Average salaries for quants

[fshaikh]

Dude,

This day and age their is job insecurity in every field. Finance still gives you the opportunity to make above average salaries compared to many other professions and doesnt have a ceiling or limit to what you can do. You dont have to be in finance to get layed off You can be a clerk at a metal plant and still loose your job if the plant shuts down.
Only downside of living in NYC is the high cost, add a little commute time and your fine. Every one work 9-10 hrs a day. I have a freaking corporate Engineering job that makes me work 9 hr days plus have 40 minute commute time. So add one more hour to my day and 2 more hours of commute in NYC and draw 500k. How does that sound ?
As a financial professional you can still be one of the richest paycheck slave out there

 

[Larry Bear]

I think it is very unrealistic to think that these high salaries will persist. First, the latest continuing crash has shown that derivatives pose serious risk to entire system, that derivatives of derivatives of derivatives of derivatives are not possible to model. They will need less people to model. Also, once acceptable models are built, they don't need you anymore.

Think: why should someone with no practical experience & very limited knowledge make $100,000 to start, when average salary of experienced person in the US is $40,000 and these people also have college degrees?

Like internet & other programming, and many technical tasks, a great many of these jobs will be moved to India soon, where a really well-trained engineer who is a whiz in math & programming will do this job for $10,000 per year at their manipulated exchange rate. This will shortly be followed by Red Chinese doing same job for $1,000 per year at their manipulated exchange rate (good pay there), and then for $200 per year by a Vietnamese. Anyone with minimal knowledge and a modem can design simple naive models.

People thinking about a career as a FE should rethink very carefully. Every school in US is offering FE degrees -- just like they offered Internet programming degrees 10 eyars ago. It's a simple way to make a lot of money and expand college. Most jobs left the country. There are thousands of unemployed or retrained programmers. One personal friend programmer is now working as an electrician's "helper" in the NY Subways. India has about 50,000 investment analysts who have taken jobs that Wall Street people used to do. Virtually all X-rays are read and interpreted in India now; most X-ray US technicians lost their jobs. Indian firms are now also writing legal documents for 10% of the cost of US lawyers.

At Columbia U in NYC you can get a degree or major in derivatives in the (1) business school, (2) engineering school, (3) mathematics school, (4) public administration school, and possibly more. I expect music school and theology will add a derivatives major soon to boost revenues. This proliferation is a bad sign.

I recommend learning a job involving the real world that can improve the physical lives of people. We need tornado-proof, earthquake-resistent houses, schools, hospitals etc. There are thousands of diseases to be cured. We don't need every cab driver, supermaket cashier to be writing derivatives or trading them from their iphone. Larry

 

[Poomrang]

Well, I don't think that the situation is so dark.. May be because modelisation is a technical field, then it can easily be outsourced to low cost countries (just like programming). But such jobs like risk manager or portfolio manager will always require local competences.

 

[cofibreak]

I think the picture is less grim than portrayed by the thread in general.

At a macro level, the picture is like countries like India and China are trying to catch up with the developed countries which are already at a summit. The vertical distance these countries cover is giving the impression that tremendous growth is happening at those parts of the world. While it is true, they still need the ropes tossed to them by those at the summit.

A tug at the top can make these countries slip a few yards. That is what we are seeing during this credit crisis.

Until all these countries complete this part of the vertical, there is enough work for those at the summit. While maintaining the height differential may not be easy, keeping the lead will require that much more effort and those at the top do realize it. It was not without reason the US and UK have remained the leaders for the last century.

Think of the larger picture. If you are good at what you do, the US/UK is your best chance you can make your mark. If you want to code for money and your heart is elsewhere, there is a larger issue and you are on the wrong forum.

 

[bigbadwolf]

I think it is very unrealistic to think that these high salaries will persist...

I concur with your post (but have snipped it out to save bandwidth). The only thing I wanted to add is that people thinking of entering the field shouldn't think of it as a "career": no-one knows what the area is going to look like even a few years down the road, let alone a decade or two. So when some pompous know-nothing professor solemnly assures an incoming class that they're making a transition to a "lucrative career," they should take that assertion with a bit of polite scepticism: it's not the prof's tenured academic sinecure that's on the line when he makes these irresponsible claims.

