Millennial Investments — Careers
6 Jobs That Pay Over $1 Million
Here are six jobs that can pay you over $1 million a year.
One million dollars a year is $83K a month. The top 1% of American earners make $470K, so if you make $1 million, you’ll be in the top 0.1% of earners. If you grind hard enough to land these jobs, you’ll earn well over $1 million. We’re not going to talk about the obvious things like athletes, entertainers, and CEOs but regular career paths that anyone can take.
#6 Strategy Consulting Partners
Coming in at number six, we have strategy consulting partners. If you’ve seen some of the other articles and videos walking through the highest paying jobs out of college, you should be familiar with what consulting is. Consultants are business experts that are hired by companies to help them solve their problems. If a company is struggling to make sales or wants to figure out if they should make a new product, they hire consultants who dig into all of the data and do many analyses to find the best solution.
Top consulting firms are expensive, so only big companies can afford them. Almost every single fortune 500 company and governments from around the world have hired consultants. What makes consulting firms valuable is that they have the expertise to help in any industry. A lot of governments actually hired consultants to help deal with the COVID-19 pandemic. Consulting firms can make a ton of money using minimal resources and time. The firm might have a team of just a few fresh out of college analysts, two associates, a manager, and a director, so many 7–8 people total and get paid millions of dollars for a few months of work. That’s why consulting salaries are so high, and as you get more experienced and specialized in one area, your earning potential can go through the roof.
Partners at a consulting firm are the best of the best. Most of them joined consulting as soon as they graduated from college and have at least a decade of experience. If you want to become a partner, you need to absolutely grind and hustle, working 60–80 hours every week for a few years and building relationships with your clients. Because partners are proven to be great consultants, they are responsible for landing new clients and making deals. Their salaries are typically between $500–650K, but the real benefit of being a partner is that you get a piece of the firm’s profits every year, and to do that, they need to buy into the company. It’s basically like buying stock in a company. It’s just super exclusive. The buy-ins are different for each consulting firm and are different every year, but they’re a few hundred thousand dollars and can even be up to $1 million on the lower end.
Many partners have to take out a loan from their company just to get promoted to the role. But that million-dollar buy-in is well worth it because top consulting firms make billions of dollars, and depending on performance, a bonus can be upwards of $4 million. Most partners at top consulting firms average around $2.5 million every year, which is ridiculous.
#5 Law Firm Partners
In 5th place are law firm partners. This is the dream job for most people who join big law firms. The concept here is similar to consulting partners, but the job is way different. Law firms are set up in a very hierarchical manner. When someone first joins a firm out of law school, they come in as a junior associate. After two years, they can get promoted to a mid-level associate. After another 2–3 years, they will usually get promoted to a senior associate.
Senior associates at top law firms make a boatload of cash, generally averaging over $300,000. After the senior associate position, there are three more positions, junior partners, senior partners, and managing partners. That’s where big money comes in. Most law firms have just one managing partner. They’re basically the CEO, so we’re not going to talk about them. Let’s focus on junior and senior partners. Usually, it takes people 8–9 years after law school to reach the junior partner level and 10 to 15 years to reach the senior partner level. Partners are responsible for handling multiple law cases and managing teams of associates to work those cases, but like consulting, one of the main things partners do is bring in new clients. The more clients and cases they bring in, the more money they earn. They have to become a non-equity partner at some law firms first, which means they’ll just get paid a salary. But eventually, they’ll have to give the firm a few hundred thousand dollars to buy in to get a chunk of the firm’s profits, which would make up more than half of their pay. Law firms do an excellent job of keeping their partner compensation secret. We estimate average partners at top law firms make over $2 million.
#4 Managing Directors
Holding the #4 spot are managing directors (or MD for short) at investment banking firms. Investment banking offers some of the highest salaries for people fresh out of college. The biggest thing investments banks are known for is working with corporations to help them go public on the stock market, help companies issue debt like bonds, and manage their investments. The bank makes a percentage of every deal they make. Top investment banks do hundreds of billions of dollars worth of sales every year, so even if they get less than a percent of the total, they make a boatload of cash.
Managing directors are directly responsible for bringing in more money to the bank by winning deals. Most of their time is spent meeting with clients, so they’re not really involved in all of the typical day to day finance stuff. On average, it takes 16 years to become an MD, and it’s not easy, to say the least. People in the field have to work upwards of 80 hours a week, which really doesn’t get any better as they progress throughout their careers. The first step to becoming an MD is getting promoted to the vice president (or VP for short) level, and good performance as a VP isn’t nearly enough. In the business world, it’s someone’s connections that get them promoted, so they need to have many allies in the bank vouching for them. The more people someone knows, the higher the likelihood they’ll become an MD. They might think that once they become an MD, they can chill a little bit to take a break. After all, they’re close to the top of the food chain, but it’s still investment banking. MDs have really aggressive revenue quotas they have to hit, and many people only last in the role for 1–2 years because it’s just too difficult. That’s not to be negative; we just like to give you guys a real picture of what jobs are like because too many people over glorify these jobs. If you want this career path, you have to figure out if the struggle is worth it, and for many people, it is.
