At what point is experience worth more than $$$?

I recently ran across a job posting for an entry level equity research analyst in my town. Normally this would not be a big deal but there are very few jobs in equity research where I live. I am not really living in what anyone would call a financial center. The problem is that the job only pays $35k. I am currently making $60k and I am trying to decide if I should consider the job. To put this in some perspective, I am 26 and am working in client service for a bank trust department. Currently a L2 candidate. Oh, and I am extremely bored with my job (even though I would probably be considered a “star” in my department). So, at what point is the experience worth more than salary? I would love to be in equity research, but not having worked in the field, I can not say if it would be worth a $25k decrease in pay for a year or two. Or is the experience worth it at almost any cost?

what’s the firm and the position? buy-side or sell-side? if it’s at least a somewhat respectable shop, i’ve probably heard about it. however, that $35K salary is very bad…and if that’s all they’re offering you, my initial thought is that it’s not an offer to be taken seriously.

btw, if there’s one thing that i’ve learned about wall street, it’s that talent can be bought. at $35K/year, what kind of talent do you think there is at that equity research firm? put yourself in the shoes of someone that already works there; if you’re going to be working around others that are on $35K/year working in “equity research,” what kind of mentorship do you think you’re going to get? the answer: about $35K’s worth, which is…not a lot.

Thanks for the thoughts numi. The position was just posted today so I have yet to hear from them. The posting was listed as a “company confidential” however I can probably guess which firm it is based on what is in the area. I just sent you a quick email on the firm to the porcupines email address if you do not mind. If you have any insight as to them, that would be great. Thanks again. I suppose aside from my specific situation, when is experience worth more than salary for everyone else out there?

sure…that sounds good… fwiw i didn’t get any email from you. try again. porcupines AT gmail

I just tried again. It should be coming from wanderingcfa at gmail…thanks.

my experience is an employers’ mentality is “you get what you pay for”… if an employer is only looking to pay $35k they are not looking for a whole lot so your responsibilities (and accompanying training/mentorship as numi pointed out) will probably be less as well. i think the experience and training you will get from a shop paying so little probably won’t be great. but as a poster on this forum said to me a long time ago the opportunity to leave will be more a function of your own hard work and dedication. you’ll probably have to learn a lot of things on your own, but once you’re in a front-office job as an equity research analyst recruiters will at least stop to take a look at your resume… they have no idea how much you’re making or what type of shop you’re at.

wanderingcfa, i got your email, and obviously my recommendation as to whether or not you go for the offer at this company depends where you are currently at now. while i think this opportunity is certainly more in-line with your aspirations to become an equity analyst/PM, there are a few things that aren’t appealing to me about this opportunity, based on what i gleaned from the company’s website: - compensation - you’re taking a pay cut of about 50% - reputation - i have never heard of this firm. not to say i’ve heard of every firm out there, but they are an extremely small shop and they tell you nothing about their business model, and also don’t quantify any of their “outperformance” results (obviously a real issue, because nobody has any idea whether their recommendations have “outperformed” indices by 1% or 100%). you have to ask yourself, “how do these guys make money?” maybe you know, but i don’t. - prestige - again, these guys don’t have much of a name. it looks like there are only four senior people on the research/management side (maybe four people in total? they don’t list junior personnel on their website), and none of them have very interesting backgrounds. educational backgrounds are pretty mediocre, it doesn’t appear that any of them went to business school, and they all built careers at small shops. again, not to say that bigger is better, but it’s generally understood that you’re better off building your career on the street at larger firms because of the perception of their superior prestige, training and networking - products - their research appears to be a “blend” of fundamental and technical, in that they sort of teeter around the line between the two but don’t seem to do such a diligent job in either area. looking at their “special studies” section, much of their “quantitative” analysis seems to involve looking at pretty simple charts and ratios, and i didn’t see anything that really went in-depth into any company analysis. in addition, their articles tend to focus more on macro topics than micro ones - this is useful and all to get a general sense of how the market is doing, but i don’t think their research really points you in the direction of what stocks you should buy. of course, maybe they actually do this kind of research, but in that case the company would be well suited to post some excerpts on the internet. anyway, i hope this helps. obviously whether this is a “good” opportunity depends on where you are coming from, as there are certain opportunities that just won’t be realistic to certain people given their work experience, educational background, and overall qualifications. but as someone who sees a lot of resumes, i don’t see this firm giving you much meaningful advantage over other candidates simply because their “fundamental” analysis seems to just skim the surface and i don’t think the skill set is that rigorous. you should keep in mind that i am obviously biased towards the big investment banks because of my own bulge bracket experience, but hopefully there is also some candor and objectivity in my words. p.s. you may consider posting the link to the company on AF but i’ll leave that to your discretion

this is exactly how i got my first front office job. i first worked back office, then middle office. got my first break as an analyst making $30k, less then half of what i made in mid office. i felt insane taking a job with such bad pay. i sucked it up…best decision of my career. i got raises very quickly, started making normal money. it helped get me into a top 5 mba program. i got a big bonus. completed the cfa. made a lot of contacts. most importantly though, i learned a ton and i KNOW what i’m talking about…that kind of experience simply cannot be valued highly enough. things are good now. if you’re serious about becoming an analyst, take the job, make the absolute most out of it, and use them just like they’re using you.

