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"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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AUTHORXavier Baume Insider Comment
  • GS
    GS1
    30 December 2023

    This is a copy and paste article from years past I've read with no real content...

  • Mi
    MissyB
    28 December 2023

    I think Citigroup has one of the largest and prestigious network in the industry and it is because it is still the most international bank in the world with peers that have connections to a lot of governments, international firms and UHNW persons. The time the bank spent being the largest bank in the world prior to the financial crisis created the strongest network that still holds today. But I do agree that if you get into these bulge brackets, use the connections you can get to make more money outside the bank.

  • Mi
    MissyB
    28 December 2023

    You can say this about most bulge brackets - Citigroup, JP Morgan...not just Goldman.

  • Br
    BronchoSyrup
    14 April 2023

    That's the dirty secret. Spending 6h / day into meeting rooms doesn't help you much to carry trades / investment ideas / reports.

  • li
    ligmabiggoldsach
    14 April 2023

    Lmao only suckers would stay at goldman after VP. Bonuses are shit and you don’t get carry or massive single year payouts like you do in PE or HF

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