by Zeke Lee Comments (46)

Consulting vs. Trading vs. Entrepreneurship: Got Lifestyle?

Lifestyle: Trading vs. Consulting vs. EntrepreneurshipThis article was guest-written by Zeke Lee, a Stanford graduate, former management consultant, and former derivatives trader on Wall Street. He founded the GMATPill.com, a video-based GMAT prep course for ambitious MBA candidates that was recently featured in Bloomberg Businessweek.

So you’ve reached your last year of university – or maybe you’re in your late 20s or beyond and still haven’t figured it out – and you’re in “What do I do with my life?” mode.

The obvious solution is “Whatever makes a lot of money and positions me to make even more in the future.

But it’s tricky to answer that one, because there are quite a few fields where you can do that.

I’ve worked in 3 that you may have considered if you’ve been reading this site: trading, management consulting, and entrepreneurship.

You can do really well in any of those, but the one that suits you best depends on your personality and the kind of lifestyle you want.

So today, we’re going to delve into the lifestyles offered by these different professions and learn how everything from the location to the hours to your co-workers, stress level, and pay differs.

And yes, there will be at least one models and bottles reference by the end.

Location / Travel

With a job in management consulting, you never know where you’ll be staffed. You could be based in your home office for a good amount of time; or you might get stuck in Nebraska, Dubai, or go mining for gold in Saskatchewan.

That’s not necessarily a bad thing when you’re 22 and just out of school, but traveling every week is the last thing you want to do once you’re older and have a family.

You also spend a lot of time in consulting thinking about travel arrangements, when you need to arrive at the airport, and how your travel affects the number of hours you’re billing to the client each week.

That can be annoying if you’re not into travel, but then you could also be enterprising and AirBnB’ing your vacant apartment when you’re out of town to earn extra cash – which comes in handy when you compare consulting pay to the others on this list.

In trading, by contrast, you always know where home is and you never find yourself using Google Maps on your smartphone to figure out how to get back to your hotel at night (though you might be too hung over after a big night out to find your office successfully).

The only downside is that trading is focused on a few big hubs – New York, Chicago, London, Hong Kong, and a few others – so you’ll probably have to live in one of those cities. Whereas you do get more flexibility with consulting, since plenty of consulting firms have offices in dozens of cities.

With entrepreneurship, it’s so dependent on what type of business you’re starting that it’s hard to say much about where you’ll be living and how often you’ll be there.

My experience is with online businesses, which are great in some ways because you can work from anywhere, go to any city you want, and meet people anywhere.

Of course, if you decide to start some type of high-end consulting or service-based business instead, then it will turn into management consulting and you’ll be flying all over wining and dining clients in different places.

Location / Travel Winner(s): Trading is the most stable / predictable option, but starting your own business could be even better  if you pick the right type of business.

Hours

The good news is that none of these 3 fields necessarily involves the 80-100 hour workweeks that you see in investment banking – but there are other factors to consider.

Consulting calendars are usually based on projects, so your hours and schedule will fluctuate greatly depending on what stage of the project you’re at. Weekend work happens sometimes, but you’re not necessarily expected to be in the office unless you’re working on a project that gets incredibly busy at the last minute.

The hours worked per week are about the same (~60 on average) for both consulting and trading, but with trading you have a more fixed schedule because you work when the markets are open.

So if you’re trading US stocks, you work from 9:30 AM to 4 PM New York time, and might have 1-2 hours of pre-market and post-market work to do, giving you a 7:30 AM – 6:00 PM workday most of the time.

The biggest advantage is that trading hours are more predictable since they don’t vary much from day to day, so it’s easier to have a life and do at least a few things outside of work.

Just be careful not to take a trading job on the west coast if you still want to have a life: you’ll be waking up 3 hours earlier than you would on the east coast, and also going to sleep 3 hours earlier and most likely missing out on parties and events that happen on weekdays.

Just as location was unpredictable with your own business, so too are the hours.

These days a lot of people fantasize about traveling the world and living the 4-hour workweek lifestyle, but the truth is much different: especially in the early stages, your business becomes your lifestyle.

