Why Prestige Really Matters

I think this mostly hits it on the head. Overall, there are exceptions and for sure disadvantages, but at the end of the day, we can only do the best with what we have

Looks like an outstanding post. I'm too inexperienced to know how much truth there is to it - hopefully the more experienced guys will give their input. Either way, thanks for taking the time to write it out.

Looking forward to seeing others' responses.

Outstanding post. SB

Great post. Fully agree with this.

We are creatures of an evolutionary process. At some point, prestige became a proxy signal for mating fitness.

There are some interesting points. Here's some things I wanted to point out:

• This idea that all people who got into a target busted ass through high school is not entirely true. I know of plenty of people who benefited from legacy and were able to get into a target without putting in much work. On the flip side, I know people who worked their asses off but were simply drowned out in the sea of competition. Admissions for top schools has become somewhat of a shitshow, and there's no guarantee that any particular set of grades, test scores, ECs, etc. will get you in.

• You cannot discount the family background factor. IB has become competitive enough that if you are not preparing for it by the beginning of your sophomore year (at the latest), you odds of getting in drop dramatically. Most of the kids who have found out about investment banking did so because they have family connections in the industry. This is the case at practically all targets and semi-targets.

• We need to put to rest any talk of people earning high 6 figures, 7 figures, or 8 figures in finance. This is the domain of a very exceptional few. You need an extraordinary amount of skill, background, connections, and luck to reach that level, and even if you have all of those four things in abundance, you still might not make it.

My points above don't discount the fact that if you have the will and determination to get into IB, it can definitely be done. However, hustling and doing well in school may not be enough to get in, and there are people who have gotten in without putting even half the amount of effort that their peers have.

Ultimately, most people, young and old, don’t realize what it takes to “compete.” Most people don’t have an innate understanding about getting into a “target” school or an understanding of how competitive the job market is; in fact, most kids are told: “Employers just want to see that you’re trainable.” Success is built on momentum, the more “wins” you have under your belt, the easier it is to obtain more. You do that by building your pedigree, which starts with test scores, brand names on your resume and generally ends with your performance in various roles/job titles.

I don’t like your initial examples; financial stupidity is still financial stupidity, irrespective of the “brand name” of the school or car. I’d rather not be a freshly minted college grad with an English degree from Harvard and $250k in student debt, especially in the pursuit of a highly unlikely IB position. You’d feel that cluster-fuck for the rest of your life.

How this does not have more silver bananas, I have no idea. SB to you, my friend.

Goldman Snacks:

So, everyone is a prestige whore in some way or another. Let's be honest. For every 1 person who can afford to pay cash for an S500 AMG but drives a Prius for the mileage, there are 100 million people who finance a car they can't really afford. The same applies to school - How many people take the full ride to State when they got into Harvard with no financial aid? Probably very, very few.

My point here is this; prestige matters.

But why?

I think, ultimately, people care about prestige, especially at the school level, because it provides you with opportunities. A Harvard trained English major can get a job at an investment bank, when a non-target English major is either stuck paying out the nose for a masters to be a teacher, or doing social media for their high school (hyperbole for effect).

Some people view this as a privilege thing, or injustice, or whatever you want to call it. The Haves vs the Have Nots. I think this perspective, especially seen in people who are obsessed with searching for examples of those with non-traditional backgrounds who have cracked the silk barrier, looks externally for the solution to an internal problem.

High finance jobs hire from prestigious schools for multiple reasons, but the main one is the quality of the candidate (eye roll). Captain Obvious here, but hear me out. You don't hire someone from a target because they went to a target. You hire someone from a target because they got into a target, and continued to perform. Getting into a target school says something about discipline, especially when most high school students are too busy trying to get laid or too undisciplined to put in the work. There are lots of other factors at play, but what I'm getting at here is the fast track isn't the fast track, its just the early track. Were you disciplined enough to get into a top 5 undergrad? Congrats, you're 4 years ahead of the majority of people. Were you disciplined enough to graduate Cum Laude? Congrats, you're light years ahead of some. Were you savvy enough to network and land a job at the top of your field, whatever it may be? You did it, but you're just scratching the surface.

Now, were you unable to do these things? Well, every tick on your background sets you back. Do you have gaps, did you go to a non target, did you get a shitty GPA, etc etc etc. So you're wondering why no one with your background is an investment banker? Well there are minimal job openings, and it's incredibly competitive, so why would they hire someone like you? Most people who get these jobs have already established a track record of excellence that spans close to a decade, and they have something else that is driving them to succeed. And, 99,999 times of out 100,000, someone with your background probably isn't going to figure it out or make the effort if they do.