$35k is just too low (I say this based only on your current $60k, which I think is ample premise). There are times when you can take a paycut (chance at early promotion, or equity in the firm), but I agree with the poster that said this can’t be taken seriously. But I don’t understand, are you wedded to you area? Would you not move to a major metropolitan area for a few years?

Sounds like you may want to take the job just so that you can list something front office on your resume and then start applying right away for things that pay better. Of course, they may suspect that you do this, and that might affect your chances of getting the job. Is there an offer on the table, or are you just thinking of applying for it. Go ahead and apply for it… maybe you can up the pay a bit if they want you enough.

WanderingCFA, your position sounds all too familiar. I currently work in BO and make around 60K. I am applying for ER analyst positions in my area which is not much of a financial district. I have the same concerns as I feel that I will probably have to take some paycut if I get offered an entry level analyst job. 35K is low, it would simply be too low for me to live on currently so I’d have to make some life adjustments. Hopefully an offer comes through around 40-45K. The thing that seems inevitable to me, and probably you, is relocation. Even if you become an instant superstar within your new firm, where are you going to exit to? Most likely a major metropolitan area with high paying finance jobs. So at this point you (and I) might as well just apply to jobs outside of your current location. That is if relocation is at all feasible now for you.

35k is the salary right? If there is some sort of performance related bonus at the end of the year (say 20%) then your first year comp would be 42k. In addition, if you’re a star in BOM, then you should be picking up stuff really fast and actually contribute. If you impress them enough, you can be looking at a 10k~15k raise per year for the first 2 ~3 years. I’m assuming that the BOM position gives you raises somewhat indexed to inflation, in 2 years in research you’ll have out earned your BOM job. I was in a similar position, accepted the job, this is my 2nd year as an analyst and glad I made the switch.

If the new job brings you want 1 step closer to where you want to be with your career, I would strongly consider. =if(“skillset, contacts, etc., developed at new job” > “skillset, contacts, etc, at current job”, “take job”, “stay at old job”) my 2c

I think some of you are overlooking a point here. Just because the new opportunity is called “equity research” doesn’t necessarily mean it brings him a step closer to his longer term objectives. Not all research opportunities are created equally, and my diligence into the firm leads me to think that the opportunity may do his career less good than you guys think. Remember employers always ask you to talk about why you decided to take certain jobs. As a potential recruiter, I would always ask why a person decided to work at a very small firm that puts out product of average quality, and which compensates its employees is at the very bottom of the pay range (almost absurdly low, if you ask me; $35K base is a record low). If it’s the best opportunity you can find, go for it; if not, just be prepared that your experience likely won’t be the same at a larger shop, and people will always question your logic as to why you decided to take a pay cut of such magnitude if your work experience doesn’t make up for it.

Thank you for the thoughtful and relevant posts. A few follow-up comments. I have seriously considered relocation and will most likely venture down that path. Based on my current situation I will not be able to relocate until later this summer (not a major problem as I can wait). I would love to stay in my current local. Finding the right opportunity here would be ideal, although I realize my opportunities are limited. No offer just yet and jobs never hurt to be applied to, so that was a quick choice. I suppose I wanted to wrap my head around taking a 50% pay cut and if it would be “worth it” in the end. Any decision would obviously hinge on the specific offer presented to me. If the job were at one of the BB for an entry level $30k position then my decision would be slightly easier. Since the position is with a small independent shop, the value of having their name on my resume or the knowledge I would obtain is not yet known. If anyone knows of the firm, the place is ford equity. Numi: I just sent you one quick follow-up email with one of their research reports on JPM I was able to get. If you have any follow-up comments based on their report, I would appreciate your input. Thanks again everyone…

Sounds like my life story. I’m still trying to reach comp levels beyond what I was making SEVEN years ago on my simlar path (I took a similar pay cut some 4 years ago…) Firms will only pay you what they have to to keep you from walking out the door. NUMI - could you reply to my email from last week? I had the in person interview today.

mcthorp, i sent you an email a couple days ago. check and pls get back to me, thx

Very interesting points. If this job has growth opportunity, then the initial pay is irrelevant. If you make 35k your first year, but 150k in your third, then it would be worth it, right? However, like Numi mentioned, you get what you pay for on “Wall St.” and when you go to another firm, they are going to wonder why the hell you took a job for 35k - they will look down upon you for it. It’s funny, but the more you make the more respect you get when applying for a new job. A company will look at your sticker price, and a higher price denotes higher quality. Kind of like a Lexus versus a Toyota - same company, same engine, but different branding. From the sound of this company, it doesn’t seem like a door opener. With my limited information on the situation, I’d stick it out until the summer, move to a location that has legit opportunities, and once you’re established move back if you really want to. Best career advice: start in the biggest city at the most well known firm that you can…firms from Seattle, Houston, Chicago, LA, etc. will always take someone who worked in NYC for a reputable firm, but it’s a lot harder going the other direction.

There is no harm in talking to them. You cannot determine the merits of this position from their website and a message board. It may very well end being a poor option as others have mentioned, but you never now.