Average salaries for quants

[alain]

...but what does quant do that deserve a high pay? what good does it do to society?

We are able to provide financing when there is no other way so business can keep going and new jobs can be created. We are able to minimize, understand and manage risks from asset portfolios including pension funds and retirement funds.

So, it my eyes, there is a huge contribution to society. The fact that you only hear of financial disasters but you don't hear from the successes doesn't mean that the contribution is not noticeable.

 

[alain]

... 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 think a trial lawyer helps society, it means that you have never been sued in your life.

 

[IlyaKEightSix]

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?

If you want to be the model citizen, go and be a model citizen. If having some sort of "yay I'm a helper to society!" feeling is worth the loss of all of those potential dollars that you can reinvest in your own standard of living and building your own family in financial security, so be it. In fact, please do. Anyone that can be deterred from adding to the bazillions of people wanting to work in finance improves the chances of anyone that actually has a dream staked out there.

The way I see it is that Wall Street is a soulless place. You leave your soul, pick up your briefcase, and go to work. You return from work, put down your briefcase, and take your soul back.

In my opinion, I don't care how uncaring I have to be in my decisions, if I'm ever faced with a large financial decision that will always screw over some group of people.

Money isn't lost or made, it's simply transferred from one perception to another.

I'd rather be the perception that it's transferred to, rather than from. I don't care how well the guy next to me does. He's not me. And yes, I realize I'm the guy next to me for every other guy. It doesn't matter. Those that have the talent and the passion and the desire will reap the rewards, or so I hope in my case.

Now as an aside to foreign outsourcing, here's my stance. Remember that this is only my opinion drawn from my own experiences.

Basically, my thoughts can be summed up in the following way: mortgaging the future by outsourcing all labor and letting in massive amounts of foreign students completely screws over the American populace that have paid their tax dollars to Uncle Sam and command regular American salaries. If you wish to work in America, you should be a citizen with strong enough English to teach a class. Why does America have to provide the opportunity for everyone in the world at the cost of its own citizens?

As for how quants aid society--in order for quants to do well, their employers have to do well. In order for their employers (read: investment banks) to do well, their clients have to do well. When these end-clients do well, you get better managed retirement/pension funds, or more people with more money to play with (read: SPEND, thereby boosting CONSUMPTION, which is the main driving force of our GDP), and thereby GDP growth and so on.

Yes, it's trickle-down economics in some sense. But if people are making more money and there is prosperity, everyone wins. Anyone that can do financial optimization, therefore, goes a long way into shortening or preventing recessions, and also goes a long way into prolonging times of prosperity.

And that IMO is no less of a help to society than any other profession.

 

[alain]

Dude, you do have some issues.

You are an immigrant also so I really don't understand your claim that a person needs to be a citizen to go to an american school. There is a reason why those foreign students were accepted in first place. Probably it is because they are very good and the admission board in such schools deemed it right to accept them.

Maybe you should try to be a politician instead of a quant. You might get a lot of votes.

On the other hand, I do sense a lot of rethoric and anger in your words so, calm down.

 

[IlyaKEightSix]

Alain, thanks for that. I edited my post to summarize my thoughts. I don't know why those students are accepted, but the phrase I will always remember the most is:

"Ilya, the university is also a business. It's also in it for the money."

So yes, I am really angry at the educational system we have going. Extremely bitter in fact.

I believe that a person needs to be a citizen so they actually would have to live in the country in which they want to receive an education. Is that so much to ask?

As for a politician, no, I'd make a horrible one because I try to be as clear as I can be with my words such that there is no ambiguity. Politicians have to spew enough bullshit so everyone thinks the politician is saying what they want said politician to do.

I'm the exact opposite. I realize that most decisions are zero sum, and for every person that profits, there's someone out there that loses, and I'm secure in this fact.

 

[alain]

I believe that a person needs to be a citizen so they actually would have to live in the country in which they want to receive an education. Is that so much to ask?

Actually it is.