It’s totally different from consulting or trading where you can separate work and your own life – if something comes up, you have to take care of it even if it’s 3 AM and you’re about to go to Bali to go surfing in a few hours. After all, if you don’t take care of every aspect of the business, you’ll be the one suffering the financial consequences in the end.

Hours tend to be longest at venture-backed startups, where you need to sink or swim quickly and start showing exponential growth; you can potentially get better hours with a small business or anything that doesn’t need to scale very quickly.

I say “potentially” there because your hours will be intense as long as you’re actively running the business, and especially when it’s in the early stages.

At GMATPill, we get questions from students all over the world and so everyone involved needs to be ready to respond no matter what time zone. That’s one reason why some students have said it’s more helpful than Kaplan or ManhattanGMAT, but on the flip-side, you can see how even with an online business you might have long and unpredictable hours.

Hours Winner(s): For the average person, trading wins in terms of hours worked and predictability.

Co-Worker Interaction

The amount of co-worker interaction you get and how you act around your co-workers is even more different than the first two criteria above.

Consulting is generally the most team-friendly environment, because you always work on projects with other consultants and are often in the same room as the rest of your team.

You’re talking to other people every day, and the people who are in consulting tend to come from more diverse backgrounds and have better “people skills” than those in (some) areas of finance.

The culture at consulting firms also tends to be more employee-friendly and tolerant of mistakes than what you see in trading, where it’s 100% results-driven and you as an individual are valued according to your P&L.

While each trading desk is a team, there’s much less back-and-forth interaction and collaboration between team members than there is in consulting.

You spend most of your time staring at all 8+ of your monitors, processing information, and figuring out how market developments impact your portfolio. Your boss and more senior traders occasionally check in with you, but it’s more solitary than what you do in consulting, especially on the prop trading side.

At a large bank, you do interact with the salespeople and junior traders and field calls from them during the day, but it’s not like consulting where you’re all in the same room sitting around a table working together.

Co-worker interaction is arguably the worst when you start your own business – if it’s online, you start developing “online” business relationships and you spend more time writing emails and talking on the phone rather than meeting in-person.

And even if it’s a traditional business with an offline presence, you don’t have true peer co-worker interaction unless you start it with a business partner or two – and even if there are other people in your office, the dynamic is much different when you’re the boss rather than the employee.

On the other hand, you also don’t have to deal with office drama and politics, which is appealing to many people.

The best option to get around this issue is to create your own community and start networking with other business owners – there are lots of Meetup and Facebook groups for this purpose in most major cities.

Co-Worker Interaction Winner(s): Consulting wins in the average case, with the most teamwork and the most co-worker collaboration.

Dress to Impress?

Ah, fashion: perhaps the only topic on M&I that’s more controversial than the CFA.

In general, fashion matters the most for consulting because you’re around clients constantly and need to wear decent clothes to be taken seriously.

Since you’re never in your apartment and can save on furniture, take that extra cash and spend it on decent clothes and shoes: you may think it’s all about merit, but just as with anything else, appearance and first impressions are huge. If you don’t dress well, they’ll assume that you’re not as polished or articulate and may not send you on as many client engagements.

In trading, by contrast, fashion makes much less of a difference because you don’t meet clients in-person, and in prop trading you don’t even have clients.

You can’t show up to work wearing jeans, but normal business attire is fine and spending extra on clothes won’t give you a huge benefit (this, of course, is much different on the sales side).

With entrepreneurship, once again it comes down to the type of business you’re starting: if it’s online and you never see people, fashion is irrelevant and you can work in your bathrobe.

If it’s client-based, fashion becomes much more important and spending extra on clothes can have a huge ROI ($100 per hour vs. $1,000+ per hour).

Even if you’re working online or you’ve founded a tech startup, it still pays to have at least 1 good suit and decent clothes on-hand, because you never know when you’ll find yourself at a networking event or presenting to a large group – and appearance matters.

Dress to Impress Winner(s): If you like fashion and buying good clothes, consulting wins. If you’re not into it and really want to work in your bathrobe, entrepreneurship (assuming an online business) wins.

Stress

All of these professions can be stressful, but the types of stress you encounter are much different.