Twenty years ago, people thought skilled white-collar jobs like programming and engineering could never leave the country. Why this hubris concerning quant jobs? A quant is like every other worker: selling his labor for money. If employers can have the same work done cheaper elsewhere, they will. For instance, a bicycle manufacturing company shifted its plant from Ohio to Missouri because the wage rate was $10.50 an hour in the former compared to $8 an hour in the latter. A little later, the plant moved to Mexico, where the wages were $4 an hour, and two years later to China, where the wages were about $0.40 an hour. Now if this can happen to relatively low-paid jobs, why do people insist on deluding themselves that $100-200K jobs are somehow magically immune to the same process?

 

[Francis]

Considering the avg pay at hedge funds was over 700k a couple years ago 500k doesn't seem to out of ordinary for the experienced.

 

[MidasCFA]

I think the answer will be very subjective.
Here is an attempt at a rough estimate........
gross salary: 100k
taxes and payroll deductions for health care etc: 35k
401k/retirement plan savings: 10k - tax-deferred
rent and non-food expenses: 30k-40k (rents range from $2000-3500 for 1 bedroom)
food/entertainment expenses: 10k
travel/durables/education/misc: 5k
if you live very tight, you could save over 20k per year in addition to 401k savings.

At the risk of oversimplifying things, is it reasonable to say that even if you live very tight, the most you can end up saving is around 20% of your salary, regardless of how much you make, living around nyc?

or is it more like (20k + any excess salary over 100k). As the income level goes up, personal consumption may or may not increase as much in proportion, depending on your lifestyle, right?

 

[MLBrandow]

I concur with your post (but have snipped it out to save bandwidth). The only thing I wanted to add is that people thinking of entering the field shouldn't think of it as a "career": no-one knows what the area is going to look like even a few years down the road, let alone a decade or two. So when some pompous know-nothing professor solemnly assures an incoming class that they're making a transition to a "lucrative career," they should take that assertion with a bit of polite scepticism: it's not the prof's tenured academic sinecure that's on the line when he makes these irresponsible claims.

Twenty years ago, people thought skilled white-collar jobs like programming and engineering could never leave the country. Why this hubris concerning quant jobs? A quant is like every other worker: selling his labor for money. If employers can have the same work done cheaper elsewhere, they will. For instance, a bicycle manufacturing company shifted its plant from Ohio to Missouri because the wage rate was $10.50 an hour in the former compared to $8 an hour in the latter. A little later, the plant moved to Mexico, where the wages were $4 an hour, and two years later to China, where the wages were about $0.40 an hour. Now if this can happen to relatively low-paid jobs, why do people insist on deluding themselves that $100-200K jobs are somehow magically immune to the same process?

bigbadwolf,

Typically the education required to work in a bicycle manufacturing plant is slightly less than that required to work on wall street.

 

[cofibreak]

At the risk of oversimplifying things, is it reasonable to say that even if you live very tight, the most you can end up saving is around 20% of your salary, regardless of how much you make, living around nyc?

or is it more like (20k + any excess salary over 100k). As the income level goes up, personal consumption may or may not increase as much in proportion, depending on your lifestyle, right?

I think 20% is not like an upper limit on savings. If you make 175K, out of the additional 75K, you may be able to save another 20-40K, if you are very concerned about financial security. It will also matter where you put the savings. People have had their entire 401K balances wiped out.

It is all a matter of personal preferences. But the potential will be there to save substantially over 20K if a single person can make over 150K and has good control over the cash outflow.

 

[Andy Nguyen]

The saving will not start until you pay off your student loan which can take years depending on how much you borrow. I know some who borrow upward to 80K for an MFE education.

 

[MidasCFA]

alain,
For those of us who speak English....

bigbadwolf,
Typically the education required to work in a bicycle manufacturing plant is slightly less than that required to work on wall street.

MLBrandow,
your exacting approach to upholding the high and lofty standards of this forum is sure for the benefit of the entire community. And for that, we offer you the Award of Excellence in Correcting People's Mannerisms.
:D:dance:

 

[Schaum]

bigbadwolf,

Typically the education required to work in a bicycle manufacturing plant is slightly less than that required to work on wall street.