You are in this country but chance since, as you have posted before, you came when you were really young. It means you didn't make the decision to come here, somebody else made it for you (for that you should be thankful to your parents even though you are not to happy with one of them). I'm sure you became a citizen long time ago but it was not your decision either. You were probably too young. Now you would like to restrict the chances of higher education to others that come here looking for a better life and opportunity? Think about that.

People come to this country for the opportunities so, why restrict them? American is for freedom and/or looking for the American dream and it should remain the same for anybody.

 

[Prateek Bhatia]

Nobody really makes a decision to become a citizen of a particular country. You are born into one by your own luck. That is why patriotism, like religion, is an absolutist notion and a dangerous one at that.

 

[IlyaKEightSix]

Yes, America theoretically is about freedom. The question is, how much freedom at the cost of our standard of living?

I honestly thought that better education would be the one ground that was the sanctuary from having your work outsourced.

I like operations research, I like optimization, probability and statistics, and finance. I realize I have to really brush up on my programming in order to put it together and so far have had poor experience with it, but I'm not even 22 yet and I guess I still have a little bit of time.

I'm researching the field of working as a quant since I want to continue to use my math and problem solving skills and create a lifestyle for myself in which I can build a family in financial security and provide for the people in my life I wish to provide for.

That's a bit of a fantasy if I have to compete with people willing to work for less than the cost of living in Philadelphia, let alone London/NYC don't you think?

About a year ago, I wrote in a class called Organizational Planning and Control (leadership class) that the way to avoid getting your job outsourced was to have a higher education in order to keep it, so that cheap labor could not replace quality skill and talent.

Was I wrong?

 

[Uncle Max]

Nobody really makes a decision to become a citizen of a particular country.

Why is that? I made it myself. As well as many naturalized American citizens did.

 

[Eugene Krel]

Ilya,

The "nativist" approach you are advocating has been proposed in this country time and again. It has also been rejected time and again. If skilled immigrants are refused jobs that they qualify for (or even more drastically, refused entrance to the country), the country is suddenly short on professionals in disciplines like engineering and medicine. Fewer engineers and doctors lead to a lower standard of living among the general populace. Moreover, those immigrants that are your competition for the highly skilled jobs (such as quant jobs) are not coming here to work for peanuts. Upon completion of their education here they expect to make at least as much as their qualification suggests they should make.

If you are worried about competing with someone who is willing to work for less than the cost of living in (insert city), then I have to ask exactly how these people live in those same cities. It is impossible to outsource everyone, and this is doubly so for high contact jobs such as those that quants hold. There are jobs out there that have very high security. These range from lower paying positions such as teaching to higher paying positions such as those found in medicine. The catch is that the starting pay for a teacher may be several times less than that for someone starting in finance and being a doctor is certainly not for everyone.

I also have to note that the actuarial profession has been ranked highly many times on desirability, stability, low stress and security (compensation is of course at the expense of some other factor such as stress). This is another option for you especially since you have some experience in the field. I am not suggesting that you give up on being a quant, but if you have reservations about the state of the job market, in terms of competition from people willing to do the job for significantly less than you are, then it is nonsensical to close doors on good employment opportunities.

Finally as Max mentioned, becoming a citizen is a choice left up to the individual (if not born in the country) unless the person is too young.

 

[Poirot]

"That is why patriotism, like religion, is an absolutist notion and a dangerous one at that. "

Ah, I respectfully disagree!

"Chauvinism" and "Fanaticism" are dangerous notions. "Patriotism" and "Religion", I would argue, are essential for the well being of a society.

 

[IlyaKEightSix]

Ilya,

The "nativist" approach you are advocating...

That really helped. I am definitely not worried about an immigrant coming into this country to capitalize on the American dream. Heck, I *AM* such an immigrant, and I *MYSELF* want to do this.

So to all of those that come from China, from India, from my own country of Russia (well, fine Ukraine, when it was PART of Russia =P), I say "bring it on". I believe that if I want it enough, I'll prove myself.

As for professors, doctors, engineers, and people that do things that make society run, I believe they are indispensable, and once again, some of my best professors are definitely immigrants.

It's just that I'm deathly afraid of that no matter how good I am (and let me be humble here, there are many talented people out there, some with a head start on me via family/programming since middle or high school), that my work could be outsourced.

