Now this is good inflation... Goldman to raise entry level analyst salaries to $110,000! You men and women, Just Do It!

Here is a headline from today's WSJ:

For those of us that have worked in the investment banking industry, the name Goldman Sachs often conjures up very strong feeling, both positive and negative. Haters will hate, but what is clear is that they are a gold standard of investment banking and that anyone who has the opportunity to work there (Goldman's interview process is notoriously time consuming and difficult), should hop on it for the simple reason that you will eventually be able to parlay that into something great a few years down the road if/when the time is right to make a move. 

On the one hand, this is not a surprise. Goldman announced Q2 profits of $5.49 billion (on revenues of $15.39 billion - this is a good gig if you can get it). This is coupled with very positive outlook statements given the visibility of deal flow, backlogs. Note that trading revenues are more volatile and less predictable. For this reason, raising salaries is not an issue for investment banks.

On the other hand, historically GS has been able to offer lower initial salaries, as they can always dangle the carrot of prestige and very high potential total compensation packages a few years down the line. So imagine my surprise when the article stated that they would now rank at or new the top of the entry salary scale. This is what is likely to be announced later this week:

• entry level analysts (think 22 year old college grads) would make $110,000 base salary;
• second year analysts would receive a raise to $125,000;
• entry level associates (think newly minted MBA students) would make $150,000 a year.

Now what do you get in exchange for that very handsome payment? Well firstly you will most likely live in New York (or some other major financial capital) which is obviously expensive. 95 hour workweeks will be the norm and much of the work will be relatively tedious.

That being said, I would wholeheartedly recommend anyone who has the opportunity to jump on this train to do so. Why?

1. You are only young once, and that is the time to give it your all when you are free from many of the familial responsibilities that will come with dogs and kids;
2. You will get a wonderful overview of multiple industries and get a chance to eventually decide which one floats your boat;
3. You will work with some of the best and brightest and learn a lot; 
4. If you have student loans or other debts, you will be able to lay down a stable financial foundation; and
5. You will be able to make a major step up either within the financial services industry, or across industries, or with a return to grad school.

If I had to give advice to young men and women thinking about (or hesitating) going into this industry, I would say it's a relatively easy choice. What doesn't kill you makes you stronger. Just do it!