Secret & Lessons From 2yrs in Banking: My Advice

Leaving banking to head to a tier 1 UMM shop in PE very soon.  Wanted to write my full experience as both a document for myself to reference in the future but to payback all of the advice I have read on this forum when I was an intern. This week folks are still remembering how to log into their desktop after the holidays so wanted to use the downtime before I get trampled again. 

My background is fairly standard: non-target that got a couple breaks and landed BB coverage group NYC. Ranked top bucket first year and likely top again this year. 

Would I do banking again / is it worth it?

Banking is a lot like having braces: you're excited to get them, then you hate them, and it's only after they are off and gone do you appreciate what they did for you. Banking was one of the most rewarding and challenging experiences of my life. I learned how to work under pressure, how to manage a process, how to lead calls, how to talk to a tenured management team, how to manage up and down, how to mentor interns, and how to swallow my pride (more on that later). I learned a little bit of finance, but the reality was anything I learned was from self studying for PE or from my own time. You don't get into banking to become the next Bill Ackman. You won't get that experience at a BB at least. What you do get, however, is a stamp on your wrist that says you paid the price of admission for the next room. 

My hours were 9am to 12am most days. There were periods of 1-2ams for sure. Only done 15 or 20 5ams. Would consider that pretty good. Closed a few deals (all small M&A and large debt transactions where we led). Did an ungodly amount of pitches. Most if not everything I did went nowhere. Mandates were from clients calling us. Never won new business. Made a few friends along the way. Certainly figured out my path forward given the problems I saw in my own group. 

In summary, banking is the best 1st job you can possibly have if you are a fast learner and you can speak up. The analysts who I saw struggle the most were either folks who were slow learners or who couldn’t speak up. Speaking up means selectively communicating your thoughts. Confused on something? Don’t bring that up 30 minutes before the ask was due. Think something is going to take 6 hours vs the 2 the associate thinks it will? Say it. Think the model you are referencing is wrong? Better speak up. These sound like elementary things to be saying but banking culture is strict and uninviting. At least in my group, the winners and the lowers were pretty cut and clear. So much of banking is do you have common sense (albeit learned within the context of the job), and if you really struggle then it’s likely a reflection of intelligence or being unable to manage your environment. Banking is worth it. Choose your bank and group wisely (if you love to talk about your weekends and you insist on pushing back a lot on asks, maybe Moelis TMT isn’t the group for you). Banking is largely what you read about but it is overhyped for sure. It’s just a job where you are used and abused for a check. What job isn’t. Do banking. It’s worth it. 

Key lessons

Success = intelligence + willingness to eat shit + confidence * likability 

1. Learn about yourself . Do you make a lot of mistakes in spelling? Are you a numbers guy? Learn where your mistakes are coming from and create a system to fix it. 

2. Print out everything. Nothing should go up the chain before you’ve printed it out and looked at it in a new form.

3. Read what you are outputting. Ask if this makes sense. If EBITDA is growing 56% YoY and this is a retail business, maybe you’ve got a bust in the model. 

4. Be confident. You can get away with a lot of shit if you are confident. Never cocky. You earned the seat in some way or another. If you think you can do it, let people know that.

5. Understand that there are no friends in banking. While a lot of the analysts may be close, this is still the land of wolves. Every single person is in this for themselves. The most dangerous are people who make you believe you are their friend (very few exceptions here). I’ve seen people get fired who were one of the best in their class but they pissed off the wrong guy. I’ve seen backstabbing like you wouldn’t believe. It’s great to be friends with people, and see below for my opinion on mentorship, but trusting these people like your real friends is a vulnerable move. Act carefully.

6. Get mentorship and get it fast. The most important people in your life are the seniors directly above you. That means associates through directors if you are an analyst. MDs won’t remember your name (true story one of the MDs in my office didn’t know the kid’s name who did an IPO and follow on for him). In reviews, you need someone pounding the walls and screaming your name. That means having real relationships. Go talk to your director about their favorite sport. Learn about their home life. Get drinks with them. Be friendly and laugh at their shitty jokes. These people made all of the difference to me, and while it might not be all of them, I know some of these guys and girls will have my back even after this job ends. It’s a form of friendship, but see point 5 again. 

7. Know thy enemy. People won’t like you. This is a fact. Someone somewhere is not your fan. Identify these people quickly. If you fucked the goat on a project, you had better be sure you don’t work with that person again and do damage control. Enemies make or break your pay and group status. One bad voice will trump 5 people that are generally positive about you. Know these people and avoid them. 

8. You have to eat shit in this job. It’s just part of the formula. Your pay depends on it. You will be asked to do idiotic tasks. I can promise you no one has been asked to do more idiotic tasks in their career than me. I have gotten emails at 3:15am asking why the gridlines were left on for a tab in the graveyard section of a model. I’ve gotten comments to change the name of a folder from “Precedent Txns” to “Deal Comps”. At first you will be happy to do it because you will believe others will like you. This is true so long as you do it mindlessly. After a while, you understand how moronic this is when your group hasn’t done a large M&A transaction in 2 years. The more complain about it the more self aware you become, and the less likely you are willing to do the dirty work, and your reputation will suffer. It’s a good feeling knowing you pushed back, but it’s a slow death on your own sword if you aren’t meticulous about it. Ask yourself how meticulous your pushing back will be on your 3rd 2am night. 

