Quora answer f finance undergrads

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Quora Answer:
https://www.quora.com/q/financeanalytics?__ni__=0&__nsrc__=4&__snid3__=17799020765&__tiids__=4024214


What are the best paying jobs with a finance degree?
Originally Answered: What are the highest paying finance jobs?

“What are the highest paying finance jobs?”

It’s a fair question to ask, as most finance/business students in school, don’t understand or even know about many of the jobs out there

Many of those paths lead to dead ends, low pay, boring work, or even trickster roles that have nothing to do with real finance.

    I’ll break down some of the highest paying career paths in finance.
    I’ll share my experience to show you exactly how people in your position land Tier 1 jobs.
    I’ll teach you how to dodge the Tier 3 jobs you’ll want to avoid like the bubonic plague.
    MOST importantly: I’ll show you why you 1000% need to have some relevant experience ahead of time (whether a Tier 1 internship or our ILTS Analyst Program

    which gives students & grads that experience) to actually land the jobs

For those who want a more full list of all the jobs, you can check out our full length post on this here

Let’s dive right in

What Can You Do With A Finance Degree? The 3 Tiers

Our finance jobs fall neatly into 3 distinct tiers. It’s super simple:

    Tier 1
    Tier 2
    Tier 3

Tier 1 are the best, and Tier 2 is ‘eh’.

Tier 3’s you want to avoid at all costs.

Here’s the details.

Here’s Why You Want Tier 1 Jobs

    The $$$. It’s pretty straightforward — Tier 1 finance jobs pay the most. But how much, you ask? You’ll make anywhere from $70k to $125k. Right out of school.
    The Status. They’re more prestigious. Even if you’re one of those humble-pie cats who refuse to dwell on such things, trust me, you’re a socially wired, hierarchically aware creature — it will inevitably matter to you someday. Call it reputation or standing or honor if you have to. But whatever you call it, get it. You’ll thank me later.
    The Work. They’re much more fast-paced and it’s genuinely exciting work. Barring sleep, you’re going to spend the majority of your life working. You know what that means? Boring job = boring life. On the shinier side of that coin… Tier 1 = Rewarding life.
    The Exit Opps. More importantly, they’re better for your resume, and they open up a lot more exit opportunities. Later, I’m going to show you all the highest paying Tier 1 career paths in finance, and some clever ways to wield your new degree and get into them.

Now that you know the why, let’s talk about the what and how.

The Highest Paying Finance Jobs – Tier 1 Jobs

Let’s start with the big banks. I’ll break down these jobs based on what type of firm they’re part of.

The Banks

If you’re a business major, finance major, or economics major, and you want that big, high paying, prestigious job on Wall Street, you’ve probably heard of investment banking.

Investment banking is the big one.

You’ll make six figures, right after earning your degree. Work hard, play hard. And long too —

You’ll probably work anywhere from 80 to 100 hours a week. But again, it’s the most prestigious, and it has the best exit opportunities.

But here’s the thing:

→ To actually land a job at a top bank you need to have relevant experience on your resume ahead of time

So I’m talking a Tier 1 internship that is similar, participating in our ILTS Analyst Program

to get the experience, or joining a student run investment fund at school.

The banks won’t even consider you if you dont have anything on your resume to actually show

So before you just try and start applying, theres A LOT you need to to ahead of time

Investment banking characteristics recap:

    Big $$$
    Work-hard/play-hard environment & long hours
    Massive prestige
    Best exit opps

Next up? The groups.

The big banks, especially the investment banks, can be broken down into three groups:

    Bulge bracket banks. Say that three times fast. These are the J.P. Morgans, Goldman Sachs and Morgan Stanley’s of the world. Oh yes.
    Middle market banks. Then you got your middle market banks, like a Cantor Fitzgerald or a SunTrust.
    Boutique banks. These are small, more local type firms. They may specialize in a certain industry. Either way, they’re still great opportunities to get the most out of your finance degree.

Later, I’m going to show you how investment banking can help you get into the buy side AKA the highest paying career path in finance.

I’ll also show you how the buy side pretty much can have you making a quarter million to half a million a year, just a few years out of school. It’s pretty wild.

But first, let’s dive into the different divisions within an investment bank.

1 – Investment Banking

Every investment bank is organized a bit differently. Some investment banks will break themselves down by product group. Some do it by industry group. It just depends on the bank.

Product Groups

If you’re in a products group, it’s mostly about getting to know transaction-specific models very well.

Within a products group, you’ll usually see groups like below.

(By the way — want a back door trick to get M&A experience without being at a big bank, if you’re unable to get in? More on that soon.)

