Let’s summarize his reasons as to why Wall Street pays so well :
* Trading stocks, doing IPOs, merging companies, managing money is a very lucrative business. Not everyone can do it. It’s hard. Wall Street hires in that 99 percentile zone. And then they make your life miserable hoping you’ll quit before they break you. Or hoping they break you before you lose money for the firm.
* The score, like an SAT test, is kept with real money—how much your trading desk makes for the firm—how big a chunk of the bonus pool you command for your do-or-die heroics day in and day out.
* The job ain’t fun. ou have to one up on the Goldman Sachs of the world, generate as good a return on equity and earnings growth so that you could win the meritocracy game and get paid in spades. How dare Bear Stearns’ CEO make more than ours! Let’s lever this sucker up with mortgage-backeds and create a trillion-dollar balance sheet. If not us, who?
My brother worked on Wall Street for years, and then invested for companies after that. He was always pretty conservative regarding risks, but managed a solid 8-10 percent return per year anyway. But that wasn’t good enough for him to fly with the hotshots - the same hotshots who ended up taking the financial system to the edge of ruin, and who always ended up adversely impacting my brother because their risk ended up screwing up his division’s profits.