I know the city isn't cheap, but if you're making 120k gross, 10k debt and rent shouldn't be such a large concern.
Are financial programmers under paid?
- Thread starter nitro
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$150k is imo what a good (not great) financial programmer should make in Chicago. Double that in NYC.
I agree that good teachers are underpaid. I remember someone suggesting that in order to incentive teachers, they should have some sort of contract with the student such that they would get a piece of the what the student went out and made. In some cases, these grads right out of school would go and make two or three times what their professors make.
Also, I believe that schools have gotten into the act. If you discover something of extreme value while doing research in their labs (pharma related stuff I believe), I believe they have some sort of rights to it.
It has even gotten trivial, e.g.,
http://scienceblogs.com/seejanecompute/2008/08/who_owns_student_work.php
Ok, I will be controversial here. I don't think financial programmers are overpaid, and I was head of technology for a med-sized broker dealer.
The reality is, as much as financial programmers like to think they do all the "cutting edge programming" and get paid relatively little compared to the modelers and traders. The work is no more difficult than say some that codes up a 3-D rendering engine (try to tweak efficient out of a multi-source light shading engine), or say some one that writes code for a cryptography engine (which I did for a few years of my life). So I don't see financial programmers should receive a "premium" just because they work in finance. The trading models and quant analysis, directly result in comparable PnL gains, so their value should be directly tied to such gains.
And yes, it pains me to say it. Since when I was head of technology, I knew that my total comp is merely that of a mid-level trader, let alone a trading desk head. That's why the good technologists tend to jump over to the trading side. Look at Will Sterling, he started as Island's CTO, now he runs equity trading for UBS, and most likely next in line to be global head of equities over there. and his current comp, is at least 10x when he was CTO, and this is fair.
Edited: Pay is also tied into how "replaceable" one's contribution to the overall profitability is. For instance, I know of FIX experts making 700k+ a year, because they are simply not "replaceable", in the head of trading's eyes.
The reality is, as much as financial programmers like to think they do all the "cutting edge programming" and get paid relatively little compared to the modelers and traders. The work is no more difficult than say some that codes up a 3-D rendering engine (try to tweak efficient out of a multi-source light shading engine), or say some one that writes code for a cryptography engine (which I did for a few years of my life). So I don't see financial programmers should receive a "premium" just because they work in finance. The trading models and quant analysis, directly result in comparable PnL gains, so their value should be directly tied to such gains.
And yes, it pains me to say it. Since when I was head of technology, I knew that my total comp is merely that of a mid-level trader, let alone a trading desk head. That's why the good technologists tend to jump over to the trading side. Look at Will Sterling, he started as Island's CTO, now he runs equity trading for UBS, and most likely next in line to be global head of equities over there. and his current comp, is at least 10x when he was CTO, and this is fair.
Edited: Pay is also tied into how "replaceable" one's contribution to the overall profitability is. For instance, I know of FIX experts making 700k+ a year, because they are simply not "replaceable", in the head of trading's eyes.
Depends on the environment, but it really depends. You're right in general.
I did a few things that revolutionized the work flow in my old organization and I got paid less than a first year college graduate, if you adjust for region and such. They knew, they acknowledged it, but I got shafted. I knew I got shafted when the guy volunteered to give me a recommendation for a new job; I guess it was more politics from high above. Who offers to give a glowing review of someone when they threaten to leave? So the way I see it, I was underpaid.
By revolutionized, I literally mean saving 50-100k per day, and I got those savings doing work that was substantially cheaper than commercial fixes would have offered.
The biggest thing I grapple with daily is this:
If I want to go independent, I need capital. I need to raise it, because infrastructure costs for the sorts of things I'd be good at are so far above and beyond what I could pay myself. ~20k/month, base expenses. In the asset class for which I'm a quant analyst, the costs are far above 20k/month. It's a rich man's game.
If I go to another place, I may get shafted like I already got shafted.
If I go retail, like Jack Hershey suggests, I lose all the institutional edges Jack seems to be unaware of. Retail trading is extremely risky.
