The Future of Wall Street

For those that are in the “know” Wall Street is currently going through a major restructuring. The new issuance market (IPOs) has cooled off substantially when we compare 2016 to 2015 results and there is no reason to believe there will be a material snap back any time soon.

We’ll outline our thoughts on how the industry will evolve.

Overview

Barbell of Banks: First, there will be a barbell approach to existing investment banks. This means that there will be two types of firms, first the type that provide primarily advisory services such as Moelis, Evercore, Qatalyst and Lazard and the second group that will have a mix of IPOs and advisory service. The catch? Everyone who is in the middle will be squeezed. Return on Equity metrics across the industry have declined materially and we have to look at how the banks will adjust to hit their return metrics. In an answer? Layoffs.

If we fast forward a decade or so we see two key changes. First the smaller banks will either die off or find some advisory niche. Second, the larger banks will down size to address core markets that have large revenue potential. With a cooling market, the clear answer is to cut the global equities business first.

Who Gets Cut: No one is immune to the cuts. However, the areas that will be hit the hardest include Research and Sales & Trading. As more clients move to electronic trading, the need for a human to match buyers and sellers becomes irrelevant. In addition, if the equity market is cooling off, there is no reason to have multiple senior analysts covering sectors with minimal investment banking potential. Finally, on the investment banking side, the clear loser in this case would be Equity Capital Markets. The silver lining here? Sectors with good banking potential or good growth potential in general likely won’t be hurt much. The non-core sectors will be consolidated with more “multi-sector” analysts to keep costs down and maintain full coverage of US equities (Marketing for investment banks).

How Big Will the Cuts Be? Somewhere around 20% makes sense, perhaps up to 30-40% for some banks (think DB, Credit Suisse, Barclays) given the weaker environment and impacts of Brexit on European banks. We are still in the early innings of cuts, while some small reductions in force (RIFs) were made earlier in the year and over the last 2 months of this year… The Trend will continue. Anticipate seeing another set of cuts around the January time frame and don’t be shocked when the hammer drops.

In addition to the cut in head count, expect bonuses to be down materially as well. We would wager another 15-20% decline in bonuses (we will announce the real numbers at the end of the year before normally available) but this rough math makes sense. If the cost structure is about 20% over staffed, you have to charge the restructuring costs of FY16 numbers so the layoffs don’t really help the bonus pool at all.

The Safer Segments: The safest sector in our view is the advisory segment. If you’re working for a top advisory firm and have buy-side relationships where you’re “their banker”, then you’re in great shape. As long as you can offer good advice and help negotiate attractive deals, there is no reason for you to be displaced. Giving high quality advice is difficult work. This is a great dynamic for the industry as it is least prone to automation. Instead of simply reacting to rules like a trading algorithm, it is not easy to automate 1) multi-year relationships, 2) salesmanship and 3) a long track record of successful transactions.

Secondly, beyond the advisory piece we find that “hot” sectors will unlikely be touched. Expect a wider gap between the haves and have nots. This means sectors such as Internet (AirBNB IPO, Snapchat IPO, Uber IPO etc.), medical technology (including biotechnology) and energy for example. While we wont go through a list of each sub-segment, simple high level views should give a clear answer… Is there investment banking business to be done (new issuance and growth) or not? For fun we’ll provide one example, which is banks themselves. If banks are cutting and downsizing along with overall secular declines, this is not a good sector to be tied to.

How about the buy-side? The segment is also in secular decline, ETFs, robo-advisory and significantly reduced management fees will be seen. While it will not occur abruptly, secular declines will be seen and the safest place to go is Private Equity or specific hedge funds.

– private equity will always be around. If/when interest rates start to hike… then it will become even tougher. That said, there will always be poorly run companies that need to be bought and fixed for a profit

– hedge funds, any fund pegged to beat or be in-line with the S&P (beta 1) will see secular declines. This is no different when compared to a long-only. The two pieces that will likely still be around are market neutral hedge funds and merger arbitration funds.

In short, avoid all investment vehicles pegged to the market. Go to PE or a market neutral/merger web hedge fund.

