"You don't make real money as a managing director at Goldman Sachs"
I spent over a decade at Goldman Sachs in New York before leaving last year. I quit because I want a proper career in which I make some real money. When you've spent a long time at Goldman, you come to realize that there are two kinds of people there. There are people who typically joined straight from university and who are at the firm for life and can't imagine not working there. And then there are people who want the firm to be a stepping stone to something else.
I am one of the latter. In my opinion, the real value of working for Goldman Sachs is the credibility it gives you and the network of peers you earn over your time there. If you really want to unlock its value, you need to remain at Goldman until you're a managing director (MD) because that title is earned.
Anyone in theory can become an analyst or associate at Goldman, you just need strong academics and strong internships. Anyone can even become a vice president (VP). There are tons of them and it just means you are competent at your job. But if you become a managing director, it ticks a certain box. It means that when you call other managing directors and partners, they will take your call. When you leave, it makes a huge difference. This is the real value of working for Goldman, and it differentiates the firm from other employers in financial services.
It's this alumni network and the doors it opens that potentially allow you to make far more money when you leave Goldman than you make Goldman Sachs itself. When you're outside Goldman, the real money comes from hedge funds or start-ups. Goldman Sachs pays ok compared to peer banks, but your pay there comes with a discount. The firm knows this, and understands that it's all about monetizing the name when you leave.
There can be an element of non-reality to people's financial expectations, though. Partners and managing directors will often complain about compensation that would seem lavish to people in other industries. People at Goldman love to moan about their pay, but it's not really about the money. Money becomes a lazy metric for measuring success, and people confuse their success with their compensation.
The wisest people avoid this conflation. They also invest the money they earn from Goldman carefully. A decade at Goldman can enable you to take a career risk when you leave. Sometimes that will work out, sometimes it won't - but if you've invested your Goldman money wisely, you are able to take this higher risk/reward trade without impacting your broader lifestyle.
Xavier Baume is a pseudonym
This article was first posted in April 2023. We're reposting it during the festive break
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