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The Prestige Trap: finance, big tech, and consulting

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Re: The Prestige Trap: finance, big tech, and consulting

#231

Post by eganp »

shuckles wrote: post #24
wayoutthere wrote: post #16

Earlier quoted context omitted.

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 t…

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.

How much of this compensation is equity appreciation? Is it realistic to expect this 10 years from now?

Not like interest rates can get lower or search could get less competitive.

Re: The Prestige Trap: finance, big tech, and consulting

#233

Post by jpochtar »

Prestige is also "legible" in the sense introduced by "Seeing Like a State". It's valuable in eg. socially, if someone sees Harvard/Goldman, they can instantly bucket you in a particular social class, even if they're in a wildly different field and couldn't assess your actual merit. Whether you want to be perceived as a member of that particular social class is a mixed bag which I wont waste space on here, as if you're interested in reading more about it, I'd direct you to literally any issue of The New Yorker.

Re: The Prestige Trap: finance, big tech, and consulting

#234

Post by est31 »

username90 wrote: post #221
est31 wrote: post #217

Earlier quoted context omitted.

> without extreme stock value changes. That's the point, you don't know whether there will be any. So they are definitely not "as good as cash". Just because they aren't lottery tickets doesn't mean they are equivalent to cash.

You are much more likely to get fired and lose all your income than for the stock to lose that much value, so the difference in risk between stock and cash is therefore minimal. Edit: Just to clarify, $300k as a senior engineer is without any stock appreciation at all. I made $250k as one step below senior without any stock appreciation at all. My point about significant stock changes is for significant stock changes…

> My point about significant stock changes is for significant stock changes downwards

My point was a more holistic view. It's great that there is a 95% chance that your stock RSUs will increase. But if there is a 90% chance that within 3 years it's a 15% increase or more, you should rather use the 15% increased figure for calculation instead. And then the risk is much higher because it's not just stock not going down, but stock not going up as quickly as it did before.

Re: The Prestige Trap: finance, big tech, and consulting

#235

Post by vagrantJin »

ashtonkem wrote: post #218
Gunax wrote: post #111

I don't think a lot of people know what they want. There is just as much guessing as to which job to take as employers have choosing who to hire. Taking the most prestigious or most compensation is the safest bet, given that you don't really know what you want to do other than 'I like coding and interesting problems'. Partly I think that Harvard students have been adapted to seek prestige (else they probably wouldn't…

One of the key takeaways from the social sciences is that people are really bad at estimating what will make them happy. Even those who have a plan for what they want are often drastically wrong about how it'll make them feel in the long run.

This has legs. Adulthood has been a major disappointment thus far. I can say, without condemning myself, that I can no longer pursue happiness. Happiness is to found in moments and at the bottom of a bottle of beer, the rest of the time is mild stress and contentedness with ones lot and working on my goals without pomp or self adulation.

Re: The Prestige Trap: finance, big tech, and consulting

#236

Post by username90 »

est31 wrote: post #234
username90 wrote: post #221

Earlier quoted context omitted.

You are much more likely to get fired and lose all your income than for the stock to lose that much value, so the difference in risk between stock and cash is therefore minimal. Edit: Just to clarify, $300k as a senior engineer is without any stock appreciation at all. I made $250k as one step below senior without any stock appreciation at all. My point about significant stock changes is for significant stock changes…

> My point about significant stock changes is for significant stock changes downwards My point was a more holistic view. It's great that there is a 95% chance that your stock RSUs will increase. But if there is a 90% chance that within 3 years it's a 15% increase or more, you should rather use the 15% increased figure for calculation instead. And then the risk is much higher because it's not just stock not going down…

But I use the 0% figure, so it is how much the company paid and not how much I get. If you count stock appreciation then a simple senior engineer can make 400-500k or more, but people don't really count that.

Re: The Prestige Trap: finance, big tech, and consulting

#237

Post by ativzzz »

shuckles wrote: post #222
ativzzz wrote: post #210

Earlier quoted context omitted.

A good MBA program will help you develop those exact connections the parent comment mentions

My experience has been that it’s a lot more gatekeeping than networking to the extent that I’ve seen banks move away from requiring it.

As with anything, it is what you make of it. HN has a stereotype of MBA students that doesn't always hold up to the real world (though not all stereotypes are wrong).

Re: The Prestige Trap: finance, big tech, and consulting

#238

Post by eganp »

This is a nice essay but I think it misses 3 key points:

1. FTC returns are predictable. The returns to taking an unbeaten path is anything but. Further, how will your peers and the world view you as CEO of New Idea Inc vs. L4 at Google? 2. Prestige is a cheap correlate, and thus substitute, for aptitude. Outside of Tech, verifying aptitude and fit is like trying to pay with physical gold whereas prestige is like paying with Amex Platinum. 3. Consulting and Finance offer exposure to a swath of otherwise opaque industries and opportunities. This appears to be especially true in industries driven by culture fit and trust. Why do many e.g. biotech companies eschew an MD/PhD CEO for an ex-MBB 'professional CEO'? Because the CEO exists raise money and that requires immense trust and penetrating opaque networks.

Perhaps returns to prestige are overrated, but I'll take the prestige 10/10. In my experience, the previously closed doors suddenly open themselves for you.

Re: The Prestige Trap: finance, big tech, and consulting

#239

Post by throwaway713 »

centimeter wrote: post #10
notacoward wrote: post #6

I find two things to disagree with in this article. First is the premise that equally high compensation is offered elsewhere in each industry. I don't know about finance or consulting, but at least for FAANG it doesn't seem to be true. Second is the overlooked explanation that it's headroom - not prestige - that accounts for the difference. I'll provide an example that illustrates both points: me. When I went from Re…

I find it surprising that people still consider FAANG prestigious, given that these companies collectively have probably 1-200,000 engineers in their employ. Even if they managed to perfectly select for the cream of the crop (they don't), that still has to be like 10-20% of all programmers/engineers in the US. Being top 20% isn't that impressive, and in reality they're probably mostly hiring from the top 30-40%.

You’re looking at the wrong pool of potential employees. On my team of ~40 people, I am the only one who was born in the U.S. They hire from all over the world and will pay what’s necessary to import top talent from other countries.

Also, 200,000 sounds way too high for total number of technical positions at these companies. There are a very large number of people working non-technical jobs there as well.

Re: The Prestige Trap: finance, big tech, and consulting

#240

Post by est31 »

username90 wrote: post #236
est31 wrote: post #234

Earlier quoted context omitted.

> My point about significant stock changes is for significant stock changes downwards My point was a more holistic view. It's great that there is a 95% chance that your stock RSUs will increase. But if there is a 90% chance that within 3 years it's a 15% increase or more, you should rather use the 15% increased figure for calculation instead. And then the risk is much higher because it's not just stock not going down…

But I use the 0% figure, so it is how much the company paid and not how much I get. If you count stock appreciation then a simple senior engineer can make 400-500k or more, but people don't really count that.

IDK for me personally that's the metric I'd use when comparing jobs/careers. From your statements alone, it can mean hundreds of thousands of dollars in difference. That's not something to gloss over.
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