Automation: This will be the largest structural change we’ll see over the next decade. Timing the exact year is not easy, however, any rule based position is going to be dismantled by automation. Cars will have self driving capabilities (somewhere around 2021 it seems) and the need for taxi drivers will decline as well. For Wall Street, this is the trading segment. Matching buyers and sellers for a few pennies per share, will decline materially. An automatic, electronic trading mechanism will decrease total revenue associated with these transactions and this will cost fractions of pennies per share. The need for human involvement declines for most day to day activities.

Automation will not impact relationships on a massive scale given that trust is a difficult quality to build over a multi-year time frame (let alone automatically).

Is Wall Street Still a Good Career: We will now answer this with “it depends’. If you’re going to end up at a major bank post the downsizing (you’re likely ok) and if you end up at a top tier advisory firm, you should be thrilled with the opportunity. The upside to attaching yourself to a growing sector or a major advisory firm will remain unchanged. When you make a percent off a billion dollar transaction, there is enough money to be dolled out to everyone. The only problem is each individual should choose carefully. If the sector goes into secular decline, either you will be fired or you will get lucky and be a multi-industry expert as spaces consolidate.

Long-story short, there are really only two paths that make sense. A major bank within a good sector (either the bank is good at getting on deals or they are expanding) and secondly within advisory.

Now what? The silver lining here is that many sectors will need more bodies. Technology will not slow down any time soon and this means being an engineer is also a good career. You’re still going to go into: Sales, Silicon Valley or Wall Street. This advice hasn’t changed, the only difference is that you have to be even more careful when choosing your niche. There will be an immense amount of growth in technology and overall innovation and the opportunities will be endless (for a select group of smart people)

Best Ways to Make Money

Sales: The common theme here is that everything is still sales. If you can build up your ability to sell and build trust at the same time, you’re going to be fine. This does not require fancy degrees or thousands of dollars of college debt. This only requires hard work, persistence and an obsession to become successful. The days of being paid without eating what you kill are dying slowly but surely. The producers will continue to make grips of money and support roles that do not require sales (clerical work) will be eliminated.

Technology: If you have the skills, going into technology is still a great sector. Facebook, Google and IBM will still be around in a decade and having a set of skills that are difficult to learn will help you land positions at major technology companies. Negatively, this segment will also be cut between the haves and have nots. Hardware engineering for example is simply not as useful as software engineering. So. Choose the sector carefully, got to a *top school* and find a way to avoid debt. This will give you a clear path to riches.

Wall Street: As mentioned above we think advisory and “hot” sectors are best. That said? Go to a big league advisory firm if given the chance. If you’re working for Frank Quattrone and are involved in many major transactions, your resume will stomp out all of the competition over night.

Starting Your Own Company: This is the second leg of the puzzle. If you can land a solid career, within a short couple of years you’ll have enough to begin your own venture. Once you do, the sky is the limit. It is very difficult to get rich working for someone else, they are never going to pay you what you are worth otherwise they would lose money! As always refer to our post on a clear path to a million dollars.

Ramifications of Wall Street Adjustments

– The ability to obtain a position on the Street will decline. The competition will continue to be fierce and the number of slots will decline (structurally)

– The number of positions in Global Equities will decline materially. This will lead to a swath of people fighting for corporate finance roles within specific companies

– Crowd funding will prevent smaller scale IPOs. With ways to raise funds outside of debt offerings (mezzanine, bridge loans, etc.) before going public, the time frame will become elongated. In short, there will be longer sales cycles unless the economy is rocking and rolling

– Generating revenue will be tied to performance based bonuses. While there is always some wiggle room for the sales cycles, if the sector/group is not producing the bonus differential will magnify. Don’t expect to get paid simply because you did all the right things (followed the rules). You have to generate revenue.

– Top tier students will likely flood technology. With financial packages that are more attractive when compared to investment banking the cream of the crop will turn to positions at Google, Facebook and other large and growing technology companies. The remaining that attempt to go into Wall Street will be difficult to compete with, however, they will no longer be the top of the top.

Conclusion

Wall Street will go through material changes over the next several quarters, however, there are still slots that will offer large compensation packages and upside over the next several years. The performance based structure of the industry will move to “eat what you kill” and it would be wise to choose a segment or sector that will be growing and not consolidating.

