Is Banking Worth The Time?
Many users on WSO shoot for investment banking because of the large salaries and even more massive bonuses achieved by finance’s best and brightest. It is not hard to understand why banking is such an enticing profession for those of us who are looking to bank as quickly as possible. These analysts endure punishing hours for a paycheck that can be near minimum wage on an hourly basis. After a couple of years, most analysts will attend a prestigious MBA program and drop down several hundred thousand in tuition and lost wages/opportunity cost. Is this really the best use of our time?
I am trying to find out why more monkeys aren’t pursuing opportunities to run their own businesses, whether it is a tech startup or a small local business. As many of us know, the wealthiest Americans are those who have at some point run their own business, and many, never even graduated from college.
Here is a scenario. After graduating from undergraduate school, work a well-paying job (not compared to investment banking however) for 40-50 hours a week and use that 50 additional hours you would be spending in Excel and PowerPoint to start something you actually have equity in. You should have enough money to live comfortably and use that capital to start your business or leverage your income to get loans.
I know not everyone goes into investment banking JUST for the money. Many want to grind themselves to a pulp for a few years in order to exit to an industry such as private equity. Most see investment banking as the perfect platform to beginning your PE career. However, if you started your own successful business, you could very well use that experience as a platform to work in private equity.
Do you monkeys see investment banking as your golden ticket or just too scared to start a venture on the side? I am interested in hearing your thoughts.







Comments
These types of threads come
These types of threads come up all the time anymore
Are you familiar with the concept of risk aversion???
Investment banking is one of the safest ways to become a wealthy American. All you do is play by the rules, continue to advance, and eventually you're 50 and you're an MD or a managing partner at a PE or a CFO at a company.
Plus if you want to start your cheesy little business what's wrong with waiting until you've done a few years in a real job so you have something to fall back on and have some actual business knowledge.
valuationGURU: Do you monkeys
Do you monkeys see investment banking as your golden ticket or just too scared to start a venture on the side? I am interested in hearing your thoughts.
I was too scared to start a venture. (I don't believe I could do a successful venture on the side. It'd be all-encompassing if it were to be successful.)
Of course, now I feel quite differently... but I needed those early years of grinding to get me to this point.
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adapt or die: Investment
Investment banking is one of the safest ways to become a wealthy American. All you do is play by the rules, continue to advance, and eventually you're 50 and you're an MD or a managing partner at a PE or a CFO at a company.
Pretty sure you can do this in several different fields.
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valuationGURU: adapt or
Investment banking is one of the safest ways to become a wealthy American. All you do is play by the rules, continue to advance, and eventually you're 50 and you're an MD or a managing partner at a PE or a CFO at a company.
Pretty sure you can do this in several different fields.
Pretty sure you're still going to be busting your ass hours wise in big law or medicine also... not too many other routes are on that level of safe career path to become wealthy
All my friends who have done
All my friends who have done their own startups work 80-100 hour weeks on them . And it's FAR from guaranteed that you'll come out the end with any money at all. If you really want to play the odds , you'd have to take 3-4 swings before you finally land one.
So yeah , people are partially afraid of risk , partially afraid of the long hours under EXTREMELY high stress . (Nothing teaches you stress till you invest 80% of your net worth in a venture) , and the very real prospect of walking away from it with nothing at all. It takes a special person to get through the 2-3 unsuccessful ventures , and not lose faith till he/she lands a successful one.
You could say the same thing
You could say the same thing about College
Fear is the greatest motivator. Motivation is what it takes to find profit.
Banking is the worth the
Banking is the worth the time. Most people who go into banking are not entrepreneurial types, and for what it is you are paid very well. I wouldn't go as far as to say your hourly wage is minimum wage but at the analyst level closer to what a plumber makes. Also, going into banking is viewed as the perfect training ground for a multitude of other finance gigs. If you go into a good firm and leave you can pretty much write your own ticket for two - three years of commitment.