Here’s our product groups:

    M&A. AKA mergers and acquisitions work.
    Lev-Fin. Usually LBO, leveraged buy-out type work.
    Capital Markets. Maybe a little lower tier below those two groups.These are your equity capital markets or debt capital markets. The main difference is, the capital markets team is a little more in tune with what’s going on in the market, the trends and pricing.

They’re able to take that information, relay it to those previously mentioned teams, who are building out their models so that they can get the inputs they need.

Next, we have banks broken out by industry group.

Industry Groups

Within those groups, it’s definitely more important to have industry-specific knowledge. You’ll be doing more three-statement model building out. You’ll see groups like:

    Healthcare.
    TMT.
    Natural resources.
    Etc.

2 – Sales & Trading

Next up, we have sales and trading.This is another incredibly competitive group within a lot of the banks. The main difference here boils down to personal preference. Within sales and trading, it can be high paced and more stressful.

Because you’re trading. Naturally there’s a lot more pressure on you. That said, sales and trading requires less hours. If you’re one of those people that need to take a break and cool off, sales and trading could be right for you.

It depends on your long-term career goal most. If you want to get into the trading space and you’re totally set on doing specific things in the buy side, you might prefer sales and trading over investment banking. Once again, a super, super competitive job to get into. But again, an absolutely outstanding opportunity to leverage your finance degree fresh out of school.

3 – Asset Management

Asset management within the big banks. Think J.P. Morgan — the asset management division. Very competitive. It’ll probably pay the highest out of all of the above, but it’s tough — you really need to know your stuff there.

At the same time, you probably got to have a pretty darn strong network if you’re trying to get into asset management within a big firm. As we’ll get into a little bit later, there’s other types of asset management firms out there besides the ones at the big banks.

4 – Corporate Banking

Next up, corporate banking. Corporate banking is similar to what you do within investment banking. It’s more focused around providing the financing to corporations and institutions.

You’re more focused on the terms of loans, a company’s credit worthiness, stuff like that. Whereas a leveraged finance group within an investment bank is more focused on high yield bonds and LBO-type things.

Still, corporate banking is still a great place to start if you’re within one of the bigger banks. It’s great experience on your resume, and you’ll nail down a solid salary. Not as lucrative as investment banking or sales and trading, but still good.

5 – Equity Research

Then, there’s equity research. For example, if you’re looking on Yahoo! Finance or Google Finance and you see an article about how J.P. Morgan lowered their stock price on Tesla, that’s their equity research arm.

They put out research reports on different stocks, sometimes known as sell-side research. Again, pretty cool stuff to do with your degree. Probably trickier to get in, because there usually aren’t as many entry-level roles there. Again, not as lucrative as something like sales and trading or investment banking, but still pretty good.

The Buy Side

Now, let’s talk about the buy side, AKA the highest paying career path in finance. What’s the buy side? It’s just like it sounds.

On the buy side, you have money from clients that you need to invest. You’re buying things, whether it’s stock or it’s debt or it’s private company or it’s start-ups. That’s the buy side. The buy side’s broken up into a couple different groups.

1- Large Asset Managers (Traditional Asset Management)

These are big institutional asset managers. Think BlackRock or Fidelity. Bigger companies. These are less hands-on, maybe less fun. Very lucrative fresh out of school.

They’re super competitive too, especially if you’re talking about BlackRock or Fidelity. There’s some entry-level positions, but the majority usually require a couple years of experience.

2 – Hedge Funds

Next up, we have the hedge funds, which is probably a term you’re familiar with. Working at a hedge fund means very, very high pay. To get into a hedge fund, which is probably the highest paying career path in finance, usually requires a couple years at an investment bank. Or sometimes even a MBA from a top ten school. It depends.

Again, very, very interesting work, very, very high pay. The hours aren’t as bad as an investment bank and a lot of people will leave investment banks to go to a hedge fund, mainly because of the higher pay and the lower hours.

Equity Only

Within the hedge fund group, you have equity only funds:

    Your typical long-short fund, where you’re buying stocks and you’re shorting at the same time.
    Long only specific, or short only specific.
    Some will break themselves up into different categories, like a value fund or a growth fund or whatever the hell they want to call themselves nowadays.

Credit Based

Next, you have hedge funds that are only credit focused:

    Some will be focused on distressed debt.
    Some will be focused on mezzanine financing.

Hybrids

Finally, and probably the most common are your hybrids.

These hedge funds are both buy debt and equity.

3 – Venture Capital

Venture capital is basically investing in start-ups. This is definitely a lot more unstructured to get into. There isn’t a clear cut path to get into VC like there is with hedge funds and private equity firms.

Much of the time, entrepreneurs who make a lot of money from their first company (with or without a diploma) turn into venture capitalists to invest that money.

