Another compensation-related consideration: in many cases, base salaries are (very nice but) not stratospheric, and the real money is in the annual bonuses. Large but irregular income may be less valuable than lower-on-average but more regular income, e.g. because it makes planning more difficult and because it leads to paying more tax.
Cultural consequence: A sense of competing with one’s colleagues for bonuses may make for a more stressful atmosphere. (In some sense this sort of competition is present in all companies, but it is made more obvious by the bonus system.)
Another ethical consideration: exploitation. That is: some portion of how a hedge fund or investment bank makes its money will be by finding others willing to make bad deals, and making them. See, e.g., the remarks about “dumb money” in Cathy O’Neil’s linked article.
Some possible views on this: (1) it’s bad because it involves taking advantage of others; (2) it’s good because those others would have made the bad deals anyway and your eagerness to take the other side actually incrementally improves the prices they get; (3) it’s bad, at least sometimes, because while they would have been willing to make those deals even without you, they might not actually have made them without you.
Large but irregular income may be less valuable than lower-on-average but more regular income, e.g. because it makes planning more difficult and because it leads to paying more tax.
Not if someone’s solely earning to give, no. But (1) it’s possible to be “earning to give” and also hoping to enjoy some of the earnings oneself, and (2) AIUI this post is intended to be useful more generally than only to ETGers.
[EDITED to add: On rereading, actually it’s not clear that #2 is correct. But I suggest that it should be; LWers might reasonably be interested in finance careers for reasons other than altruism. I have heard that a few people who are not altruists are none the less attracted by the prospect of big piles of money, and some bits of the finance industry are quite well suited to LW-ish brains.]
Another compensation-related consideration: in many cases, base salaries are (very nice but) not stratospheric, and the real money is in the annual bonuses. Large but irregular income may be less valuable than lower-on-average but more regular income, e.g. because it makes planning more difficult and because it leads to paying more tax.
Cultural consequence: A sense of competing with one’s colleagues for bonuses may make for a more stressful atmosphere. (In some sense this sort of competition is present in all companies, but it is made more obvious by the bonus system.)
Another ethical consideration: exploitation. That is: some portion of how a hedge fund or investment bank makes its money will be by finding others willing to make bad deals, and making them. See, e.g., the remarks about “dumb money” in Cathy O’Neil’s linked article.
Some possible views on this: (1) it’s bad because it involves taking advantage of others; (2) it’s good because those others would have made the bad deals anyway and your eagerness to take the other side actually incrementally improves the prices they get; (3) it’s bad, at least sometimes, because while they would have been willing to make those deals even without you, they might not actually have made them without you.
Shouldn’t matter much for earn-to-give.
Not if someone’s solely earning to give, no. But (1) it’s possible to be “earning to give” and also hoping to enjoy some of the earnings oneself, and (2) AIUI this post is intended to be useful more generally than only to ETGers.
[EDITED to add: On rereading, actually it’s not clear that #2 is correct. But I suggest that it should be; LWers might reasonably be interested in finance careers for reasons other than altruism. I have heard that a few people who are not altruists are none the less attracted by the prospect of big piles of money, and some bits of the finance industry are quite well suited to LW-ish brains.]