9. Never upset the master. If someone is above you, then you have to follow the rules of their kingdom. They may be totally incompetent. And while there may be exceptions to this, the rule of thumb is just to go with it. I’ve worked with VPs who didn’t know how to add fractions, but you can’t go around them or take charge. Think your associate is shit at running calls? It’s not a bad idea to make suggestions, but if you try to wrestle it away from them then resentment will follow. It’s called the corporate ladder for a reason. 

10. Bankers are not cool people for the most part - be a chameleon to the environment. My group was infested with nerds. Guys and girls that were really hard to get along with. But you need to blend in. Don’t forget rules 5 and 7. If you are sticking out for the wrong reasons, you’ll make enemies naturally. Not a good thing to be doing. Be a nice guy and try to fit in. This is arguably the hardest thing to do.

11. Don’t make this your life. If you burn out redlining every day then you are missing the point. This is a 4 quarter game. You just lined up for the tip off. While you will never have work life balance, own the things that are crucial to you. Gym time on Saturdays. Eating out once a week. Movie night with your girlfriend or boyfriend. Join a sports league. Having an identity outside of work is one of the drivers that will improve your work product. Don’t abuse it though. If you are telling your team you are out every 4 days for a few hours, then they may hold that against you. 

12. Group gossip is like playing with a live grenade, use it in the most extreme circumstances. It’s easy to start shit talking people because we just work too much together. That’s why it is critical to be friends with everyone and humble most importantly. Having senior protection will largely absolve you from any of this, but you don’t want to be seen as the gossip person. It’s just slimy. Use this to your advantage when possible. Information can be key (who is hard to work for, who gives BS comments, who you can learn from, who never speaks up at reviews, etc).

13. Make friends outside of your group. Coverage. Product. Corp dev. Whatever other groups sit in the bank. Make friends. You never know when you will need it or how these people can help you down the road. 

14. The only person in charge of your success is you. Yes you can get fucked over by someone (the rules above are meant to deter that from happening but sometimes it just happens), but for the most part you are driving your success. If you are shaky on modeling it’s time to practice on the weekends. If you are shit at speaking up on calls then you better get better at it as soon as possible. I can only remember 4 or 5 instances when someone really sat me down and said ok this is how you do this finance thing. Modeling, valuation, and any other work came from outside my job. 

15. Save money. You’ll hear the phrase save your bonus spend the salary. You should be saving every dollar of that bonus and you should be saving your salary as well. That doesn’t mean live cheaply. It means put away 700-1k a month. Not life changing money but wealth is built over time. That said, you are working hard hours and doing hard things - buy nice stuff for yourself. Buy that Hermes scarf. Buy those Knicks tickets you wanted. Go out to that restaurant. Life is so short. I started my banking career yesterday and it will end tomorrow. Your money is a resource not the end result.

16. Don’t be afraid. If you sit on the sidelines waiting to be ready the only thing you’ve done is built up sweat under your shirt. Take action. Figure it out as you go. Get burned. Get some wins. Don’t ask for permission to take initiative. 

17. People are rooting for you. Believe it or not, people want you to succeed. Associates want strong analysts. MDs want strong junior teams. Group heads want a great culture (whatever that is deemed to be in your group). That means having a well spoken, technically capable analyst who is well rounded. Your employer is secretly hoping when they go to bed at night that someone will make their life easier tomorrow because it sure as hell sucks today. Try to be that guy. 

Why am I leaving?

While I guess I am on the IB - PE treadmill, I would probably leave regardless to another group or bank. I broke a lot of these rules (primarily the enemy piece and not willing to eat shit), and I just can’t do this job at this bank. I am not the same person I was when I started, and while that version of me was willing to change the bar chart color 1/10th of a hue at 1:30am on Sunday night, I can’t. Not without saying something about it anyway. I’m sure PE will be same flavor different restaurant, but it’s the hope of something being better that drives my move. I made and saved a significant amount of money, and that wealth will only accelerate in PE. The takeaway here for you is that you will feel the wind change one day, and that’s how you will know the clock has started. Behavior changes manifest themselves in large ways when you work with people 80-100 hours a week, and as soon as you stop sipping the company gatorade folks will catch on one way or another. 

A note to my future self

I remember praying everynight to have this job. I am so thankful to have it, to have succeed in it, and to be leaving to an even better opportunity. I earned every penny I was paid, and I am thankful for the hard lessons I have learned. I am proud of the man I have become, and I am proud of the man I will become. Nothing was given to me, and I will take everything I want at all costs to myself and to others. I am praying for your success, and the next journey sure will make for a great story. Until next time.