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In one of his more famous books -- Outliers: The Story of Success -- Malcolm Gladwell introduces the "10,000-hour-rule". I'm sure you've all heard of this one before, but just to rehash, the rule basically states that the key to being successful in any field is, in many ways, a function of practicing a specific task for roughly 10,000 hours.

This has become a popular mantra in today's society, from beginner-guitarists posting weekly videos of their playing as they hope to transition to virtuoso-level ability, to recording artists like Macklemore and his song Ten Thousand Hours.

Guess 10K hours paid off for him, but for the rest of us...

Meet Dan McLaughlin, someone who hadn't played 18 rounds of golf before embarking on a 10,000-hour plan. Right now he's sitting pretty with about 6,000 hours left, and has improved his game significantly, hoping eventually to win amateur events and make it to PGA-level events. Hearing about this 10K hour thing got me to thinking -- do Investment Banking Analysts hit that threshold after a two- or three-year Analyst stint?

If they do, shouldn't they be _really_ good at what they do -- one would hope, investment banking -- after that period of time? And if they are really good at investment banking (which roughly equates at the Analyst level to modeling, quickly performing research, performing under pressure, taking criticism, and absorbing a ton of info quickly), is an Analyst stint one of the quickest and most financially-rewarding ways to finish the 10,000-hour race to being an expert at something?

Let's do some quick math...

There are 52 weeks in the year, and an Analyst typically receives something like 2 weeks of paid vacation: 50 weeks of work per year.

An Analyst typically works 90 hours per week, which I don't believe is a particularly conservative estimate.

As per this post, and information from two trusted WSO members -- CompBanker and CaptK -- an Analyst "works" roughly 75-90% of the time spent in the office. CompBanker mentions he worked about 90% of the time in the office, excluding meals, so assuming 13 hours per day (91 hours on the week) and 1.5 hours per lunch & dinner combined, he "worked" about 10.35 hours per day, or 72.45 hours per week.

72.45 hours per week * 50 working weeks gets us to a magic number of ~3,600 hours per year. That's 7,200 hours for a typical Analyst stint and 10,800 hours if you stick around for a third year.

What does this mean? Probably not a whole lot. I can't say I'm a huge subscriber when it comes to the 10,000-hour-rule, but it _is_ something interesting to think about. Dan the golfer is giving up everything to become an expert at his craft, as are all of the YouTube hip-hop artists and wannabe-virtuoso guitarists. Not to mention the fact that if they _aren't_ giving up everything, it's taking them a hell of a lot longer than 3 years to get to 10,000.

You can get your 10,000-hour certificate, or at least come close to it, while earning a cushy salary and padding your resume pretty nicely. It's not a sport and it's not sexy like being an incredible pianist, but someone has to be an expert at finance, right?


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Comments (13)

  • SirTradesaLot's picture

    The reason I don't think this works is that unlike, let's say, playing the violin or programming a computer, being an analyst isn't doing the exact same thing for all of those hours. Some is spent in meetings, some on excel, some on formatting, some on whatever. I think it's fair to say that you should be really damn good at excel and PowerPoint though, even if you don't hit 10,000 hours in either of them.

    adapt or die:
    What would P.T. Barnum say about you?


  • HowardRoark's picture

    The 10,000 hour rule applies to only one particular skill. As an analyst, you're not only learning to be a beast in excel, but you're also working on your ability to sell a product, becoming better at reading/understanding/analyzing financial statements/projections, and also learning about the culture. It's hard to just be "good at finance" like you can be "good at guitar."