Well, as you may already know a great portion of MFE students ARE Chinese and Indian. And especially India being the service sectors choice of outsourcing, you cannot deny the possibility of these jobs going overseas. For your info IT jobs requires education too albeit not as much as a MFE. It probably won't happen overnight or in the next year, but there could very well be a big migration of these jobs in the future.

 

[bigbadwolf]

Well, as you may already know a great portion of MFE students ARE Chinese and Indian. And especially India being the service sectors choice of outsourcing, you cannot deny the possibility of these jobs going overseas. For your info IT jobs requires education too albeit not as much as a MFE. It probably won't happen overnight or in the next year, but there could very well be a big migration of these jobs in the future.

The only jobs we know will remain for sure (and which, incidentally, are predicted to increase) are those where physical proximity is essential: teachers, nurses, food preparation workers, beauticians. Probably include civil engineers as well. Most everyone who sells his labor for money -- skilled or unskilled -- is in jeopardy. Lester Thurow first pointed this out over ten years ago, in his book "The Future of Capitalism." On a related note, take a look at Brown and Hesketh's The Mismanagement of Talent. (If you can get hold of the book, look particularly at chapter 9: The Great Training Robbery.)

 

[MidasCFA]

The only jobs we know will remain for sure (and which, incidentally, are predicted to increase) are those where physical proximity is essential: teachers, nurses, food preparation workers, beauticians. Probably include civil engineers as well. Most everyone who sells his labor for money -- skilled or unskilled -- is in jeopardy. Lester Thurow first pointed this out over ten years ago, in his book "The Future of Capitalism." On a related note, take a look at Brown and Hesketh's The Mismanagement of Talent. (If you can get hold of the book, look particularly at chapter 9: The Great Training Robbery.)

bigbadwolf, its fascinating how knowledgeable you are about the markets and the economics literature.=D>

 

[MidasCFA]

Its because bigbadwolf is somethin like 50 years old and has spent more time observing the world than any one of us here.

do you guys all know each other in real life?

 

[bigbadwolf]

do you guys all know each other in real life?

It seems he knows me, though his identity is still shrouded in mystery. By the way, I forgot to add maintenance workers, plumbers and electricians to my list.

 

[Poomrang]

It seems he knows me, though his identity is still shrouded in mystery. By the way, I forgot to add maintenance workers, plumbers and electricians to my list.

you alos forget that history does not obey to linear approaches..

 

[fshaikh]

Hey Bigbadwolf : You seem very interesting by the way. I am curious what your educational back ground is and are you indian/chinese & work in the wallstreet if you still have your job. How did you come upon this great nick name " BIGBADWOLF"

 

[resfranzi]

i'm just amazed by this quant thing. let's say if you are an accountant or a lawyer, you help the society by trying to solve the basic human problem of selfishness(though it can't be solve completely) by maintaining trust. if you are a civil engineer, you help the society by building tall buildings which provide more space(30, 40 storeys as oppose to 1 storey) for use. if you are a mechanical engineer, you probably can help the society by building trains which save time. but what does quant do that deserve a high pay? what good does it do to society?

 

[cofibreak]

i'm just amazed by this quant thing. let's say if you are an accountant or a lawyer, you help the society by trying to solve the basic human problem of selfishness(though it can't be solve completely) by maintaining trust. if you are a civil engineer, you help the society by building tall buildings which provide more space(30, 40 storeys as oppose to 1 storey) for use. if you are a mechanical engineer, you probably can help the society by building trains which save time. but what does quant do that deserve a high pay? what good does it do to society?

are you in the wrong forum?!

seriously,
if doing good to the society is the main criteria, maybe teachers and counselors should be among those paid highest?

Also,
1. all quants do not get paid very high salaries.
2. there are areas where quants help shape the economy and the society, directly or indirectly.
3. ability to tell a computer -in unambiguous terms- to crunch numbers related to money in a precise and superfast fashion is a unique skill and deserves to be recognized and rewarded.