Finance as a career option

Finance is a popular career option amongst graduates from elite universities: with about 20% of Harvard, Princeton and Yale graduates getting jobs in the field. Tyler Cowen has suggested that people with high intelligence have a significant edge in the field.

Compensation

Salaries in investment banking, private equity and hedge funds can be very high:

• Careers in finance reports that somebody with ~5 years of experience at an investment bank typically makes ~$450K/year.
• In 2006, Richard Rusczyk at Art of Problem Solving [1] wrote "While it's not expected that you'll make a million dollars in year 5, neither is it impossible. If you're not making at least middle six-digits by year 6-8 as a quant in a hedge fund, then something has gone very wrong for you."
• Some of the most wealthy people in the world, such as George Soros (net worth $23 billion) and James Simons (net worth 11.7 billion) made their money in these fields.

Work-life balance

The high pay in investment banking should be viewed in the context of the grueling hours on the job. According to IBankingFAQ,

"Analysts can routinely expect to work 90-100 hours per week or even more. A typical work day during the week might be 10:00 am until 2:00 am. Analysts will also typically work both days on the weekend. During a particularly busy time [...] it is not uncommon for Analysts to work all night..."

According to a highly upvoted Quora response

"Your physical health will almost certainly suffer. The extent to which it suffers depends on how careful you are with your diet, whether you make time to exercise, how much sleep you get, and how well or poorly you deal with stress. Most people have at least partial burnouts."

The quotations are referring to the hours of work in entry level positions. We have not been able to find substantive information on number of hours that more senior employees work per week – our impression is that the number is smaller, but not dramatically so.

The number of hours per week that hedge fund employees work seems to be smaller. In 2006, Richard Rusczyk at Art of Problem Solving wrote "I would say the average work week at places like Shaw or Jane Street is closer to 55 hours, maybe lower (unless things have changed dramatically)." This is in consonance with what we've heard from another acquaintance who works at a hedge fund.