So why does this matter? It matters because the people searching for others with non-traditional backgrounds are looking for validation, or the easy way. Everyone seeks validation at some point, but this is not the time. Someone with a non-traditional background didn't achieve success because they got lucky or because they got a chance that was handed to them when they asked nicely, they excelled because they figured out what needed to be done and set off to do it. So you have to go Big 4 audit and bust it for 3 years, transition to TAS, study like a maniac for the GMAT, kill yourself networking to get into an MBA business schools">M7 and compete for a job at smaller MM Banks or PE firms or Advisory shops because you still aren't quite there. Well guess what, you figured it out before your senior year in college, and by my count, it's been 7 years of grinding. Someone who graduated at the top of their class from a target had already been grinding for 8 years from high school through undergrad.

So what are you going to do? Is this when you give up and blame the system, or is this when you realize you're an associate at a small shop and you're finally in the industry, so you step on the gas even harder? Hone your skills, keep grinding, and now, despite a different background, you have the experience and the hustle to make the next jump somewhere else. Maybe you stay put, make VP then MD and pull in a fuck ton of money because you've been working your ass off for over a decade now and you're getting a reputation in your space. So maybe you only make high 6 or 7 figures compared to 8, cry about it. Is that not good enough because you didn't make it to GS SSG or BX HeMan Woman Haters Club or fuckin' Citadel as a PM? What the fuck? Hell, maybe you love Big 4 accounting and you never take the next step and you make partner at a massive firm and pull in a big salary with great job security and that's that. Or you can quit in your twenties and go sell fuckin' insurance because, whatever, Commerce Insurance responded to your application and made you an offer.

Everyone is so concerned with making sure there is a path laid out for them, and people just assume prestige is the qualifier. Its an indicator, not a rite. There is no path - only you and a machete, and the sooner you pick it up and start hacking in the right direction, the sooner you'll get somewhere.

TL;DR - you gotta earn it.

Excellent post. Well written

Goldman Snacks:

TL;DR - you gotta earn it.

Gotta hustle for that MONEY!

the car is called s55 amg.

As a longtime Mercedes owner (SL), there's no such thing as an "S500 AMG". (unless you're driving a knockoff). "Mercedes AMG"

true

this is totally true

This post is an interesting counter perspective to today's podcast on the "prestige trap".

https://www.wallstreetoasis.com/podcast/jean-denis-head-of-engineering-…

The prestige of your university doesn't really matter at all. What matters is your intellectual horsepower, which most Ivy Leaguers (and similar) possess in abundance.

https://www.usnews.com/education/blogs/the-college-solution/2011/03/01/…

Dale and Krueger concluded that students, who were accepted into elite schools, but went to less selective institutions, earned salaries just as high as Ivy League grads. For instance, if a teenager gained entry to Harvard, but ended up attending Penn State, his or her salary prospects would be the same.

In the pair's newest study, the findings are even more amazing. Applicants, who shared similar high SAT scores with Ivy League applicants could have been rejected from the elite schools that they applied to and yet they still enjoyed similar average salaries as the graduates from elite schools. In the study, the better predictor of earnings was the average SAT scores of the most selective school a teenager applied to and not the typical scores of the institution the student attended.

In other words, intelligent people succeed regardless of what school they attend. The Ivy Leagues don't produce talent--they recruit it. And talent almost always rises to the top.

https://media3.giphy.com/media/rCs8YcA4fDK8w/giphy-downsized.gif" alt="dorsia" />

I needed a post like this right about now. +1

Target school people make good employees - especially C-level executives. Nothing wrong with that. But it doesn't mean that they are cut out to be billionaires. If you see the list below, more than 53% of the people on this list did not go to target schools.

https://www.forbes.com/billionaires/list/#version:static

"Comparison is the thief of joy." - Teddy Roosevelt

Am I the only one on here that doesn't consider studying for tests, doing your homework, and participating in fun activities such as clubs and sports as "hard work"?

I just don't find getting A's in high school and doing a bunch of clubs and activities all that impressive, especially if it's not even the student pushing for this but their well-educated parents who have planned every step of their life and have paid for a dozen SAT prep courses.

.

I almost made another account to give you two silver bananas

Totally agree. This hits close to home for me as your example of non-target --> Big 4 audit ---> Advisory ---> MBA is the path I've taken. The difference is I busted my ass at a shitty public high school to get into a decently ranked college and top feeder to the Big4.

Truth is, there were a select few people at my school who got into IB directly out of undergrad, mostly because they knew what the hell IB was through family connections, etc. I assume that's the way it is at Ivies. This knowledge gap is definitely shrinking due to the internet and information sharing, but we still have a long way to go.