If there was a conventional path to get into venture capital, it would probably be a) getting into a good MBA program near Silicon Valley, and b) making a bunch of connections and getting in that way. But it’s probably a little bit harder to get into than a hedge fund or private equity firm, just because it’s less structured.

4 – Private Equity

Next up, we have private equity. It’s just like it sounds. Private equity invests in private companies. This can be a very, very lucrative job to get out of that freshly printed finance degree of yours. But it’ll depend. Private equity’s a little bit different than the hedge fund space. Sometimes there’s entry level private equity opportunities.

Traditional

They’re not going to be as lucrative as working at the big private equity firms, which, like a hedge fund, requires a year or two of investment banking experience. But there are some private equity entry level opportunities that finance students can get into, as well as internships, which I’m going to discuss in a little bit.

So a private equity firm, they could either be what’s known as hands-on or hands-off:

    Hands-on. If a private equity firm buys a company, they could take their team and shift them over to the company they bought, completely overhaul it, run it, do what they got to do to fix it up, then probably sell it in a couple of years.
    Hands-off. Other private equity firms are known as what’s hands-off, meaning they’ll buy a company, let it do its thing, take the money, and keep on moving.
    Industry specific. They’ll focus on a certain industry, and have specialized knowledge. Again, they can be really, really wide-ranging within a private equity firm. So it really just depends.

Going back to what I said before, the best opportunities in private equity usually require a year or two of investment banking experience. Again, you’ll be making super-high pay, just like a hedge fund. You’ll probably be making anywhere from $200K to $500K a couple years after getting your degree, which is wild. But again, that’s why these roles are so competitive, and that’s why everybody wants to target these really high paying career paths in finance.

Search Funds

On the other hand, there are private equity firms called search funds. These fall under two categories:

    Buying companies for the first time. That is, you got a MBA person who just came out, got a bunch of money from family and friends, and is trying to buy a company to invest in.
    Helping others find deals. Or you have search fund, which is designed to help find deals. There are a number of internships and entry level opportunities here, which pay less, of course, than the really good jobs, which require a couple years of investment banking experience.

So at this point, you’re probably thinking, “yikes, sounds like breaking into investment banking or the buy side is going to be a real pain.”

Good news — in a second, I’m going to show you three little-known career paths in finance you can use to break into careers like investment banking or the buy side.

The Big Four

Ah, the big four. Think of your big four accounting firms, like Deloitte, PWC, KPMG, et cetera, et cetera. The caveat here being, I’m not talking about accounting. You don’t want to be in audit or tax. If you’re an accounting major, it’s pretty damn easy to turn your degree into a job.

But the problem with accounting is, you’re going to be working investment banking hours without the pay. The exit opportunities after accounting are just accounting. Unless you’re dead set on accounting, I wouldn’t recommend it.

There’s a few main roles you’ll want within a big four accounting firm.

1 – Corporate Advisory

This is where you’re doing advisory work on deals, kind of similar to an investment bank.

2 – Valuation

This is where you’re doing valuation work on companies. Both of those are great ways that you can use them as stepping stones to get into investment banking later down the road.

Again, not as intense as something like the buy side. The pay’s going to be lower. But those are also still strong roles. But like I said earlier, it’s probably going to take a little bit of experience beyond your degree if you’re trying to get into that.

Credit Based

Okay, so next up, number two, interesting kind of role to get into that you can use to leapfrog into something like investment banking or the buy side. That’s a credit-based job.

1 – Ratings Agencies

When I’m talking credit, I’m thinking Moody’s, S&P or Fitch, where you’re known as an associate analyst, where you’re doing pretty similar work to investment banking, working on deals, you’re doing a lot of modeling. You’re not really working on pitch books or PowerPoint, like you would at an investment bank.

Your hours are going to be dramatically lower. Obviously, the pay’s going to be lower with it. Doing something like that is a great way to break into one of the big banks down in New York, Wall Street, Chicago, wherever you are. Really good roles.

2 – Credit Risk at Banks

Then, at the same point, the big banks also have credit risk departments. Like I said, very similar to the types of stuff you’d do in a rating agency, but you’re going to get higher pay and you’re probably going have higher hours too.

Corporate Development

Then, number three of the back door jobs you can use to get into something like investment banking or the buy side later on, is corporate development. This is a weird one. Essentially, what corporate development is, is doing M&A, aka mergers and acquisition work, within a Fortune 500 company.

Think of this — If a company has an acquisition strategy which they use to grow, they’re probably going to have a corporate development department that pretty much does work finding companies for them to buy.

It’s really good work, and you could probably use it to leapfrog into some better jobs that are paying more.

Again, pretty similar to some of the stuff you’d be doing in investment banking, just without the prestige, without the resume booster and without all of the exit opportunities. But again, really, really good thing to get into if you aren’t able to break into IB right away.