Whats the point of investment banking?
I've been on this forum for a while now, and I just can't stop thinking about this. "Whats the point of investment banking?" What value do you bring to a investment bank that makes them pay you anywhere from $100k to over $1,000,000 if you are a partner? Literally you're just being somebody's slave who is probably super lame and just kissing butt because you want to move up and taking crappy hours. Like lets be real:
- You need a Ivy League Education or go to a great university
- Once you get hired, you literally kiss ass.
- (Most Important) For all the hours you guys put in being somebody's little lap dog and doing all their work, if you focused that same level of attention and detail towards building your own company or empowering yourself, you will be (eventually) successful.
Isn't this pretty pathetic? You graduated from an Ivy League and you have to BEG for a internship at an investment bank, working horrible hours, and your wage is TINY compared to the person who runs it. That person is a Don. Working for him makes you his (%#%@%). And here is the real kicker! If you don't get an intern you are probably screwed at ever being an analyst, so it is literally do or die.
SECOND of all, you need to have all these "EXTRA" crap that you don't even care for, such as joining the financial club of your school, or making a stupid blog about the markets, just to SEEM MARKETABLE to your future employer.
Listen, some of you are probably super pissed reading this, and let me say this, Prove me wrong. Tell me what you do in an investment bank, that you COULDN'T do yourself, (Obviously deal with the big companies but, that skill set could be taught and learned without all these other uppity prestigious crap of going to an ivy league etc.) You aren't building anything at all. You are just doing some excel here and there, and acting like you're building something important but in reality you just get a tiny commission.
In conclusion, the real Dons are a Steve Cohen who was making tons of money trading before he went to a hedge fund, Ray Dalio, etc. Everybody else will NOT reach that level period. You guys think if you go to Harvard Business School, you'll magically just LAND these hedge fund jobs? Good luck! You want to get rich? I have a solution.
Our Society pays you on Intrinsic Value. If you get paid minimum wage, that is what you are worth to society at that time. The issue is that, if you don't work, you will not get paid. YOU TRADE YOUR TIME FOR MONEY. The only way to defy this, is fame. Being a Lebron James or Kim Kardashian defies this law because, they get paid extremely high for their line of expertise that isn't normal for most people.
Get out of this pay scale if you aren't an athlete or famous person.
The second way is to provide a value to the market place and get paid off that. For example if you own a restaurant, you are trading time for money. But if you franchise it to let's say 20 people, now you are free and you get money every month no matter what. Invest in real estate, and you also get money every month.
Back to Investment banking, lets talk!
Cliff Notes Version: Be Lebron James, Kim Kardashain, Ray Dalio, or Steve Cohen.
Got it.
If you do not have the mental capability or discipline to completely read my piece of excellent work, then I can not hire you. We only want winners with an "I can accomplish anything" attitude. You didn't even try to read the whole thing, therefore you are not hired and I will make sure all the other local hedge funds take note. - Champagne
You're acting as if IB is the only rigorous and competitive career path that undergraduates take. We all have similar notions of power/prestige/knowledge that we attach to our perceptions of investment banks. We are all almost competitive, power-hungry, money-chasing undergraduates who want to fulfill our lives intrinsically while also being better off financially.
You want to work at facebook/google/Amazon/microsoft as a SWE? You need to have robust academics, unique and often top-tier extra-curricular activities as well as personal projects, and go through several layers of phone/whiteboard/superday-style interview sets to even maybe just get a taste of what it would be like.
You want to get into medical school and be a doctor? You need to have top academic performance, good extra-curriculars as well as a plethora of little activities and experiences that makes you less cookie cutter. Don't even get me started on how it'll be another almost decade of med school, residencies/fellowships/internships and constant competition to get into a specialized practice as well as a decade of collected student loans.
You want to go to law school? Get a 3.8+ from top undergraduate schools and also have good extra-curriculars and experiences.
