It was recently noted by a commenter that I haven't done much on this board besides fight about politics for quite some time. The truth is, as one of the older posters still around, I'd given most all advice that I could think of as I rose through the IB ranks. However, this year I left investment banking to join a sponsor-backed portfolio company and thought I'd check back in here to share a few reflections after a decade in investment banking for the younger monkeys to consider.
Yes, it was worth it. With one major caveat.
This is the $750 question (you didn't expect me to avoid all politics references, did you?!). I can confidently say that entering and staying in IB was worth it for me. I got to travel the world, sit in with F500 executives, work on interesting transactions, and make significant money along the way that allowed me to experience life to the fullest while setting my family up well for the foreseeable future. The highly anticipated "exit ops" were interesting and plentiful for me, even in a depressed Covid job market.
However, I never in 10 years worked in a sweatshop, and my regular hours were far closer to 60 than 100. I only recall pulling 6 true all-nighters in 10 years and rarely spent a weekend night in the office. Part of this was luck (and sometimes inconsistent deal flow) at the shops/offices I worked, part of it was by design (I passed on approaches from "better" banks for bigger bonuses, knowing I'd be signing away my limited free time). I worked til midnight during the weeks throughout my 20s and never joined a Tuesday softball league or Thursday night trivia, but rarely missed the big events that were important to me (i.e. weddings, bachelor parties, family holidays, ski trips). I considered that a fair tradeoff, and made all of the warped work/life warped balance worth it. Had I missed out on the important things (like I concede so many of you have to do), I don't think I could justify ten years in the investment banking industry, no matter the size of the paycheck.
I stayed in IB the first five years for the experience, and the last five for the paycheck
Pretty self explanatory, but the learning curve flattens out far quicker than you'd imagine. I always worked in standard vanilla sell-side shops, so most transactions looked the same. Once I hit VP, there was very little to learn from each new transaction, and I was on a glide path to a glorified high-paying sales gig. Each bonus season, I had fewer reasons to stick around for another 12 months, but the bonuses kept getting bigger and the hours lighter. A good problem to have, no doubt, but at some point, I knew I'd have to jump off the merry-go-round, because I was far too young to "ride it out".
Golden handcuffs are real, and hit a lot sooner than you'd expect
Usually you hear about the MD who can't leave banking because they have to pay for three mortgages and four private school tuitions (and I've seen that story play out plenty of times). What I'm talking about is the 25-year old who is already making more money than they thought they'd ever see in their lifetime. I passed up a lot of interesting opportunities simply because I couldn't justify rolling the dice and taking a 75% pay cut at a young age. Had I been making $50k, I'd gladly swap that out for a more interesting $50k job, and perhaps I would have found my passion or rose to greater heights in another field. You can count on one hand the number of jobs that offer a 25-year old $250k outside of banking, and it's really hard to walk away from that, no matter how much equity your friend's startup promises you.
Live within your means and always prepare for a life outside banking
On a related note, save your money. I have two watches - one cost $200 and the other was $10. My nicest car was under $30k. I get far more joy knowing I have enough savings to last 10+ years without working, than I ever got from buying bottle service. A career in banking is highly volatile especially as you ascend the ranks, and you always need to prepare to take that big paycut if you ever leave (or get kicked out of) the industry.
Prestige is an empty pursuit, but I understand the allure
I was that college kid who wanted Goldman on my business card like everyone else here. Never happened for me, and I quickly learned that all that stuff wears off quickly. Prestige is something employers sell you to underpay and/or overwork you. It carries no value, and the sooner you discard that from your equation, the more clarity you'll find when making those big career decisions.
Drop the ego as soon as possible
No one cares you're a banker. You're a glorified Excel/Powerpoint monkey, then a salesman going hat in hand begging for your next mandate. Most of your friends think it's pathetic you work so many hours. And truthfully, most of my friends outside of IB were happier than I was. The difference now is I host them at my lakehouse. Who cares? We both get a lakehouse weekend out of it, and theirs is free of charge.
You only live your twenties once
Tying in a lot of the points above - a career in banking is all about delayed gratitude. Work 80 hours weeks in your 20s for that cushy buyside gig or 7 figure C-suite job in the second half of your career. And that is a tried and true path! But I had more fun in my 20s at $1 beer night than I could ever have now with 7 figures in the bank. I'm settled down with a family, and life is great! But it's a different kind of great. That period in your life to live carefree on the weekends, jetting around the country, skiing, golfing, etc. only happens once. You wait to do that as a single guy in your 40s, and you're the creepy rich guy in the bar. Find a balance. Set your limits. Ensure you have something to show for your 20s besides a bank account and work stories.
Learn and practice empathy
If there's one thing that troubles me observing WSO over the years, it's the seemingly lack of empathy conveyed by many posters. Many of you grew up in extreme or at least above-average wealth. Many of you are white males, that yes, still have an enormous amount of privilege, even in 2020. Don't feel bad about that, but be grateful for it. The fact that all of you even found this website puts you in the .01% of the workforce who can expect to live a pretty prosperous and comfortable life. A 22-year old who gets a donut for a bonus will still be in the 97th percentile of income earners for their age with just their base salary.
Have empathy for those who aren't in the same position as you. Yeah, you worked hard. So do billions across the world. You also fell into a hell of a lot of luck along the way. I still don't know how I landed my first IB job - I was in the second round interview before I even knew what role I was interviewing for, and I have no recollection of ever applying to that firm. I didn't even know of investment banking until I caught my senior year roommate browsing Wall Street Oasis and asked a few questions. Internalize how much good fortune played into your story, and you might look at our world's issues a bit differently with more compassion.
