurable, but it could have to do with less opportunity or Occupy Wall Street sympathy. It is most likely a combination of both. There are most certainly less finance jobs than when I was in the industry. There is also an uprising of negative sentiment towards Wall Street after the arrogance of so many executives during the meltdown in 2008. Having seen the poverty and suffering of so many, our generation wants to give back more than it wants to take says the New York Times.
According to the Bureau of Labor Statistics, there are many other job sectors that are growing and pay well. For example, Biomedical Engineering is expected to grow 61.7% between now and 2020 with an average median income of over $81,540; physical therapists are expected to grow 39% with an average median income of over $76,000; finally, veterinarians are expected to grow almost 36% with an average median income of over $82,000. You don’t need to work in finance to earn more than the average individual. You can even contribute more to society than profiting off of arbitrage while doing it.
That brings us back to the original question: Is finance the right career for you? It depends. If you want lots of money, long hours, and early retirement, you might want to start looking at which banks or hedge funds you will apply to.
Photo Credit: Alex Proimos