
Telling people to leave finance - adunk
http://mathbabe.org/2012/09/30/telling-people-to-leave-finance/
======
JumpCrisscross
I worked in finance (as a trader). And I left. But I loved it. Most people
didn't, but I did; I found the history and the _mission_ captivating and I was
not shy about showing that passion.

I left because they fired my charismatic manager and the firm's culture grew
neurotic as the scandals and random terminations piled on. I saw the over-
worked, sociopathic, misanthropic archetypes. But I saw the same personalities
in Silicon Valley.

The capital markets are a critical piece of our modern world. We're still
figuring out how these fascinatingly complicated machines work - they act
differently in different cultures, in different sentiments, and under
different geopolitical constraints. When they work...it's magical. The
philosophical dimension of a weighted democracy doing better what kings and
emperors through antiquity failed to do is a powerfully individualist
statement. And there is _so much more_ that has to be done. There are
literally not enough hours in a lifetime of lifetimes to see all the
implications and interactions and human potential waiting to be unlocked.

Do I sound like a crackhead? Probably. But I love the idea of taking what is
not understood, considered "random" or "exogenous", and building something to
bring it from the unknown to the known. I understand the historical struggle
these resource allocation machines (how I think of them) have faced and why we
need people to carry the flag, even if it means being hated and misunderstood
by the public.

A lot of people go into finance for the wrong reasons. I feel sorry for them.
A lot of them are held there by a fear, not of losing the cash flow, but of
losing the prestige or business card. These people need help, not derision.
But concluding the entire industry is corrupt is like looking at JustFabulous
and a handful of overworked founders and concluding Silicon Valley a blight on
humanity.

P.S. I don't expect a huge salary just for working at a bank. But if I'm
coming up with original ideas, I will do the calculation of what I could earn
if I went out on my own, and if the bank figure doesn't line up with that
figure (it didn't) it makes sense to arbitrage. This is classic
entrepreneurship and there is nothing more sinister about JPMorgan having to
compete with a star player launching their own fund than there is Google
having to pay out to top performers who may otherwise do well launching a
start-up.

~~~
zackzackzack
This was a great a comment. I normally rail against Wall Street precisely
because I've been around some of the people who go into the business and seen
some shitty attitudes about life, but the call out to a higher calling of
doing humanity a necessary and useful service really strikes a chord.

In your opinion, are there any trading firms that you feel embody that idea
that they should be working to create systems to better allocate capital
(instead of, say, gaining all of the capital for themselves)? I'm attracted to
the problems that banks have to solve and deal with, but the culture around
the current solutions is incredibly off putting.

~~~
JumpCrisscross
Bridgewater Associates catches my eye as a firm that has fun with economics -
they pioneered risk parity in the 1990s and have invested so much in
intelligence and analytics that Paul Volcker commented that they have "a
bigger staff, and produce more relevant statistics and analyses, than the
Federal Reserve" [1]. Another one, going off the academic papers coming out of
the firm and conversations with people I know there, may be AQR.

Note that it's more fun to prance around the trading floor Gangnam Style than
compose oneself as an extra-dimensional intelligence, a memo the tech industry
has taken to heart. The loudest kid isn't driving the bus.

[1] <http://www.economist.com/node/21549968>

~~~
zackzackzack
Thank you for the suggestions. I wonder how possible it is to find a position
at either firms if you aren't explicitly in the finance industry. I have no
idea how to apply there and would be interested in talking to somebody about
what goes on there.

~~~
joshAg
Why not just do some projects relevant to what you'd want to do there, and
then try contacting HR about a job with a link to your projects?

------
spiredigital
I spent my first few years out of college working for an investment bank, and
feel the same way as the piece author – I have no regrets leaving. Finance can
be a great way to start / springboard your career: I sharpened my analytical
mind, saw how companies worked under-the-hood, really learned how to work hard
and was able to save some money. But as a long-term profession, at least in
the area I was in, it's brutal. The job took a huge toll on the people that
stayed with the career for 5-10 years. And like the author said, once you're
making insanely great money it's hard to give that up.

