Author Topic: Financial Badassity in Sales vs. Engineering/Technical Positions  (Read 10883 times)

SAP5243

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Financial Badassity in Sales vs. Engineering/Technical Positions
« on: November 22, 2013, 11:30:39 PM »
I heard a VERY interesting debate during work today in the lunch room that got quite heated near the end.  The subject started with a simple question, "Why do the salesman make twice as much as the engineers?"  The salesman argued that a business does not start until a sale is made, while the engineer didn't quite have the smooth talking to defend himself adequately.  I personally don't agree with the salesman, because a product has to be made first (i.e. the engineer's job) or the salesman has nothing to sell.  What followed was a vicious argument that I would say the salesman actually won.  I am in sales ops/tech support, so I'm kind of stuck in the middle here and not fully entitled to an opinion on the subject, so I thought I'd ask you MMM'rs your opinion. 

For those of you who were in sales or engineering (or both), which do you think ensures the highest level of financial freedom?  And for those of you who were in sales, how many of you were one of the top performers and how hard/easy was it to consistently rake in the cash?  If this seems like an insensitive question, I apologize.  I'm a young 22-year old who does not yet know his specific desired path and would like to get all the insight he can!

LRS

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #1 on: November 23, 2013, 04:15:01 AM »
Wait - salesmen make more money than engineers?

How do I get a job in sales?

chasesfish

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #2 on: November 23, 2013, 05:57:13 AM »
I'm in sales and make far more than a lot of engineers (and my wife with a dr's degree).

Its very basic, in sales you get paid a % of the revenue you bring in or a % of the gross profit (amount you sell the item for less the expenses to manufacture that item).  You need to generally be in higher end, business to business sales to do better than engineers. 

Oh, my engineering friends were all happy when their starting salaries were almost double mine out of school.  10 years later, we don't talk about that stuff.

lentilman

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #3 on: November 23, 2013, 05:58:26 AM »
In my experience, sales people are more focused on getting money (offense) and technical folk are more interested in optimizing expenses (defense). 

Also from my experience (and a wild generalization) - when you see an old salesman working it's because he needs the money but when you see an old R&D person working it's because he is doing it as a passion. 

SnackDog

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #4 on: November 23, 2013, 06:04:26 AM »
Engineering and all positions which do nothing more than "specify" have limited income. Sales is the path to potentially unlimited income. Engineers may be well paid, and I know many who earn $500,000/yr but sales is unlimited and can lead to millions per year. People in sales tend to have social skills which the specifiers lack, thus their preferred role interacting with computers, calculators, etc.

chasesfish

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #5 on: November 23, 2013, 06:17:55 AM »
Here are some more perspectives from a "sales guy"

Regarding the path to FI, engineering my have a slight leg up because of the higher income in the early years.  I think it took me 6-7 years to start crossing the pay of my engineering buddies.   I have some solid savings habits, but will be a year or two behind on hitting the financial independence dates.  I've been working for 10 years but only significantly out earning an engineer over my past three.

I think this is contributed to two factors:

1) Even if I have the same lifetime earnings 12 years into working as the engineer does, taxes probably take a more significant bite out of my lifetime earnings since the rates go up dramatically and you loose deductions and tax shelters (roth ira) when you earn a high income in a year.

2) You loose the compounding effect of those early savings.  I am sure my engineering friends making 50,000 ten years ago to start saved more than I did making 34,000.

Regarding the "older" sales guy working - Some of the perception is true, but you have to also consider that sales can become a lot easier each year and the income generally keeps going up, especially if you're in a business where you are making recurring sales to the same customers.

Its hard to give up a job where the people you're interacting every day with customers who are generally your friends or acquaintances (because over 20-30 years you naturally migrate to interacting with people you like), have a lot of freedom in your job because you produce revenue for the company, have a nice client entertainment budget, and make in excess of six figures for not working *that* hard.   This is why you almost never see older financial advisers or insurance agents retire.  They can take almost as much vacation as they want and still keep their income. 

ender

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #6 on: November 23, 2013, 08:17:33 AM »
I would think an engineer doing any sort of management track could keep on pace for quite some time with a salesperson.

If you are heading the MMM route then lowering the overall number of years working means this probably nets you the most money the fastest?

idk. I make a good income as an engineer and if I end up taking a few promotions will probably hit $100k range in my 20s pretty easily which I'd suspect is hard for a salesperson to overcome even if they end up at $150k/year in their mid thirties.

iamlindoro

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #7 on: November 23, 2013, 09:41:36 AM »
idk. I make a good income as an engineer and if I end up taking a few promotions will probably hit $100k range in my 20s pretty easily which I'd suspect is hard for a salesperson to overcome even if they end up at $150k/year in their mid thirties.

I'm in engineering, but I think you may be drastically underestimating the amount that salespeople make, at least in tech sales.  $150K would be positively entry-level in enterprise software and hardware.  Lots and lots of guys clear over a million a year (particularly in big data, storage sales, etc.).

(Admittedly, this is from my own experience in the SF Bay Area)

chasesfish

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #8 on: November 23, 2013, 09:51:16 AM »
There's really a lot of variables:

Engineers start with higher salaries that grow decently over time.

Sales start with low salaries and a narrow pyramid to the top.  However, the very top of the profession can be paid very well because its a % of revenue.  Investment bankers are in the sales business, they sell companies and earn 7 figure fees.  Unfortunately they have to kill themselves for 10 years on the hope to make it to the bigger side of that business.   IT sales can make huge money, as can the highest end of real estate sales.  The highest end of sales also requires some good technical skills.

The question for anyone is what career suits them better (selling your technical skills as an engineer, or selling your social and technical skills in sales) and how quickly they can get up the curve.  I've seen engineers making 7 figures, but they started their own firm and operate like a law firm would (fair salaries then massive distributions when the company does well).  That however is part engineering skill, part entrepreneurial risk, and partly the sales ability of the engineering partners to bring in new customers.

My chosen sales route had a pretty quick curve up, but it tops out similar to what an engineer experiences.  Its just a little steeper curve up on the income scale and a little higher upper limit when it flattens out. 

SAP5243

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #9 on: November 23, 2013, 11:00:50 AM »
My chosen sales route had a pretty quick curve up, but it tops out similar to what an engineer experiences.  Its just a little steeper curve up on the income scale and a little higher upper limit when it flattens out.

Chasesfish what sales industry are you in?  It's looking like tech sales is the way to go, and seeing how I'm already in tech that could potentially be a smoother transition down the line. 

Tell me though, how often do sales men/women actually make it to the top or to a decent living?  I'd imagine that turnover is extremely high and most people don't see anywhere close to 6 figures or a consistent income.  It seems very unstable, competitive, and basically a dog eat dog world where you compete against your own peers and coworkers.

chasesfish

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #10 on: November 23, 2013, 02:59:50 PM »
I'm in old fashion banking, basically selling money and fee based services to businesses.

The other good thing about sales, you'll know if its going to work out for you in the first couple of years, if not, you can always fall back on your technical skills.  There are plenty of banking jobs I can do now that'd involve a small pay cut but still put the skills I learned to goo duse. 

SAP5243

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Re: Financial Badassity in Sales vs. Engineering/Technical Positions
« Reply #11 on: November 24, 2013, 06:02:23 PM »
Great point!  Looks like tech sales might be a good fit for me, and it's perfect because in about a year my company's sales team will be expanding.  I can take this time to learn the business and products a little more and then move to sales if I feel comfortable enough.