Money Is Power (2024)

Welcome to your freshman year of college. Here's why you should major in finance.

Dear Students:

School is back in session, and you have had a few weeks to get used to your new routine. As you think about your next steps and what courses you might take in the future, I’d like to pitch you an idea: please consider a career in the investment industry.

I know, it sounds a little boring, and you probably associate the word “investment” with a bunch of finance bros, greedy fraudsters and all manner of unsavory characters from the movies. Between the Bernie Madoffs of the world, the “Wolf of Wall Street” tropes and the banking institutions at the heart of the 2008 financial crisis, the investment industry does indeed deserve your criticism.

But here is the thing you need to know: MONEY. IS. POWER. According to the 2022 Credit Suisse Global Wealth Report, there are about $450 trillion worth of investment assets globally. That money is bigger than governments, bigger than billionaires, bigger than any other entity on the planet trying to influence long-term changes in society, economics or climate.

And guess what that money does? It decides who gets rich and who stays poor. It decides who gets healthy and who stays sick. It decides what ideas or communities are investable now and in the future. It decides who gets elected and who controls states or governments. It decides who or what makes every decision that matters globally.

Most of that $450 trillion is overseen by institutional investment professionals like me. People like me, the investment allocators and the investment managers we hire, have an outsized influence over how this money is invested. If you want to change the world coming out of college, working in the investment industry is probably the MOST impactful thing you could ever choose to do.

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Not everyone in my seat looks like me or thinks like me, which means there is a huge opportunity for YOU to influence the future of all of these investment dollars. You can help shape the future globally by understanding that, as you learn how to become an investor and asset allocator, you are putting yourself closer to the ultimate decision-making seat. I need you to help influence others in the industry on your way to the top seats and to consider both financial returns and the real-world impact of our investment decisions. Your future as the critical decision-maker will shape what assets and structures remain investable or become obsolete.

Now, I understand that finance, economics and the investment profession can seem intimidating – I wrote a whole other newsletter about this very topic (Why I didn’t wear a skirt to work for 10 years)! But right now is a GREAT time to join me because many of the most annoying and persistent problems with the profession are on their way out. The pay gaps for women are shrinking, especially for new graduates. Many firms recognize that diverse leadership is imperative to their long term success and are making huge strides in creating more family-friendly cultures and the industry continues to prioritize diversity of thought on decision-making teams. Deloitte estimates that women in leadership in financial institutions will increase from 24% to 28% in the next eight years, which might not seem that much, but we know that for every woman promoted to the C Suite another three women are promoted to senior leadership. So I expect that you will be part of the generation that reaches gender parity. Don’t let anyone sell you a bunch of false choices as you consider a career in the investment industry.

Did I mention that jobs in the investment industry pay really well? Jobs in institutional investing are among the highest compensated, with the average person in finance making $31,000 more than the average median salary in the US each year (Forbes, 2023). As Jeanine Skowronski points out in her article, Is Investment Management a Good Career Path?, top financial managers can make more than 4.5 times the median annual pay for all professions. Lifetime earnings potential in the industry runs well into the millions and, for a select subset, can be over a billion dollars.

You also get to be a true lifelong learner in this career path. Trying to figure out the impact of economic, market, local and global events on your portfolio definitely gives you a ton to think about every single day. Then you get to see all sorts of new, weird, and interesting possible investments. Some are good and lots are bad; you’ll get to know some real characters in the process of making that decision.

Well, dear students, what do you say? Do you want to have a huge impact on the world while making plenty of money and keeping your brain engaged? If it sounds like a fit, please drop a note in the comments.

More importantly, readers, I ask that you each forward this along to all the college students and rising high school seniors in your network. Hopefully we can inspire and interest a few more of them to consider this under-discovered but incredibly important career path!