When my (now wife) and I went to my going away party, she was approached by
many of the other banker's wives. They said they were so happy for her that I
was leaving the industry, and expressed the difficulties the lifestyle
presented to raising a family and relationships. I loved the people I worked
with - they were hard working, honest, great people. But only an all-consuming
industry could generate this kind of response from the families of my co-
workers.

After my stint in banking, I left to start my own company which I've been
doing full-time for nearly five years. And while banking provided the initial
savings safety net to scale-up the business I couldn't imagine going back. For
anyone interested in the full story of my departure from finance, I wrote
about it in the post below:

<http://www.ecommercefuel.com/my-corporate-escape-story/>

------
BklynJay
I'll never forget the conversation I overheard where someone who was utterly
and completely miserable (at arguably _the_ quintessential Wall Street
investment bank) described how miserable he was, but also that they pay him so
much money, at age 34, that he'd "lost the ability to complain."

The hours, lifestyle, verbal abuse, sociopaths and general disregard for
virtually everything except making more money, will eventually wear you out.
As an influential managing director at an investment bank once told me in a
moment of honesty, "This business brings out the worst in everyone."

~~~
corwinstephen
I can't see how even the pay could justify living such a miserable life. I
feel like the life of a miserably rich banker scales perfectly down to a
simple conversation I had with a taylor in Hong Kong last month.

He mentioned to me that it had been a long day for him, so I asked him what
long was. He told me he'd been working for 17 hour, and that he's used to
working only 15. Aghast, I said wow! That's a lot of work, but at least it's
Friday. He told me it didn't matter, because he worked 7 days a week. He also
mentioned that the last day off he'd taken had been over a month prior, and
that it was because he was sick.

I remember thinking, what's the point of living? This man works all day every
day so that he can live, but he's only living to work. And honestly, that's
exactly what I see in the bankers. Yeah, you make an enormous amount of money,
but your job makes you so miserable that you don't even enjoy having it, so
what's the point?

~~~
JumpCrisscross
Some people work so they can earn money to live the life they love. Others
find living in work as much as out. Neither is better, they're just different
personalities and cultures.

I've felt compelled to put down a book and get a drink with friends as often
as to postpone travel to fit around a client. Just because someone leads a
different life from the one you choose to or would choose to if uninhibited
doesn't mean they're miserable. Watching _Jiro Dreams of Sushi_ where Jiro, a
world-renowned sushi chef, takes pride in doing the same thing every day for
the rest of his life (his words) helped me reflect on that.

~~~
corwinstephen
I actually just recently saw that movie. To be honest, I couldn't help but
wonder the entire time whether he really was the happiest person he could be
while making sushi, or if he just couldn't bring himself to let it go. The
scene where he visits his friends for example, is in my opinion, the happiest
he appears throughout the entire film.

Obviously his lifestyle is one that I won't ever understand. I suppose some
people's minds just work differently. But then again, studies show that the
happiest people are those that have warm networks of friends and family that
they speak to regularly, and I can't imagine that making money for your family
(at least past a certain point) is better than simply spending more time with
them.

------
nugget
Whenever I read articles like this, I try to remind myself that there's an
entrepreneurial component to finance as well. One of my friends from school
was a trader for several years at a major bank. In 2012, his MD slashed his
comp and the theme communicated to him was, like in the article, if you aren't
happy with it, then "Just Go". He left. He took a handful of his smartest
peers with him, and started a hedge fund where he now runs 500 million dollars
and is up 15% on the year. If you lower compensation across the board, you
provide more incentive for the rock stars like this to leave and create value
elsewhere instead of for your firm. In this case, my friend took risk, and
earned a reward, and I don't think anyone begrudges him the many millions of
dollars more he will now earn in his new position.

It's not too different in tech. I have developers who work for me who I have
to pay $250k/year + serious benefits, because if I didn't, I know they'd
either start their own company or be poached by an early stage team. For me
the challenge is figuring out who the real rock stars are from amidst the vast
sea of wannabes.

