I’m going to show you some of the highest paying career pass and finance and exactly what you need to do to get into these types of jobs. These are the same career path and finance that can put you on track to making a quarter of a million dollars in just three to four years out of school. And today, I’m going to go through each of these career pass and finance.
Step by step. Let’s go.
You’re probably thinking to yourself, what can I do with my finance or business degree? That’s got to maximize my earnings potential. So at this article, I’m going to cut through the crap and show you the exact career path and find ads that you should target to maximize your earnings potential. And at the same time, the types of career pass and finance you want to completely avoid.
Because they can totally flatline your career. So what types of careers in finance do you want? You want what I call a Tier 1 job.
Tier 1 Jobs in Finance
Tier 1 jobs are front office analytical type roles where you’re actually doing really interesting work, whether it’s working on different companies, working on different deals, doing research, etc. vs. a boring back-office type job where you’re not doing interesting work or maybe plugging numbers in Excel and you know, it’s not going to do anything for your career.
So why are these Tier 1 jobs so attractive?
- They come with some of the highest pay in the industry.
- They’re the most prestigious in the business world.
- They can lead to some of the best exit opportunities which come with even higher salaries.
- They come with the best kind of work.
So within our career path and finance, we have three main routes.
- We have the banking route.
- We have an asset management route.
- We have our stepping stone route.
Now, when you’re thinking of the best paying jobs for a finance major, you’re probably thinking of stuff at a hedge fund, private equity firm, venture capital, etc.. Now, these career paths are all designed to lead towards those types of jobs because like I mentioned before, within 3 to 4 years out of school, if you get to the buy-side and you’re working at a hedge fund, private equity firm or venture capital firm, you’ll probably be making a quarter million dollars, 3 to 4 years of school, which is fantastic.
So, again, these career paths are specifically set up to get you to the buy side as quickly as you can. But again, sometimes people will stick in the roles they have. I don’t want to move, but that’s totally fine. But more than likely, if you’re a finance major, you’re a business major and you’re looking for that big box kind of job. That’s the buy-side. And we’re going to get into how to get there and a little bit.
01. Jobs in Banking Route
So first up, we have the banking route. Now, the banking role is probably the most lucrative, but at the same time, the most competitive route finance majors are usually trying to go for. So who is this route for primarily? This is for students that are on the younger side, primarily freshmen, sophomores and even some juniors, because, again, the recruiting for this type of route starts very, very early. So you need to be on your game as soon as possible. So why are the jobs and the banking route so competitive?
Obviously, it’s the money. If you get a job within the banking route, you’re probably going to make anywhere from $90,000 to $140,000 in total compensation right out of school. But again, the requirements are a lot tougher. Usually, it’s going to take a year of relevant experience, whether it’s a relevant analytical type internship or participating in experience based program like our IELTS analyst program.
Usually, you have to have a relatively good GPA and by that I mean you’re probably looking somewhere from 3 to 5 and up your school probably needs to be somewhat well known. And at the same time, you probably have had to do a little bit of networking to actually get yourself in an interview. So one of the jobs within the banking row. Let’s take a look.
Investment Banking Jobs
First off the bat, we have investment banking, which is probably the most lucrative and most competitive job for entry level grads. Then we have roles like sales and trading, corporate banking and even equity research.
So first up, we have investment banking. Which, as I mentioned before, is probably the most competitive yet lucrative role out there. You’ll be making a lot of money, but at the same time, you’re going to be working a lot of hours, probably in the range of 80 to 100 hours a week sometimes in some cases. I’ve heard up to a hundred twenty hours a week, which is nuts.
But again, investment banking is probably the most effective route to go if you’re trying to get to the buy side. Usually, if you’re in investment banking for about a year, too, you can do that and then move over to the buy side from there, whether you go to a private equity firm or a hedge fund. So it’s a lot easier to make that jump to the buy side if you started in investment banking. As a quick overview, investment banking is primarily a deal based business. You’ll be working on things from mergers and acquisitions to oppose to debt refinancings, to leveraged buyouts, etc. So your job as an entry level analyst will primarily be building different models, whether it’s a three statement company specific model or a product based model like an M&A model or LBO model.
But at the same time, you’ll also be working on pitch books to go over the details of various deals, depending on what kind of department you’re in. Within investment banking, you can be on what’s called an industry based team, where you’re focused on covering a different industry like health care, TMT resources. You can be on a products based team like leveraged finance or M&A, or you could be on the capital market side of things where you’re in there equity capital markets group or their debt capital markets group. All of them are very, very great roles to start into. But in terms of which are probably better if you’re on the M&A lead then or an industry based team that’s more preferred than something like capital markets, although capital markets is still a great place to start. Next up, we have our group of corporate banking, sales and trading and equity research.
