Investment Banking Questions
Hey bros, first post.
I am a Senior in High School and I am heading to University of Texas at Austin next year where I plan to major in either Finance or Economics and I have a couple of questions.
- If I choose to major in Economics does it matter if I get a BA or BS if I want to work in banking?
- Are Investment Bankers allowed to trade stock? Do you trade?
- Do I have to move to New York to work for a major Investment Bank?
- At what age do you expect to retire?
- How many Investment Bankers went to Ivy League colleges? Is that a big selling point on a job interview?
Thanks. I have many more questions, but I'll just use Google and not pester y'all anymore... for now. :)
1) probably joining McCombs undergrad makes more sense than economics 2) different business but 'capital markets' does fall into investment banking that requires traders 3) NY, London, asia? idk houston has some IB too 4) 30 with a sexy skank broad at my side, son. 5) a lot but a lot of people also worked hard to get in the industry from non ivy and shit on ivy leaguers bc they are pussies (which most are, sorry), but your school has a ton of alumni and your school will have some good on campus recruitment
McCombs UG is better if ibanking is ur ultimate destination. Econ is alright too, but McComb will make your life relatively easier.
Yes and no. Investment bankers do a lot of things, trading can be one of them.
NY is heart of ibanking. Houston/Austin/Dallas have offices of major banks as well.
Depends person to person. Keep in mind, its rigorous hours, repetitive task, most often a bossy manager
ivy league, yes, is a big selling point. But you do not have to go there to be one. I banking is not a game where guy with 150 IQ beats the one with 130 IQ. Precisely because the nature of work is not utterly sophisticated, we bankers try to make it sound as if we're the shit ; we know more than others. Realistically, its not the case. But in this context, I would suggest, if you CAN go to Ivy, go ahead. If you cant, McComb is a great option, especially for UG business.
good luck.
i think question 2 meant if we are allowed to trade for our own personal accounts... and the answer is "it depends, you have to declare your investment account to the firm... and obviously, u're not supposed to make trades on your clients or any inside information..."
for #2
could be hard, because any trades you do need to be run by compliance (the legal team) first to make sure there are no conflicts. so, its hard to actively trade, though you can have a portfolio and do a couple trades every so often. if you're trying to be trading every day it will probably be hard and will piss off the compliance officer.
Join McCombs, do not do econ unless you do econ/integrated MPA (which very few people know about but it is tough to get into).
Do you have to move to New York? No. But if you aren't interested in oil and gas then target New York.
ummm... what is McCombs? lol.
LOL!
I though this was someone else asking about the name, and still thought he was rather unintelligent as someone would normally infer what the conversation is about and thus put 1 and 1 together.
And no i see its the OP.
Tip, don't got into INVESTMENT BANKING!!11! as you will be required to put lots of 1s and 1s together.
The business school at Texas. Get on the website and do some reading.
McCombs has OCR or on-campus recruiting where banks come to campus to interview. If you are an econ major in the college of liberal arts there is not on-campus recruiting.
Am I totally f'd if I don't go to McCombs? How much harder is it if I don't?
No it is not impossible. Much, much harder though. Is there a reason you wouldn't go to McCombs? All you have to do is take the required courses freshman year and make over a 3.5 and you can transfer internally.
I know 1 person in an analyst program not at McCombs. They did Econ/Plan II. They got in through connections because they couldn't drop a resume for the analyst positions.
lol. The reason I don't want to go is because I need a foreign language credit. And if I took a foreign language I know it will totally screw my GPA. Do you think there is pass/fail language courses?
Edit - what is that integrated MPA thing you were talking about?
Why do you have to have a foreign language credit? I never took a single class of foreign language. I'm sure you can take an easy Spanish class. If you go to Texas and want to do banking and choose not to do McCombs then I'm not sure what to tell you. Would not be the brightest move.
http://new.mccombs.utexas.edu/MPA/Econ-MPA.aspx
Here is the link to the econ-MPA program. MPA is the masters of accounting program and is highly regarded. But I would recommend doing finance or the regular MPA program instead of econ/MPA.
Just like everyone else, I would say go to McCombs. I'm pretty positive you won't need a language credit, but if you do, just take Spanish or something, it is easy!
There are three main areas of investment banking that you can go into.
Mergers & Acquisitions - you help companies merge and combine
Wealth management- you help high net worth people build and maintain a customized portfolio
Sales and Trading - this is where you would most likely trade stocks on the floor.
That was my brothers main concern. He was looking into Chicago since they have many branches and you get the city life for cheaper, but the big boys play in New York. That's where the best bankers are.
My brother retired at 43 after working at GS for his career. He has a mansion in Palm Beach, Florida, a nice car, a private jet, and a yacht. So ya, i wish I were him, and, you do make huge money in investment banking.
If you can get into an Ivy League, it can help a lot. However many people, including my brother, went to non Ivy Leagues and still got analyst positions at huge I banks after college. My brother went to Northwestern University.
Ignore everything BenSimone said.
http://lmgtfy.com/?q=mergers+and+inquisitions
Hey treynorblack, please explain to us how this kid that doesn't even know the name of his own university's business school was supposed to fucking know to search for "Mergers and Inquisitions" on Google?
How is an undergrad w/ an MPA regarded in the ibanking world?
It boggles the mind how high school kids even know about investment banking.
I got the bug in eighth grade. Sister went to UPenn, all her friends were from Wharton. Thanks a lot sis, look where I ended up now..haha.
I bet it was all the shit that went down (and is still going down) in 2008. I'm sure all the schools had students write some sort of report or at least read up on it since it was so huge. IB was a big part of what happened so they were probably like "THIS MAKES US RICH??"