~~~
zzleeper
Just a tidbit: The _market_ is about 15% up this year, so his investors are
probably worst off that if they just invested in an index fund.

~~~
tome
It depends what the volatility is. The S&P hasn't dropped below about 14% vol
this year, and looks to have been about 18% on average.

If a hedge fund returns 15% at 10% volatility that is much, much better than
the market.

~~~
fbru02
why is the volatility a factor ? My intuition say that you with high
volatility is a lot easier to pick the wrong equities. Is that correct ?

~~~
tedunangst
There are two ways to compare returns. Higher returns at the same risk or the
same returns at lower risk. Either is better.

------
jseliger
>a majority of them are miserable. They feel trapped and they feel like they
have few options.

This describes the feelings many of us have towards grad school; by now
there's a rich anti-grad school lit that I've contributed to in my own small
way. [1] Interestingly enough, here people are risk-averse too—but instead of
being awesome, the money is _terrible_.

The interesting thing is that very people seem to be leaving, despite the
money issue, which makes her last point less analogous.

[1] [http://jseliger.wordpress.com/2012/05/22/what-you-should-
kno...](http://jseliger.wordpress.com/2012/05/22/what-you-should-know-before-
you-start-grad-school-in-english-literature-the-economic-financial-and-
opportunity-costs/)

------
justincormack
If banks paid less, they would have to pay their shareholders more instead,
which they always seem reluctant to do. Banks dont horde cash like industrial
companies, or pay vastly more to the executives than the workers, so in many
ways theu are model companies. The problem is the level of profits they make,
and the amount to which they are subsidised by the government (especially
recently).

~~~
tatsuke95
> _"and the amount to which they are subsidised by the government (especially
> recently)."_

False. TARP has been paid back, at a small profit, to the FED, which returns
the money to Treasury. The auto companies are a black hole of subsidies, but
that's another story.

~~~
apu
What about TARP's big brother, TALF (at least $1 trillion)? We don't even know
where most of the money has been spent.

<http://en.wikipedia.org/wiki/TALF>

 _"The way TALF loans were set up, 100 percent of any profit is retained by
the borrower, but the Fed and the Treasury absorb any losses."_

------
nikomen
Do banks have a monopoly on sociapathic culture? I wouldn't disagree with
anything in the article, but there are probably companies in other industries
that are just as bad as banking, they just don't pay their employees as much.
At least if you're going to work with crap get paid reasonably for it.

~~~
justin66
I'm sure they don't, but finance people are actually pretty unique creatures
in my limited experience. Talk to someone working in criminal justice, for
example, and they'll happily own up to all the ways their work creates human
misery and they'll probably float some interesting ideas about how the system
is broken.

Then go out and try to find a banker, trader or mortgage person and try to get
them to accept some actual blame for the highly-leveraged, taxpayer subsidized
horror their profession periodically unleashes on the world. It's surprisingly
difficult to do, given the obviousness of the problems.

------
spaghetti
What's a typical day like for a software engineer working in finance? I've
worked in a variety of environments so I know that arrival times, perks,
leaving time, meetings etc can all vary a lot. However I've never worked in
finance or known anyone that has.