With consulting, the stress is mostly about what the client wants and getting random requests that further complicate or lengthen the project.

Then there’s the stress of travel and having to plan your work life around that.

You do get some pressure from your superiors and other co-workers, but overall it’s not like investment banking where people can be cutthroat and where relationships with higher-ups are tense.

With trading, by contrast, you don’t have clients in the same way so it’s more about market-related stress and not screwing up personally.

Imagine looking at your Facebook and Twitter news feeds all day, and then multiply that by 10x and you get an idea of what it’s like to be a trader: there’s tons of constantly changing information to sort through, some of which is useful and some of which is useless.

It’s a constant flow of information, and if you miss one small detail or step away briefly you might lose tens of millions of dollars (or more if you have fat fingers).

At a large bank, you might be forgiven for mistakes in the early stages, but prop trading firms and hedge funds are less forgiving and won’t hesitate to boot you if you’ve lost a lot of money.

With entrepreneurship, especially in the early stages, the stress is related to where your pay is coming from: it’s not like consulting or trading where you get a guaranteed base salary.

You never know what sales will be like the next day, week, or month, and if something goes wrong you start playing mind games and second-guessing yourself, wondering if it was just a temporary hiccup or something more serious.

Then you have the stress of managing employees, making payroll, working with partners, figuring out what product to build next, worrying about what happens when Google/Facebook/Apple enters your market, and so on.

Stress Winner(s): Assuming you want the least amount of stress, consulting wins. If you’re a masochist and want as much stress as possible, entrepreneurship wins.

Budgets, Models, Bottles

Ah, now the fun begins.

You get paid significantly less in management consulting than in trading; the gap may not be huge in your first year or two, but it increases more and more over time.

A trader might start out in the low 6-figures and reach the 7-figure range in between 5 and 10 years, and sometimes earlier than that, assuming good performance.

And the top traders and hedge fund portfolio managers make hundreds of millions or billions of dollars in cash.

Even the most senior Partners at the top consulting firms won’t come close to that; the compensation progression is much slower, and many Partners and Principals won’t even hit the $1 million USD mark.

The average case in both industries is probably not too different at the entry through mid-levels, but the ceiling is far higher in trading because there’s no limit to the amount of money you can make from investing.

Entrepreneurship is similar to trading in that respect: look at Fortune’s list of the richest people in the world, and most billionaires have started their own businesses and/or are investors of some kind.

In fact, the ceiling is even higher with entrepreneurship because you could create a company worth tens or even hundreds of billions of dollars – no trader could reach that level because it’s so hard to raise sufficient capital.

But the average case is much trickier to establish; the oft-cited statistic that 80% of all businesses fail within 5 years isn’t quite correct because it’s based on whether a business still “exists” according to tax returns – so if you sell your business or voluntarily move onto something different, that counts as “failure.”

Even figuring out your own income is trickier with your own company, because you also have expenses: it’s not like trading or consulting where it’s just your base salary and a year-end bonus.

Plenty of retail stores and restaurants have revenue in the millions, but have very low margins because of their high cost of goods sold and operating expenses – so the owner doesn’t take home nearly that much.

It’s safe to say, though, that if your business lasts for any length of time you won’t be starving – and remember, 31% of “The 1%” consists of “executives and managers in other industries,” many of whom own businesses.

Budgets, Models, Bottles Winner(s): For the ceiling case, entrepreneurship. For the average case, trading.

So, What to Do with Your Life?

You may now be tempted to say, “Aha! I’ll just see which career won in the most categories above and pick that one!”

One small problem, though: it’s a 3-way tie. They each won or tied in 3 categories, so there’s no clear winner.

And that’s the point of this exercise – we like to debate “lifestyle” a lot, but it’s not the best way to pick a career unless you have strict requirements that absolutely must be met.

Lifestyle only matters in the context of what’s important to you: if you want a predictable schedule and location, you’re a trader; if you like to travel and work in teams, you’re a consultant; and if you have a burning problem you need to solve and hate working for others, you’re an entrepreneur.

So think through these lifestyle differences, but always keep in mind what matters most to you.

And remember that nothing above will guarantee you that risk-free $10 million and your own beach in Thailand.

