This probably won't go over well, but can we have a discussion about why many of us are working the vast majority of our waking hours basically helping the richest people in the world become a little bit wealthier? I work in markets, which is a bit more shameless than IB, but still... despite what Lloyd Blankfein says I think we can all agree that we are not doing 'God's work.'
Please consider the following questions:
Why do we really need so much money? It is well known that vast amounts of money do not bring fulfillment, joy, or meaning to one's life. How many times do we see a wealthy and 'successful' (as traditionally defined) person go down in flames? Greed is a base human trait that has plagued us since the beginning of civilization, but why do you personally need so much money every year? Is it truly worth the opportunity cost? Are there more important things to this life than acquiring material goods, showering ourselves in luxury and comfort?
Is this what we want to do with our lives? How do we find this fulfilling? The world desperately needs smart, motivated, and hard working individuals. I think it's safe to say that most of us fit this category, yet we decide to use these talents and attributes in order to enrich ourselves and others who are privileged. *I am using privileged as broadly defined. In other words, you can't control where you are born or how your parents treated you or what IQ you have.
I am a believer in capitalism, but I think things have gone a bit too far. We all know about the data behind the 'wealth gap' and the problems it is causing. I think it is possible to live a comfortable life while also dedicating ourselves to an important and worthwhile purpose. Am I crazy here or have any of you had similar thoughts? Many fellow analysts also find the work unfulfilling and culture unpleasant, but have not gone as far as to seriously consider quitting (although I have spoken to many who plan to leave in a year).
No one here will he remembered mate. Give it a hundred years and it will be as though you never even existed in the first place, regardless of your occupation
I just spent an hour changing font and formatting on a model because the director, who last week liked the model, now saw a different one and wants it to look similar. So yeah not quite “God’s work”.
I’m in year 2 in IB and this job is shoveling clients’ shit at the lower levels and sales at the higher levels.
Microfinance is a fucking joke, absolutely no proof of positive impact on development. Actually, commercial microfinance in India led to credit crunches and the suicide of dozens of farmers
Please confirm if your firm is hiring. Haven't received any of this "vast" amount of money. Upper middle class at best. Guy makes it sounds like we're making Bezos coin. The point of working this hard is so I don't have to think about shit all when it comes to finances. Basic Maslow's hierarchy of needs. I gain freedom by doing this job in the long-term versus doing "God's work" plenty of time for that "later".
The only reason you’re asking these large questions is because you haven’t answered the truly big ones. Figure out what the meaning of YOUR life is, and work on nothing else besides achieving that. Figure out a goal(s) for you life, put together a plan, and make that a reality. It may mean quitting your high finance job in 3 days or 3 decades.
I think you need to step back and realize that we're small ants in the bigger picture, but we're still doing something useful in society.
It's kind of like being a bricklayer. Every day, you're stacking bricks and thinking that you're doing nothing in this world. You're not the engineer or the architect. True, you're just laying brick after brick. It seems pretty boring and without purpose, but combine that with all the other tasks and before you know it, you have a building. People get to live in that building.
We're kind of like highly paid bricklayers doing repetitive tasks over and over. However, it's part of keeping capital markets efficient, of properly allocating capital to useful projects, and prudently managing assets. In addition, don't forget that it's not just about MDs making money and year end bonuses. There are investors behind each of those companies in a M&A deal....those investors include spoiled rich princlings to college endowments to pension funds to 401Ks of regular people on main street. If through prudent financial decisions, you can increase the returns of a pension fund or 401K by just a few percentage points in your lifetime, you've helped a tremendous amount of people.
So, yes in the finance world, we're all unimportant and each of our efforts only lays a few bricks in the system, but the bigger picture of what we're building is actually really important.
I think you're giving this whole thing a bit more credit than it deserves and drinking the kool aid. You're right that efficient and reliable capital markets are crucial and help people around the world, but am I wrong in thinking that the system has gone too far? People get paid millions to help corporations buy back their own stock and issue records amount of debt for seemingly pointless M&A transactions. PE firms enrich the billionaire class by obliterating working class jobs in order to cut costs. Wall St. has had a record year as the rest of the world recoils from the worst public health crisis in a 100 years... We all know there is more to the story than what you're putting forward. Also, look at what happened to pension funds in '08. In my experience, those are the players who are taken most advantage of and ripped off constantly in order to boost PnL. The whole thing has become a circular feedback loop that enriches the most wealthy and privileged of society while completely disregarding and in some cases harming the ill-informed/vulnerable. This job is not about helping anyone, it's about enriching ourselves. Read most of the posts on this site and that becomes very clear. "What car does your MD drive? What are bonuses going to be this year? Luxury apartment rentals in xyz city?" the list goes on. We all know deep down.
