- Thread starter
- #21
Addendum to original post:
Sell side front office total comp for 3rd year (trader, sales-trader) : 500k+
This is a fact in NYC.
Sell side front office personnel, particularly fixed income traders, have the highest total compensation for age range coming fresh out of school all the way to the age when people typically head back to business school (ie. start at 21 years old, head back to school around 27 years old plus/minus 1 to 2 years on average).
Given this fact, money-wise, college seniors should focus on landing a trading job (esp. fixed income) at an established institutional bank (JPM, GS, MS, BAC). They will be well ahead of their investment banking peers in terms of savings by the time their peers are thinking about heading back to business school.
For example, at 21 and 22, you could expect 100k-150k roughly each year, at 23 after two years on the desk, you would expect around 500k total compensation; similar package at 24, 25, 26. By the time you are 27, you would expect to have grossed around $2million. Take away taxes, living expenses, you will have saved up a bit over $1million at the age of 27.
On the other hand, your peer who decides to go into equity research or investment banking fresh out of college will typically see these numbers; at 21 and 22, 80k-120k roughly each year, at 23, given that he has not been “encouraged” to apply to business school, he will become an associate, and make roughly 200k; by this point, said peer will typically apply to business school, effectively wiping out what he grossed as an associate on tuition. If not, said peer will apply to entry level positions on the buy side, in which he will most likely start at a similar base salary as he had in investment banking (anywhere from 70k to 100k base), and would expect around 120k-200k total compensation first year on the buy side. But their hours will be much better than before, but still, even not as good as sell side traders’. So, at 23, you would be making 200k on the buy side working slightly more hours usually in a library type environment, compared to 500k as a 23 year old trader on the sell side in a bustling environment. Career path of a buy side analyst is also more volatile than a sell side trader, especially at smaller funds; could mean huge upside, or just a two year pit stop before once again being “encouraged” to go to business school.
Of course, there are risks in committing to anything, and preferences (working environment, education, family life, etc.). But it seems like sell side trading, particularly fixed income trading, is the place to be for someone who enjoys a louder environment and not as much emphasis on mandatory supplementary education. From 21 to 27, the sell side fixed income trader will make more money than your typical 2 year investment banking, entry level buy side analyst. Also, the sell side fixed income trader will typically not have gone through the CFA process, and most likely will not bother starting the process in his career.
Sell side front office total comp for 3rd year (trader, sales-trader) : 500k+
This is a fact in NYC.
Sell side front office personnel, particularly fixed income traders, have the highest total compensation for age range coming fresh out of school all the way to the age when people typically head back to business school (ie. start at 21 years old, head back to school around 27 years old plus/minus 1 to 2 years on average).
Given this fact, money-wise, college seniors should focus on landing a trading job (esp. fixed income) at an established institutional bank (JPM, GS, MS, BAC). They will be well ahead of their investment banking peers in terms of savings by the time their peers are thinking about heading back to business school.
For example, at 21 and 22, you could expect 100k-150k roughly each year, at 23 after two years on the desk, you would expect around 500k total compensation; similar package at 24, 25, 26. By the time you are 27, you would expect to have grossed around $2million. Take away taxes, living expenses, you will have saved up a bit over $1million at the age of 27.
On the other hand, your peer who decides to go into equity research or investment banking fresh out of college will typically see these numbers; at 21 and 22, 80k-120k roughly each year, at 23, given that he has not been “encouraged” to apply to business school, he will become an associate, and make roughly 200k; by this point, said peer will typically apply to business school, effectively wiping out what he grossed as an associate on tuition. If not, said peer will apply to entry level positions on the buy side, in which he will most likely start at a similar base salary as he had in investment banking (anywhere from 70k to 100k base), and would expect around 120k-200k total compensation first year on the buy side. But their hours will be much better than before, but still, even not as good as sell side traders’. So, at 23, you would be making 200k on the buy side working slightly more hours usually in a library type environment, compared to 500k as a 23 year old trader on the sell side in a bustling environment. Career path of a buy side analyst is also more volatile than a sell side trader, especially at smaller funds; could mean huge upside, or just a two year pit stop before once again being “encouraged” to go to business school.
Of course, there are risks in committing to anything, and preferences (working environment, education, family life, etc.). But it seems like sell side trading, particularly fixed income trading, is the place to be for someone who enjoys a louder environment and not as much emphasis on mandatory supplementary education. From 21 to 27, the sell side fixed income trader will make more money than your typical 2 year investment banking, entry level buy side analyst. Also, the sell side fixed income trader will typically not have gone through the CFA process, and most likely will not bother starting the process in his career.
