We always dream of earning big.
Who doesn’t? Every employee dreams of earning salaries big enough to meet all their needs and luxuries.
This is what makes Wall Street attractive to finance professionals.
Day in and day out, news agencies present how high the income and bonuses of Wall Streeters are. Six-digit figures are the norm. Anything below is considered small. Some say they can live fabulous lives because of their income.
This makes us ask, how much do these professionals earn?
Does the profession we want will make us big in Wall Street?
To answer these questions, this article has compiled the usual income of different professionals you can find on Wall Street (Wall Street Salary and Bonuses).
Please note that all of these are average data. Once you’re at the Wall Street, you might earn less or more than the published amounts here.
However, these salary and bonus ranges are good benchmarks you can use to decide if Wall Street is the right destination for you or not.
Famous Wall Street Professionals
Before we discuss how much you might earn, let’s talk about how much THEY already earned.
Think of this as a motivation for you. If you become a big name in Wall Street, your net worth could be like what these professionals have.
#1. Warren Buffet (2015 Net Worth: $66.7 Billion)
Through his legendary skills in trading, this man has consistently been named as among the top 10 richest people in the world. In fact, he was the richest in 2008 with a net worth of about $62 Billion. At an early age of 11, he already has a net worth of about $6,000.
His feats earned him the nickname “Oracle of Omaha”; Omaha being his hometown. In 2015, he was considered the 3rd richest man in the world with a net worth of $66.7 Billion.
#2. James Simons (2015 Net Worth: $14 Billion)
Aside from being a hedge fund manager, he is a mathematician. He used his skills in Math to conquer Wall Street. In 1982 he founded what eventually became the most successful hedge fund– the Renaissance Technologies.
Mind you; he is also a great contributor in the field of quantum fields. He is also a code breaker, pattern recognition specialist and philanthropist.
#3. John Paulson(2015 Net Worth: $11.3 Billion)
Not all traders fell during the 2008 financial crisis. No, not John Paulson. Since 2006, he already had predicted the crash. In fact, he built two hedge funds dedicated to betting against subprime mortgages. Needless to say, he won.
Today, John Paulson is one of the best on the Wall Street. In 2010, his hedge fund shattered records by setting $5 Billion income in just one year.
#4. Ray Dalio(2015 Net Worth: $15.4 Billion)
He founded the biggest hedge fund company, the Bridgewater Associates, which manages approximately $154 Billion of assets. No wonder, he sits with a net worth of $15.4 Billion– good enough to make him part of the top 100 elites in the world.
Aside from being one of the richest, Ray Dalio was also recognized as among the Top 100 Most Influential in 2011 and 2012 by Time Magazine. In those same years, Bloomberg Markets shortlisted him as one of the 50 Most Influential People in the World.
#5. Carl Icahn(2015 Net Worth: $21.3 Billion)
Carl Icahn is the founder of Icahn Enterprises, a conglomerate holding company that is based in New York City.
Here’s an event which showed how influential he is as a trader: On August 13, 2013, after declaring that Apple is his new stock pick, the stock price of Apple immediately escalated by 5%. With today’s success of Apple, no wonder his bet has paid off well.
In 2015, he was the 33rd richest person in the world.
#6. Dan Loeb(2015 Net Worth: $2.7 Billion)
Dan Loeb is a hedge fund manager who founded the firm Third Point. He started by pooling investments from his pocket and five of his family and friends. Today, he is overseeing assets amounting to around $17 Billion.
His firm had earned a lifetime annualized return of 16.20%, well above the 7% set by S&P 500. Aside from being known as a great manager, he is also infamous for his public tirades against corporate executives.
Do these people inspire you?
They’re not the only ones earning well on Wall Street. The following sections will show you how much, in general, does the other members of Wall Street earns.
How much do bosses earn?
If you want a jaw-dropping compensation, you don’t have to be a Chief Executive Officer. There are some other head positions that offer jaw-dropping salaries.