To address the social impact investing point: Bill Gates has created more value and done more good for the world through Microsoft than he ever will do through philanthropy. Creating Windows and Office has had a profound impact on streamlining business processes, improving education, and allowing for the growth of global commerce. In my opinion, micro-finance is cool. I love the IPA and J-Pal, but micro-finance's tactics are still new, its efficacy is unproven, and it will not have an outsized impact on improving the quality of life of the world's poorest people as a whole. Micro-finance and other forms of social impact investing have not, by any comparable scale, had the impact at improving the mean/median quality of life that rapid economic growth has had on the world.
I think you are trying to look at the big picture, but I think you are not stepping back far enough. It may feel like greed and your work means nothing, but the system you feed into has brought billions of people out of poverty in the last half-century. Easing access to capital markets may feel like helping rich people get richer, but those people are offering something to someone that is willing to pay for it. Everyone's quality of life, around the world, is improving at an exponential rate.
I am not saying people don't fall through the cracks or that everyone in the world experiences the improvement in the quality of life and expanding wealth in the same fashion. What am I saying is that, on the aggregate, people's quality of life is improving faster today than it ever has in history.
People love to hate on greed but it is the accumulation of wealth that allows for people/funds to invest in new business processes and technologies that improve our quality of life. You can discuss the wealth gap all you want but massive economic growth means the pie is bigger. Do you think the world would be better without Amazon? Apple? Microsoft? Just because a few people are orders of magnitude richer doesn't mean they stole money to get there, it means they offered a good/service that hundreds of millions of customers are willing to buy over and over again. Many of the most successful companies got to their current scale through investments by wealthy people and ease of access to capital markets.
I agree with you more than you probably think. I agree with you when it comes to Bill Gates. He dropped out of college to pursue a passion, and absolutely has contributed positively. The jury is still out on micro-finance, but that was merely a suggestion for someone investigating more impactful fields within the realm of finance. I am in full 100% agreement that capitalism and globalization has been a net positive for the world and for reducing global poverty. I support the concept of free and fair open markets.
However, there a few points I would like to bring up to you and get your response.
(1) Financial incentives are the underpinning of free and fair markets, but unchecked personal greed is a bit different. Staying at a PE firm for a couple of more years because you want a new apartment, expensive watch, or luxury car is a lot different than Bill Gates inventing Microsoft and revolutionizing the computer. Of course there needed to be a sophisticated financial system in order to finance his risky endeavor, but that doesn't have much to do with why there are so many talented and hardworking individuals focusing their potential into things like raising money for billionaire PE investors, helping corporations buyback their own stock, securitizing student loans, the list goes on and on. There is a reason why a lot of posts on this website are people trying to grapple with whether all of this is worth it. You seem to be talking more theoretical, I think things are more complicated than free markets theory at this point.
(2) The wealth gap is extremely troubling. Real wages have stagnated for the past 60 years and we are living in a society akin to the medieval era. We literally have the 1% being driven around and catered to by the working class via uber, food delivery services, etc. Amazon has wrecked local businesses and has made it more difficult to pursue the American dream of starting your own mom/pop shop. There are benefits to globalization and there are massive drawbacks that must be addressed. Overtime this country's financial system has shifted further and further away from producing Microsofts, Apples, Amazons, and more towards circulating/allocating the wealth of the elites. Not to mention the massive disconnect we have between the people who have benefited from globalization (all of us) and those who have been destroyed by it (almost all Trump voters). These divides have been building for a long time and have to do with the wealth/opportunity gap resulting from tech/globalization/central banking policy.
I am not saying that there should be no rich people. I am not a 17 year old self-identified socialist who demands free college, guaranteed employment, and a gift bag to boot. I am a capitalist who got into this business because I believed in exactly what you are saying, but I've become disillusioned given what I believe is the new reality. i think things have shifted for the worse.
like any service industry, many people wonder "what is the point?" but here's the deal, people want these services, regardless of the value generated. so long as there are humans who do not want to live a pastoral subsistence lifestyle, there will need to be industry. with industry comes a need for funding and capital markets and mergers. when people have money, they need advice on what to do with that money, whether it's with a broker or investing in PE/VC issues as an LP. so I do think the financial world serves a purpose, and there are questionable "service" businesses all over the place. sure, industry needs funding, but do bankers need to do that? no, but it's a helluva lot easier to pay someone a fee for generating your funding, just like you pay a fee to have someone wash your car. you don't actually "need" to wash a car (or have a car in some parts of the country), but you do it for convenience.