Managing directors aren’t partners with the bank, so they don’t have to buy-in to the firm. Instead, they’re paid a salary and a bonus based on how much revenue they brought into the bank. If an MD absolutely kills it and is bringing in hundreds of millions of dollars of deals, they’ll make a pretty penny. On average, the base salary for an MD is $400–600K plus a bonus. Because pay is based on performance, there’s an extensive range. Some MDs don’t hit $1 million, but at most top banks, if an MD earns less than $1 million, it means they’re doing poorly. They probably won’t keep their job long. Average MDs can make $1 million in bonuses alone, and top performers can earn well over $10 million. To put that into perspective, a top-performing MD could buy two Lamborghini Aventadors, a Rolls Royce Phantom, a luxury Manhattan condo, a charming house in the Hampton’s, and still have over $1 million left in the bank. But is dedicating your life to work and having almost no free time worth all that? That’s someone you’ll have to ask yourself.
#3 Private Equity Partners
Coming in 3rd place are private equity partners. Many people pivot from consulting and investment banking into private equity (of PE for short) because they can make a lot more money, which is absolutely absurd. Private equity is basically higher-stakes investing. Private equity firms will collect billions of dollars from rich people and corporations and then use the money to buy and sell businesses. They might buy a company for $500 million, pump it up with debt, raise revenue, and then sell it for $2 billion a few years later. To understand why private equity firms make so much money, you’ll need to know how PE firms structure deals. Most firms follow the 2 and 20 rule, which means they’ll charge a 2% management fee just for keeping an investor’s money, and then they’ll take 20% of the profits from any deal. To put that into perspective, the deal made $1.5 billion, and 20% of that is $300 million.
On top of that, the fund makes 2% on all the money they manage, and if we look at a top private equity firm like Blackstone, they manage over $184 billion. Two percent of that is $3.7 billion. Add in hundreds of deals these firms make every year with their base management fee, and it makes sense how they make billions of dollars. Many people don’t like private equity because they say firms don’t care too much about the actual companies they buy. All they want to do is milk it for as much cash as possible in as little time as possible. That’s not true all of the time, though, because each firm has a different approach. Some will buy a company, fire employees, and do other cost-reducing actions because that makes a company more valuable. But others actually help to organically grow a company. Although that usually takes more time.
Getting into private equity is pretty hard in the first place. Some firms hire people straight from college, but usually, someone only has a good shot if they go to a top business school. After they’ve proven themselves in another fast-paced business industry like consulting or investment banking, most people get in. A lot of PE firms want people to have an MBA before they promote them to higher positions. This is a big difference from investment banking because most investment banking partners just have bachelor’s degrees.
#2 Venture Capital Partners
At #2, we have venture capital partners (or VC partners for short). Think of venture capital like private equity’s cooler younger sibling. While private equity firms’ main goal is to buy and sell businesses, VCs focus on buying startup businesses with long-term potential. You’ll find that most people who’ve had success in the tech world dream of becoming venture capitalists because they’ll get to make a crazy amount of money off startups without having to do all of the backbreaking work. Venture capital doesn’t have a straightforward way of getting into the industry with a formal recruiting cycle. The key is to start networking with people in the industry quickly and have a background in investing. Venture capitalists have a similar fee structure to investment banks where they charge a management fee then take a percentage of profits. Most investment banks take 20% of profits from their investments. It is common for venture capitalists to take 25%-30% of profits because venture capital is so much more high stakes than investing in earlier-staged companies. As a partner at an established firm, someone can make a $1 million salary, and that’s just a small piece of what most venture capitalists make. Most of their pay will come from their bonus and carry. All in successful VCs can produce between $10-$20 million each year. And if they managed to find the next Instagram or Airbnb, they stand to make Billions with a capital B.
#1 Hedge Fund Managers
And finally, in the #1 spot, we have hedge fund managers. Hedge funds don’t have to do any of the complicated stuff VCs and investment banks do. They simply invest in stocks. Hedge funds are famous for creating billionaires. Right now, there are 25 hedge fund billionaires on the Forbes 400. Portfolio managers are responsible for developing and actively managing a client’s investments, and they’re paid based on their performance and how much money they work. If a portfolio manager is responsible for $100 million in assets, it’s common for them to get 1% of that or $1 million, plus if they outperformed most other managers at the firm, they would earn more. On average, senior managers make anywhere from $6–12 million dollars a year. Hedge fund managers who run the whole shop make hundreds of millions. Some even pull in over $1 Billion, also with a capital B.
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