The finance industry has its own risks. It's a tournament type structure where as long as you stay in the tournament you are doing very well, but if you fall out you can end up doing pretty poorly. Whereas the tech industry, at least for the last several years, has offered a soft landing to many of those that choose to enter the startup lottery and lost.

Probably the least risky choice among high paying jobs that exist in reasonably large numbers is to become a doctor.

> Probably the least risky choice among high paying jobs that exist in reasonably large numbers is to become a doctor.

Though it's likely that your first several years of awesome salary will be spent paying off loans.

Can you elaborate on the "tournament type structure?" Are you referring to those at a high enough level where the expectation is that they source deals? If so, then yes, because at that point it is sales, and if you don't deliver new business, you bomb out, same as any other sales job.

If you are low enough level though, that isn't necessarily a concern since you aren't expected to source deals.

In the investment banking industry you can't be a lifetime associate, it is up or out. If you make it to managing director you are doing very very well for yourself, but you still don't have any job security. That big pay packet is a ripe target when fortunes turn and the bank needs to cut costs. And if you get let go as an MD it is unlikely you will find another bank to take you in (the usual thing where it is harder to find a job without a job is even more so in the financial world.)

There's also a technical meaning to tournament theory that helps explain why firms in some industries are so structured. You can read more about that here: http://www.econ.ucsb.edu/~pjkuhn/Ec250A/Slides/Tournaments&T...

Interesting research and thanks for the link.

So it looks like we're in agreement that this primarily would apply to the upper levels of ibanking when there is an expectation of deal sourcing. But for junior analysts and such, there really isn't that stigma since their performance is not measured on a sales basis (and thus their mobility is not necessarily hindered by a down year).

Do you have any info or insights into how deal sourcing typically works at that level? Seems like a crazy thing to measure against when your annual deal volume would be relatively low given the size of the deals.

> So it looks like we're in agreement that this primarily would apply to the upper levels of ibanking when there is an expectation of deal sourcing.

I've never worked in finance, but I have a lot of friends who do.

From the day they entered (ie. as junior analysts), up or out has been the mantra. You simply cannot be in a position for more than a few years. If you're not promoted to the next level, you're fired (though most of them had the sense to switch industries when it became clear they weren't going to be promoted).

Deal sourcing comes in at higher levels, but the "tournament" structure is embedded throughout.

Where do a lot of them tend to end up if they jump ship, and where to they tend to end up if they don't have the foresight to jump ship and are fired?

Every other industry. (Including and especially tech.)

A good portion of the business people you meet outside of finance are people who wanted to work in finance but couldn't hack it.

Or as michaelochurch likes to say, SV's CEOs are NYC's rejects. Not that I agree with him.