Side note on politics. Yes Donald Trump will win the presidency on November 8. We placed a financial wager on Mr. Trump last year and it will pay off. Despite many concerns about his potential downfall we know with certainty the polls are skewed and yet he’s still within spitting distance. As more negative news surrounding Clinton surface, the inevitable outcome will be seen. Brexit 2.0.

*As Usual Absolutely No Questions, No Clarifying Questions Either.  ZERO Exceptions, We Will Not Respond. Interesting Value Additive Comments are Always Welcome.*

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Comments

  1. VC wannabe says

    Great post.

    Was waiting for this one, i’m sure you are familiar with the site but over at mergers and inquisitions they have a similar analysis:

    Harder to get in, recruiting starting earlier, certain exit opportunities not as attractive, and compensation down.

    I’ve switched tracks now based off my own research and the advice given here, will graduate with 0 debt and move directly into a certain niche of sales i’ve scoped out, build skills, start company, win.

    As you mentioned, the opprutinities are increasing year by year, each one gets better than the one before!

    Looking forward to the book. Cheers

  2. says

    Just thought as someone in tech that it might be worth adding something here. For people considering becoming a software engineer, it’s important to note that our industry is going through a commodification process as well. Meaning, there will be plenty of tech jobs, but you’ll see a lot more of them on the lower end of the pay scale and much less on the higher end.

    When picking your employer, I recommend the following heuristics:

    1). A growth startup (A company that is at a minimum doubling in size every year by either revenue or users). This is the riskier option with higher upside. DONT just pick a random startup that has no metrics. The odds of you hitting gold off of your gut alone are slim to none.

    2). A market leader – Facebook, Google (On a team where they lead the market. NOT Google+).

    Do everything you can to end up on a team that is core to their business and generates profit. While Sales is obviously the most direct link, companies still tend to prioritize engineer teams by the ones that make them the most money. This includes career growth and compensation.

    Otherwise, great post! I don’t have anything to say about Wall St. or Sales and completely agree with you about the starting a company thing.

    • RKO says

      Great advice. I’d also encourage when looking at high end companies to pick one where engineers at top of the food chain. Microsoft and Facebook have the same core roles – developer, PM, UI/UX – but devs are the kings at Facebook while PMs are the kings at Microsoft. There’s a clear compensation difference between PMs and developers at Microsoft. By contrast, devs at Facebook actually make more than PMs on the same ladder level. They also have greater promotion velocity and upside than devs at MS. This tends to go hand in hand with being ‘in-charge’.

  3. JL says

    Best breakfast ever.

    Ironically anyone on Tech / Wall Street wins since:
    1. If the Wall Street vomits you out.. given that you’re still ‘somehow smart’ you will easily grasp Tech anyways.
    2. When you’re at Tech, starting your own company on the side will eventually lead you into learning sales.
    3. With the right industry and the right skillset, what the fuck can you expect.

    $$$.

  4. mshiddensecret says

    Timely post and have been thinking about since 2 weeks ago. Been following WSP for a year now and had been planning on breaking into Wall Street since then.

    Currently a junior studying electrical engineering (with finance/accounting courses) and currently going through recruiting for summer IB positions. Realizes that IB is no longer the best place to go anymore (banks are cutting down on the number positions and are hiring significantly faster, GS is doing online interviews to cut down on cost) unless you get into the independent advisory firms, which takes only a handful of students.

    Currently pivoting myself to tech (product management roles) and leveraging my engineering background and previous internship (venture capital) to break in. My efforts and energy will be better utilized this way.

    Few years down the road, I will take the skills and network I have built in tech towards starting a business and will have a much higher earning ceiling than in IB without burning out myself through an analyst stint.

  5. Wolfinsheepsclothing says

    Was thinking of working in Tech Sales then after a few years do the MBA so either I can move back into tech or the “City” in the UK.

    I know a former head of research (Any head of a department is a multi-millionaire) at one of the five big banks who took that path (also institutional ranked researcher in the sector at the time). He works at a smaller bank now but head of that sector in the bank I think he chooses to work with people he likes(Better to choose to work than have to work).

