A Career in Investment Banking is Retarded
Pre-2008, I can see why IB was an excellent choice. The comp was astronomical at the higher levels and it justified the insane hours and toxic culture. But nowadays, I'm struggling to see the point of why anyone would want to start a career in IB, let alone do it long term. There are so many careers out there with similar pay that don't require you to work 90-100 weeks doing bullshit like formatting powerpoints. Outside of this forum and high finance, people aren't even aware that people sacrifice that much time just for a paycheck. People in tech are working half the hours, doing more interesting work, without asshole VPs emailing them at 1 am. Also, there are so many outlets to start your own business online that if anyone put the energy and skill they put into banking into starting their own thing, they'd have a good shot at success. There are so many ways to make a killing in today's society that it's actually comical. You have tik tockers like Josh Richards making millions for showing his abs, Jake Paul making millions for knocking some guy out who has never boxed before, people getting stoned on podcasts making ungodly sums, some 7 from your high school making a few grand a month on OnlyFans, the list doesn't end.
But instead, we choose to go to IB, and for what? Because a bunch of other misguided, college students trying to live up to their parents' and friends' expectations said it was the best path? In IB, you'll have enough money to be well off, but never rich enough to have true financial freedom, because so much of our money goes towards rent and keeping up with our peers. Of course, if you stay in for 20 years and become an MD, you'll reach this level, but at that point, who the fuck cares. You've spent the last 20 years in an office in a high-stress state. Add to this, that you might have one night a week, if that, where you can actually go out and enjoy your hard-earned money. Many people have the mentality that they will do IB for 2 years and then leave. Ok, great. So you leave and go to PE, which is just as many hours except now you are actually doing more difficult work and the stakes are higher. You still have no free time to enjoy this money you've spent you're entire life trying to accumulate and everyone you interact with is just as rich or richer than you, so you don't even feel well off.
Sorry for the rant but I'm giving up on the fool's gold that is IB and going to doing my own thing, where at least I'll have equity and control of my life.
Go ahead and get that tech job or start that tik-tok if its so easy.
I am, read the last sentence of my post.
Cool
That's awesome man. I never realized starting your own business was as easy as bitching on a finance forum and then simply saying "I'm doing my own thing now".
What are these "so many careers" that have similar comp and trajectory to IB? Its a pretty straightforward way to make a lot of money for people that have been good at following traditional "safe" paths, but of course the hours suck. The chances of becoming a Jake Paul or Addison Rae or Joe Rogan are laughable, not something you can just put the hours into to have a "good shot at success."
Those are just examples of some outliers everyone knows, the amount of people no one has ever heard of making a killing via e-commerce or other online businesses is very high
I just don't think the chance of making it in any of those businesses is even remotely a "good chance" even with hard work or a bit of luck. The allure of IB isn't necessarily the nominal amount of money, but the general idea that its something achievable without remarkable talent or luck for someone that has done well without taking much risk.
Because I’m too much of a retard to work in STEM, not artsy enough to draw furry porn for cash, and too ugly for YouTube. But I sure do work hard.
the only honest reply I've seen on this post LOL
I think you’ve made some assertions here that don’t hold true for everyone. “To make our parents proud” some people come from a place where no one in their family knows what investment banking is, they do it to set themselves up for success.
I get the gist of your post but I mean it is what it is. I still think it’s one of the most sure fire routes to financial stability directly out of school. I’m sure you know the TikTok and YouTube career cash flows have higher discount rates.
I agree with you, IB probably is the most sure fire route to financial stability and Tiktok and Youtubers typically have a sub 5 year lifespan, so they aren't the best examples. But the costs to working 100 hour weeks for someone else are much higher than this site gives credit for, and there are simply less painful paths to financial freedom
I've only very occasionally work 90 hour weeks (pretty decent BB group). Usually average somewhere between 70-80. Not the perfect job by any means, but pretty solid for the pay.
This post is completely baseless. Sure there are people who make the same and then some in tech, but guess what? Those people studied comp sci, engineering, or mathematics. How many liberal arts majors get those jobs? Little to none. The god to honest truth is that there are more seats in high finance for one (because bodies are what is needed) and that almost all of them can be filled by someone with desire to learn on the job. The same cannot be said in high tech.
Way more seats in tech vs finance. Just google hires more new grads for swe than all the BB combined do for IB
Making IB money? Not a shot.
This is something I find to be a big problem on this forum. People are super short sighted as to what a career in investment banking entails. They think that the full career revolves around the material creation that occurs in the analyst and associate years, when in reality that is going to be only 5-7 years of your career. They always compare these 5-7 years to careers in tech and other industries. No shit, investment banking is tougher than those other career paths at the junior level, but it’s a path to more interesting work. I call it “taking your licks” while you’re young.
Then you move into the senior ranks of IB where you’re covering clients, sourcing new business, and negotiating and structuring complex deal terms with clients and counterparties. This should be the portion of the job that is compared to other career paths, as it’s the end goal. Assuming you went into IB for the right reasons (because you like finance), this should be the portion of the job that you aspire to.
Don’t lose sight of the light at the end of the tunnel, if the factors I mentioned above appeal to you.
Wait, fool's gold refers to something flashy but ultimately worthless. How is getting paid 2-3x the median household salary as an undergrad fool's gold in that analogy? If you're having trouble achieving financial independence in this field you would have trouble achieving it in any field. I don't know why you think it's a fault of IB that some individuals have poor financial discipline.
