There are certain aspects of the salary/career choice issue which I almost never see discussed. For example, there’s a tendency to fixate on starting salary and mean salary as the only metrics determining income. These are only two parameters of a salary distribution which needs several more parameters to fully characterize—the median, the standard deviation, and the skewness, and how these are all a function of time. Then there’s what you might call the probability of promotion in a given year, which I’m fairly sure isn’t a number you can look up online.
Then, after asking around and discovering that the probability of being promoted to the next salary grade in a given year is roughly 0.01, you have to ask yourself whether that number is low because it really is that hard and that competitive, or because most people are content to plateau at $100k/yr and/or lack the confidence to put themselves forward for promotion.
For example, in computer programming, engineering, and consulting, you can push your career down a management track toward becoming an executive within a large company. An executive position could command five or ten times the net income of a typical engineer. The frequentist odds of becoming an executive are very low, but I personally believe this is because almost nobody is actively trying to become one. Rather, most people who end up in executive positions are unusually ambitious, self-promoting, and somewhat lucky.
Investment Banking: My guess is this is the highest earning career, when considering probability of achieving certain incomes multiplied by the quantity of income, and high incomes right out of college.
Perhaps this is true, but I would challenge you over your use of the word “career.” A career is a weird, organic, practically unplannable thing. If you browse the resumes of relatively successful people on LinkedIn, you will very rarely find anything that looks like
Worked at Company X for 25 years, performing the same general class of duties with gradually increasing responsibility.
Instead you will probably find a long list of companies, positions, roles, responsibilities, projects, and even titles—perhaps gradual transitions from “engineering” to “finance,” or “computer programming” to “graphical design” to “marketing.”
In fact, I would say such cross-pollination is almost a requirement! Nobody I personally know who works in banking started out in banking or finance or any of the “business” subdisciplines. Rather, they started their careers in other disciplines, became experts in the internal workings of those industries, and then leveraged that expertise to go into finance for those industries. Think about it from the perspective of the banks; do you want somebody with fifteen years of experience in finance only, or a guy with ten years of experience in engineering with five years of experience in finance as a natural progression of his increasing purview?
In summary, I feel that making a career choice is a nonlinear optimization problem. If it were easy to pick the highest-grossing career, then everybody would pick it, and it would cease to be the highest-grossing career. (This actually happens, repeatedly, as the new “hot thing” changes over time.) Investment banking seems too obviously the most lucrative choice, which indicates that in ten years it won’t be anymore. There may be other factors you’re missing. Maybe all those high salaries in banking are reserved for people with degrees from Yale, without which you might as well not bother. I don’t know. The point is, career selection is full of these gotchas.
Perhaps this is true, but I would challenge you over your use of the word “career.” A career is a weird, organic, practically unplannable thing. If you browse the resumes of relatively successful people on LinkedIn, you will very rarely find anything that looks like “Worked at Company X for 25 years, performing the same general class of duties with gradually increasing responsibility.”
True. Perhaps, I should clarify that I’m looking for my “first step”. What job/career I would do first, before inevitably moving on to something else.
For example, there’s a tendency to fixate on starting salary and mean salary as the only metrics determining income. These are only two parameters of a salary distribution which needs several more parameters to fully characterize—the median, the standard deviation, and the skewness, and how these are all a function of time.
Not to mention there’s also a tendency to exclude benefits and bonuses from the calculation as well.
Not to mention there’s also a tendency to exclude benefits and bonuses from the calculation as well.
PS: Also one must consider whether the employer has any donor matching programs, as that’s basically additional salary as far as an “earner to give” is considered.
There are certain aspects of the salary/career choice issue which I almost never see discussed. For example, there’s a tendency to fixate on starting salary and mean salary as the only metrics determining income. These are only two parameters of a salary distribution which needs several more parameters to fully characterize—the median, the standard deviation, and the skewness, and how these are all a function of time. Then there’s what you might call the probability of promotion in a given year, which I’m fairly sure isn’t a number you can look up online.
Then, after asking around and discovering that the probability of being promoted to the next salary grade in a given year is roughly 0.01, you have to ask yourself whether that number is low because it really is that hard and that competitive, or because most people are content to plateau at $100k/yr and/or lack the confidence to put themselves forward for promotion.
For example, in computer programming, engineering, and consulting, you can push your career down a management track toward becoming an executive within a large company. An executive position could command five or ten times the net income of a typical engineer. The frequentist odds of becoming an executive are very low, but I personally believe this is because almost nobody is actively trying to become one. Rather, most people who end up in executive positions are unusually ambitious, self-promoting, and somewhat lucky.
Perhaps this is true, but I would challenge you over your use of the word “career.” A career is a weird, organic, practically unplannable thing. If you browse the resumes of relatively successful people on LinkedIn, you will very rarely find anything that looks like
Instead you will probably find a long list of companies, positions, roles, responsibilities, projects, and even titles—perhaps gradual transitions from “engineering” to “finance,” or “computer programming” to “graphical design” to “marketing.”
In fact, I would say such cross-pollination is almost a requirement! Nobody I personally know who works in banking started out in banking or finance or any of the “business” subdisciplines. Rather, they started their careers in other disciplines, became experts in the internal workings of those industries, and then leveraged that expertise to go into finance for those industries. Think about it from the perspective of the banks; do you want somebody with fifteen years of experience in finance only, or a guy with ten years of experience in engineering with five years of experience in finance as a natural progression of his increasing purview?
In summary, I feel that making a career choice is a nonlinear optimization problem. If it were easy to pick the highest-grossing career, then everybody would pick it, and it would cease to be the highest-grossing career. (This actually happens, repeatedly, as the new “hot thing” changes over time.) Investment banking seems too obviously the most lucrative choice, which indicates that in ten years it won’t be anymore. There may be other factors you’re missing. Maybe all those high salaries in banking are reserved for people with degrees from Yale, without which you might as well not bother. I don’t know. The point is, career selection is full of these gotchas.
This is good advice; thanks.
True. Perhaps, I should clarify that I’m looking for my “first step”. What job/career I would do first, before inevitably moving on to something else.
Not to mention there’s also a tendency to exclude benefits and bonuses from the calculation as well.
PS: Also one must consider whether the employer has any donor matching programs, as that’s basically additional salary as far as an “earner to give” is considered.