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Dreaming of Money

April 2, 2014

Avery Coffey

My mom posted an article about a DC teen who is now sought after by five of the Ivy League schools (unfortunately, this guy who was accepted into all Ivies overshadowed him [I will also note here that I have one friend who was accepted into all Ivies years ago who is now highly upset that there is a news article about this event]). I congratulate this guy for all of his accomplishments and his successes — and hope that he has continued success, but there was a part of the article that saddened me:

The local Fox affiliate recently asked this remarkable young man what he wants to do next.

“I guess probably the CEO of an investment (or management consulting) firm. I guess pretty much overseeing acquisitions or transactions between large companies. Hopefully, Fortune 500 companies,” he said.

I posted that this quote, and my sadness, on Facebook, and one of my friends responded:

Why does this make you sad? Some kid is stating a dream.

What does it mean when people dream of investing or consulting?

As a tax accountant, I am aware that to many people, my career doesn’t rank highly in the list of Careers That Actually Help People. And try as I might to argue that tax accounting improves businesses, which allows those businesses to continue improving the world through their products and services — even I have to admit that a lot of the services that tax accountants provides has a tenuous (at best) link to helping people rather than just helping people get (and stay) rich.

And I feel the same is assuredly true of private equity, investment banking, and management consulting.

This isn’t a post to try to defend tax accounting and bash the others. Even though I like much of my job (the parts I don’t like are not really related to the work itself, but to the way the industry works — I think taxes are fascinating, but think the working environment of public accounting is pretty crazy), I’ll concede that tax probably fits in the same category as I’m going to put the other business careers listed above in: these are not the careers of dreams.

The “before” part of that video (especially the extended version) is something that goes around my office pretty regularly, because it is so spot on (in a cry-yourself-to-sleep sort of way). But pay attention to that “after’ part — what makes the “after” part a miss when the “before” part is such a hit is precisely the reality that kids really wouldn’t be saying those things. They wouldn’t be dreaming about those things. (I mean, yes, having work life balance and having a normal life is a given, but that’s not really a dream.)

For the most part, these are careers for people who are looking for money. I’ll caveat here (here I go, rationalizing my own career out of the way of the brunt of the attack) by saying that tax accounting is simply in a different category from the others as far as compensation goes, but in a broader sense, one becomes a tax accountant because it’s a well-paying, stable option.

One becomes an investment banker because the profits are insane and the pay is insane. (When I first heard about the “carried interest” treatment from in my tax class, I wondered whether we were learning something that was borderline illegal, like some sort of tax shelter.)

And yet my friend says: some kid is stating a dream.

I like accounting and tax, and can see that the theoretical and legal frameworks of these fields could make it possible for me to pursue my “passion” of social science research in these fields. So, I can buy that maybe, one could see something similar in investment or consulting.

However, it seems to me that if a kid is building robots (and has the capability to do that), then instead of investing in the companies that build robots (which is supposedly the societal benefit of investment companies — they invest in the companies that Help People), then why can’t the kid aspire to build robots?

Oh, I got it. Building robots isn’t necessarily as lucrative as investing.

Financial innovators of Wall Street: 1

Helping Society Directly and Concretely: 0.

…on second thought…I will say that I can understand. Why was I ultimately driven to the stable, safe, well-paying career? Quite simply, it is a reality that the economy that students face in these times is precarious — you can be in an industry that’s safe, or risk your well-being throughout your adulthood. Maybe finance and accounting and management consulting are the “it” fields because the risk-to-return is much more favorable?

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9 Comments
  1. I suppose if I grew up in the poorest area in DC I might research the career with the greatest return and claim it as my own. I would want to be rich and buy my mom a house and give my family everything I never had. The dream isn’t so much about ‘what’ he’ll do to get rich but, perhaps, more about being rich and ‘what’ he’ll do with his wealth.

    I tend to agree with you though; the dream is kind of sad; but I’m thinking he will change his mind somewhere down the road. Building robots is just too exciting to give up for being a CEO. He will have a lot of opportunity to change the world and maybe he’ll do it.

  2. Yes, I can definitely see that point too. Can’t really blame anyone for that.

    I definitely hope that whatever he ends up doing (even if it is multiple things, multiple careers, multidisciplinary), he has success.

  3. You are assuming it is all about the money. Why?

    Perhaps it is about the puzzle, solving a vexing problem? Warren Buffet is ridiculously wealthy, but it is not about the money for him, it is about doing something interesting. The man lives in relative modesty.

    I love consulting work because it is different, it is varied. It is always a problem to be solved. Money is necessary, but not everything. After making enough to be safe, it is about doing something interesting.

  4. Joseph Abraham,

    There are plenty of interesting things in the world…but it just so happens that few of those interesting things that people do end up earning people an exorbitant amount of money as investment banking does.

    So, suppose that engineering and investment banking are both equally interesting, and in other material respect are comparable, except the investment banking makes considerably more money…then the decisive factor would be the money.

    • Sorry, I did not see this until now.

      Actually most extremely interesting things do pay well, since they are not easy. If something is easy, it is usually not interesting, and vice versa. Also, the young man in question lived a relatively poor life, so financial security is important.

      It would seem you’re being unnecessarily judgmental.

      • Your latest comment barely addresses the thrust of my last comment. Let me ask a few further questions:

        Let’s compare/contrast engineering and investment banking. Since engineering does not pay as well as investment banking (comparatively speaking), is that to say that it is less interesting? Is that to say that it is easier? Would pursuing a career in engineering preclude financial security, or provide less financial security (note that financial security is not the same thing as windfall profitability)? [Also, if you think a career in engineering provides less financial security than a career in investment banking, then wouldn't you say that someone who cares about financial security is precisely "going for the money"? You do not dispute the motivation here; you just disagree on whether that motivation is good or bad.]

