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On the compensation point... If you are a smart, quantitative person looking to maximize your income, you should go into investment banking, not software engin

On the compensation point... If you are a smart, quantitative person looking to maximize your income, you should go into investment banking, not software engineering. Partners at an investment bank can make $5M a year. You won't make that as an engineer at Google. Since you're reading this, I'll assume you didn't go into investment banking, but went into engineering, likely because you found it more rewarding. Good job! Life isn't about money. Now if you're a software engineer looking to maximize your income, go be a senior engineer at Google. You'll make $400k a year (supposedly). But you may find working in a smaller organization to be more rewarding / engaging / exciting. If that's the case, work at a startup. You won't maximize your earnings potential at a startup. But you'll likely work in a nimble environment, solving interesting problems, and get a lottery ticket (options) to boot.

wskinner 8y ago
"Maximize income" is not helpful without probabilities attached to the outcomes. What percentage of people who start in banking end up as partners making $5m? And what does the income distribution for the rest of the bankers look like? I suspect the long term payoff distribution for engineers is fatter, meaning if you end up around the 25th to 75th percentile, which you should expect to do, you will earn more as an engineer.
- mikekij 8y ago
  By "Maximize income" I mean Expected Value. The Expected Value of a lifetime of investment banking is certainly higher than that of a software engineer. While not every investment banker ends up making $5M, very few make less than $200k.
rrdharan 8y ago
Aside from the probability distribution issues with investment banker income, it's actually a much harder thing to simply "go do". Going straight into investment banking right out of undergrad is a privilege largely reserved for students of "elite" schools [1]. The other way in is post-MBA, but an MBA is quite expensive. The hourly rate also looks very bad [2]; junior/entry-level research analysts routinely put in 80+ hour weeks, regardless of the reforms that were put in to attempt to curb that sort of abuse after multiple deaths. [1] https://news.efinancialcareers.com/uk-en/199099/top-50-universities-getting-front-office-investment-banking-job https://news.efinancialcareers.com/uk-en/199099/top-50-unive... [2] https://corporatefinanceinstitute.com/resources/careers/compensation/investment-banker-salary/ https://corporatefinanceinstitute.com/resources/careers/comp... (Edited to add a couple of pertinent links.)
- mikekij 8y ago
  I would argue that making $400k as an engineer at an elite school also requires some element of academic pedigree.

wskinner 8y ago

"Maximize income" is not helpful without probabilities attached to the outcomes. What percentage of people who start in banking end up as partners making $5m? And what does the income distribution for the rest of the bankers look like? I suspect the long term payoff distribution for engineers is fatter, meaning if you end up around the 25th to 75th percentile, which you should expect to do, you will earn more as an engineer.

mikekij 8y ago
By "Maximize income" I mean Expected Value. The Expected Value of a lifetime of investment banking is certainly higher than that of a software engineer. While not every investment banker ends up making $5M, very few make less than $200k.

rrdharan 8y ago

Aside from the probability distribution issues with investment banker income, it's actually a much harder thing to simply "go do". Going straight into investment banking right out of undergrad is a privilege largely reserved for students of "elite" schools [1]. The other way in is post-MBA, but an MBA is quite expensive. The hourly rate also looks very bad [2]; junior/entry-level research analysts routinely put in 80+ hour weeks, regardless of the reforms that were put in to attempt to curb that sort of abuse after multiple deaths. [1] https://news.efinancialcareers.com/uk-en/199099/top-50-universities-getting-front-office-investment-banking-job https://news.efinancialcareers.com/uk-en/199099/top-50-unive... [2] https://corporatefinanceinstitute.com/resources/careers/compensation/investment-banker-salary/ https://corporatefinanceinstitute.com/resources/careers/comp... (Edited to add a couple of pertinent links.)

mikekij 8y ago
I would argue that making $400k as an engineer at an elite school also requires some element of academic pedigree.