as far as the world needing smart hard working people, what do you suggest we do? I see questions like this all of the time and I would say if you feel you're not in a high value field and you feel guilt about that, change your field. it's that simple, if you don't like your circumstances, work to change them. I'd also argue that while finance definitely enriches the employees and the clients, plenty of fields do that, it's just banking has less of a "product" that is offered. let's take a high potential value person, a drug researcher. let's say you spend 40 years working on looking for therapies to cure a whole slew of diseases as part of a university's research work. let's also say you never discovered anything, except maybe a slight improvement to a drug (maybe you extend 40% of the test subjects' lives by 2-3 months, but they're still terminal). compare that with someone who makes a fuckload of money in finance and sponsors scholarships for underprivileged people, sits on the fundraising committee for a local VC group helping raise funds for entrepreneurs, and who's single handedly helped dozens of kids get jobs. who has made the bigger impact? I'm not saying the finance guy's work was more meaningful, but I am saying that he made a bigger impact on society. the researcher added value, sure, he discovered a whole bunch of ways something won't work, which is very important, but I think you get the point here. you can spend your entire life doing "meaningful" work and never make an impact.
finally, on the wealth gap. this is a more complicated question than you're giving credence to. the seemingly endless money supply has helped buoy asset prices and rewarded holders of capital rather than labor. I think our nation is cronyism at its worst and both parties are culpable, so until that changes, don't expect anything to move. specifically, look at how businesses' taxes work and then look at yours & mine. businesses get all sorts of deductions and favorable treatment, whereas we're supposed to say thankyouverymuch to a standard deduction and pay a higher rate than our employer.
I also wanted to insert some broader comments here. you live in the world you live in, not the world you think should exist, so make your peace with that and move onto something productive. if you want to leave finance to work for a charity, I do think you can make an impact there, just realize it'll be a life of poverty and thankless work. me? I like to think "how can I do well for myself, while also leaving the world a better place?" and often times that leads me back to working my ass off at work, making more money than I need, and giving my time and money to organizations and individuals I think need it more than I do. I find fulfillment in achieving goals I've set out for myself, in helping others both through the work I do (hey, people still need to figure out how to invest their money) and the philanthropy I do on the side. I find fulfillment in being a good husband, being in shape, being kind as much as I can (still need to improve there), and so on.
I guess what I'm saying is, you can make as much of an impact as you want, your career does not dictate that. sure you may spend more hours on "worthwhile" work, but if you're going for impact, that's a more complicated equation. so let me flip the question back on you, if you left, what would you do, specifically? I find that when you really pull on this thread, you end up with the same frustrations about how the world works, except that now you make $25k a year and live in a shitty apartment. me? I choose to make the most amount of money I can so I can take care of who's important in my life, and leveraging my expertise and assets to benefit others. that's not the same impact as others have chosen, but I'll tell you this, I go to sleep with a clear conscience, and I suggest that if you're not, do some more introspection.
"Why do we really need so much money? It is well known that vast amounts of money do not bring fulfillment, joy, or meaning to one's life."
Because even if having money won't buy me happiness or meaning- not having enough will bring me pain and suffering. And more importantly- I like fancy cars and nice houses- fuck you. You're free to donate your money to buy poor people socks- I however will not be.
"Greed is a base human trait that has plagued us since the beginning of civilization, but why do you personally need so much money every year?"
You say plague- I say greed is the greatest asset we have. I'm not religious myself but if there was a god- he knew what he was doing by making us greedy and not a bunch of do-gooders. The entire rise of humanity is a result of greed. Indirectly- it has benefitted everyone. All of us are better off because of the greed of our ancestors. We are where we are because of greed. Greed is good. Why do I need so much money every year? Because the shit I want to buy and the things I wanna do aren't cheap. Why do I need so much money? Because fuck you that's why.
"Is it truly worth the opportunity cost?"
Yes.
"Are there more important things to this life than acquiring material goods, showering ourselves in luxury and comfort? "
Sir this is a Wendy's. Dude I don't fucking know if there's more to life. What I do know is that I wouldn't want to do the opposite...shower myself in shit and backbreaking labor.
"Is this the type of work we want to be remembered for? "
Nobody will remember us. Even if they did, fuck do I care? I don't give 2 shits what happens after I die. Know why? Cus I'll be fucking dead.
"The world desperately needs smart, motivated, and hard working individuals. I think it's safe to say that most of us fit this category, yet we decide to use these talents and attributes in order to enrich ourselves and others who are privileged."