If I raise 1 million for infrastructure and another 300k for two programmers on borrowed capital, I'd need to come up with an edge right away and make sure that edge offsets the infrastructure costs. The thing is, for many of the microstructure/high-frequency related strategies, you run the risk of the data not being clean or the model viable until you collect the data in the field.
Now, if I work inside an organization, find an edge and then leave, that -may- be workable. But it's dirty.
My current plan is more or less to slog through development a bit more and tolerate the "underpaidness" for a while and go through the cycle of development another 4-5 times. Once I see the PnL, the loss, the gain, the rapidity with which we roll out strategies, etc., the more I'm going to be ready to take 2-mil and run with it.
Realistically, I can save about 25-40k annually after all expenses. Rough approx:
+120,000
-24,000 rent
-50,000 taxes
66k left, -25k for whatever, so around 41k. Minus 10k for education this year, ~31k. Last year I had about 15k left over, because I spent 15k on education. My base was lower, and taxes completely chewed up my bonus.
A bonus, if I get one, improves the picture but not by much.
If I get laid off, that 31k becomes a buffer for about 6 months + the 1month severance or whatever, at which I'm broke and the cycle repeats again. It's living paycheck to paycheck, in a long-run sense and not a literal sense.
Since when is the complexity of what you do related to your compensation? Trading is incredibly boring most of the time. I contrast it to being a fighter pilot where 95% of the time you are bored out of your mind, and 5% of the time all your training and flight hours are put to the test. The difference being that all you do is win or lose money as a trader, whereas in the case of fighter pilots life is at stake. Their pay? waaaaaaaaay less than a typical trader for similar complexity profiles.
So why does everyone else that works in finance get a disproportionate take home? Does the CEO of Proter and Gamble have a less complex job than the CEO of Goldman Sachs?
I have no problems with quantitative people earning what they do. I have a problem with programmers earning what they do. This is just some rule you are making up. There is no apriori reason that one is more direct than another. It is simply that one interacts with the markets through their trading decisions and/or ideas, and the other is interacting with the market throught their trading software.
You make my point exactly. People in this country complain that the youth here doesn't want to go into technology or science. LMAO. Yeah, let's pay someone that stands in a pit or in front of a screen doing almost nothing for 5 hours of their day, and reward them exponentially better than someone that has spent years mastering a science and then has to continously keep up in his field by constant self education, all the while creating complex real-time systems without which the entire financial system would break down.
Awesome. The world loses another great scientist [I don't know who he is but he sounds like a star] to trading because he is undercompensated. I think we should also go and round up all the nurses, pharmacists, and other highly educated people and turn them into traders because that is where people get compensated. Seriously, listen to yourself!
Oh yeah, I have seen this. What ends up happening is that people then code job security into their code. Great way to have a healthy environment. FIX engine irreplaceable? Aahahahah. That said, he seems (overly) well compensated.
Quite a few professors have made a mint in options from prior students who utilized them for advisory rules (all while concurrently teaching).
Although, generally, I completely agree the incentives for creating advances in science and scholastic achievement are completely bass ackwords.
Sure, that can work in finance. What about when a (Bio)Chemistry major goes and discovers a new molecule that is key in curing some disease at MRK or PFE? What does his Chemistry, Biology etc teachers see from that? Their salary.
My point is that no one is an island in the modern world, and yet, we continue to compensate as if these are all lone geniuses like Einstein that worked it all out by himself in 1905.
"If I have seen further, it is because I have stood on the shoulders of giants" - Isaac Newton
Agreed. But as someone once said to me
regarding equitable fairness, if I could change the rules I would, but I can't, so we just have to do the best we can with them.
I watched a movie titled, "dark Matter," a bit back. I think it kind of relates slightly to your discussion and you would get a kick out of it.
http://www.amazon.com/Dark-Matter-M...ef=sr_1_1?ie=UTF8&s=dvd&qid=1246147554&sr=8-1