Perhaps a more appropriate title would be “Why Business Majors are Scams” but nevertheless it’s all the same. Since I graduated with degrees in accountancy and finance, this article will be geared toward that but this will generally apply to business majors. Here’s why a business major is a scam.
You start out with nothing
This applies in college and after college and if you’re taking on loans for college then you may even start negative! For the most part when you enter college, you’ll most likely be starting out as a generalist and take non-relevant classes. While some of you may say that these generalist classes help develop critical thinking skills and are applicable in the workplace, you can learn these skills on the job. Let’s be real; most likely at an entry-level job you’ll be doing basic tick-and-tie work which only requires 2 brain cells. The whole point of these entry level jobs is to develop basic skills necessary to handle the promotion. You don’t really need the skills you learned in college as a business major (this most likely doesn’t apply to STEM majors) so why even get a degree in the first place? If you are looking at FIRE, you’ll notice that a lot of people who FatFIRE’d have a tech background compared to those with business or even medical backgrounds.
Longer hours with less pay
This is semi-related to the first point but when you start out in business, you’re either being paid a lot less compared to a similar role in tech or you’re working a lot more hours to make the same annual pay. In the latter scenario, if you divide the salary and the amount of hours worked, you’ll realize that you make a lot less on an hourly basis. Sure coding and debugging a program may not sound fun but the whole point of a job is to live. Some may live around their careers and be workaholics but I am not. Why work 80 hours a week in high finance when you can work half of that and make the same amount in tech? The Big 4 audit guys are getting even more screwed because it turns out that they work longer hours than banking while getting paid peanuts. You could argue that I should just leave and get a more relaxing job but unfortunately my hobbies / goals are expensive so I need a good salary.
Lack of prestige
I’m not the type of person who cares about prestige but there are those who do and mistakenly believe that going into finance will finally get people to respect them. Guess what? That doesn’t happen. In fact, you are more likely to get looked down upon especially if you work in the Bay Area. If you work in private equity / investment banking in the Bay Area you may be familiar with “tech bros” calling you out or making fun of you (“teasing” is what they call it but I always believe there’s a hint of truth behind a joke) but you put up with it because these people will be future clients. It’s never a good idea to pick a career for the sole choice of prestige but if you’re going to do so, why pick business or finance?
This is obviously subject to interpretation but there’s a stereotype of a person who enters finance vs. one who enters tech. When we think of the finance person, we think of someone who is outgoing and gregarious while not bringing as much of a value-add compared to an engineer while the latter is seen as a nerd who only codes all day. Obviously I hate stereotypes but there’s a reason why they exist as you’ll see more of these than not unless if you go into enterprise sales at a tech firm. If you’re an introvert who loves data and facts then go into tech but if you’re an extrovert who is comfortable about “massaging” the numbers, then go into finance / business.
Questionable exit opportunities
Investment banking analysts are really susceptible to this because we all think while in college that there are greener pastures in private equity but this is further from the truth. The hours myth is the biggest one as you don’t actually work less hours in private equity and this is coming from someone who has to work with private equity folks. In most cases, you may be working the same amount or even more than someone in investment banking. Additionally, you’re taking on more risk when it comes to compensation since a significant portion of it comes from the carry while investment bankers get paid on a commission or retainer basis. That means that if you’re an associate in private equity and a portfolio company suddenly defaults on a material covenant, say goodbye to half of your paycheck! Meanwhile that investment banker who advised you on the deal walks away with a check for closing the deal and doesn’t care if the company ends up being a good investment or not. Additionally, if you’re going to a middle market or lower middle market PE firm, expect a base pay cut since most of the compensation comes from the carry and bonus so you better pay sure your firm buys the right company.
If you’re a high school senior considering business or finance, please reconsider. A lot of financial programs are a 2 year “in ‘n out” deal where you’re forced to go to business school, jump to another firm, or switch to an entirely different industry altogether and a lot of finance guys end up in tech anyway. So why go through all these hurdles and take more risk when you can just start out at tech in the first place and save yourself the headache? This is why a lot of banks and financial firms have trouble recruiting talent because the best go to tech and for a good reason. Don’t aim for 2nd best; aim for the top.