'We're bigger than U.S. Steel"
GS: All my friends who have
All my friends who have done their own startups work 80-100 hour weeks on them . And it's FAR from guaranteed that you'll come out the end with any money at all. If you really want to play the odds , you'd have to take 3-4 swings before you finally land one.
And even then, "landing one" might not be as much money as you think. I remember an interview with some silicon valley veteran in which he remarked that among 100 or so friends of his who have started new companies, even if several of them were profitable, only maybe 2 or 3 of them made more than $2 or $3m off the whole ordeal. After all the blood, sweat, and tears it just doesn't sound like the odds are too great in the tech business.
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I think some people might go
I think some people might go to investment banking because it gives some industry knowledge, and of course in order to invest or open your own venture you need capital and investment banking is one of the best ways to earn money and then make your money work for you.
I want to get into IB because
I want to get into IB because I believe being a part of the buying/selling/turning-around or restructuring of companies is invaluable experience if you someday want to run one. That kind of experience makes future fire drills somewhat comparable to a situation from the past since you get to see so much "action" in banking.
Now if only I could get that interview...
What about opening a local
What about opening a local small business. This could potentially provide several hundered thousand an income a year. Potentially more than you could make in banking and either less hours, or at the very least more enjoyable hours.
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prospie: tech business I
tech business
I think that far too many people, especially on this board, equate "start your own business" with "tech startup aka design a website (like this one) or gizmo/feature/product that will be aquired by faceGroupFlix". Truth is, there are a ton of opportunities outside of tech.
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UFOinsider: prospie: tech
tech business
I think that far too many people, especially on this board, equate "start your own business" with "tech startup aka design a website (like this one) or gizmo/feature/product that will be aquired by faceGroupFlix". Truth is, there are a ton of opportunities outside of tech.
Hit the nail on the head!
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depends really what you would
depends really what you would actually do with the extra time.
honestly, i work about 50 hours a week and spend the rest of my time hanging out or jaggin' off. i think a lot of people are undisciplined like me and would fare well being forced to work the i-banking hours.
Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?
UFOinsider: prospie: tech
tech business
I think that far too many people, especially on this board, equate "start your own business" with "tech startup aka design a website (like this one) or gizmo/feature/product that will be aquired by faceGroupFlix". Truth is, there are a ton of opportunities outside of tech.
Totally agree, and that is one reason I'm avoiding that industry. He did use the term "startup," though, and he was talking about a high likelihood of failure while working 80-100 hr weeks. To me, this sounds like the tech industry. But you're right, it could be a hundred other things.
One point I think people should remember, above all, is that a startup is something that scales. I remember hearing a woman in IT consulting who was really proud of having ventured out on her own and kept using the word "entrepreneurship." Is hanging out your own shingle and charging a fee for your hours worked on the service you provide really all that "entrepreneurial"? I don't see that as being very far out on the risk/reward curve.
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valuationGURU: UFOinsider:
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Serjik91 had it right when he
I was taught that the human brain was the crowning glory of evolution so far, but I think it's a very poor scheme for survival.
The other reality that most
valuationGURU: What about
I don't understand this
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Babyj18777: valuationGURU:
they say years of
And I think it's gonna be a long, long, time
Going Concern: they say years
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bankerella: Going
And I think it's gonna be a long, long, time
I can make a few comments on
prospie: UFOinsider: pros
No, it's not.
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Going Concern: bankerella:
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Going
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I'm working full-time on a
prospie: UFOinsider: pros
GS: That's not something a
bankerella: Going
80% of life is just showing up
-Woody Allen-
Some thoughts in no
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80% of life is just showing up
-Woody Allen-
UFOinsider: slotmouth: If
UFOinsider: slotmouth: If
Babyj18777: UFOinsider: s
GS: Babyj18777: UFOinside
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Don't fail.
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I'll respond to this. Yes, a
firstworldthird: we've sort
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80% of life is just showing up
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Unless you have an