So I mean if we all wanted to live limited, often unfulfilling lives we could just work typical f500 corporate jobs making 40-60k, maybe 100k by the time we're 30 and have almost no job progression or lateral positioning. The perks/benefits/salary compositions between regular "business" roles and those pertinent to wall street are pretty substantial in my view and often what drives kids.
A majority of regular people in the business world are somebody's bitch and someone's working slave. You are in most places making just as little of a real impact as you would be as a simple entry-level analyst. The benefits and general perceptions surrounding IB are greater however and most of us here are willing to endure the horrid road ahead
was hoping someone was actually curious as to what benefit IB brings to clients and we could discuss whether the benefits get watered down or if they're really tangible, maybe then going into a conversation about incentives...
nevermind, 2/10, wouldn't read again
I was actually hoping to go that route, but some of these dudes are really butt hurt, which is hilarious. Forums are about learning, and having nonsense back and forth banter dilutes the integrity of the post.
We'll start with those two and hopefully people can add on more.
clients that need IB services are at an informational disadvantage, they don't know how to value their business, how to structure a deal, pros and cons of same, and they have no network of buyers. this is where IB & PE come in, people need advisors in these sorts of situations. the benefit is maximum value, ideal structure (issuing debt versus giving up equity, being allowed to retire versus having payout be contingent on owner employment, etc.)
this is secondhand info, I've never worked in banking but have many friends & family who did and still do. the way I've heard it described is like this: analysts are working on a deal, which has to go to associates for review, then VP, then MD. all along the way there are revisions or things that the client wants to see that need to be put in, but because VPs and MDs are likely not glued to their desks, analysts are sitting and waiting for these revisions to come back before they can move to the next step with that deal. I'd always heard that about 7pm-11pm was quiet time, where you were waiting to hear from your higher ups if it was okay to split, but it's too late to start on other work. if I ever wanted to catch up, I'd call around 8pm and nearly always get them. though not as regular, they say there are many of these quiet periods during the day, where you're either waiting on instructions from higher ups, or you're not working on a deal. so yes, you are in the office for 80 hours a week, because in order to get deals done in a timely manner, people need to be ready to act when instructions come in. however, 80 hours a week of constant work? nah. this was corroborated by a family member who worked at JPM/MS/GS in the 80s & 90s, he said most of the nights they were ordering pizzas waiting for their MD to get back to them with changes, after which they'd make the changes, get the final ok, then go home.
Briefly skimmed your post and got cancer from it, holy shit. I don't think you really understand how things work.
Please explain.
No.
Doesn't get an internship in banking
Posts on WSO shitting on banking
You really don't understand anything do you?
First of all, investment banks are the engines that allow every company and every innovator to access the capital they need to survive and grow. Without IB, industry wouldn't be able to exist. It's meaningful, it's dynamic and it's engaging. Some of us actually really enjoy doing the work and making the impact. Sure, the hours suck, but to be honest the pay is pretty good. If you've never done it (clearly you haven't), maybe you don't have a full appreciation of how much money 100K+ coming out of undergrad really is. The pay is good. maybe it's not Zuckerburg money, but it's good and it's not the end of many people's careers. Do you know how many CEOs, PE guys, HF kingpins, etc, even tech leaders did IB? A fuckload. It's an unparalleled bridge.
Also, some of us who made it to ivies didn't do so with a silver spoon, and need the money to support a lifestyle, support our families, or pay back loans. There's nothing shameful in working hard to make a good amount of money and grind your way to a lot more money and exit opportunities down the line. It's shameful that you're a hater sitting on the sidelines calling people bitches for working hard.
Second of all, there is something to be said for finding a high-paying risk-averse career. Sure, Ray Dalio took a fuckload of risks and made it and yeah he's cooler than your average hard-working MD who grinded for 20 years to make his low 7 figures. But you know what, for every Ray Dalio, there are 10 kids who took risks and got fucked up the ass by them. There are way people who bet big and lost big then there are people who bet big and won big. So it's not shameful (in fact, it's logical and prudent) to pursue a meaningful and high-paying career where the risks are considerably lower than starting your own HF or other firm and literally betting your life on it.