So obviously these roles are a lot different than each other, but I grouped them together here primarily because of the exit opportunities that you can get from them. Now, these are still really, really great jobs to have, but the exit ops won’t be as good as the types you’ll get from investment banking. So can you go direct to the buy side after going through one of these roles? Yes. But sometimes it requires getting some experience in investment banking or also pursuing MBA and using that to leverage into the buy side. So what are these roles? So starting with corporate banking, it’s somewhat similar to investment banking, but there’s also a lot of key differences.
Corporate Banking Jobs
So within investment banking, you’re primarily working in a deal based environment, whereas corporate banking is primarily focused on the credit side of things. So, for example, in leveraged finance, which is part of investment banking, you’re primarily working on high yield debt issuances that would be used for different mergers, acquisitions, transactions, leveraged buyouts, etc. Whereas in corporate banking you’re primarily working on more investment grade type products, whether it’s a term loan, a revolver, etc. Now with corporate banking, obviously you have lower pay, but that comes with better hours which might work for someone that wants that better lifestyle.
Sales and Trading Jobs
Sales and trading is pretty much what it sounds like. You know, you’re doing a lot of trading work during trading hours. It can be really, really intense because obviously you’re doing this work in real time. But at the same time, compared to investment banking, the hours can work better because when the markets are closed that you’re trading in, you’re pretty much done. So if you prefer to handle quick periods of intense situations where you’re doing this trading work versus kind of the fixed long hours of investment banking, sales and trading might be for you.
Equity Research Jobs
But as I said, you’re not going to have those exit opportunities like you would with investment banking. Then we have equity research, which is again, pretty much just like it sounds if you’ve ever been on Yahoo! Finance or just kind of look at Google and you’ve seen a report that let’s say this Goldman Sachs analyst put out a price target on Tesla. That’s their equity research department where they’re literally just putting out research reports on the different companies that.
Covering now, the key thing here is it’s kind of tricky to get right into equity research out of school, so this might not be the best thing to look for in terms of an entry level opportunity. But if you can, equity research obviously can lead to full time by side role occasionally, depending on where you are. But sometimes it might require that banking experience ahead of time or go through your MBA first.
So as a recap, the banking row is probably the best paying job in finance to go after. Why?
- If you still have time on your side and you know you’re a freshman, sophomore or junior and can make sure you’re prepared ahead of time. Because once you miss the recruiting cycle, it’s a lot harder to get into after. And it might require a stepping stone job, which will cover a little bit later on.
- You’re absolutely going to need to have some sort of relevant experience on your resumé to show that you’ve done work similar to this and that you’re not just a complete newbie who’s never known anything about the space. So those are things like having an investment banking internship already, having a Tier 1 type analytical internship that’s still relatively close to investment banking or going through a program like our Invest like the Street Analysts program, where we literally teach you what you need to know for these jobs, but at the same time give you experience doing this work. So you have something to put on your resume.
- You’re going to need to have a pretty darn good GPA. So ideally, you want to have something that’s three, five and up as banks tend to have the cut off at about three to five. Sometimes you can still do it at three, two and up as that’s kind of the next year in terms of a GPA cut off. But it gets a little tougher than anything below 3 and 2 and you’re in a much trickier spot. You’re probably going to need a really, really strong connection to get you in for an interview or you’re going to need to go through a stepping stone job first, which we’re going to cover in a little bit.
- You’ll probably need to go to a relatively decent school. The more alumni that you have in the industry, the better it is and the more people that you’re going to be able to network with.
- Obviously, you’re going to have to do that networking. So you have people on the inside of these companies pushing your resumé through to actually bring you in for an interview.
2. Jobs in Asset Management Route
We have our second career path in finance, which is the asset management route.
So what is the asset management route?
It’s kind of similar to the types of requirements you would need for the banking route. So, again, gonna need to have some relevant experience on your resumé. You’re gonna have to have a pretty good GPA. You’ll probably have to have gone to a pretty well-known ish kind of school. And obviously, you’re going to have to do some networking to even get in for an interview. So within the Ass and Manzer route, it’s primarily where you’re going to be working in the asset management departments of a big bank like a JP Morgan or at places like Fidelity and BlackRock, where they’re managing their own assets. And you’ll primarily be doing work in terms of researching different companies, doing research on different industries, doing work with portfolio management, et cetera.
So, again, it’s really, really interesting work. That’s obviously a lot more relevant to stuff that you’re going to be doing on the buy side where you’re actually working at a hedge fund, private equity firm, venture capital firm and doing the same kind of shit at the same point. The total compensation that comes with this is also pretty darn high. You’re probably going to be making anywhere from $85,000 to $110,000 in total compensation right out of school, which again makes the asset manager route a pretty competitive yet lucrative route to go after. So how does the asset management route stack up against the banking route? So there are a couple things here. So the trickiest part about the asset management route is there are fewer opportunities available.