About the Author

Zeke Lee is a Stanford graduate and former management consultant with Booz & Company and derivatives trader on Wall Street. He founded GMAT Pill, a top-rated online GMAT Prep course designed for busy working professionals who want to study less and score more.

Use coupon code OPTION for a 10% discount, exclusive for M&I readers.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

We respect your privacy. Please refer to our full privacy policy.

Comments

Read below or Add a comment

  1. Can you discuss Intrepreneurship in detail?

  2. So I always here about investment bankers going to parties late night and popping bottles. While I am very interested in investment banking, I actually don’t like this kind of lifestyle, but it almosts feels as if it is a requirement to be a good “fit” in the industry.

    Do you think, in addition to networking, I should go out partying to get used to this? I can’t believe I’m asking this question, but it’s been on the back of my mind for the longest time.

    1. M&I - Nicole

      No, not necessarily – there’s some element of that though I know people who didn’t party much and still succeeded in banking.

      No, I don’t think you need to do that.

  3. I’m extremely interested in Consulting/Entrepreneurship and would like to work on the west coast after undergrad, preferably in California. Which option would give me better options?

    McCombs (UT Austin) or Northwestern (Economics), with double majors in both schools either in something quantitative like stats or math or soft such as psychology.

    I’m from New England and I’m not really sure how much I like being in Texas (I’ve spent a year living in Austin). However, my main priority is which school gives me better options towards my ideal locale/occupation: consulting/startups in California.

    1. M&I - Nicole

      I think Northwestern may have a better name though McCombs isn’t bad either. I’m sure both of them are renowned in the West Coast and you’ll probably find alums on the West Coast for both. I’d suggest you to contact both’s alumni and career placement office and look at placement statistics in California. This should give you a better idea

  4. The Graduate Management Admission Test is a Standardized test that measures verbal, mathematical and analytical writing skills. It is intended to help the graduate schools of business assess the potential of applicants for advanced study in business and management.

    Nearly 900 management institutes all over the world (almost all of them in the US) require GMAT scores from each applicant. The GMAT tests the fundamental skills – Reasoning and Comprehension included – and does not require any subject-specific theoretical study.

    The test is designed in such a way that it would be unlike any other test you would have taken at school or college. First, the test has no question paper or answer sheets, nor does it have the same set of questions for all the examinees. Further, it does not give you the option of not answering a question (unless, of course, you run out of time at the end). All this because the GMAT is now an entirely Computer based test – the keyboard and mouse do the work of a pen or pencil. The test is scored out of 800 (in multiples of 10), and most scores fall in the range of 500-600. However, a score of even 800 is not unheard of!

  5. prospectivebankster

    quick question for any traders. how exactly do you know you will be ‘good’ at trading? I go to a target, have decent marks, have won trading competitions and manage my own PA with decent returns, but does that really make a good trader? I know this business is very performance driven, but I am afraid of signing up for a stint in S&T and ending up losing money or being really bad at it. Does anyone know they will be good when they start out? Do some people just KNOW they are born traders?

    1. M&I - Nicole

      You can’t be afraid. Feel the fear and do it anyway. You already have a track record of managing your PA and I presume passion for trading. Why not give it a shot? You won’t know until you land yourself a S&T role and do it.

      Some people love investing…and they have traded since they were 10. Not sure if they were born traders but I’m quite sure their love of trading made such people work harder and traded more which enhanced their performance

  6. SpaniardTheLatino

    Hi M&I and Zeke,

    I think I am at a crossroad in my life and I do hope some of you would be able to provide me with some pointers.

    I have a BA in social sciences (nontarget), a MS in entrepreneurship (non target) and a MS in public policy (target). All in all, I spent 6 years at university learning the art of BS and honing my non quantitative skills that is forcing most BBs to balk when they look at my CV. I did another MS at a target because I thought I could do better with a ‘brand name’ school on my CV and it was pretty much the only MS i am qualified for; but that even screamed ‘this kid is the most confused kid ever’.

    I have no debt as my education was funded primarily by scholarships and my parents. In fact, I have about $30k saved up from my 6 month back office job at a BB (my one and only full time job), some ebay sales and oddjobs during undergrad.