I'm under the impression that algorithms and data structures knowledge is very
important. But do software engineers in finance really deal with this on a
day-to-day basis?

~~~
BklynJay
Bottom line: everything about financial software is what Joel Spolsky warned
you about. If you want to work on software, go to a software firm. If you want
to just pay the bills and are not passionate about software, finance software
is..well, read below.

I've worked in finance as a software engineer at several large investment
banks for many years. The software consists of a mash-up of legacy stuff
incorporated into generally very "safe" architecture choices. Unless you work
in some highly specialized (and very rare) type of group, you won't be making
any decisions as to what language to use, database, environment or any other
project specific choices. They do not value the product. Expect no
documentation of anything and consider it a gift if you ever see an internal
wiki. While documentation may be the exception in some circles, any developer
worth his salt knows the true value of writing stuff down, or at least
commenting code, so you can come back to it at a later date. This isn't the
type of software environment where they're going to appreciate the years you
spent in school, learning how to measure time-complexity of various
algorithms. For the most part, those algorithms are already written and those
data structures have been decided upon for you. I literally have conceived
maybe a handful of algorithms over the years.

You will spend your time maintaining hacked together code that was assembled
by literally 30 other people who came and left before you. There will be
little to no testing before software is deployed into production. You will
likely not have an adequate test environment. If you are lucky enough to have
a test environment, chances are that it won't resemble production in any
meaningful way. This test environment may be called "your development
environment." You will work with many people who do not understand, nor
respect, the art of writing good software. You answer to "the business," ie:
traders. Traders for the most part, will not appreciate what you do. Its too
nebulous for them, and most people not in tech at the IB, for that matter.
I'll never forget when we rolled out our new auto-trading system and the IBank
laid off several dozen traders that day.

Depending on how your group is organized, you may be on call 24/7. Some groups
have coverage structures, with people covering production software in shifts.
Expect to be interrupted on holidays. Expect to work on at least one of the
following holidays every year: Xmas, New Years, Thanksgiving, Easter, any
other national holiday. Projects will be scheduled poorly. Timelines will
exceed aggressive-scheduling and wander into "insane" territory. This may be
the norm, depending where you work. The quality of the software you write will
suffer for it. Your lifestyle, health, social-life, family-life, interests,
hobbies and life will all suffer for it as well.

Politics will rule everything. Politics will stifle your productivity, unless
you have a great manager who keeps you away from all of it. Unfortunately,
I've never met a great software manager in finance. I'm sure they exist, but
I've never had one. There will be many meetings. The meetings will run on and
on and many topics will be discussed that concern none of you, which could
have easily been hashed out in minutes over email. But you will spend hours in
meetings because thats the corporate attitude, and finance is as corporate as
it gets. The excessive meetings will impact your productivity and result in
regular 12-14 hour days, year-round. You'll have far less resources than you
require to do the job even adequately, because the people making the decisions
about funding view tech as a cost-center. You'll frequently realize, when you
read hacker news, that there's a great many exciting things happening in
software outside of the world of finance software. You will see none of these
exciting things.

I know this seems like a long, negative entry, but I assure you - my
experience was not unusual. I strongly caution anyone passionate about
software against going into finance software. I've worked as a software
engineer and (unusually) in the front-office on the trading side.

~~~
timrobinson
I think this is a little too cynical. I've seen elements of what you describe
in previous jobs, but never all at the same time, and never to the same
extent.