Not really. I remember me and my friends saying we wanted to do investment banking when we were juniors in HS....God!, we were clueless.
@Spencer--read Monkey Business so you know what you are getting into. Transfer into your business school. If you honestly can't do well in one beginner language course then you have much bigger problems and answering questions like "how do I get into investment banking" would be an effort in futility on our part.
Retire? Shit, there are bankers in their late 50s and 60s who still work. You never get richer, you just go to a different state of poverty. Once you have a lifestyle, it's hard to give it up.
How is an undergrad w/ an MPA regarded in the ibanking world?
bamp.
MPA is well regarded. Plenty of people go into banking from MPA. The nice thing if you are rather risk averse is you are basically guaranteed a Big 4 or good accounting job if you can't get into banking. However, if you want to do finance I would just do the finance major.
My friends who did MPA and are in banking all regret it because they didn't really like accounting and it doesn't really matter that they have an MPA in finance/banking. None of them are going to become CPA's or anything so it ends up being a waste of time and money. And accounting classes suck.
You can try BHP (Business Honor Program) at McCombs.
The more I research the more I see people saying that ibanking firms don't necessarily look for a finance major or even business related major. Is that true at all? My goal is to make 80k my first year out of college. Can I do that w/ an ib job? w/ a big 4 accounting job?
and do sites like this: http://www.payscale.com/research/US/Employer=Deloitte_%26_Touche_LLP/Sa… include bonuses? How big is a first year worker on Wall St.'s bonus?
Firms don't necessary look for it because many of the top schools don't even have undergraduate business school. But at Texas or a school like UVA or Mich with undergrad business schools you better believe the recruiters are going to be at McCombs and the engineering school, not recruiting fine arts and English majors. If you were going to HYPS, etc. then major in whatever you want.
You can not make 80k 1st year out of college in Big 4 accounting. Your most common options are basically investment banking, sales and trading, consulting, and petroleum engineering jobs.
However, I would really not be worried about what you are making your first year out of school unless you have a lot of student loans you want to get paid off. Take a variety of classes and figure out what you enjoy/have an interest in and go from there.
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I know they don't want an English major, but I don't see what is so unappealing about a BA in Econ. I really like economics..
On-campus recruiting. You can minor in Econ or double major.
Honestly if you want to major in econ, go ahead. Just be warned it will be 10x harder to get a job in investment banking.
Remember your in high school and probably took micro economics and got an A+. Wait till this is your major and your taking very advanced classes regarding international monetary policies and unappealing topics of this nature. No one could say this is interesting. I'd say do a major in Finance and a minor in Economics.
...if u dont find international monetary policy interesting that I'd stay away from bond trading. You also arent going to ever trade macro if you dont have some handle on this subject. What exactly about finance is interesting if this topic isnt?
But that being said, many other Econ classes are indeed what ITSALLABOUTTHEU said... Very theoretical and not very captivating. I remember taking International Trade (more Micro-related) and International Monetary (more Macro). The difference was astounding.
To Spencer: it's as simple as rankings. If your undergrad business school is more prestigious than the econ department, GO THERE. Business and econ are extremely intertwined. And you don't need to major in econ to cherrypick a couple of interesting econ classes and take them as electives (international monetary, maybe behavioral finance or something).
Alright thank you for the information.
PS "ITSALLABOUTTHEU": I got an A+ in AP Macro...
Edit - And thank you especially to Eric for posting so much
Knew it. High school economics is nothing like the intro level economics in college. Also keep in mind that in college the intro level economics are NOTHING like the higher level economics. Most of your professors will be foreign and unable to related resulting in a difficult and frustrating major.
No problem, glad to help. Just don't want you to be caught off guard when you can't do on-campus recruiting and potentially miss out on internships/jobs if you only do a BA in Econ. Obviously you can network and try to get in that way but it is tougher.
As a current undergrad at McCombs, I can support the opinion above: if you don't pursue a major at McCombs, it will be incredibly difficult to obtain a position in banking. The internship/full-time job postings from investment banks are posted on McCombs' on-campus recruiting system ("Symplicity"), which is only accessible by McCombs students. Without access to this board, your only hope will be directly speaking with banks and hoping that they reserve time for you to interview while they are in Austin. Any way you look at it, McCombs gives you much better access to banking.
1) I echo Eric Stratton. You are fighting a huge uphill battle if you plan to only major in economics. In fact, if you plan to major in anything other than BHP and/or finance (yes, even if you're MPA), you will be fighting some kind of uphill battle. It is harder to make the 3.7-3.8+ GPA cutoff in MPA, and the banks will not account for it. Also, it would be even more important to get some kind of finance internship or be an officer in a finance student organization, otherwise it will look like your interest is in accounting. If you really like economics, do a double major or minor in it. If you want to do banking, it will make your life a lot easier if you at least major in finance.
2) Yes, you are allowed to trade, but all trades must be cleared through your firm's compliance department first.
3) No. SF, LA, Houston, Dallas, Chicago, Charlotte, London, Hong Kong...
5) I would say if you want to be in NY, an Ivy is a huge selling point. If you want to be in California or Texas, an Ivy isn't really a selling point unless you have some kind of tie back to the state (ex. your family lives there, you grew up there, etc).
Do ibankers in Wall St. make the most money?
Seriously? Stop asking stupid, shallow questions about the pay, do a little research about the profession, and find out if you're even interested.
I would also 100% recommend majoring in Finance at UT if you want to go into investment banking, or any other sector of finance. McCombs has an excellent reputation, especially within the state. I know a lot of guys who were finance majors at UT and work for BB banks.
Pay is comparable across most US banking regions. One might argue that the bankers in NYC make less in terms of local "purchasing power", since NYC is much more expensive than Houston/Charlotte/etc.
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