    4 months ago, I started a niche site like yours, selling products and was able to generate about $300-500 in profits/month. Today, I met one of my dad’s good friend who has a 10 yr old company that sell technology products to SMEs and pulls about $4M a year. He has asked me to be his ‘distributor’ and market his products in other states. Also, I hold an offer in consulting for a botique firm that has about 10 offices worldwide.

    I get really excited when it comes to entrepreneurship and feel absolutely pumped discussing opportunities and the future. As for consulting, I am not so sure if I like it – the lifestyle, the nature of the work, but having read this article, i do like the ‘interaction’ factor

    I am 23 this year.

    A – Take consulting $60k/yr + focus on niche product site in spare time (not even sure if I have the time as I’ve heard these guys have the stress and hours of IB without the bonuses of course!)

    B – Hustle out on the streets trying to sell my dad’s friends products (each piece of equipment is like $20k and avg contracts are worth ~$50-100k) + focusing on my niche product site, while eating away my $30k savings (out of which $10-15k will be spent on the niche product site, yep – i am selling tangible products not BIWS or interview guides :)

    Sorry for the lengthy post. Its late and I cant sleep.

    Cheers

    1. M&I - Nicole

      I’d take B if you want to be an entrepreneur. It’s your call. Trust your gut.

  7. Hi,
    This is off topic but I would really appreciate any help.
    I’m trying to transition from middle office into corporate finance. I have a hopefully final round interview lined up with a small firm based in London. Although the firm is small (about 10 people) everyone there has bulge bracket experience. I met 3 people in the first round and went through some technical questions and a case study. This time I will be meeting the founder of the co, not sure what to expect, any advices? Shall I still mention the quirky/interesting side of me to make myself stand out when it’s a 60 years old sitting across the table? Also what kind of smart questions can I ask him at the end?
    Thanks a lot

    1. M&I - Nicole

      Not necessarily, depends on his personality etc. I’d try to demonstrate my interest in what the firm does, how he founded the company and his story. Smart questions – ask him how he decided to found the company, why, what his challenges are going forward, etc

  8. to KM: refer to the interview of the UBS guy in leveraged finance – depending on the banks, levfin is part of structured finance, DCM or IB, and project finance is very much in line with leveraged finance, i.e. it has nothing to do with relationship (you have relationship managers for that) and it is also very quantitative – where it differs with IB is that you never pitch since you don’t sell ideas but financing, which companies actually need, and will seek you out for

    1. M&I - Nicole

      Thanks for your insights!

    2. Thanks for your feedback HK Banker! And now we have an article about Structured Finance !

  9. Though trading hours are good like from 6.30 am to 7 pm , in between those hours life is as good as hell and nerve racking.Billions of dollars are being risked and if ur manager can smell the money being lost , then its goodbye

  10. Very nice article! I hate to be one of the guys asking unrelated to the article questions, but I’ve been thinking about it for quite a while; what’s your opinion about Structured Finance and Project Finace (usually a sub-division of SF)? If you know anyone working in this field, I guess many people would be interested to learn how demanding it is to work there or getting in, what the work hours are like, if it is more relationship-driven like M&A etc.

    1. M&I - Nicole

      I don’t think it is as relationship driven as IB and I think it is a lot more “quantitative”, though I honestly don’t have in-depth insights on this sector. Readers might have better insights!

  11. I have a year’s part-time entrepreneurship experience while studying full-time in college. and then i interned at a boutique. Should i apply for analyst position or associate position? Thanks.

    1. M&I - Nicole

      Analyst position because you haven’t had any full time experience!

  12. Hey M&I,

    Great article, I enjoy the informative writing on all the topics. Keep it up!

    I would like to get your opinion of a college education and its value in relation to entrepreneurship.

    It would be interesting to see an article on college education in the future.

    Thanks

    1. Personally, I think college education is borderline useless if you want to be an entrepreneur (see: The Education of Millionaires). Formal education is only worth it if you want to follow traditional paths in life i.e. medicine, law, finance (but that last one may change eventually). And I say that after having gone to a top school and spending $200K+ on education – these days I barely use anything I learned in school, and most of its value was in some of the people I met there… but you can get that networking elsewhere.