Then again, the culture and the work varies in different cities and in
different roles. In London we tend to get excellent developers joining the
industry (traditionally there hasn't been much else for good developers
locally) so you can typically expect to have skilled colleagues. And the
closer you get to the front office, the more money there is for IT projects,
and the more remit you have for writing good software.

~~~
michaelochurch
I think most finance jobs are somewhat better than what he described-- it
sounds like he's taken some crappy jobs-- but I don't doubt what he is saying.
Code quality issues in finance are well-known and seem to be systemic. Hours
are widely variable; there are 9-to-6 IT jobs and there are others that
involve more stereotypical (read: awful) finance hours.

I think finance is a great place to work (yes, even as a full-time programmer)
if you have a strategic reason for being there (VCs like financial experience,
there are some interesting machine learning problems) but I would say that, in
general, you're best off if you know you have the social and political skills
to get the best work and, if you don't, finance is not likely to treat you
well.

------
cmdkeen
As someone who works in finance in Scotland there are several other factors
outwith this article to consider. I know people who have left because of the
inertia at some banks - systems don't improve and "workarounds" are the norm.
Retail banks that aren't risk driven can have horrific IT. But there are
reasons to stay in - plenty of institutions manage to be places you can have a
lifelong career at, they won't lay you off and you can do relatively
interesting work. That is the flip side of the personal risk the author talks
about. These places don't pay $400k. And especially don't do obscene bonuses -
but they don't treat you like dirt either. Half the reason they don't get
mentioned often is that people don't leave very often, there isn't scandal
associated with the companies. My employer has a reputation for being the
place people come to from other companies.

------
shicky
I'm currently new to the finance world (6 months) and know I'm not built for
it. I entered as a top student but a worse than average programmer I feel. I
work in production support and though this is good for me in terms of being a
person who gets things done, it has zero learning for me. The only dev work is
debugging which I'm decent at. Basically I see no learning, no personal growth
in this and therefore its value is limited. I suck as a programmer but I'm
willing to put the work in to correct this or find something I'm interested in
to get good at. So the finance world isn't for me, however now I'm a comp sci
grad with worse programming skills than I left uni with....what the hell is
next or how do I work that out?

------
dawernik
I worked in finance and left when I realized that the people who were
successful in finance were typically salespeople. Not necessarily by title,
but more by action. It's bizarre how little the industry actually manages
itself through data. We all know that a good index fund is going to beat the
average hedge fund, but there is something so sexy about investing in a hedge
fund. We all know that making 25% annually isn't realistic, but oh to make 25%
annually and be able to tell your friends. It's all sales.

When I was 25 I swore it off. I was too young to sell versus build. But the
cash was good.

------
rsaarelm
If I were a math grad-student type and actually had the talent and skills to
get into a high-paying quant job, I'd consider doing the job for something
like five years, saving everything I can, and then leaving for more fun jobs
with the option to live off the investment income from the savings whenever I
don't feel like working for a year or three.

If the salaries really go to $400k, saving up a million in the five years
seems possible, and investing that with 5% annual return would give you a
quite nice for the math grad-student type $50k salary for free.

~~~
ramchip
They may go to $400k, but not until you have significant experience in the
field, so you five year would be more like 10 years. Then you have a family,
health insurance gets pricier, and so on such that $50k a year doesn't look
that attractive anymore...

~~~
rsaarelm
I did guesstimate that in. You'd only need to save an average of $200k per
year to get to $1M savings in five years, you can do that before you hit the
$400k rates.

I'm not really familiar with US costs of living, where I come from $50k is an
upper middle class salary. Quick googling got me 5k as the ballpark for the
health insurance fee for a single person, and with a family you'd probably
have a spouse chipping in, so that doesn't look like a dealbreaker. Housing is
tricky, apparently "live in an apartment, don't have a car" doesn't work in
the US for some reason. You could always move to a rural area with cheap
housing, but that does get a bit extreme, and then you'd need to figure out
the costs of getting everywhere by car.

------
fatjokes
It would be even more convincing if these former finance types gave away (or
were forced to give away) their massive bonuses. Until that happens, people
will still want to work for finance for a few years of mad cash, then quit and
tell people about how evil it was and how glad they are that they left.

------
michaelochurch
Having seen finance, VC-istan, and a few other places I think finance is
better on average.

People who bash finance are comparing it to some R&D Valhalla that doesn't
exist anymore (except perhaps at a few cultural leaders like Valve) where
everyone has complete autonomy over their work and no backstabbing exists
because everyone is thrilled about what they do. If you compare typical
finance jobs to typical real-world software jobs that are available to people
without more published papers than years on this planet, then finance wins.
That's not to say there aren't bad finance jobs (there are) or that finance is
without its problems.

The software industry sucks. Programming is fun, but the software industry
itself is a horrible place to be unless you have an edge that can consistently
guarantee you a stream of high-quality work and no bullshit, and there isn't a
much good work to go around in this industry, so that edge really has to be
solid. The way you get good at software (and one of the things I admire
greatly about software engineers is that a lot of us genuinely care about
being good at our jobs; that's a rarity in the corporate world) is to get good
work, but you can't get good work unless people think you're good. Hence,
there's that need for some sort of edge when you're starting out. Finance, for
its flaws, is a pretty good place to get this sort of edge: it gives you a
certain credibility that helps you escape "Just A Programmer" mediocrity.