As for being an actuary, I'm definitely not giving up on that. It's just that I wish to be utilized for the skills I have fun using. If there are actuarial firms that love engineers for their operations research and quantitative abilities, hopefully my people (me) can meet their people (them) and we can work something out.

I'm definitely not committing to any one career path right now, but right now, it's a toss up between a quantitative bent on investments (quant, hedge funds, etc...) or actuarial science. Before I found out about all of these opportunities in investments, I said "I WANT TO BE AN ACTUARY!" but was still unsure enough not to go to Temple University and instead to Lehigh (a great choice in retrospect). Now, I've found that there are other careers besides actuarial that encompass my desire to do quantitative work with financial analysis that would allow me to build a family in financial security while still having enough time in my life to enjoy the wealth I create.

Once again, thanks for the reassuring post!

 

[Andy Nguyen]

Except Native Indians, doesn't everyone in this country has their root as an immigrant at some point?
How this thread becomes immigration, I have no idea but to get back to the topic, here is why quants are paid high salary.

Supply and demand. As more and more supply going in, salary will drop
Higher entry barrier (why doctors get paid more than factory workers)
It's financial industry. Almost everyone works there has higher salary than their counterparts doing the similar thing in other industry.
So on...

I have no problem sleeping at night because my job is not helping humanity as much as doctors or teachers
I help provide liquidity to the financial market, and by arbitrage, I help investors to realize that they over/underpay the goods.

 

[doug reich]

I help provide liquidity to the financial market, and by arbitrage, I help investors to realize that they over/underpay the goods.

More than just that: as we have seen clearly since July of last year, you need liquidity for the rest of the economy to function properly. Without a place to raise investment capital, things come to a grinding halt. Whether you are considered a bottom-feeder (which I think is pretty accurate) is just a question of which cog you are in the larger financing machine.

 

[Prateek Bhatia]

Why is that? I made it myself. As well as many naturalized American citizens did.

I meant that when you are born, you become a citizen of a country without any choice of yours. The citizenship you get later on is of course your own doing and your own decision. And that sort of thing should be encouraged, rather than being inhibited (as was being insinuated in some posts. )

 

[IlyaKEightSix]

I have no problem sleeping at night because my job is not helping humanity as much as doctors or teachers
I help provide liquidity to the financial market, and by arbitrage, I help investors to realize that they over/underpay the goods.

Well if you ever run out of energy to play the game yourself, Andy, go be a professor and pass on your knowledge. My algorithms professor was a quant working for Axioma at one point. I just regret I didn't catch onto the fact that aside from software development, finance is the biggest employer of programmers everywhere.

 

[Uncle Max]

why quants are paid high salary.

Supply and demand. As more and more supply going in, salary will drop

I don't think it's true. The higher salary aimed to insure proper level of quality. If quant makes a typo while coding something it can result in billions of losses for the bank. While if teacher makes typo on the board there will not be severe consequences to that. Therefore, quant takes more risk and has to be paid more.

 

[Andy Nguyen]

Max,
I pray every night that you are right, BOSS.
The rule indicates that what goes up must come down but I have no problem with our salary being the exception to the rule

 

[resfranzi]

it's not just some vague idea of humanity or model citizen that i care about. in every university degree that is being offered, there is certain problem that the professors are exploring and trying to help students to solve. and in so doing, the university contributes to the good of the society. but for fe/qf, the problem it is trying to solve is not so obvious, is it? some may say that fe improves market efficiency and helps create instruments to transfer risks. but is that too trivial a task to solve and one day may become automated or standardised?

 

[MikeK]

some may say that fe improves market efficiency and helps create instruments to transfer risks. but is that too trivial a task to solve and one day may become automated or standardised?

I'm sure there is a long-term need for financiers with mathematics and programming skills, though the academic focus will evolve over time.

If you want to talk about salary injustice, think of the best, most influential elementary school teacher you had growing up. Think of how much he/she inspired you, taught you, motivated you. Think of how you are now a better person in life because they helped you. Now, realize that Ben Affleck made more during bathroom breaks on the set of "Gigli" than they will make in their entire lifetime.