Did I need to bust my ass and work a little harder than the private school kid who was the son of an alumni, went through SAT prep courses, and knew what high finance was during middle school? Yes. But I did it, and will continue to do it.

Life isn't fair and some people have a shorter path paved for them than others. Everyone can concoct some slant about how external factors are against them, or how life isn't fair for them specifically, but if you really work at it you can do it and will end up where you belong sooner or later!

Interesting view...

I read that entire post from a "Remember the Titans" perspective. Like, imagine Denzel Washington waking up a bunch of non-targets at 3 am to run from Virginia to Wall Street, and when they get there (6 weeks later) he gives a monologue similar to the OP.

1. Non-target School
2. Average GPA (3.5)
3. Top of League Table Sponsor Leveraged Finance (Analyst > Associate)
4. Boutique IB (hired as yr.3 - did 1.5yrs)
5. Middle Market PE (>$2BN AUM, Associate > Senior Associate)

That was my path. Keep your head down and WORK. More importantly though, complement your hard work with personality. Have opinions on deals / handle pressure with a smile / make people laugh at happy hour (with you, not at you; stay 1-2 drinks behind your MDs).

Good luck.

I mean there is a fundamental problem in here, right off the bat. In 99.99% of cases, the brand and model of the car you drive won't have a statistically significant impact on your career. Taking on 200k of student debt to go to Harvard versus a free ride to Montana State University (or wherever, apologies if you went there) absolutely will. It's the classic good debt vs bad debt paradigm. Going to Harvard gives you good prestige, helps you network, opens doors. Driving a Range Rover vs a Jeep doesn't.

Or study computer science and make 300k at Citadel at yr1, and start your own company at yr5 without getting caught in the rat race...prestige shaming is like the faster rats laughing at the slower rats for not running as fast when really all of them should be thinking about getting out of the race altogether

Why oh why do so many of you think that you need to go through Big4 audit, then advisory and then MBA to get into some MM PE firm if you come from a non-target? Such a waste of time. I know plenty of people who skipped audit to do Big4 Corp Fin straight out of uni and then moved to MM PE, myself included. Just network smart, get cosy with a top headhunter and rock interviews. The probable answer to my own question is that the people that need 17 moves to land in PE simply don’t belong there (getting ready to get thrown some monkey shit for saying this). If you can’t get a headhunter’s attention after doing hands on work in M&A/capital raising at a Big4 Corp Fin group with good deal flow, the problem isn’t the resume, it’s you. Take it from someone who took that path and who works with three others who did Big4 advisory before landing associate roles in a 3-6B fund. Some have MBAs, others don’t, but the message is the same.

Why oh why do so many of you think that you need to go through Big4 audit, then advisory and then MBA to get into some MM PE firm if you come from a non-target? Such a waste of time. I know plenty of people who skipped audit to do Big4 Corp Fin straight out of uni and then moved to MM PE, myself included. Just network smart, get cosy with a top headhunter and rock interviews. The probable answer to my own question is that the people that need 17 moves to land in PE simply don’t belong there (getting ready to get thrown some monkey shit for saying this). If you can’t get a headhunter’s attention after doing hands on work in M&A/capital raising at a Big4 Corp Fin group with good deal flow, the problem isn’t the resume, it’s you. Take it from someone who took that path and who works with three others who did Big4 advisory before landing associate roles in a 3-6B fund. Some have MBAs, others don’t, but the message is the same.

>Just you and a Machete

F*k yeah

The notion of professional prestige is almost only confined to finance, consulting, law, and similar white-collar jobs.

For some jobs, like consulting, it's easy to use for sales, when pitching someone a consultant "Oh, he/she's a top graduate from [prestigious school], has a lot of experience from [prestigious firms] - great match!" Many clients will probably just nod along, and think the clients are super humans that'll solve any problem thrown at them.

For other jobs, it's easy to use as a point for measure. If you have hundreds of applicants, all above minimum threshold, how do you start sorting them out? By school. If someone comes from Harvard, they certainly must be sharper than someone from Podunk State, right?

Not always, obviously, but for the majority, probably. So it's just an easy way to filter out - no real work required.

But that, IMO, can be a big flaw. I 100% believe that once you've crossed a certain level, it doesn't really mater what GPA the candidate has, or where they've gone to school - they're all excellent candidates, and things like GPA essentially becomes a useless measure. That is to say, the correlation between their GPA and job performance will go towards zero.

You might as well just draw candidates randomly, put them on the job, and your production output wouldn't be much more different than if you hand-picked the "best".

Top schools tend to produce more executives because going to a top school will open doors that "lesser" schools doesn't, and it's been like that forever.