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I work in consulting, and I’d say the top-end in consulting is still higher and much more of a safe bet. It’s not uncommon for people in consulting to be making

I work in consulting, and I’d say the top-end in consulting is still higher and much more of a safe bet. It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40. If you’re a partner, compensation can be significantly higher than that; in the $2M-20M range. I think there was a golden era of startups capturing value from the old guard, but that era is largely over IMO. All of those tech darlings are hiring consultants to help build corporate functions and product strategy — turns out there is significant value in knowing how to manage a company of 30,000+ employees and revenues in the hundreds of billions of dollars. Even a fraction of a percent gain in efficiency translates to enormous sums, which the consultants capture some percentage of in fees. As the unicorns continue to evolve into mature enterprises, more of that value will shift into the consulting / finance realm. If I were graduating in 2020, I would not go into tech as an engineer if my goal was to get wealthy. It’s still a great career and you’ll be able to live a very comfortable life regardless, but if building wealth is your goal you need to follow the prestige (aka political power).

whimsicalism 6y ago
For the typical Harvard student, tech is better paying than consulting unless you are an extraordinarily successful consultant. > It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40 This is not "uncommon" in FANG either (just take a look at the salary charts), and if anything can be reached earlier. > there was a golden era of startups capturing value from the old guard, but that era is largely over IMO If I could take a bet against this, I would. That value capture is only going to increase.
- scarmig 6y ago
  > If I could take a bet against this, I would Can't you, by starting or (much less favorably) joining a startup?
  - whimsicalism 6y ago
    Betting on technology capturing value in general over "jack-of-all-trades" consultancy vs. betting on one particular startup capturing value.
- hailwren 6y ago
  5 year EV is much lower in tech than finance for Harvard grads. I'm not sure ab consulting. Consulting and tech have similar starting salaries, but consider finance/hedge fund engineer starting tc is about 3-4x tech for top 3 grads rn.
  - whimsicalism 6y ago
    > 5 year EV is much lower in tech than finance for Harvard grads. I'm not sure ab consulting. Based on what? This is not true in my experience, unless you're comparing finance tech to FANG tech, in which case it is true. Moreover, at Harvard, some segment of those who go into finance are "connected" with higher paying finance jobs due to their parents/etc. Consulting salaries are lower (sometimes substantially) than tech starting salaries.
    - hailwren 6y ago
      Yeah, tech has a starting salary advantage but FAANG just doesn't compare on the upside. What's the top 10% of FAANG outcomes (for Harvard grads) after 5 years? 500k, maybe? The jump to MD in finance makes 1M+ something like 10-20% of outcomes (for Harvard grads) after 10 years. I'd be very surprised if it were that common in tech (over the next 10 years, I know that it was better in the 2000s). I think quickest to MD at Goldman was 4 years.
      - vikinghckr 6y ago
        Top 10% of FAANG is, what, around 30K-40K in raw numbers? What's the top 10% in Big Finance? I'd bet it's far lower number compared to that. So it's not apples to apples comparison. If you compare what top 10,000 FAANG engineers make 10 years into their careers vs what top 10,000 finance folks make 10 years into theirs, I'm pretty sure FAANG will come out ahead.
        hailwren 6y ago
        (for Harvard grads) is the important part there.
shuckles 6y ago
It is not uncommon for people in technology to be making $500k-$1m annually by 30, and the lifestyle is much better if you have outside commitments.
- wayoutthere 6y ago
  Consulting in particular really depends on the company. The big 4 will grind you to the bone, but boutiques often pay better and have much more reasonable expectations of time commitment. I don’t see consulting ever going back to the weekly travel model, and during the pandemic I work maybe 30 hours a week while pulling in the salary I do. Most of my work involves going to meetings, understanding complex business architecture and providing advice around niche topics while working within the politics of a various org. Pulling in a salary+bonus in this range with very little risk on my part.
  - emteycz 6y ago
    How would a software engineer/previously small startup 'CTO' get into consulting like this?
    - wayoutthere 6y ago
      I know this is gonna sound corny, but apply for jobs at any of the big 4 to learn the industry, and after a couple years you’ll know the companies you want to work for and have connections through co-workers who have left. Consulting is all about politics and connections, so thinking those aren’t directly correlated to wealth is naive.
      - shuckles 6y ago
        Do you see this industry loosening its expectations for an MBA? That is nearly $1m of opportunity cost to some of the technologists who might be interested in growing a management consulting career.
        6y ago
shostack 6y ago
What's the stress level like to get there? WLB?
howlgarnish 6y ago
However, isn't quality of life as a junior hire in both finance and consulting much worse than in tech? Every Goldman or McKinsey hire I know was worked like a dog for their first ten years, while at a FAANG you can generally work 9-5 and still have a pretty successful career.
- hiq 6y ago
  I started comparing the (expected) hourly salaries precisely for this problem: somebody earning twice your salary stops being relevant once you know they work three times the hours. Obviously there are other components as well (how much you travel, being on call...), but that already captures a lot of what's commonly missing in salary discussions.
mdorazio 6y ago
I also work in consulting and think it's a bad comparison. At the top levels of consulting most of your job and a good portion of your comp are tied up in sales/profitability, and client/account management with a pretty crappy lifestyle and work/life balance to match. It's significantly more grueling and less of a "coast to riches" path by far than big tech, although you're right that take-home comp can definitely be higher if the aforementioned job type is up your alley.
bertr4nd 6y ago
How many people make it to that $2-20MM partner bracket in consulting? That’s VP range at FAANG and while there are only so many VPs they certainly exist.
- wayoutthere 6y ago
  Somewhere in the 10% range if you stick with it. Plenty of folks leave to director / VP level roles in industry before they make it though -- the job of a partner isn't one that everyone enjoys.
eganp 6y ago
Ok let's suppose that consulting salaires hit $1M by age 40. What fraction of new hires make senior consultant? Partner? If your firm is operating on leverage of 20:1, sure you can make $2-20M annually. But, realistically, what are your odds on the margin of making partner 25 years down the road?

