Money drives the world. As a result, many people aspire to work in finance. It is a highly sought-after career. People tend to assume most finance jobs pay a lot. And they are usually correct. But how much are they getting paid? Questions such as “What do finance jobs pay?” do not have a simple answer. It is highly dependent on the finance job, as well as the person’s experience.
In this guide, we detail various finance jobs and their average salaries. We show average salaries for entry-level finance jobs and salaries for finance experts. Our goal is to help you understand how much you can potentially earn. So, let us break it down.
Investment Banking: High Risk and High Reward
When it comes to pay, investment banking seemingly has it all. On the contrary, it is the career with the most demanding hours. Investment bankers help companies in getting funding and acquiring other companies. Because of these factors, it is quite a stressful job.
Analyst Compensation
This is the first position you take when entering the job market. A degree is usually required. There is a new analyst in every major city. Starting salaries are around 100K in New York. However, the bonus is even more exciting. A bonus is usually around 50K, bringing your total first-year compensation to 150K.
Associate Earnings
After a couple of years, you will be promoted to associate, or you may enter the company as an associate following business school. There is a significant pay increase when this happens. Total compensation is now in the realm of 150K to 200K, plus a bonus that is equal to your base salary, bringing your total to 300K or more.
These amounts are high because of the amount of work being done. 80-hour workweeks are standard, along with working every weekend. This is the sacrifice that the high amounts are aimed to reward.
Financial Planning and Wealth Management
Not everyone aspires to work on Wall Street. A financial planner works with people and families. They help them save money for retirement and for their children’s college.
Understanding finance fundamentals also helps entrepreneurs know what must be done after creating a business plan to manage budgets and investments effectively.
Financial Advisor Salaries
You might be wondering, “what do finance jobs pay?” It depends. Some advisors are on commissions, while others are on salaries. The average pay is about $90,000 per year. But great advisors earn significantly more.
The best advisors manage millions of dollars. They earn a percentage of their clients’ money. If you manage $100 million, you make a lot of money. The best advisors earn more than $500,000 a year. Building a client list takes time. The first few years are the hardest. You need to find clients and make them trust you.
Paraplanners
Paraplanners help financial advisors. They conduct research and draft reports. Paraplanning can be a good entry point into the financial services industry. Annual salaries typically range from $50,000 to $65,000, and hours are typically 9 to 5.
Corporate Finance: Managing Company Money
Every business requires a finance department, even Apple and the grocery stores. They handle the budget, make forecasts, and ensure there is enough liquid cash available.
Financial Analyst
This is a very common role. You are analyzing data to identify trends and, subsequently, report to the management on cost-saving opportunities. Entry-level salaries typically range from $60,000 to $80,000.
With five years of experience, you can expect to earn over $100,000. Senior analysts can expect to earn more. Overall, the hours are better than in investment banking. 40 to 50 hours a week is typical, and you get the weekends off.
Chief Financial Officer (CFO)
This is the highest position in the field of corporate finance. The CFO is in charge of the entire allocation and distribution of the company’s finances. If it comes with great responsibility, it comes with greater pay. CFOs of smaller companies make about $150,000 – $250,000 annually, and at larger companies, they make millions. It is not uncommon for them to access stock options. Many employees in finance consider it to be the best position.
Accounting: The Language of Business
Accounting is the most adaptable, as every business has to prepare its taxes and issue its financial statements. And in case it gets audited, its numbers need to be accurate.
Public Accounting (CPA)
Most accountants work for large accounting firms, and they work as auditors for other companies. They make about $60,000 – $75,000 annually as their entry-level pay. After a few years, they get promoted to manager, and at that point, they make over $100,000. Partners at large firms make extremely high incomes and can make anywhere from $500,000 to $1,000,000 a year
Corporate Accounting
Alternatively, you can choose to work for a single company. You take care of their financial book and daily financial transactions. The income is comparable to that of public accounting, but usually, it’s a little less at the beginning.
On the other hand, the work-life balance is better at these jobs, and you get less crunch time.
Private Equity and Hedge Funds
These positions are considered the best of the best, and getting these positions is extremely difficult. Usually, you have to have a background in investment banking first. These firms take the positions of other firms to strategically raise returns.
Private Equity Associate
You purchase firms, you enhance their operations, and you sell them for a profit. Depending on how the fund is performing, your bonus is pegged to that.
Private equity associates often use metrics like the internal rate of return to evaluate investments and forecast potential profits. Associates earn anywhere between $250,000 to $400,000.
Hedge Fund Analyst
Hedge funds are firms that buy and sell stocks and bonds and analyze the market to see how they can outperform the market. They have analysts who generate ideas they can invest in.
The pay is extremely unstable. Bad years mean no bonus. Good years mean tons of money in the bonus. For senior analysts, the total pay can reach $300,000.
Conclusion
We examined money, bankers, advisors, and analysts. We quantified finance job salaries and potential, and a few industries offer higher. Almost any finance job will pay you comfortably. The top positions pay a lot. However, they are tough. It takes significant effort, study, and long hours. Many do find the reward worth the sacrifice.
Pick the option that suits you best. Don’t just go after the strongest figure. It is a marathon, and you will want to enjoy the journey.