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  • kyleyboy's picture

    I think the 10 grand rule would only apply to IB for time spent learning things outside of work (there isn't really any) to go the extra mile. Expertise is a comparison, it is all relative to those around you. The time spent outside of work would push you over the edge to beat out the other guys you are working with. Not everyone can be experts because they work 10 thousand hours. There are only so many experts and they are the ones who are either smarter or have put more time in and often both

  • MFFL's picture

    I'll provide a unique response and say thank you for putting in the time to make this contribution. And for my contribution - I don't think it will make them an expert at "investment banking" because of the reasons listed above, but it should make them an expert at "being an analyst", which entails listening during meetings, excel, powerpoint, formatting, etc etc all listed above

    "Well that's even more than less than unhelpful." - Jack Sparrow

  • couchy's picture

    1) those 10,000 hours need to be spent effectively - it takes grit, challenging yourself on things you're uncomfortable with, for the hour to count (gladwell doesn't write this but similar books will bring it up)

    2) time outside of practice matters a well but is not accounted for in the 10,000 - a tiny little insight or aha! here and there while talking to friends or watching a movie... said another way, there is such thing as mental exhaustion and you need to rest...

    3) weak feedback mechanism - sports, music, math problems, all have quick feedback mechanisms - when it comes to getting a deal right, timing the market, investing etc.. it can take well over a year before you get your answer...

    so yes, you get good at being an IB analyst, not a banker..

  • Banker88's picture

    Better question, is who the fuck would want to be that good at investment banking? Trading or investing maybe, but banking is not worth that time investment.

  • dazedmonk's picture

    You're massively overestimating the time most IBers spend doing actual work as to wasting time. Also, if you spread comps for 10,000 hours you will indeed be a comp spreading beast, but not necessarily an IBanking beast.

    Overall, 10K hours is also arbitrary bullshit - though I do admire the emphasis on practice and determination. Just focus as much as you can on what you hope to accomplish, and you will get as much as your focus deserves

  • greengohome's picture

    And what you get, in fact, is that 2nd year analysts, at least in IB or MBB consulting, are incredibly good at doing the kind of menial BS that we do in Excel and Powerpoint; in fact, head an shoulders above the competition in more "normal jobs"

  • LBT's picture

    My reaction to the "10,000 hours", is there must be more efficient ways of learning and mastering a skill. I do like the notion of persistence, but I think it is one piece of the equation and one should also incorporate efficiency. If it takes one 10,000 hours to be really good at something, then the method is probably not ideal or it's not worth doing. I also don't believe it applies to investment banking because it isn't categorically a skill. Maybe comps or negotiation could be broken out, but not the whole occupation at any title level. At the analyst level, it isn't continuous work so although it was an interesting notion, especially if you subscribe to "10,000" hours, I don't believe it applies.

  • cibo's picture

    I never read the book but from what i've seen in life, there's exponential time demands for each level of mastery and most of the gains are in the first 2,000 for 80% of the benefit. Maybe not master but more than skilled enough to hang your hat on. From there, each additional hour gets less benefit and then to get the last 20% of mastery, you will probably have to be putting in the other 8,000 hours.

    I've done muay time for like over 10 years, most of the quickest gains were in the first 2-3 years. After that, the last 7-8 years have been about refining that shit to perfection. Very miniscule tweaks that only another master would notice, e.g. are your toes twisting at the right height during a punch or am I balancing my weight correctly while I'm kneeing from the clench? Even then, I feel my rate of new learning in this area has slowed to nearly nothing.

    I really don't see the need to go beyond pretty good in most cases. So it's probably not really worth it to climb that wall to mastery, unless you have a real driving desire for perfection or just enjoy doing it regardless.

  • mdk6c's picture

    Malcolm Gladwell's books belong in the self-help section

  • In reply to cibo
    pplstuff's picture

    from what i've seen in life, there's exponential time demands for each level of mastery and most of the gains are in the first 2,000 for 80% of the benefit. Maybe not master but more than skilled enough to hang your hat on.

    This is exactly what I thought. I don't want to be an expert, just good enough to not look like a fool. Gladwell should've written about when marginal utility for a given activity begins increasing at an decreasing rate.

    Side note: I own the book and it's an alright read (though, I recommend Gladwell's The Tipping Point first).

    I'll do what I can to help ya'll. But, the game's out there, and it's play or get played.

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