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Starting a business typically feels risky. But Meghan Muntean, 29, who in 2011 founded ChickRX, a health company geared toward women, came to entrepreneurship with the knowledge that even big, long-standing companies don’t guarantee stability.
When Lehman Brothers crashed five years ago this September, Muntean, a graduate of Princeton University, was an entry-level employee in the analyst program in the bank’s investment management division. "The biggest lesson is that everything involves risk and can feel unstable," says Muntean, who had just returned from vacation the day of Lehman’s collapse to find an office where phones weren’t working and "everyone had this look of death on their face."
As a college senior, Muntean had doggedly pursued a job with the investment firm. Right after the Lehman meltdown, she was offered a job with Barclays, the British bank that scavenged some of Lehman’s assets and hired some of its staff. But seeing Lehman practically vanish bolstered her desire to try her hand at a start-up.
"I was watching the industry downsize, seeing layoffs, and pay scales decrease," she says. "There is so much risk even on the safe path, so you might as well be doing what you really love and are passionate about."
Meet the post-Lehman generation of young bankers. They fell victim to a once-in-a-century institutional failure just as they were supposed to be forging big, bright careers. Lehman’s demise altered many people’s paths, but in the eyes of some young erstwhile financiers, this reorientation hasn’t been such a bad thing.
A lot of friends thought I was totally insane for leaving the Street
Jared Dillian, 39, a trader at Lehman, where over a trillion dollars passed through his hands, turned down an offer at Barclays, where he says he could have continued making in the high six figures. Instead, he decided to pursue a writing career, something he'd dabbled in by writing trader’s commentary — notes for others in the business about the trades he was conducting.
The commentary landed in the inbox of Stephan Barr at Writer's House, who reached out to Dillian a few days after the Lehman crash. In 2011, Simon & Schuster published Dillian's book, Street Freak: A Memoir of Money and Madness, which chronicled his rise through the bank’s ranks and the brash, no-holds-barred culture of the high-octane trading floor.
The publication of his book made Dillian, who had about half a million dollars in Lehman stock when the bank was at its high, an anomaly among the people he knew at the bank. Many of his colleagues, he says, still work on Wall Street. "I would say that a lot of friends thought I was totally insane leaving the Street," says Dillian, who now lives in Myrtle Beach, S.C.
Today he's figured out how to combine writing and finance through a popular financial newsletter for traders called The Daily Dirtnap, which Dillian says generates enough income to live on. "I probably wouldn’t go back to Wall Street," he says. "The thing I took from the crash is that I got to figure out the thing I really like to do. Trading was super, super stressful. I don’t think I could handle that on a daily basis."
Wall Street is definitely a less attractive proposition today. It pays less, public opinion is down, and it’s hard to read about what a jerk you are all the time.
While Dillian and Muntean are earning far less than they did during their Lehman years, the promise of a big financial reward on Wall Street isn't there to tantalize them, perhaps making their decision to walk away a little easier.
"There is not that big carrot anymore," says Dillian. "Bonuses are smaller and many of them come in the form of very [long-term] deferred stock."
In other words, a young trader probably can't make millions of dollars right out of college anymore, something Muntean believes motivated many in her generation to seek financial industry jobs. "Now you are lucky if you are making a couple hundred thousand dollars," she says. "I think it was an anomaly that Wall Street did as well as it did. It was a bonanza."
Still, recent college and business school grads continue to swarm to Wall Street in large numbers because of the promise of a huge payday, although there are not as many jobs. According to a 2012 analysis of Labor Department data, in the last five years New York has shed 48,600 finance-sector jobs, a category that includes bankers, insurance agents, stockbrokers, employee-benefit counselors and real estate agents.
Perhaps the biggest change for many, beyond the tightened job market and the new regulations, is psychological. Surveying the scene today, Muntean says the romance of Wall Street has been shattered. The status jobs — those that the best and the brightest clamor for — appear no longer to be in finance but at technology companies and in the start-up space.
And some 20-somethings working in finance may have their eyes open for other opportunities. According to a 2012 study by PricewaterhouseCoopers LLP, 48 percent of employees in financial services born since 1980 reported at the time that they were looking for new jobs. Forty-two percent said they were open to offers, and 21 percent said they would prefer not to work in financial services because the reputation of the industry has declined so much.
"Wall Street is definitely a less attractive proposition today," says Dillian. "It pays less, public opinion is down, and it’s hard to read about what a jerk you are all the time."
Yes, I've had more adventures since the fall of Lehman but also more career instability. I don’t have the nest egg or stability Lehman would have provided.
But there's still a lot of money to be made on Wall Street compared to other industries, something David Abraham, 40, another former Lehmanite, points out. "Hundreds of thousands of dollars a year is still a good sum of money," says Abraham, who joined Lehman’s geopolitical risk team in 2007.
After the crash, he didn't get a life raft with Barclays. While the last five years have opened up a lot of interesting opportunities — including with Clearwater Initiatives, a nonprofit focused on providing clean water to conflict-affected areas of northern Uganda, where he was the CEO — Abraham says he does think about the financial trade-offs.
"My goal was to be at Lehman for five years. Yes, I've had more adventures since the fall of Lehman, but also more career instability. I don't have the nest egg or stability Lehman would have provided. I am on a tighter shoestring now," he says.
He’s now working on a book, The War Over the Periodic Table: Minor Metals, Major Conflicts at the Dawn of the Rare Metal Age, which will be published by Yale University Press.
Abraham says the LinkedIn profiles of his peers at Lehman — most of whom were around 35 in 2008, an age when many could have been managing directors —indicate that many are still working in finance.
"At that age, with a family, you are probably not going to want to start a new business or a career," he says.
In terms of his own career path, Abraham, unlike Dillian, says he doesn't rule out the possibility of going back to Wall Street, even though he concedes the industry lost its way. "I was not happy with some of the decisions Lehman made, but I was proud to have a job at Lehman."
It's probably bad to say because it [Lehman collapsing] was such a bad thing for the world. But it provided me with such a good opportunity.
A few years ago, Cherry Liang's prospects were not looking good. She was working at Lehman in 2008 doing risk management in public and municipal finance. Liang, a graduate of Baruch College, was hired by the Barclays team but promptly laid off in 2009.
Then she received a call from her former boss, who asked Liang, now 30, to join a team of about 300 people who were charged with liquidating Lehman. Their job was to figure out how to value all of the bank's outstanding transactions and reach settlements with those clients.
Just two years out of college, Liang was on the front line in the epilogue to the Lehman crash. "It was a really large portfolio," recalls Liang, who is now a first-year MBA student at MIT's Sloan School of Management. So the crash of Lehman, as it did for others, came with a silver lining for Liang — an unexpected way to land on her feet.
"It's probably bad to say because [Lehman's collapse] was such a bad thing for the world," Liang says. "But it provided me with such a good opportunity."