whimsicalism 6y ago

For the typical Harvard student, tech is better paying than consulting unless you are an extraordinarily successful consultant. > It’s not uncommon for people in consulting to be making $500k-$1m annually by the age of 40 This is not "uncommon" in FANG either (just take a look at the salary charts), and if anything can be reached earlier. > there was a golden era of startups capturing value from the old guard, but that era is largely over IMO If I could take a bet against this, I would. That value capture is only going to increase.

scarmig 6y ago
> If I could take a bet against this, I would Can't you, by starting or (much less favorably) joining a startup?
- whimsicalism 6y ago
  Betting on technology capturing value in general over "jack-of-all-trades" consultancy vs. betting on one particular startup capturing value.
hailwren 6y ago
5 year EV is much lower in tech than finance for Harvard grads. I'm not sure ab consulting. Consulting and tech have similar starting salaries, but consider finance/hedge fund engineer starting tc is about 3-4x tech for top 3 grads rn.
- whimsicalism 6y ago
  > 5 year EV is much lower in tech than finance for Harvard grads. I'm not sure ab consulting. Based on what? This is not true in my experience, unless you're comparing finance tech to FANG tech, in which case it is true. Moreover, at Harvard, some segment of those who go into finance are "connected" with higher paying finance jobs due to their parents/etc. Consulting salaries are lower (sometimes substantially) than tech starting salaries.
  - hailwren 6y ago
    Yeah, tech has a starting salary advantage but FAANG just doesn't compare on the upside. What's the top 10% of FAANG outcomes (for Harvard grads) after 5 years? 500k, maybe? The jump to MD in finance makes 1M+ something like 10-20% of outcomes (for Harvard grads) after 10 years. I'd be very surprised if it were that common in tech (over the next 10 years, I know that it was better in the 2000s). I think quickest to MD at Goldman was 4 years.
    - vikinghckr 6y ago
      Top 10% of FAANG is, what, around 30K-40K in raw numbers? What's the top 10% in Big Finance? I'd bet it's far lower number compared to that. So it's not apples to apples comparison. If you compare what top 10,000 FAANG engineers make 10 years into their careers vs what top 10,000 finance folks make 10 years into theirs, I'm pretty sure FAANG will come out ahead.
      - hailwren 6y ago
        (for Harvard grads) is the important part there.

shuckles 6y ago

It is not uncommon for people in technology to be making $500k-$1m annually by 30, and the lifestyle is much better if you have outside commitments.

wayoutthere 6y ago
Consulting in particular really depends on the company. The big 4 will grind you to the bone, but boutiques often pay better and have much more reasonable expectations of time commitment. I don’t see consulting ever going back to the weekly travel model, and during the pandemic I work maybe 30 hours a week while pulling in the salary I do. Most of my work involves going to meetings, understanding complex business architecture and providing advice around niche topics while working within the politics of a various org. Pulling in a salary+bonus in this range with very little risk on my part.
- emteycz 6y ago
  How would a software engineer/previously small startup 'CTO' get into consulting like this?
  - wayoutthere 6y ago
    I know this is gonna sound corny, but apply for jobs at any of the big 4 to learn the industry, and after a couple years you’ll know the companies you want to work for and have connections through co-workers who have left. Consulting is all about politics and connections, so thinking those aren’t directly correlated to wealth is naive.
    - shuckles 6y ago
      Do you see this industry loosening its expectations for an MBA? That is nearly $1m of opportunity cost to some of the technologists who might be interested in growing a management consulting career.
      - 6y ago

shostack 6y ago

What's the stress level like to get there? WLB?

howlgarnish 6y ago

However, isn't quality of life as a junior hire in both finance and consulting much worse than in tech? Every Goldman or McKinsey hire I know was worked like a dog for their first ten years, while at a FAANG you can generally work 9-5 and still have a pretty successful career.

hiq 6y ago
I started comparing the (expected) hourly salaries precisely for this problem: somebody earning twice your salary stops being relevant once you know they work three times the hours. Obviously there are other components as well (how much you travel, being on call...), but that already captures a lot of what's commonly missing in salary discussions.

mdorazio 6y ago

I also work in consulting and think it's a bad comparison. At the top levels of consulting most of your job and a good portion of your comp are tied up in sales/profitability, and client/account management with a pretty crappy lifestyle and work/life balance to match. It's significantly more grueling and less of a "coast to riches" path by far than big tech, although you're right that take-home comp can definitely be higher if the aforementioned job type is up your alley.

bertr4nd 6y ago

How many people make it to that $2-20MM partner bracket in consulting? That’s VP range at FAANG and while there are only so many VPs they certainly exist.

wayoutthere 6y ago
Somewhere in the 10% range if you stick with it. Plenty of folks leave to director / VP level roles in industry before they make it though -- the job of a partner isn't one that everyone enjoys.

eganp 6y ago

Ok let's suppose that consulting salaires hit $1M by age 40. What fraction of new hires make senior consultant? Partner? If your firm is operating on leverage of 20:1, sure you can make $2-20M annually. But, realistically, what are your odds on the margin of making partner 25 years down the road?