Asset Managers Jobs
There are lots of investment banks out there, but there are as many big asset managers which are gonna have the same prestige and lead to the same exit opportunities like an investment bank would. As you’ll see a little bit later on, I refer to smaller asset managers in the stepping stone route. But the thing about those is while the work might be interesting, it’s not going to lead to the same exit opportunities as it would if you’re at a big asset manager, whether it’s a Fidelity, BlackRock or working in the asset. IT department of a big bank like JP Morgan or Goldman Sachs. Those roles can lead you right to the buy side where whereas small asset managers, they’re not going to get you into those roles as easy. And you’re either going to, one, have to know someone who’s going to be able to get you in to go get some banking experience ahead of time or three, go the MBA route and use that to leverage into a really, really solid buyside role.
But we’ll cover this a little bit later on in terms of the small asset managers. So moving on to our last career path in finance and probably our most important one, which is the stepping stone route.
03. Jobs in Stepping Stone Route
So if you’re like me, you’ve probably screwed up in school. And a lot of us when you’re in college, you don’t realize how much you need to do to actually land some of these really, really good roles in finance just like me. So that’s where the stepping stone route comes in, the stepping stone route. And the jobs within it are basically jobs that you want to get into, which can help redefine yourself and position you for one of the better jobs within the banking route or going direct to the buy side. So how do we get into jobs like this?
But first off, we need to identify our weaknesses here. If you’re looking at a different career path in finance and you think you need to go the stepping stone route, there’s a couple of things you’re probably trying to overcome.
- You’re probably late to the game. Meaning you didn’t start early enough preparing to land a job in the banking round. And that’s OK. There are still ways to overcome being late. Whether you’re a senior in college and you’re scrambling to find a full time job or you’re out of school and don’t have a job or are in a role you don’t like, isn’t taking you anywhere in your career.
- You might not have the best GPA. If you’re like me, you probably didn’t have the best GPA in college because you might’ve slacked off. You might a too much, etc. It happens. There are still ways to overcome that.
- Probably the most important thing here is you don’t have relevant experience. So if you’re applying for jobs that are in the banking row and you have no relevant experience on your resume, that shows that you’ve done stuff related to those jobs. There’s no shot. You’re going to get an interview.
So these three things we need to overcome. And there are different ways to do that. So in terms of things you can do to overcome a weak GPA, lack of experience, not go into a good school. Take a look at our post below where we literally go through the things you can do to overcome your weaknesses, lack of experience, etc. It will dramatically help you out even if you’re on the younger side and you’re trying to get an internship when half the internships these days still require some experience. So it’s worth taking a look below. But if you’re at this point and you think, OK, I might have some relevant experience I can use here, my GPA isn’t all that bad and I think I can do something to get myself on track here. This is when you want to take a look at some of these stepping-stone jobs. So what are the jobs within the stepping stone route? So within the stepping stone route, we have four main buckets.
- We have credit.
- We have the big four.
- We have lower tier asset managers.
- We have corporate developed.
So let’s start off with credit. What is credit? It’s basically where you’re going to be doing work analyzing a company’s creditworthiness.
Now, this can be jobs like working at a rating agency like a Moody’s, S&P or Fitch, where you’re working on different companies, analyzing their creditworthiness, building models, etc. It can be working in a credit risk department within a big bank where they’re literally doing the same type of thing. Or it could be working in commercial banking where essentially you’re doing this type of work for a small kind of lesser known bank, whereas if it was a bigger bank doing bigger deals, that would be corporate banking. Like I said before. But again, starting off and credit is a really, really good space because you can use what you learned in credit to leverage it into a job down the banking route, whether it’s investment banking or one of the jobs up there. And within the credit bucket here, you’re still probably gonna be making anywhere from $75,000 to $95,000 right out of school, which is pretty darn good for an entry level role.
04. Accounting Based Jobs
Next up, I’m referring to the accounting firms like BWC, KPMG, etc. Here I’m not talking about the typical accounting based job. It’s like audit or tax, which is usually what you do when you’re an accounting major. I’m referring to the more finance space toilets, which are valuation in the corporate advisory. Valuation is literally where you’re putting together valuation assessments on different companies, different deals, etc. And corporate advisory is where you’re literally doing advisory work on certain transactions. Kind of like you would add an investment bank. And the nice thing about these types of jobs is the work is pretty darn relevant to those types of stuff. You would do an investment bank or one of the jobs within the banking room. So by going the big four route, you’ll be able to use what you learned to leverage into a job over in the banking route. Now, within jobs like this, you’re still quite making a decent amount of money and usually you’re starting compensation will be anywhere from $75000 to $85000 right out of school.