  13. I am kind of in consulting, sick of finding my baggage mid night at airports and the small number on my salary check

  14. Hi,

    Great article. I have a few questions:

    1) If you were working on the sell-side at a BBB, within FX, would you be authorized to provide liquidity to your clients past the end of the ‘normal’ trading hours? If so, would you also be able to offset thoose principal transactions past the end of the ‘trading day’ later on that night?

    2) If you work as the above and finish working late on a given night, would your bosses mind if you came an hour or so late the next morning? (assuming you made money the night before).

    Thanks,

    1. M&I - Nicole

      I think it would depend on your boss and company policy. I’m not quite sure, perhaps readers could provide you their insights.

  15. I have a bit of dilemma, and hope everyone can chip in some thoughts.

    I met with a guy from a bulge bracket in late September. I don’t think I said anything wrong, though it’s pretty casual, and I didn’t nail every question he asked. He referred me over to his colleague later. I followed up with him after meeting his colleague. I sent him an email requesting another meet-up a week ago and he never got back to me – so I sent another one a couple of days ago.

    Is it possible that I didn’t make a good impression on him in the first place? – but why did he even bother to refer me if that’s the case?

    Is it because people tend to be super busy in December so my email just sank to the bottom?

    Should I call? Since I think if he’s busy, calling might annoy him..

    Comments are welcome! Thanks.

    1. He referred you, so he thinks you are competant. I once emailed a guy five times, not once did he reply back. Finally I picked up the phone, introduced myself said I had cooresponded with him via email blah blah blah. Long story short, he got me a first round interview. Sometimes you just have to say fuck it. I can relate three more istances also. Quit worrying and start pestering.

    2. Hard to say based on that. If he referred you to someone else, you probably made at least an OK impression. People are super busy in finance especially near year-end as they try to close deals, so it’s possible he missed it. I would call him to follow-up.

  16. Zeke,

    Great article. I am actually considering a jump to one of the fields you worked in and appreciate the insight. I currently work at a regional boutique investment bank focusing on technology on the west coast, but definitely want to get into entrepreneurship in the near future. After my analyst program I am considering going the “unconventional route” to prepare myself for starting my own business. That said, what do you think is the best way to go about this? I have considered working at a start-up for experience, working in management consulting to get more high-level experience, or working for a Google-of-the-world to learn about branding and how the internals of a large organization work. Any input would be greatly appreciated.

    1. If you want to start something on your own, definitely go to a start-up. Consulting and Google are both too high-level to be of much use in starting a company from scratch. Start-ups are all about finding product/market-fit and learning how sell and market (things they don’t teach you in school, or in consulting or at Google).

      1. That makes definite sense. Thank you for your input, Brian. Ironically you, and your site, are the ones to thank (blame) for getting me into investment banking in the first place, and now it’s giving me advice on where to exit. Thanks again, and keep up this fantastic resource.

    2. With startups, you might have 2 major options:
      1) work for another startup
      2) start your own startup

      #1 offers a lot more stability, especially if it’s a funded startup and you have a regular salary and opportunities to learn from people around you. This is a great place to start.

      Most people ultimately want to be in #2 – starting their own startup. But this requires a lot more responsibility and you should only pursue this route if you have a good backup plan: another job lined up, business school, or loads of cash.

      Two guys from Blackstone, for example, were able to live off of their bonus for several years while they failed over and over with their startup and with their pitches to VC. Luckily, after several years, they struck it big with Yipit. But they could only afford this risk because of the cushion of cash as well as the branding on their resume.

      Also, management consulting is also great. But even better than the job itself is the preparation for the case studies. I believe going through this preparation process is great for helping you think about which markets you can enter and how trends will evolve with time.

  17. Stephane Blake

    Hi mate,

    Do you know if it’s hard to move from IB to Sales & Trading? If so, will it be harder to do so after completing an MBA or a master’s degree?