        For you to say that I’m being unnecessarily judgmental is merely a re-statement of the fact that you disagree with the basic thesis of my article, which is that all other things equal, someone who is equally capable of engineering and investment banking who chooses the latter over the former is going for the money, and this is a disappointing focus.

        (And then, on top of that all, there could be an entire conversation to dispute your reasoning in the last topic. I mean, the idea that compensation and interestingness of a job track most closely to its difficulty…this is something we can pretty easily call into question.)

        • Well, I have Masters Degrees in both Business and Engineering from some relatively good programs (I would humbly say world class), and I have a lot of experience working both fields. This started with you stating, “For the most part, these are careers for people who are looking for money…One becomes an investment banker because the profits are insane and the pay is insane.” This is untrue. This is a preconceived prejudice. I know you work in an engineering intensive industry, so I do not really understand the prejudice.

          The odd thing is that engineering and finance are really very similar pursuits; both are examinations and manipulation of forces inherent in their respective subject matters. Both involve detailed problem solving, and both require understanding the complexity of systems. I have found that the skills I gained as an engineer are very adaptable to business pursuits. Nevertheless had I foregone my engineering training I would still find consulting and finance to be highly stimulating pursuits.

          The fact that you are missing is that being an investment banker or consultant allows a much greater utilization of problem solving skills and presents a greater variety of challenges than being an engineer does. As to your comments, you have yet to explain why you think anyone’s main motivation is money instead of the cornucopia of other potential pursuits. You have set up this one particular answer then demanded others prove you wrong instead of actually examining the potentials.

          As a case in point, I have worked in multiple industries as a businessman, which I never could have done had a pursued in a pure engineering career. I have had the opportunity, in business, to work with robotics, mechanical manufacturing, computer engineering, chemical engineering, and so on… because I pursued consulting instead of setting up shop as a dedicated engineer. Certainly the money is nice, but I am far more interested in the challenge than I am in the money once a certain level of security was reached. I have even taken jobs that did not pay well because the challenge was so significant. In many cases my return on investment is actually lower in consulting than it ever would have been in my engineering career because I work harder.

          So when you say “all other things equal, someone who is equally capable of engineering and investment banking who chooses the latter over the former is going for the money, and this is a disappointing focus” it does not make sense from the POV of someone who was capable and who chose the latter over the former.

  5. JA,

    The odd thing is that engineering and finance are really very similar pursuits; both are examinations and manipulation of forces inherent in their respective subject matters. Both involve detailed problem solving, and both require understanding the complexity of systems. I have found that the skills I gained as an engineer are very adaptable to business pursuits. Nevertheless had I foregone my engineering training I would still find consulting and finance to be highly stimulating pursuits.

    The difference is that the product of engineering is something that will actually, tangibly, and directly affect society. The product of finance is far more indirect — at best, you can argue that it can help, say, the engineers, fund what they do, but it need not do this.

    So, if you recognize that the pursuits are similar, then we can look elsewhere for the differentiation factors, like end results, or say, incentivization through compensation. As I just noted, the end results are different between the two fields, but as I’ve argued, the second difference is that the compensation is different. So, all other things constant, engineering directly impacts society more for less compensation. If you’re driven by the compensation, you’d go with finance.

    The fact that you are missing is that being an investment banker or consultant allows a much greater utilization of problem solving skills and presents a greater variety of challenges than being an engineer does. As to your comments, you have yet to explain why you think anyone’s main motivation is money instead of the cornucopia of other potential pursuits. You have set up this one particular answer then demanded others prove you wrong instead of actually examining the potentials.

    The extent to which investment banking or consulting presents a greater variety of challenges (which I would not necessarily concede that it does) is a statement more about the complexity of the legal or financial environment, rather than a statement that it actually “helps” more. I would say that you have yet to argue (and in fact, a lot of your comments actually suggest otherwise) that finance helps directly and tangibly more than engineering to justify using that as a primary consideration *rather than* compensation.

    • I am not sure what you think engineers do, but just because someone has an idea for a more efficient engine or a new chemical formula does not necessarily mean that these “actually, tangibly, and directly affect society”. It takes everyone from financiers, to marketing, to distribution, to etc…. to actually get a new product to society. You’re basically arguing the Mitt Romney position against the premise that “You didn’t build that…” which was completely erroneous. Being involved from a finance position is as important, and having been on both sides of the equation often times more important, than the engineering side of the equation in getting an idea off of the ground. Your argument against this young man is far more influenced by rather ill-conceived prejudices than it is an examination of the ultimate utility of the different roles in product development.

      Compensation is different, as I have already said, in many cases because the work is actually somewhat harder. Having worked with consulting on projects from robotics to chemical engineering, I was actually required to understand FAR more of the internal workings of the enterprise than you probably realize, and this ultimately justifies compensation. I currently have four Masters degrees (Engineering, Business, Humanities, and Sciences), working on a fifth at the moment (another Science degree), because it is really sort of required. I have to have a background in global politics, engineering, business, and the specific nuances of the industry in question (in this particular case Computer Science) to be effective. Yes my compensation is a little more, but, I do have a LOT of education backing up my work, so it is really commensurate. The finance guys I know and work with are required to have detailed knowledge of the cosmetics business one day and then the auto industry the next, so this is a very detailed and wildly disparate field of required knowledge that naturally demands a higher compensation.

      I am not sure if you are not familiar with the work of financiers and consultants, or if your prejudices are overwhelming that knowledge.

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