    With regards to Brexit banks have cut back with about 2000 open graduate positions available this year (80% target Unis last year got in last year -Oxford,LSE, Imperial etc). Probably need multi internships aswell or have major connections. I have two friends (Went to target Unis) who left a while ago one left Citadel after a year (Did one year at GS) and the other left after a few months – Both said it wasn’t worth it. Considering these people are smarter than I am, it may be not worth to pursue an career in finance. One is in Consulting (Top firm) the other in Fintech.
    If WS/City are in structural decline (With odds stacking against you getting in and climbing up the ranks) it may not be worth it.

    Noticed that Accountancy and consulting not mentioned here so careers not worth considering.

    • Frederico says

      Never done accounting so I can’t speak to it but most consulting is trash. Borderline paper-pushing. Tip to spot a consultant: (talks a lot, says nothing)

      Managers hire consultants to hedge their downside in decision making.

      >>

      Very timely post from the playboys. The “mood in the room” has changed and those who take the time to step away from the crowd can see the writing on the wall.

  6. Tech Bro says

    I would imagine that as more and more top students go into tech and software engineering, the laid back standards of the field are quickly going to tighten up. Coding bootcamps, especially the top ones, have taken liberal arts majors from college and managed to get them decent paying jobs as web developers. I have even seen Wall Street burnouts go to these things and eventually land six figure gigs in big cities, by no means attractive to you guys but I would say that for most people this is quite a desirable situation.

    Personally, I’ve known a couple situations where a person who was an imperfect college kid that messed up went down this route, got a job at a smaller company, and then ended up working for a big 4 company like Facebook.

    Tech has long been a field that hasn’t been as pedigree heavy as finance. By having a good portfolio and showing them you could code, you were able to get a job in the field. Now it used to be that you didn’t need a CS degree to even work for a place like Facebook but now, I could definitely see that changing fast as CS majors flood colleges.

    Now with colleges being flooded with computer science majors and lots of H1B visas trying to use their computer science degree to flood Silicon Valley; seems like Coding Bootcamps won’t really be a viable option anymore. I have to say, they were a damn good option for a college fuckup a few years back.

    • pinchharmonic says

      Why do you think that having more CS graduates each year is going to devalue the boot camp? I got a computer engineering degree from a good engineering school (well known on east coast, but not particularly known for CS) and I got a job in Fintech at a European IB.

      I think it depends on what you’re going for. I think the legitimacy of the bootcamp has gone up recently, when people realize that a CS degree from a 4-year college isn’t that big of a deal. You could easily float through with a B avg (I kind of did) and still not really know that much about even the big picture of development.

      My idea is that for well established blue-chip type companies, a 4-year degree is absolutely required. For the smaller companies, start ups, etc. it is much more important to have a portfolio (something that I’m starting to work on in my downtime).

      My path (currently 24) is to get 2 years experience (mostly bs) at this bank and spend my free time learning more dev so I really get into it and enjoy it. Then I will leverage the well-known name to get a higher paying job at a more up and coming place. Then I would use the capital (accumulated through minimalist living) and network to begin to branch off and work on my own business.

      Long reply but would love to hear others’ ideas that have experience in this realm.

      • Tech Bro says

        “Why do you think that having more CS graduates each year is going to devalue the boot camp?”

        Companies respect the degree a lot more and a lot generally look down on bootcamps, even the top bootcamps. Not only that but the reason coding became so valuable is because not enough people were out there to do it, now more and more of them are.

  7. Wall Street Stallion says

    The major banks crushed it on higher revenues on trading for Q3. Goldman’s net revenue from fixed income, currency and commodities trading jumped 34% from the third quarter last year and ROE was: 11.2%

  8. YM says

    Combine salesmanship and technology – while you work on your own income streams on the side (online biz/internet marketing, etc.).

    Sales/Biz Dev/Strategic Partnerships at either a top tech driven company (Google, Facebook, Cisco) or an ultra high growth “start-uppy” company with potential (Uber, AirBNB, etc.).

  9. JJA says

    You don’t need to go to a top school to get to a top position in google, facebook, apple, msft, etc. You need to be able to pass the interview process (which is well documented and possible to study for and pass it with flying colors) and see what is needed by the corp.

