4 ms·

I think it's important to dispel a certain myth about this sector of finance. Around and past an IQ of about 135, work boredom is a chronic risk and sometimes

I think it's important to dispel a certain myth about this sector of finance. Around and past an IQ of about 135, work boredom is a chronic risk and sometimes a disability. If you're in this set, entry-level banking ("analyst" programs) and private equity aren't where you want to go. Past 135 (much less at 140, 150, or even 160) even 8 hours per day of grunt work is impossible, much less 17. There are plenty of 135+ in finance, but either they go for trading and quant or even IT roles, or they move to "the soft side" at a higher level: usually at least VP. So, yes, these people are above average in talent, but they're not "the most talented" in our generation. Depending on bonuses, they're not even the best paid. Oh, and they're the ones who go on to become VCs (not you, programmers, despite your superior talent). The 23-year-olds making half a million in private equity do exist, but they're (a) uncommon, and (b) not especially smart, just connected and unusually able (top 1%) to grind out hours. If you want to become a Master of the Universe, the optimal IQ is probably in the low-mid 120s: enough that you can build something in Excel, but not near the level that brings boredom or anti-authority risk.

deleted 12y ago
[deleted]
peterjancelis 12y ago
You're over-thinking the IQ part. And I know some 20-somethings making $500K and more for PE megafunds. There are some guys from middle class backgrounds there. The connected-but-useless ones tend to get hired in investment banking.
foobarqux 12y ago
Plenty of high IQ people in PE and hedge funds, especially those who entered direct from college, skipping IB. They seem to be people who can tolerate grinding though. It may be true that the work gets boring but the alternatives aren't significantly better (how many people at Google are doing substantially more interesting work?) and pay and career advancement are much better.
- crapshoot101 12y ago
  Yup. Some of the smartest people I've ever met went into finance, because the money is crazy - these are the kids who were building stuff for fun in college, or first gen immigrants who were on full rides and knew that college was about getting skills and getting a job, not just about 3AM drunk discussions about Sartre. The idea that these people are not as intelligent as "tech people" is silly.
- michaelochurch 12y ago
  I acknowledge that there are plenty of very smart people in finance (especially in quant roles). I said: There are plenty of 135+ in finance, but either they go for trading and quant or even IT roles, or they move to "the soft side" at a higher level: usually at least VP. Smart people tend to avoid competing on hours. Why? Because if you're putting out a 17-hour day (which is necessary at the entry level on "the soft side") anything that is a disadvantage can (no, will) derail you. That includes being too smart for the work. So they prefer trading and quant jobs where the hours are reasonable and also where the work is more interesting and they're not as much at risk of high-IQ problems. [P]ay and career advancement are much better [in finance than software]. Absolutely. This is completely true. Any idea what we should do about this in engineering? (Or just call it hopeless and exit for finance?)
  - dkrich 12y ago
    I don't think it's a solvable problem. People who tend to make the hiring and pay decisions are seldom those who understand the intricacies or value of good engineers. An engineer could make $500k a year, but the business case for why that is a good investment for the company has to be made, and that's where it falls apart. Most people capable of making that decision believe that somebody with a Harvard MBA is worth a particular sum because that's what the market, their experience, their network, and conventional wisdom tells them. For that same person to believe that a top engineer with or without a strong pedigree is worth the same amount would require that person to understand a lot of details that few are willing to learn. I don't think this is necessarily a setback for all engineers- it just creates different but highly lucrative opportunities for those that are able to make the business case to those who write the checks. Instead of relying on your pedigree and the fact that the market at large widely agrees what certain pedigrees and jobs are worth a lot (which is what makes top schools and PE/IB jobs so competitive), you have to convince people of your value on your own. Edit: To be less abstract- an example would be starting a tech consulting business in which you bill $200/hour. Not necessarily an easy task, but if you can show that you're worth more than that to the business, you can convince them to pay you that much.
deleted 12y ago
[deleted]
joncooper 12y ago
Talent != IQ. And I'd argue "smart" != IQ.
gone35 12y ago
Around and past an IQ of about 135, work boredom is a chronic risk and sometimes a disability. (...) Past 135 (much less at 140, 150, or even 160) even 8 hours per day of grunt work is impossible, much less 17. Interesting. I went to a rather old-fashioned school with a strict IQ cutoff of 125-130+ (Stanford-Binet LM, I think, because some scored above 160), and my impression is the opposite: the higher they scored, the more they valued career paths like (non-quant) finance, medicine or corporate law --tracks with plenty of grunt work and long hours but well-defined, steady payoffs. I asked many of them about this because, to me at the time, it seemed counterintuitive and a tragic waste of human talent. It often turned out, however, that they chose those careers precisely because they lavishly reward grunt work, which they can do with such incredible (almost infuriating) ease that, to them, it doesn't feel like work at all! That is not to say they do not have rich intellectual lives outside of work: but that, for them, corporate work is more like a generous sinecure that doesn't substantially impede their other pursuits. In fact, it was those of us with the "lowest" IQs who tended to be more freaked out about the prospects of mindless corporate work, and who were more likely to go for more "intellectually stimulating" careers like academia or applied fields.
- michaelochurch 12y ago
  That is not to say they do not have rich intellectual lives outside of work: but that, for them, corporate work is more like a generous sinecure that doesn't substantially impede their other pursuits. In fact, it was those of us with the "lowest" IQs who tended to be more freaked out about the prospects of mindless corporate work, and who were more likely to go for more "intellectually stimulating" careers like academia or applied fields. Your thesis is interesting. I suppose I thought that the grunt work of those careers was like the grunt work of programming, e.g. maintenance of bad code, learning "how we do things here" idiosyncrasies with little general value: mentally taxing (and, at an IQ above 130, mind-crushingly boring) but not intellectually difficult.
  - gone35 12y ago
    I would have thought so too, but perhaps one key difference for IQ outliers is that, to them, inordinate detail-orientation and extreme repetitiveness does not appear to be mentally taxing at all --so their cost-benefit calculus might seem completely foreign and unintuitive to the rest of us!