Lower Tier Asset Managers
Next up, we have smaller, lower tier asset managers. Earlier on in the article, I was referring to the bigger asset managers like Fidelity, BlackRock and the asset management departments of the big banks. Now, the main difference between them and some of these smaller guys are the exit opportunities. So while the work might be the same at some of these smaller, lower tier asset managers, you’re not going to have the same exit opportunities as you would be working at one of the bigger names. So within the smaller, lower tier asset managers, we have things like working out a search fund where you’re like helping a private equity company find companies to buy. We’re also talking about small private equity and small hedge funds where you’re literally doing the same type of work as you would at a bigger name, but you’re not going to have the same exit opportunities and the same compensation as you would at one of the bigger guys. We also have things like investment management where you’re literally working in the asset management department of an insurance company to almost offset their liabilities and do work there, which again is really interesting work, but it’s not and have the same exact opportunities as you would by going the banking route. So within some of these smaller asset managers, you’re probably going to make anywhere from 60 to 80 K right a school. But that can vary a lot, especially if you’re working at a pretty well known but smaller private equity or hedge fund. Last but not least, we have corporate development.
Now, corporate development is a pretty under the radar but a really solid role to go into. Essentially what it is, is you’re doing mergers and acquisitions work for like a Fortune 500 company or like a small role. So the work you’re doing is really similar to the types of stuff you’re going to do at an investment bank. But again, you’re working for a company internally and you’re doing the work there. The nice thing about corporate development is you’re also going to have a much better lifestyle. So you’re going to have a lot fewer hours and you wouldn’t an investment bank. But at the same time, you’re not going to have that same kind of pay like you would at an investor bank and within corporate development. You’re probably making anywhere from $75,000 to $110,000 at a school. So, again, this is a really great route to go because at the end of the day, you’re doing the same types of work that you might be doing at an investor bank and you can leverage the types of stuff you’re doing at a corporate development firm or, you know, within a Fortune 500 company to get into something like banking. So if you decided to go the stepping stone route, what are the next steps in terms of actually getting to the buy side? So kind of like I mentioned before, there’s a couple of different ways you can go.
- You can use the job from the stepping stone route to leverage into a banking job, which from there you can use to get into the buy side.
- You kind of stay in your job for a while. Go get your MBA at a top 10, top 15 schools and use that to leverage it to getting a job on the buy side. Or if you’re good enough and you got good enough connections. Use exactly what you did within your job to go direct to the side. That’s a little tougher. And again, as I said, you might need to have some pretty strong connections and be really good at what you do, but it’s not totally impossible. So as a quick recap, who is the stepping stone rod for? It’s for those of you out there that no one might be late to the game. You’re maybe in your senior year and you know, you didn’t prepare enough to land one of the jobs in the banking route or you’re out of school and don’t have a job or you’re out of school in a job you don’t like and you need to redefine yourself. Number two, for those you out there that might not have the best GPA to immediately qualify for a job in the bank, you’re out.
- For those you that don’t really have the relevant experience to get a job in the bank, you’re out right away. So like I mentioned before, I would definitely take a look at the post below where we cover the types of things you can do to overshadow a weak GPA, lack of experience, et cetera. It’ll help you out a lot.
So as a quick overview, when you think of the highest paying career path in finance, that’s the buy side. And I know I’ve mentioned it a bunch of times in this article, so it’s probably important just to cover briefly. So if you’ve ever watched the show billion’s or you’ve heard of these hedge fund managers who make crazy amounts of money, that’s the types of stuff that you’re going to see on the buy side. And like I mentioned before, there are three primary categories here.
- You have hedge funds,
- You have private equity firms and
- You have venture capital firms.
At the end of the day, your job primarily is going to be doing work in terms of analyzing different companies to invest in, doing work on, analyzing different industries, etc. So there’s lots of really, really interesting stuff you can do when you’re on the buy side. And again, it comes with some of the craziest pay, especially as you move up the ranks. But in terms of what you’ll make as a first year analyst at one of these buy side firms, you’re probably looking at anywhere from $125,000 to $250,000 in total compensation.
So for those you diehard finance students that are really, really looking to get into one of those really cool investing types jobs. That’s why I keep mentioning that you want to make sure you’re on the right route to get into the buy side, because at the end of the day, that’s what the majority of you probably won’t.
Now I’m going to turn it over to you. Are there any career path and finance we might have missed or is there more things you would have liked us to cover? Feel free to let us know by commenting below.