Here are some:
A. Chief Risk Officer (CRO)
Chief Risk Officers are responsible for detection significant business risks and mitigation of such. The responsibilities also include identification of related opportunities upon which the company will profit. In other words, his/her job is connected primarily with the company’s Enterprise Risk Management (ERM).
Risks could be operational, financial, reputational, strategic or compliance-related.
How much do CROs earn, you ask? Well not so much… just a whopping average of $1-$3 Million per year.
B. Chief Compliance Officer (CCO)
Regulatory compliance is the Chief Compliance Officer’s (CCO) primary concern. In an industry where regulations are everywhere, the value of a CCO cannot be underestimated.
Reporting to CEOs and CFOs, the CCO must help the company in creating and implementing internal controls geared towards compliance with local or international laws and regulations.
He/She can also conduct audits or investigations of business processes, to assess the effectiveness of the compliance measures of the company.
Too much work for him? Well, that calls for big compensation as well. Reports tell that the usual range of CCO’s salaries is from $1-$2 Million dollars per year.
C. Chief Technology Officer
With the advancement of technology, Wall Street companies each needed someone to lead them towards more technological ways of doing business. That need resulted in the emergence of new corporate heads – Chief Technology Officers (CTO).
He/She is responsible for keeping the business in the lead regarding technological advancements. The CTO must be able to adopt technologies which can make business operations more effective and efficient. The cost of new solutions must always be below the perceived benefits.
Though CTOs are expected to have a background in Computer Science, they are also needed to have an educational degree in business.
The CTO position is indeed hard to achieve. But, when you already got it, prepare to live a luxurious lifestyle to the tune of $2-$3 Million per year.
D. Heads of Different Divisions
Well, the first three are on the leading portion of the corporate structures. Don’t falter if you think it will be very hard for you to achieve those positions. The lower ranking officers – the division heads earn big too. Mind you, sometimes even greater than those three above.
For example, a Mergers and Acquisitions Head can earn $3 Million a year. Do you think this is big enough? Here’s a surprise for you, bigger firms give M&A Heads $7-$8 Million per year!
A Top Partner in a Private Equity Firm makes $2-$5 Million a year. For your information, a Private Equity firm is a company which buys already established companies. PEs improve those purchased companies to increase revenues.
Let’s go with Hedge Funds. The Chief Trader of these Funds earns about $1-3 Million per year.
Already convinced that Wall Street Professionals earn big? At this point, you already must!
Those that were already discussed are for bosses or heads. How about the other positions? Of course, you wouldn’t be hired as CEO or CFO at once. You have to start at lower levels.
How much do the other Wall Street Professionals earn?
Let’s take a look.
How much do the associates earn?
There are pretty much different jobs on Wall Street. Which one you will be ending up with will depend on your expertise and preference.
It’s good if you already have chosen a particular career. It will be easy for you to browse through the following section to check the salary of your chosen profession.
If not, well, here are the salary guides to help you settle on a career goal.
a. Investment Banking
If you are interested in Investment Banking jobs, here are some facts for you: inAs you can see, even Entry-level associates can earn about $100,000 – $125,000 per year on Wall Street.The bonus is even larger, which can reach up to $225,000.
Senior Investment Bankers and Vice Presidents earn six figures as well. But, take a look at the possible bonus of a Vice President. It can be as high as $925,000 per year.
b. Hedge Funds / Mutual Funds
Hedge / Mutual Funds are actually pooled funds which are being managed strategically by fund managers, in an attempt to earn income for the investors of the funds.
Here are some numbers related to income of hedge and mutual fund professionals:
Entry-level Mutual Fund Managers earn about 200,000 – 400,000 US dollars per year. On the other hand, Hedge Fund Professionals gross 67,000 -250,000 per year.
Actually, if you want to earn higher salaries, go for Funds that are big in value. Here’s a compiled data related to how much hedge fund professionals earn at different hedge fund sizes.You can clearly see that large-sized hedge funds (More than $4 Billion) compensate significantly higher than their smaller counterparts.
c. Private Equity / Venture Capital Firms
Private Equity firms buy struggling, yet established companies, in attempt to increase the earnings of those companies.
