The banks typically hire around the top 1/3 at Ivies, even higher these days given the economy. My friend, a 3.9 physics major at H/Y/P chose banking over research, and so did a lot of his similarly well-qualified classmates. Hard to turn down a job where your starting pay is about what a mid-career researcher with a PhD makes.
1. Your friend was taking a quant job, for which 3.9 and a physics major wouldn't make him overqualified.
2. He had a family connection to put a thumb on the scale and get him the most interesting projects. Banking is a pretty good deal if you have this. You still have to work 100-hour weeks, but after 2 years you can go whereever you want.
Assuming they are working 50 weeks a year.
50 * 100 = 5000 hours $125,000 / 5000 = $25/hour
Thats half what I make per hour.
Sure they might make more later on, but I'm not interested in giving up that much time for 1. something thats not my project and 2. for so little per hour
1) The $125,000 is a starting salary, which will go up substantially if the hire proves successful. There are lots of future earnings to consider when working in this type of position.
2) The psychological perception of the work and income. Does the person realize or care that he is working 50 hours a week @ $25/hour, or does the person care that he is making $125,000 annually? I am not a behavioral economist (IANABE?), but I'd have to imagine that this is a huge factor -- the salary vs. hourly mindset.
I believe its 100 hours a week, which frankly sounds absurd.
My comment is not ignoring either of your points since:
1. I state the salary will go up.
2. The point of my comment was to realize that making 125K is not much if you are working 100hr/week and have no time to enjoy it, thus a high salary might seem great but looking at it on an hourly basis can be useful etc.
In life, generally you can have more money or more time, rarely can you have both. I would rather have more time personally.
Some people may be very interested in time smoothing. That is spending time now, with the expectation of spending less time in the future because of present time invested. I think PG has talked about this in regards to startups. Work really hard for a concentrated number of years to reap large financial rewards and have the option of never working again.
Regarding the time/money trade off, that is, as you mention, a personal preference. I'd assume the type of person looking for a big law/finance/consulting job is the type of person who places much more weight on having lots of money and being part of the money culture, than enjoying downtime.