What makes you think I give a fuck what the world needs. Fuck the world. The world isn't my responsibility. Putting food on the table and accomplishing my material goals are. Buddy if someone would pay me IB money to knit socks for starving children you bet your ass I would do it. Unfortunately, the only thing that pays IB money is IB. If it means enriching someone else who's priviledged so be it. The world that needs me so much isn't paying my bills or putting food on the table.
"I am a believer in capitalism, but I think things have gone a bit too far."
No such thing as too far in capitalism. Capitalsm is beautiful.
"We all know about the data behind the 'wealth gap' and the problems it is causing."
What's wrong with the wealth gap? It's a good thing IMO. The wider the difference between the richest and the poorest person the higher the ceiling is. I see Jeff Bezos and fucks like that and think "good for him, hope I can get there one day". The fact that a kid born to a 17 year old high school student mother, worked at McDonald's during his weekends, and made it to the #1 in the world is awesome. If he did it from roots more humble than mine, then there's no excuse for me. America has more millionaires and billionaires in it than every other country combined. And that's wonderful. It's beautiful. because I want to be one of those people. I have no issue with a wealth gap so long as there is class mobility. Bezos, Steve Jobs, Larry Ellison, hell even Oprah are shining examples of class mobility.
"I think it is possible to live a comfortable life while also dedicating ourselves to an important and worthwhile purpose."
Like I said find me a job that pays IB money that also helps the world or whatever and I'll do it. In the meantime I'm gonna go back to work.
Moving past the fact that you sound completely insane and should probably seek counseling, none of us know if death is an infinite void or that our actions in this life are meaningless. We have that notion due to our concept of what it was like before life, but past performance is not an indicator of future results. Your animalistic response is a prime example of why greed is not a 'good' human trait. Also if you're referring to Bezos as the 17 year old who worked at McDonalds, he was also born with a very high IQ and extraordinary intellectual abilities. None of us can control those attributes, no matter how hard we work and there is a massive amount of evidence to support the thesis that IQ (something none of us can control) is the #1 predictor of success in all areas (wealth, longevity, social mobility) within our current system. Your views are ill-informed and outdated. You sound like a mix between Satan and Gordon Gekko on meth. Also never knew IBD analysts had so much free time that they could respond in detail to a WSO post point-by-point.
Edit: I now see that you are a prospective. Automatically disregarded.
TLDR: I'm ok with people being greedy in their life, but I don't think you should be able to pass down a huge net worth to your children after you die.
You should probably take a history class. Civilization is defined as "the stage of human social and cultural development and organization that is considered most advanced." Homo Sapiens have been greedy before civilization existed back when we were small clans of 20-30 people hunting and gathering. Although greed existed around this time these groups would be considered a semi-communist group with a social hierarchy. There are alpha males and more important individuals in hunting and gathering societies who eat first and mate with the females while there are lower class individuals who may never mate. Greed even extends outside of the the Sapien species.
People did not just decide to be greedy when electricity or the internet was discovered. That makes no sense. At least know the definitions of the vocabulary you use, you are not impressing anyone.
Talking about the wealth gap I don't think you understand what is occurring. The Bezos family/foundation will control wealth unimaginable to most individuals for hundreds of years after he dies and does not sign the giving pledge. Generational wealth is bad for society in my opinion, you have multibillionaire heirs doing a bunch of rich stuff just because they can. They are not contributing anything to society. I think a death tax should be implemented in some way. A death tax will not dissuade potential entrepreneurs to take the risks of starting up and help push humanity further. I don't think you really need to pass down more than $50 million to your children. You said it yourself you don't care if you die, because you will be dead. Might as well not pass down your $800 million net worth to your children, and hopefully redistribute a little bit of it to those who need it the most. People are still starving in America.
Also looking at the wealth gap here is a video that is very informing.
The notion that "money doesnt buy happiness" is misguided imo. Yes, it's not going to solve all your problems. You're not going to become a multimillionaire and then not have any worries anymore. But it will give you financial freedom and the ability to never have to work a day in your life on things you don't enjoy. The opportunity to travel all over the world and stay at amazing locations and do interesting things. It will make you more attractive to the opposite sex and will given you more options for things to do with your social circle (lakehouse with a nice wakeboarding boat and you have a great weekend). It will give you the ability to set your kids up for success which will bring you tons of fulfillment later down the line.
I also think most people who have this "money doesn't buy happiness" mentality haven't been truly poor. Try working 2 dead end jobs so that you can live in a shit house to support your family, with no money for leisure and no savings for a safety net, all while watching other people make exorbitant amounts of money and tell me you're "happy".