Take care WSO! I've had a rocky relationship with the Trump crowd on here the last few years, but I will always be grateful for the education and guidance this website provided earlier in my career. Patrick and team have built a great resource, and you all are lucky to find such a great career resource at your fingertips.
Would also note that the biggest part of that luck is having been born in a country that still respects the free enerprise system. It's up to us to pass on that luck to the next generation.
Unfortunately, the reason that billions around the world work hard for nothing has everything to do with bad economic policies which they are unlucky enough to be born under.
What a comedicly bad take on the source of inequality. Billions around the world work hard for nothing because their countries were raped by the western world for their natural resources, material wealth, and labor over the period of hundreds of years, not because they "don't respect free enerprise". Hard for a kid to get that investment banking summer analyst offer when their country has been in a constant state of war for two decades due to the US randomly dropping in and destabilizing an entire sub-continent.
Sure, colonialism initially screwed a lot of these countries. However, at a certain point, you can't blame colonialism from 200 years ago for bad policies instituted by these governments yesterday. For example, Spain is not responsible in any way for the terrible policies instituted by the Venezuelan government in the past few decades. It is the Venezuelan government's fault for destroying its own country.
The problem with a lot of these countries is not the West robbing them. It is the fact that many of these countries are organized as kleptocracies where a small group of elites rob their own people and keep them poor.
EDIT: Seems like a lot of people are confused by my comments here. Check out this short Youtube video which goes over a lot of the disasterous policies implemented by many African nations which had nothing to do with colonialism. Lots of the same bad ideas were tried in South America and continue to be tried in places like Venezuela.
Agree that having a free market system and entrepreneurial culture that rewards risk-taking and innovation is a big factor for US wealth, but it’s a huge stretch to say that wealth inequality is mostly due to bad economic policies. The US is protected by 2 large oceans and didn’t suffer large-scale destruction of its infrastructure and industrial base like its rivals in Europe and Russia did in WW1 and 2. The US has only really been a superpower since WW2, when almost all of its rivals were left in shambles. The US also has advantages because it encourages immigration, leading to an inflow of talented and industrious employees (immigrants by their nature are more risk-taking), which is more of a cultural reason than an economic one. And last but not least, as other posters have noted, the US also didn’t have its resources and people pillaged for hundreds of years by a colonial overlord. India is a good example of a country massively set back by colonialism. When the British arrived in India, it produced 23% of the world’s GDP, and Britain 2%. When the British left 300 years later, Britain was at 15% and India was at 2%, with massive de-industrialization occurring in the first few decades of colonization, as India was transformed into an agricultural country that was only meant to be a captive market for finished British goods. Similar stories have been repeated in dozens of other countries over the last 400 years or so.
+1 SB for the good coherent discussion points even though I don't completely agree on all points.
I think the WW2 point is an interesting one because it really cuts both ways. For example, Germany was basically leveled to the ground and half the country was taken over by communists. 70 years later.....Germany is economically the strongest nation in the EU.
That's one of the things that makes me a little skeptical on fully blaming colonialism. As is the case of Germany or say China that had millions of people starving, gulags, etc., we've seen that you can completely destroy a nation but if you have the right policies in place, it can bounce back within 50 years.
So, I look at former colonies and other countries such as Russia and much of eastern Europe and ask myself, "why did these countries not bounce back in 50 years?" There is no doubt that colonialism, wars, and destruction cause real economic damage, but I think it's more difficult to explain why it's sometimes 50 years of damage and why it's sometimes 200 years of damage. And in my opinion, when you start looking into the details of those countries, the policies and leadership are a big culprit.
Also, I think that the Eastern European examples are particularly interesting here. Yes, there were 50 years of being beyond the iron wall, but we don't have real colonialism unless you count something like Turkey's control of the Balkans and Greece. Yet, even without colonialism, these countries langish in a sort of 2nd world status.
Side note: US immigration is a policy stance....perhaps by circumstance of past heritage but regardless. In a hard-core libertarian sense, open borders and freedom of movement are very free-market principles.
You're still better than Financeabc!
If you only knew how often Trump was openly mocked in the finance world, young prospect...
I think it’s a bit easier to stay on the banking track at a BB where you have a balance sheet and built in coverage universe you can inherit from senior bankers. EBs can ride a couple of strong bankers but don’t have much to fall back on, so your office fortunes can change quickly with senior departures, and thus affect your long term prospects. MMs are in a crowded space and have less to differentiate themselves. Most have far too many sub sector coverage teams and there’s very little room for a VP/Director to make room for themselves as they ascend the ranks. It can make it harder to make “the jump” from deal execution to BD.
In general though I think this forum worries way too much about BB vs EB vs MM vs boutique. All offer interesting work, good pay, long hours, and promising exit ops. Figure out what’s important to you besides the category of the bank, and make your job decisions accordingly.
How much have you saved? Thinking of a post mba IBD career.
Reposting my comments about the almighty Exit Ops that were buried in a reply thread above:
I think the types of roles are similar when leaving IB after 3 years or 10, but the level at which you enter can vary. A 10-year IB veteran can exit to lead an in-house M&A team, whereas a IB analyst can exit to work on in-house M&A team reporting up to the group lead. Senior bankers may also be able to make the rare jump right into the C-suite (usually CFO), but I've only seen this happen where a banker went to work for their former client (and thus there was already mutual comfort in making the big jump into CFO).
Here's a sample of roles I interviewed for/received offers over the last year: