Mod Note (Andy): #TBT Throwback Thursday - this was originally posted on 10/1/12.
I occasionally get PMed by people at colleges I’ve never heard of before, asking if they have a shot at IBD.
Folks, why IBD? The finance world is broad and varied, and there are a million ways to make a buck. Why pick the one that’s going to be hardest for you in your situation? There are mutual fund companies, asset management companies all over the damn place. Hedge funds. Auxiliary businesses. Those folks will look beyond the name of your institution and your GPA in the hunt for quality. Why knock on the door of the one section of the industry that has built a massive recruiting machine designed to keep you out?
Time for me to share what is potentially the biggest career mistake of my life.
I’d been working for a small asset management company (~40 employees) during the school year in undergrad to pick up some spare dough. Reasonably laid-back place. Kind of place that’s run by a bunch of guys from state schools and hires all sorts of strange people.
So I get a full time offer from the bulge bracket I’ve been angling for. I go to the owner of the little asset management shop I’ve been working at and say:
“Hey, [BB] offered me a full-time IBD analyst role. I like it here and the idea of moving to New York is not a big plus. What can you offer?”
Guy thinks about it.
“Okay, what are they gonna pay you?”
I say,
“$55k salary and about the same bonus”
Guy says,
“Like hell they will. You got no control over that bonus.”
I say,
“I’ll take my chances.”
Guy thinks it over. Says,
“Okay, kid. I like what you’ve done for me so far. I’ll pay you $75k.”
I say,
“What’s the bonus?”
Guy says,
“Kid, that’s $75 guaranteed comp. I’ll give you the same $5k bonus I give everyone else out of undergrad at the end of the year. And I’ll let you buy an equity stake, up to a tenth of a percent. Now that’s an offer I’ve never made any kid out of undergrad.”
I say,
“I just told you I’m gonna make $110 next year in New York.”
He says,
“New York? You’re crazy, kid. You’re gonna starve on $110 in New York. You work for me, you’ll be in the same place financially in five years you would have been in New York , maybe better. Run the numbers. You stay here, you don’t pay $2k in rent, you don’t work 100 hours a week. In five years you’ll be running your own chunk of the business. No bullshitting with clients or kissing banker ass. Sky’s the limit on how much you can make.”
I say,
“Well, I’m gonna be a managing director some day.”
Guy says,
“You could also run this shop some day and do better than 90% of the managing directors at that shitty bank."
I folded my arms and waited....
Guy says,
"I’m done here. I just made you an offer that in my opinion is ridiculous for a kid still finishing up her senior year and I’m already starting to regret it. You want to go chase the name, go chase the name. Get outta here. I assume you’ll let me know if you want to work for me.”
I walked out. And I signed the bulge bracket IBD offer.
And honestly, I did it because I didn’t understand the way the world worked. I didn’t believe that some crazy guy from the middle of nowhere with a no-name education could build me as solid a career as the hallowed bulge bracket bank. I was worried he’d be out of business in a couple years. I wanted people to recognize the name of the firm I worked for. I wanted to be able to go to HBS. I wanted to do big deals that landed on the front page of the WSJ. (Ironically, my deals have had a history of never front-paging unless they die a grisly death and the front page is the death notice.)
That’s not to say I’m displeased with how my career has unfolded, and of course, the ride would have been bumpy either way. Just saying the decision itself was based on shoddy assumptions.
A better decision metric would have been: Fuck prestige, get money.
You have an uncanny knack at negotiating. A college senior getting an equity share out of undergrad? Jesus...
Damn Straight! There is eloquence in simplicity. Prestige is a fucking joke. It's some sense of keeping up with the Jones that we all want to do. Once you realize you don't need prestige, your better of. It makes it easier for you to focus on everything else that's important.
Great post. Another relevant quote could be %^#$& prestige, get a wide range of experiences. You just strengthened my resolve to try applying to boutique or middle market firms.
Why capitalize Chase in your post unless your too used to capitalizing JP Morgan Chase on all your documents. hmmm.. slip up or innocent mistake.
You should be a lawyer Bankerella, you sound like that lady with the short hair who defends all those famous women...
Gloria Allred?
She's the girl. Glors and Rells would be unstoppable together
Great point.
The sooner we stop fucking around, and call it "Vanity," the better. That's all it is, and the sooner anyone gets that through his head, the sooner will be successful.
Thanks for sharing...no offense, but would this story go under your "douchiest moments" thread?
Come on guys. We're all victim to prestige, and when we fail, we just say, "Oh it wasn't that important to me anyways." Every thing we do is based on what other people will think of us. Am I the only one that would rather sacrifice years of my life to build my own wealth than win the Power Ball?
This is not preſtige. This is ambition and determination. Preſtige is caring what other people think along the way.
Yes and that's the stupidest fucking thing I've ever heard.
no id do that too. cause when your vacationing with your earned money - it feels helluva lot better than being $$$ handed to me.
No, you're not. While I would be ecstatic if I won something for nothing, it wouldn't be nearly as satisfying.
I'm not at all convinced that you made the wrong decision. You probably came across as entitled and arrogant, but for the first job out of college, you want to pick the one that gives you the most opportunities going forward. I actually think the first post-college job sets the stage for the rest of your career and could really mess you up if you can't get the right job. For instance, knowing what i know now,i gladly would take MBB consulting out of college rather than a job for a no-name firm that pays me 2 or 3 times as much.
O RLY?
Not even close, actually, and interesting that you thought an obviously self-evident statement required further interpretation.
To clarify things a bit here, the first statement is a proposed guideline for maximizing the utility of your career. The second statement (yours) is something often heard in mafia movies and on rap albums, and is frequently followed by the intermittent discharge of firearms.
Actually it was just Ray Liotta talking about how some schlub club owner just got into a deal with someone that he would regret one day because they'd have to torch the place for insurance money.
you didn't make a mistake, you overcalculated the monetary value of said prestige. by definition, everyone who went MBB or BB has made this mistake. if they are honest with themselves they would admit that. i certainly made that mistake myself.
OP and i are at the age where we can pull this shit in focus.
Pete? Where's Pete? Maybe this thread made him vomit on his keyboard......
You're most certaintly right, payaso. I've been hurling for the last 20 minutes straight. Now my legs are shaking and I'm extremely dehydrated. My maid thought I had bulimia. I told her that everything is fine, I just saw some prestige bashing I couldn't comprehend and to get back to scrubbing.
Prestige leads to wealth which leads to more prestige which leads to more wealth, and so on and so forth, ad infinitum. It's a reflexive relationship, but it starts with prestige.
It's called Keeping Up with the Jones. The Illusion of Prestige and Wealth are easy to flaunt. Neither go hand in hand, except when you want to have people buy into the illusion and forget that Prestige doesn't make you happy. Having "Stuff" and "Prestigious Things" doesn't mean you will be happy with your life. Prestige is a joke. Get used to it.
I think this just goes to exemplify the argument that woman have attitude for brains.
After his last words there I wouldn't even have the heart to leave the place especially if I liked it. Anyways, even though I question the validity of the story, the point being made is great.
Exactly how I felt while reading this.
In this country, you gotta make the money first.
Bravo Bankerella.. I agree with you on these points.
word
How has the firm done since then?
I agree that chasing prestige is a waste of time. I think it's something people coming out of school focus on much more than people who are established in their careers.
Was about to ask the same question, I'd like to know too.
how has the asset management firm fared since you left them?
probably did well b/c she wasn't there
lolz this
I think he made you that offer because he knew you wouldn't take it.
Refreshing post, thanks.
After becoming addicted to this site and letting the prestige-bug bite me, I had some time to wind down over the summer and spend a lot of time with my son, friends, and other family. And prestige really doesn't mean dick to me anymore (not that it ever really meant THAT much to me)... it would be nice, but I'll take $$ + family over everything. I had a great time just chilling in Metro-Detroit with my friends all summer, believe it or not. family + friends > everything.
I agree that family+friends is the most important thing. After that though, prestige is pretty damm high on the list for me.
So where can I find these Asset Management Firms & Mutual Funds?
I disagree - I think prestige has its value. Maybe you made the wrong decision in this particular example, but there are tons of guys who were raking it in at a no-name shop, had the rug get pulled out from under them, and then can't find a new job making anywhere near their old earnings. Ultimately I think it's about being 'long term greedy' as folks at GS would say. Every job opportunity is some combination of prestige, payout, stability, room for growth, and lifestyle. Exclusively basing your decision on prestige - obviously that doesn't make sense. But ignoring it altogether doesn't make sense either.
In bankerella's case, I actually don't even think prestige was the issue - it wasn't knowing what she wanted to do. Asset management is a completely different job than IBD - almost everybody in AM has a better lifestyle than a banker, and most senior PMs make more money than most banking MDs; that would have been true whether bankerella got her job offer at the no-name shop she interned at or if she'd gotten an offer from Wellington or Lone Pine. If you're comparing those two jobs on the basis of prestige, you're like one of those kids who says "gee, should I do banking or consulting?" That's acceptable when you're an undergrad (which of course bankerella was here), but once you've got more than 2 years of work experience, you should know that there's prestige within fields. And once you know what job you want to do, prestige within that field should definitely be a consideration (though not your only consideration).
I thought you were going to say that IBD doesnt have prestige that it does. You work hours but hourly pay isnt as good as many jobs. Anyways, I personally couldnt be IBD simply because it isnt my desire. For those it is props to them, but it isnt as prestigious as making it as a trader or some other profession
Hey Bankerella,
I'm curoius about your bankground and how it all worked out. Did you end up at HBS? What did taking the prestigious path do for your career?
Made more ROI from swing trading than I ever did in my semi-prestigious full-time job with a salary and variable bonus. Prestige never provided me with the capital to make my life-style come true, busting my ass at something less prestigious made me much more in the long-run.
MD at prestigious firm: (9:00am - 8:00pm) - Clients bitching, divorcée calling about alimony, analysts fucking up pitch books, VPs fucking up pitch books, artery clogging steak dinner with bitching client, etc.
VS.
(8:00am): Shower after workout, go into home office, check current trades/set new ones. (10:00am) : Finish monitoring trade executions, conference call with my VC partner on why they turned to more dilution instead of venture debt for the next round of pc's financing.. (11:30am): Lunch with my kid at her school. (12:00pm): Call friend to play a quick '9'. (3:30pm): Back in the home office to check trades. (4:30pm - Whenever): Figure out some fun things to do, maybe book a quick flight to Cali for beach fun this weekend.
It amazes me how stupid some people are on this board. Why did you take the more "prestigious" offer? Because you could talk, I mean brag, about it to people. It was because of what other people told you to do, not what you wanted to do. You had a great deal sitting on the table and a guy willing to lead you to the top but you were more concerned with being able to name drop and brag. Period. It's a pissing contest. To be so smart, it amazes me the lack of judgement and pure common sense some of you lack. What's the % of analysts becoming MDs? What about analysts going to B school then PE/HF? Very low for both. So what do you have as a back up plan? Nothing. Yall are so bottled up and focused on 1 thing that you are making very poor decisions as a result. I know more people that made it without IBD than who did. Going to wherever you feel is the biggest name doesn't do anything if you're shit. It's about gaining experience and working hard to move your career in the direction you want, not in the direction you think will impress people.
Bankerella learned a valuable lesson the hard way but she is in the 1% of this board. There will be 100s of you who makes this dumb decision in the coming weeks/months when you accept offers. Finance does not equal IBD or vice versa. There are a million different paths to getting wealthy. Open your eyes and realize that. I just sit back and laugh at the revolving door that is IBD when wide eyed idiots sign their life away every year only to be miserable a year later. The money you make is shit because it costs so much just to live in NY. I'm happy for those of you who truly feel this is what you want to do. Godspeed. But for those who are doing it because of outside influences, you will die a slow death. Find what you want to do in finance other than IBD because when you fall flat on your face, which you will, you will at least have a back up plan.
*Rant over
You, my friend, are a born loser. Always have been, always will be, regardless of the decision you would, have could, have should have made.
You're a true Roy Munson, but without the Hollywood redemption gold at the end.
Monetizing the long term benefit of BB IBD on one's resume is difficult. But the reputational benefits associated with the career path you took last a lifetime, and exceed those that would have derived from your AM firm.
How do you know that? Becoming a PM for a lesser known AM firm is more "respectable" than some jobs that people get at BB IBDs... at least that's how I see it.
prestige doesnt mean shit
the problem with OP's thesis is that it could have not panned out as well at the AM as she thought. after all, it was all just talk on the part of her first boss. anything could have happened; the firm might have gone tits up, there could have been a change in management, OP might not have the chops for the work at the leadership level, etc.
what if is a hard game to play.
How did that kid do that you fast tracked to a superday, did they get an offer?
N1cktm, good question. I need to check. Will try to add a PS to my next post and let you guys know.
Yeah I mean I think it's always easy to look back and say "oh, hindsight is 20/20, I shoulda done 'X'"...
But when it comes right down to it, you made the "safest" long-term decision -- great experience in IBD, BB name, good prospects for b-school, etc. If two friends started a business tomorrow and offered to make me a part owner in exchange for ditching IBD, no way I'd do it right now. If in 10 years they are the next Instagram, it'll be easy to say "oh, yeah, I chased prestige, stupid me". Extreme examples, but same logic applies.
Your best post.