    • Tech Bro says

      From what I hear, you don’t even need a CS degree, ANY degree will do. Not sure how true it will be in the future though….

      • JJA says

        * Culturally there is a strain of tech that loathes credentialism.
        * Another part that recognizes that a lot of really top tech talent comes from anywhere. Ex: A lot of very good self driving car and deep learning / AI PhDs are Chinese for example and got educated in China.
        * Another that recognizes that some really top talent got shit grades or dropped out because they worked on something more interesting.
        * Google’s internal studies that say “what school someone comes from does not actually predict results”.
        * And so on.

        If you show that you perform, it usually is recognized fairly quickly and you can rise up the ranks.

        Wall St. is a lot more relationship & deal based with the wealthy, and the elite schools reflect those social connections. I understand why banking is like that, because the conditions of it’s success are different than software.

        Now if you have a scholarship to stanford, don’t throw it away. It definitely has it’s benefits. But not having one is not the barrier like it is in Wall St.

        —-

        Tech has an effort thermocline. Once you reach $250k/yr and become a sr. engineer, it’s definately harder to move up from there. Even if you make $400k-$500k/yr in california, cost of living and the %50 effective tax rate you’ll be running into will eat you up. That is equivalent to $16k-$20k/month profit margin business where you live somewhere where your taxes are very minimal. Can you do that?

      • Tech Bro says

        @JJA

        Obviously you’re not going to throw away a chance to go to Stanford, I was simply talking about how it might be possible to transition into a career in tech and not have to do something like go back for a second bachelors degree in CS.

  10. Jerry says

    Interesting to split the paths between a great advisory firm or a large bank with hot sectors. My take is that going with a larger bank with multiple products will provide a better platform for junior bankers to become relationship revenue generators in the end game. Independent Advisory firms seem to have trouble internally promoting their own talent and poach teams from larger banks.

    If I had to make a decision right now I’d go with the larger bank in a hot sector, get the training and reputation, build relationships at the MD level, then move to the independent advisory. If I started at the independent advisory I’d work for a couple years up to the VP level then jump ship to a larger bank to build clients than move back to a advisory shop.

  11. Pat says

    Timely post, as I just accepted a summer analyst position at an elite boutique in New York. Definitely getting tougher to break in, especially coming from a non-target school.

    Been following this blog for 2+years, and I cannot emphasize enough how much this blog has helped me. Absolutely no way I could’ve broke into Wall Street without reading this blog. Thanks fellas.

  12. Jay says

    One thing about tech is that It takes a certain mind to be able to learn how to engineer software. Those without the ability to abstract will need to take a sales role or Wall Street as you mention. Ultimately, the job market will be like lawyers in the end, bimodal where the few elites get over 120k starting and the rest get only 60k in the midwest. The companies that use tech as a competitive advantage (i.e. Google, Facebook, Citadel, other HFT firms) will pay the former whereas the rest will pay the latter. Those who aren’t passionate about the craft or that abstraction ability will inevitably not have the willingness nor skills to make it into the former.

    Also as another author pointed out, you do top out at around 250k as a senior engineer so it is a good idea to move into management at this point, learn some sales and politics on the side before you hit this point. Of course, that’s assuming that you want more money at that stage and are not willing to start your own company like the Wall St Playboys highly recommends.

  13. Anonymous says

    I am involved with “tech” and it’s not the el-dorado many people think.

    Firstly, getting into a top 4 is as difficult as Wall St. More so now, you need connections and the “right” degrees / work exp on your CV. This can mean unpaid internships or polishing skills at a shitty mom and pop web design firm. If your dream is to work at Google / FB / MSFT, don’t. It’s better to get in with a small team selling some new thing, avoiding all the political bullshit you get when a tech company grows.

    Secondly, “tech” is as broad as banking. Hardware and software are light years apart. You cannot jump between the two without prior experience. And you’ll certainly not be able to “pick” which one you do unless you have a revolutionary idea that requires many nights to work on it.

    Thirdly, tech happens in waves. If you’re not part of the next wave, you’re not going to make money. The myriads of “web design” agencies using 90’s technology can attest to that.

    Fourthly, all these “learn to code” sites are as effective as “day trading” systems. They pull you through several specific case studies (typically “how to make a website”) and leave you to it. It’s kind of like expecting to become a painter by doing paint-by-numbers. I actually feel for some of the guys in these programs because they don’t have a clue they’re being duped. “Learning to code” won’t get you a better job. Perhaps a different job, not better. And yes, most modern “coders” are just HTML / PHP / Ruby hacks. They have no experience with C++ or other lower level languages.

    Finally, the most important thing I found with tech is you need a secret sauce. It’s not good enough to just make another “x”, it has to be revolutionary so when people buy it they know they’re getting a better product. Just because you can code doesn’t mean you have a product you can sell. The best “tech” people are mostly good sales people, selling specific solutions to large businesses. The days of the talented programmer being king are long gone. Most programmers now are overworked virgins. If you’re smart… like super smart… you need to find a team of like-minded people on the comeup. This will give you a direct path to riches and you’ll basically be able to adapt to however you’re able to make $$ (it will change). To get an idea of a type of company like this, look at Bending Spoons in Milan.

    • Tech Bro says

      But I have personally known people that didn’t have CS degrees and got nice offers due to bootcamps and paths such as Odin Project and Free Code Camp.

      • mtgm says

        I would agree with the OP on this thread. As a student at a top school studying CS, tech is much harder than bootcamp+online learning = money. Computer science has incredibly complex facets when you start thinking either in terms of systems programming or algorithmic engineering. You can think of web design as a (nearly) efficient market. It has been exploited in the past to build unicorns and midsize companies, but being a web developer is like trading cash equities these days. The top groups, on the other hand, are working with machine learning, distributed systems, and augmented reality.

        Getting a decent offer after doing a bootcamp isn’t indicative of success in the field. Typically, people in finance are looking for lucrative exits and ways to build wealth. In order to achieve those in the field of software engineering, you have to know your shit, network into a good group, and work hard once you get there.

        Usually, this is not possible with the limited knowledge you gain through a quick bootcamp program.

      • Tech Bro says

        @Mtgm:

        Would you say this in this case that going back for a second bachelors in CS is the best idea?

  14. Quantinatrix says

    Being in advisory these days sounds all sweet and dandy but only if we’re talking more senior levels, where relationships matter.

    IMHO excel monkeys are gonna get hit even harder than markets roles. Is there enough time to start as an analyst now and get to the relationship-driven level by the time automation comes to whoop yo ass? Big question.

  15. ETA says

    Another IT guy here. I moved to the States a few years ago while I was half way through college. I was broke and had no clue how to get started with school again. I didn’t even know something like FAFSA existed. Getting into dept was my biggest fear.
    I was lucky enough to end up in North Carolina. After I got accepted to a local decent school I had a simple plan: Get a good GPA->Get Internship->Get full time job. I was able to transfer my credits and ended up doing only 2.5 years of school in the US.
    I kept my GPA at 4.0 until my last semester of school, but by that time I had laid my foundations, so it didn’t matter that much.
    By the time I graduated I had 3 internships ( Fidelity Investments, Lincoln Financial and Cisco), and 7 full time job offers.

    My advice to kids who can’t make it to a big school is to go to a school that is close to a major Technology hub. Companies have close relationships with local schools. They help them build their programs and hire students locally. So if you have a specific company you want to work for right out of college, check out their locations and the schools nearby.

    -Do not let a day pass by without making some money. It is easy to make $500 a month, it is easy to spend $500 a month. What’s not so easy, is having to pay an extra $500 a month on top of your fixed expenses.I did well saving from what I made from my internships while in school($20-25/h) and got out of school with very few loans. I consider that impressive, since I had no guidance and mentor-ship. If I had worked during school time as well, I wouldn’t have had any loans by now.

    -You first job should be with a tech company, possibly with one that is a leader in their area. If you work for Cisco, you will have recruiters trying to hire you every month. The down side of working for a tech company is their regular layoffs. Cisco fires 5% of their workforce regularly. But that won’t be much of a problem for you, since your resume will be more attractive.

    -Choose a team that brings direct revenue to the company. You don’t want to be the support guy, where if things work properly, you never hear from anyone, but if things go south, you’re blamed for it.