Here are some salary figures for these types of companies:Entry-level professionals have a base salary of about $68,200 – $86,500, with bonuses of 48,100 – 67,000 per year. Well, these figures are just industry estimates. It can still be lower or significantly higher once you applied for a real Private Equity or Venture Capital company.
d. Stock Traders
Stock Traders are some of the most common professionals in Wall Street. In every Wall Street movie, these professionals are always depicted as busy individuals shouting on phones or focusing on the numbers on their desktops.
Let’s take a peek at their usual income:On an average, stock traders earn about $134,000 to $224,000 per year as base salaries. Those in senior positions? Well they can earn more than $300,000.
e. Alternative Opportunities
Can’t find which career you really fit in? Perhaps you can’t find yourself doing the responsibilities of the job positions we have just discussed.
Perhaps, you can find yourself liking some of these. These positions also pay pretty good amounts to qualified professionals.Life agents are for those who are inclined to working for insurance companies.
Mortgage bankers on the other hand, are those who originate or fund mortgages through their own funds, or from funds that were borrowed. After origination, the mortgages are either kept as part of portfolio or sold to outside investors.
E-commerce Architects are more applicable to those with educational background on computer systems.One must be knowledgeable on both technical and financial aspect of doing financial transactions. Having double degrees is indeed a big plus.
Costs of being a Wall Street Professional
Sure thing Wall Street Professions are too valuable in financial terms. But, everything has their own drawbacks.
Not all things in Wall Street are made of honey.
Long, tiring hours
You might find young professionals taking pride in their work hours – 9 to 6 every day … 9am to 6am. Yes, you read it right, 9am-6am.
Wall Street has the reputation of being one of the most competitive places on Earth. Every day, thousands of professionals want to enter Wall Street. No wonder, firms can be very picky with applicants, but still, get a lot of good candidates.
To prove yourself, you will have to work and work… even beyond your limits. If you don’t, others will. The result? You’ll get left behind.
Just one text from your boss, and you’ll end up losing your rest time, and probably your sleeping time as well.
High Standards of Living
Since earnings in Wall Street are high, expect that the cost of living there is also high. Foods, Rent, Utilities, everything.
Rent in the financial district is around $3,000 per month. If you want to save money, prepare to live in a small space together with a stranger.
Even your corporate attires will cost you a lot. Men will need at least $200 for a good pair of shoes. Much more amount will be needed for women since they will need more than just one pair of shoes. But, here’s more: you will cash out at least $20 a month to keep your soles from caving in!
How about suits? Well, good suits are available for about $1,500 to $3,000.
Meals will cost you about $30-$50. For those rendering overtime, you might be shelling out about $600 per month for you snacks and caffeinated drinks.
Sense of Purpose
Some young professionals enter Wall Street thinking they are working to change the world.
But, when they are already there, some of them cease to exist for a purpose. They are there just to earn money, lots of money.
There are other costs of being a Wall Streeter. Just to let you know, Business Insider have listed 23 Ways Wall Street Job can ruin your life. Pretty much harsh though. It’s up to you to decide whether Wall Street can really ruin a life or not.
Guides on how to enter Wall Street
If you need a primer on Wall Street, this video presentation can help you out.
If you need tips on how to enter Wall Street, you can search through www.financewalk.com. There are tips on how to pass interview on hedge fund companies, private equity firms, financial advisory roles, and others.
Had you already decided a career path for yourself?
Had you decided already if you want your career to be fulfilled in Wall Street?
Take a moment to reflect regarding where you want your career to go. Where do you want to see yourself after graduation? Or, if you have a job right now, do you see yourself going to Wall Street.
As discussed in this article, there are indeed a lot of opportunities to earn big in Wall Street. With those enormous wall street salaries and bonuses, you might be able to buy the things you want.
But, as you consider entering Wall Street, be reminded of the costs that entail your decision. Are you ready to bear the costs of being a Wall Street Professional?
After reading this article, decide for yourself. Do you want to enter Wall Street, or not?