    Thanks

    1. It’s possible but you should try to do it quickly because it gets harder the longer you wait, so do it before any further degrees. The reverse scenario (parts may be applicable): https://www.mergersandinquisitions.com/sales-trading-to-investment-banking/

    2. I’d agree with Brian on doing it earlier rather than later.

      Each desk is different in terms of cultural fit and credentials. For the most part, MBAs are not as common as they are in investment banking. If you have an MBA and everyone else does not, it won’t be a good cultural fit and they probably wouldn’t take you.

      A master’s degree is probably more relevant – especially for more quantitative oriented desks including derivatives desks. Again, best to network with contacts you may have within your bank to get a sense of what kinds of people are there and they’re looking for.

  18. Great article! Keep it up guys

      1. “I decided to leave early on in finance because I didn’t want to get too addicted to the money and then be afraid to start something later on.”

        Brian – reading the above made me feel that you live up to the saying which goes something like “in your life, the least you could do is be True to Yourself”

        You rock Sir! \m/

  19. Zeke,
    Great article, definitely shed some light on an important topic for me. However, if I may, I would like to get your opinion on the following matter. In the next 2 years I plan to attend a top MBA program to “redefine” myself (eng undergrad) and work for a consulting company out of Houston. In reality however, my passion has always been entrepreneurship, but I feel like a top mba plus a few years consulting experience would give me a tremendous skillset with which I will be able to manage a company successfully. What is your take on this? Yes it is the “longer” path, but I feel that it will increase my chance to succeed in any entrepreneurial risks I take, both financially and in terms of my mgmt skills.

    I would tremendously appreciate in comments on this as I dont really have anyone to bounce these ideas off of.

    1. Personally I don’t really think an MBA + consulting would let you experiment more if you want to start something on your own. You just get more debt and a regular paycheck from consulting, which reduces your incentive to go out and do something risky. You do learn some things about management from doing consulting, but most people tend to stay in consulting after the MBA because it gets harder and harder to leave. But opinions on this one will vary.

      1. Brian, how about MBA + consulting + contracting, this way you are easing your way into owning your business. It also keeps you connected with what it feels like to be an entrepreneur! As a bonus – add trading as a side hobby – in my opinion you don’t need to stay with big boys to learn profitable trading techniques.

        1. M&I - Nicole

          Yes you can do that too.

    2. Sam,

      As with anything in life, timing is the most important. It is true you may be more experienced and more capable of handling business risks post MBA with a few years of consulting experience. However, recognize that you may also be in a different stage of your life. If you have a family or have mortages you need to keep up with and need that steady flow of cash to sustain your lifestyle, you won’t be able to pursue an entrepreneurial endeavor without a few aches and pains along the way.

      But if you’ve saved up up plenty and don’t plan on any big expenses like a house or a family, you can certainly try it out at that stage of your life.

      Note that most people feel their 20s and early 30s are the best time to take a big risk. I’d say after a few years at a branded company is the best time to try something risky.

      If things don’t work out, you still have that branded company on your resume. However, if you’re on the fast track for a high finance job, doing something entrepreneurial will take you off track and it would be harder to continue on up if that’s what you want to do.

      Zeke

      1. Thanks so much to both of you for your responses.

        I guess I am in somewhat of an interesting situation: although I am only 24, I do have a wife and kid.

        So I guess my plan was to build a strong career that develops entrepreneurial skills to some extent and gives me a strong financial foundation with which I can “jump” from later if I choose to do so… and consulting seems like the best way to do it, with a good lifestyle as well.

        Out of curiosity, Brian, why do you say that it will be harder and harder to leave consulting?

        Zeke, I will be talking to you soon on GmatPill most likely :)

        thanks again guys.

        1. Harder to leave consulting because you get paid more and more as you move up… it’s still less than what you earn in finance, but it’s more than normal jobs. So you start to say, “Well, I COULD leave consulting but then I’d be giving up my salary which is 2-3x more than that of a normal job… and if I started something on my own, I would get paid nothing at first.” It’s not impossible and some consultants do leave anyway, but you do get more risk averse as you advance within an industry. I decided to leave early on in finance because I didn’t want to get too addicted to the money and then be afraid to start something later on.

        2. Sam – looking forward to it! Good luck!

Leave a Reply

Your email address will not be published. Required fields are marked *