    -Your job title will affect how you are perceived by recruiters. If your internships are with financial companies. You will be perceived as Financial Developer. Try to work mostly for tech companies early on. That will give you more room to be flexible with your choices.

    -Find a job in an area with the cost of living similar to NC. For entry level jobs that’s better. Jobs in bigger cities, don’t really make up for the increase in cost of living.

    -Network, Network, Network. Out of all the offers I had, only the first internship offer came from cold approaching a recruiter. All the rest was from networking with people while in school. Career fair, info sessions, professor recommendations etc.

    -Do not do your masters(not right away at least).Unless you plan on having an academic career, masters add very little value to your resume. There are exceptions here, like areas where you need to be highly specialized like Big Data/Analytics.
    Most people that do their masters right after their BS degree are those who can’t get a job. On top of that, it is good to gain some intel of the job market and your preferences before you spend 2 years of your life studying(and maybe taking out loans).
    The extra time spent in school is not proportional to the increase of salary for entry lvl jobs.
    Cisco only paid an extra $10K if you had your masters. Fidelity didn’t really care, they had a flat entry level salary, since they offered training to anyone coming in fresh out of college.
    Most companies will pay for your education while you work.

    -Also I can’t believe all the hype nowadays about working for a startup. So many kids give up the tremendous benefits of working for a big company. If you work for a big company, you get trained well to do things the right way. If you work for a small one, you have the opportunity to do those things.

    -Hone your soft skills. In the tech industry it’s hard to find those type of people, and some social skills go a long way. Ideally you want to shift to management, where most of the money and decisions are made.

  16. LifeIsJustGettingStarted says

    Great post. I’m graduating by end of this year in Tech and have been following WSP for 6 months now. At that time, I was struggling looking for a job and couldn’t see a way to become well off.

    Now, I’m graduating as top of class, being headhunted by great companies, 3 weeks ago created a team and started a startup company, rolodex of successful businesspeople expanded 20x and no debt.

    Better at sales, style, game, money management and career and vision a future where I’ll be much better at them.

  17. Enterprise Software Sales says

    Another tech person here. I see a lot of people talking about being software engineers, but I see limited comments about enterprise sales. Salaries are generally very competitive in Europe for the leading American technology companies in Sales.

    If you look at Sillicon Valley companies with about 1000-2000 employees selling to enterprises, all-in salaries can start at about $80K for someone in business development, then be around $300K on target earnings (150k base + 150k bonus) for a large enterprise account executive (say 5-10 years if you do it quite fast). This is particularly lucrative if you are working in continental Europe because American tech companies seem to have a distorted view of costs and earnings and, therefore, pay sometimes more to these people than people in their EMEA HQ – say London.

  18. David Nystrom says

    Financial Samurai owes me $100, please inform him in case he forgot.

    Would also like note that my protectionism thesis about the Midwest was 100% correct–Trump’s victory was made in the rustbelt.

    #MAGA

  19. Alex says

    Thanks for another great post, WSP, and many others before that. Can’t express how much your blog has helped me to get into the right mindset and start moving towards my goals. Although I’m still in the beginning of the game the improvements are tremendous, relative to my base level.
    Thank you once again and keep up the great work you do.

  20. says

    Excellent overview! Fees and commissions were already a race to the bottom. Now with such dismal volume, it seems like a double blow.

    With Trump winning (well done on the call), journalism should see a further hollowing out. The amount of bias was incredibly ridiculous for Hillary. With the decline of mass media, I do believe anybody with an online presence who has something unique to say will flourish. Those millions of readers want to go somewhere and not only read the news, but get an opinion as to WHY.

    This will be my 5th year of NOT anticipating a year end bonus. I forgot/forget all about it until I see the buzz. Down 15-20% from down 15-20% in 2015 sounds very demoralizing. It’s almost a “why bother” type of attitude. Good thing base salaries are still much higher than tech!

    Sam

  21. says

    I like how you guys still mention that admid a turbulent market and layoff that everything is still sales, you’ve been saying this for a long time now and it back up your core beliefs which I think are very responsible for your continued success

  22. The Man says

    On second thought, I don’t think that CFA would hurt. It may enhance brand and building ‘trust’. But, still would be interesting to get your thoughts on this side when you do Q&A

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