deleted 12y ago

[deleted]

peterjancelis 12y ago

You're over-thinking the IQ part. And I know some 20-somethings making $500K and more for PE megafunds. There are some guys from middle class backgrounds there. The connected-but-useless ones tend to get hired in investment banking.

foobarqux 12y ago

Plenty of high IQ people in PE and hedge funds, especially those who entered direct from college, skipping IB. They seem to be people who can tolerate grinding though. It may be true that the work gets boring but the alternatives aren't significantly better (how many people at Google are doing substantially more interesting work?) and pay and career advancement are much better.

crapshoot101 12y ago
Yup. Some of the smartest people I've ever met went into finance, because the money is crazy - these are the kids who were building stuff for fun in college, or first gen immigrants who were on full rides and knew that college was about getting skills and getting a job, not just about 3AM drunk discussions about Sartre. The idea that these people are not as intelligent as "tech people" is silly.
michaelochurch 12y ago
I acknowledge that there are plenty of very smart people in finance (especially in quant roles). I said: There are plenty of 135+ in finance, but either they go for trading and quant or even IT roles, or they move to "the soft side" at a higher level: usually at least VP. Smart people tend to avoid competing on hours. Why? Because if you're putting out a 17-hour day (which is necessary at the entry level on "the soft side") anything that is a disadvantage can (no, will) derail you. That includes being too smart for the work. So they prefer trading and quant jobs where the hours are reasonable and also where the work is more interesting and they're not as much at risk of high-IQ problems. [P]ay and career advancement are much better [in finance than software]. Absolutely. This is completely true. Any idea what we should do about this in engineering? (Or just call it hopeless and exit for finance?)
- dkrich 12y ago
  I don't think it's a solvable problem. People who tend to make the hiring and pay decisions are seldom those who understand the intricacies or value of good engineers. An engineer could make $500k a year, but the business case for why that is a good investment for the company has to be made, and that's where it falls apart. Most people capable of making that decision believe that somebody with a Harvard MBA is worth a particular sum because that's what the market, their experience, their network, and conventional wisdom tells them. For that same person to believe that a top engineer with or without a strong pedigree is worth the same amount would require that person to understand a lot of details that few are willing to learn. I don't think this is necessarily a setback for all engineers- it just creates different but highly lucrative opportunities for those that are able to make the business case to those who write the checks. Instead of relying on your pedigree and the fact that the market at large widely agrees what certain pedigrees and jobs are worth a lot (which is what makes top schools and PE/IB jobs so competitive), you have to convince people of your value on your own. Edit: To be less abstract- an example would be starting a tech consulting business in which you bill $200/hour. Not necessarily an easy task, but if you can show that you're worth more than that to the business, you can convince them to pay you that much.

deleted 12y ago

[deleted]

joncooper 12y ago

Talent != IQ. And I'd argue "smart" != IQ.

gone35 12y ago

Around and past an IQ of about 135, work boredom is a chronic risk and sometimes a disability. (...) Past 135 (much less at 140, 150, or even 160) even 8 hours per day of grunt work is impossible, much less 17. Interesting. I went to a rather old-fashioned school with a strict IQ cutoff of 125-130+ (Stanford-Binet LM, I think, because some scored above 160), and my impression is the opposite: the higher they scored, the more they valued career paths like (non-quant) finance, medicine or corporate law --tracks with plenty of grunt work and long hours but well-defined, steady payoffs. I asked many of them about this because, to me at the time, it seemed counterintuitive and a tragic waste of human talent. It often turned out, however, that they chose those careers precisely because they lavishly reward grunt work, which they can do with such incredible (almost infuriating) ease that, to them, it doesn't feel like work at all! That is not to say they do not have rich intellectual lives outside of work: but that, for them, corporate work is more like a generous sinecure that doesn't substantially impede their other pursuits. In fact, it was those of us with the "lowest" IQs who tended to be more freaked out about the prospects of mindless corporate work, and who were more likely to go for more "intellectually stimulating" careers like academia or applied fields.

michaelochurch 12y ago
That is not to say they do not have rich intellectual lives outside of work: but that, for them, corporate work is more like a generous sinecure that doesn't substantially impede their other pursuits. In fact, it was those of us with the "lowest" IQs who tended to be more freaked out about the prospects of mindless corporate work, and who were more likely to go for more "intellectually stimulating" careers like academia or applied fields. Your thesis is interesting. I suppose I thought that the grunt work of those careers was like the grunt work of programming, e.g. maintenance of bad code, learning "how we do things here" idiosyncrasies with little general value: mentally taxing (and, at an IQ above 130, mind-crushingly boring) but not intellectually difficult.
- gone35 12y ago
  I would have thought so too, but perhaps one key difference for IQ outliers is that, to them, inordinate detail-orientation and extreme repetitiveness does not appear to be mentally taxing at all --so their cost-benefit calculus might seem completely foreign and unintuitive to the rest of us!