The point that is being missed is in order to predict whether something is worthwhile, you need to do a risk/cost vs. benefit analysis. All too often, people are lured into what seems promising blind to the fact the probability of failure is far greater than the probability for success. Investment banking sells a lot of college students with a pipe dream of becoming wealthy which is not a probable outcome.
I’m in agreement with you that the “optimal path” career trajectory in finance is unmatched by most fields. The problem is that very few reach that optimal path. There are plenty of testimonials of those that do and relatively few testimonials of those that don’t. People don’t like to share their failures.
I went to a pretty good blue ribbon high school that produced a significant number of students that went on to Ivy-level schools and subsequently the financial sector. I have done financially better than all for a few reasons:
• Income: started out from college at $90,000 (private sector + military income) and experience 10-15% average growth per year since then while never having to absorb the opportunity cost of post-grad education (more on how I have been able to sustain an average 10-15% yearly growth in income below)
• Opportunity costs: None. I have never stopped working to complete post-graduate education, and thus have never experienced a period of time where I had a substantial drop in income. Many in finance will end up having an opportunity cost of 2 years due to a full time MBA and education debt on top of that.
• Expenses: cost of living of NYC (finance) vs. Maryland (defense)
• Educational debt: walked out of undergrad with ZERO DEBT due to State Tuition Waiver from service in the National Guard. Will never have debt for further education such as an MBA or PhD
• Savings: Access to both a 401k and Federal Thrift Savings Plan. By using both accounts, I am able to contribute up to $36,000 ($18,000 per account) per year tax-free. Due to the relatively low expenses, I have maxed it out ever since my first job after undergrad
• Because my work weeks are generally 35 hours, I have extra time to pursue goals that facilitate career progression as well as hedge against risk:
o Completed a MS Computer Science while working full time DEBT FREE. 6 years of equivalent work experience in 4.5 year span which resulted in faster advancement/promotion than peers. Now I’m looking to either complete a MBA and/or PhD Computer Science part time for free to maintain the rate of progression over peers.
o Overtime: overtime where I work is paid at 1.5-2.0x the normal rate and is deposited at the end of the 2 week pay period. The idea that you have to bust your ass for 80 hours a week in finance and be paid as a lump sum bonus that is taxed heavily at the end of the year IF YOU DON’T GET LAID OFF is hilarious.
o Military reserves: Career progression here goes hand in hand with the defense sector. The networks of both are very interconnected. Fortunately, as a member of the Maryland National Guard, I have access to one of the most connected networks to Capitol Hill. Think about it, the congressional staffers that work on the Hill and are in the reserves are either in the Virginia National Guard or Maryland National Guard. Success and progression in one ladder is a self-fulling prophecy for the other.
• Retirement/Health care
o Military officer retirement/pension on top of private sector savings and investments
There’s a reason why states like MD, TX, NC, SC, etc. have done remarkably well in the past few years compared to states like NJ, NY, CA, etc. In fact the state that I currently reside in (Maryland) beat out Connecticut (home of hedge funds) for most millionaires per capital (http://www.washingtonpost.com/blogs/rosenwald-md/post/maryland-tops-the-country-in-millionaires/2011/11/07/gIQAtlphvM_blog.html). Wealth in states like NY, CT, are concentrated in the hands of the very few. Also, there are good reasons why states like NY and NJ are on the decline. These states where the economies have traditionally been driven by the financial sector are no longer the powerhouses they once were. For every 1 person moving into these states, almost 2 are moving out citing better job prospects elsewhere and better cost of living (http://www.nj.com/news/index.ssf/2015/01/people_are_fleeing_nj_faster_than_any_other_state_moving_company_says.html).
The bottom line is that I now have a higher net worth than most of my peers that slaved away in finance because I simply had a better plan and not because I was any smarter or had some prestigious brand name on my resume. Remember, I came from a middle class family with no substantial network and a 2.7 GPA from a state university.
Personal success isn’t determined by the name of the school you went to, by who your parents are, or what field you enter in the beginning. It’s determined by continual thirst for improvement, ambition, and how you create your own “angles” for success.