Cutting through all of the nonsense about challenging and rewarding work, there’s only one driving reason why people work in the financial industry — because of the above-average pay. As a recent The New York Times graph highlighted, workers in the securities industry in New York City make more than five times the average of the private sector, and that’s a substantial incentive to say the least.

First, Let’s Get the Definitions Straight

It’s not hard to create a very broad definition of a career in finance. After all, you could argue that working as a CFO or in the finance department of a major Fortune 500 corporation is a career in finance. Likewise, teaching financial theory or economy theory at a university could also be consided a career in finance.

I am not referring to those positions in this article. It is indeed true that being the CFO of a large corporation can be quite lucrative — what with multimillion-dollar pay packages, options and often a direct line to a CEO position later on. Likewise, academia pays better than many people realize, with professors at top schools earning six-figure salaries and reaping the benefits of consulting or part-time work that they get due, in part, to the name value of the university at which they teach.

Banking – Not as Demanding, but not as Lucrative

There’s a reason that soon-to-be-minted MBAs largely crowd around the tables of Wall Street firms at job fairs and not those of commercial banks. While the CEOs, CFOs and executive vice presidents of major banks like U.S. Bancorp (NYSE:USB ) and Wells Fargo (NYSE:WFC ) are indeed handsomely compensated, it takes a long time to work one’s way into those positions and there are not many of them.

Instead, a large number of the available jobs in commercial/retail banking run along the lines of branch manager or loan officer. Bank branch managers pull an average salary (including bonuses, profit sharing and the like) of about $51,000 a year, according to PayScale, with the range stretching as high as $77,000. By comparison, loan officers can make more ($80,000 or more), but the bottom of the scale is lower as many loan officers start off with more modest pay packages.

While these pay packages don’t sound great compared to the six- and seven-figure paychecks of Wall Street workers, a little perspective is in order. By and large, becoming a bank branch manager or loan officer does not require an MBA (though a four-year degree is commonly a prerequisite). Likewise, the hours are regular, the travel is minimal and the day-to-day pressure is much less intense. In terms of attainability, these jobs score well.

Wall Street – The Back Office

Wall Street workers can generally be classified into three groups — those who largely work behind the scenes to keep the operation running (including compliance officers, IT professionals, managers and the like), those who actively provide financial services on a commission basis and those who are paid on more of a salary plus bonus structure.

Make no mistake, the back offices of Wall Street do not pay as well as trading, analyzing or managing money. Compliance officers and IT managers can easily make anywhere from $70,000 into the low six figures, again, often without top-flight MBAs, but these are jobs that require years of experience. The hours are generally not as good as in the non-Wall Street private sector and the pressure can be intense (pity the poor IT professional if a key trading system goes down).

Wall Street — The Commission-Earners

When it comes to Wall Street professionals paid on commission, the range of potential compensation is truly enormous. In many cases there is an element of truth to the pitches that recruiters/hiring managers will make to candidates — the earnings potential is limited only by ability and willingness to work.

The largest group of commission-earners on Wall Street is stock brokers. A good broker with a high-quality contact list at a solid firm can easily earn over $100,000 a year (and sometimes into the millions of dollars), in a job where the broker pretty much decides the hours that he or she will work. What’s more, the entry criteria are pretty basic — brokers are generally expected to have graduated from a four-year college (and they must pass licensing exams), but this is definitely a job where your on-the-job performance is vastly more important than your resume and it’s not often too hard to find a place that will give a newcomer a chance.

But there’s a catch. Although brokerages will often help new brokers by giving them starter accounts and contact lists, and paying them a salary at first, that salary is deducted from commissions and there are no guarantees of success. While those brokers who can combine excellent marketing skills with solid financial advice can earn impressive sums, brokers who can’t do both (or either) may find themselves out of work in a month or two, or even forced to pay back the salary that the brokerage advanced to them if they didn’t earn enough in commissions.

Wall Street — The Salary Plus Bonus Brigade

While a good broker can make an impressive amount of money, most of the biggest earners on Wall Street come from the ranks of analysts, sales reps, traders and fund managers. In this category are those ultra-earners who can bring home millions (or even billions) in the fattest of the good years.

A common theme across these jobs is that the annual bonuses make up a large (if not commanding) proportion of a total year’s compensation. An annual salary of $50,000 to $100,000 (or more) is hardly starvation wages, but bonuses for sell-side analysts, sales reps and traders can go into the seven figures. Likewise, buy-side managers (especially those who run hedge funds) can make millions in performance-linked bonuses and millions more in carried interest in the fund.

When it comes down to it, sell-side junior analysts often earn between $50,000 and $100,000 (and more at larger firms), while the senior analysts often routinely take home $200,000 or more. Buy-side analysts generally make less overall, but tend to have less year-to-year variability. Traders and sales reps can make more — closer to $200,000 — but their base salaries are often smaller, they can see significant annual variability and they are among the first employees to be fired when times get tough or performance isn’t up to snuff.

The Bottom Line

While Wall Street workers can indeed take home massive pay packages, there are no free lunches. Wall Street’s highest-paid workers often had to prove themselves by getting into (and through) top-flight universities and MBA programs. and then proving themselves by working ridiculous hours under demanding conditions. What’s more, today’s hero is tomorrow’s zero — fat salaries (and the jobs themselves) can disappear in a flash if the next year’s performance is poor. In addition, there are only a few places in the world where these workers can work and live, they are expected to dress a certain way and the costs of playing the game can be high in both financial and personal terms.