Also, all of the other "ways to make money" you outlined are people at the top .1% of their respective industries and live with the risk that they may very well fall out of the limelight in a month or a year and have their earnings plummet to nothing. For every successful entertainer/actor you know there are 500 doing the exact same thing but will never achieve the same success. Your worldview and understanding of what makes IB attractive and competitive is juvenile and simple. I wish you the best in your startup endeavors but I think you will be in for a shock when you find that being an entrepreneur is 10x more taxing than anything you've ever done as an analyst.
I don't really disagree with anything you wrote, but getting paid 2-3x the median income while also working 2-3x the average work week is not exactly living the dream, so I think the analogy applies. And I understand that the people I listed are EXTREME outliers, but the ability to be self employed in a world where there is so much opportunity to create a business with low upfront cost is totally realistic. Especially for the type of people on this forum who tend to be highly driven and high achievers. I'd rather make 100k working for myself than the same amount working for someone else, and I don't see why that isn't possible.
It's not that what you asking for is impossible or even illogical. Many people, myself included, have similar entrepreneurial ambitions. What I am trying to criticize is your, rather unfair, judgment of IB and its flaws. 90%+ of people I know in my own analyst class and among my peers back in undergrad chose IB not for the pay per se, but the experience and exposure you get from a 2-year stint in IB. If you do want to be any sort of legitimate entrepreneur you need credibility, business intuition, and a network- all of which you can find in an IB analyst experience.
Also, just because you've deemed yourself self-motivated and high achieving, doesn't mean you'll be a successful entrepreneur. I know of many people who were once CTOs and CEOs of successful and unsuccessful tech start-ups who have ended up back at a FAANG company working as lower-level software engineers. Bottom line, you're committing the exact same "grass is greener" fallacy that you're criticizing undergrad IB hardos for committing.
All of these posts seem to miss something so obvious. What if I actually enjoy finance? Tech salaries mean absolutely nothing to me because I don’t enjoy coding.
While IB may not be what it once was, it’s still a great place to start for someone who wants to spend their career in financial services.
Exactly
What if you are a CS major at a target with offers from both and you "enjoy" both coding and IB -- objectively, based on non-personal reasoning, is there a clear answer?
agreed, ibd is not worth it at all
Thanks for your opinon, 1st-year analyst in s&t
that’s why i did trading after getting multiple IBD offers
I just wanna exit to Corp Dev and work 45 hours a week
That’s not going to happen. Edit: hahah monkey shit, but in all reality I’d you’re going to work in CD and make decent money you’re going to be working more than 45 hours a week. Sure, some weeks will be less than 30, but you will have those with 80+. But probably just getting monkey shit from some prospect who knows nothing.
I didn't MS you. Genuinely, do you have a better alternative that actually is 45 hours a week? Are finance roles in big tech more consistent with hours?
do it bro lol
OP is the stereotypical purveyor of the “I hate IB” vitriol that I have seen all too often. If you don’t like banking, do something else. I can’t stress it enough: pursue a career that you’re genuinely passionate about — whether it be in banking, tech, law, biotech, medicine, real estate, etc. There are literally hundreds of options.
There is, however, a modicum of truth in OP’s post: IB is not as attractive as was pre-2008. But guess what? Comparatively, it is still the career with the absolute best risk/reward profile; if you’re able to break in and you’re worth your salt, the risk is disproportionally skewed towards the upside, especially considering that you have mobility to move into private equity, venture capital, corp dev, and countless other facets of business.
Sure, tech/FAANG pay is competitive and sometimes even higher than IB at the entry level, but IB enables you to learn at a deep level how business function and how companies raise capital and subsequently allocate it. In my opinion, that’s an incredibly transferable skill set that you can’t find anywhere else. As an applied math major who interned in software engineering at a large tech firm and subsequently decided to pursue a career in IB->investing, the transferable skill set and business acumen is what makes IB so much more attractive.
Thank you sir, +1 SB.
my buddy made MD at 35...now works ~30 hours a week and takes home 1-2mm/year for the last 10 years.
where else can you do that?
Zuckerberg turned down an offer of a billion dollars for Facebook at 21
for every 1 zuck, there are over 500 IB guys...your odds of being the next zuck are slim to none
zuck had a combo of a good idea, at a time where there was not much competition...nobody had created a great social media platform before facebook, myspace, friendster...they all sucked...
hard to find the next big thing...if you have a great idea, great...but most people don't.
do you have an idea that VC firms would invest 10mm into?
are you capable of executing on that idea?
what's your edge? who is your competition? why will your company beat the competition and take marketshare?
serious questions..
If it was that easy, then everybody would work in tech
Not everyone can code. But it does beg the question: If you are a CS major at a target and you're capable of getting into both tech and IB, which do you pick? IB is clearly the more exclusive path. You can easily get into FAANG from state schools like UCSD or UWash, yet getting into IB roles from those schools is a pipe dream. Prestige-wise so many target school students go into IB as a result (like me) despite having received offers in tech that may honestly have been the better long-term option. But, because the tech bubble is so new as an industry--and it's just hard to justify entering a job that some frat bro from University of Maryland who grinded Leetcode for a week also got when you spent the last four years grinding your ass off to get into an Ivy--it almost feels "logical," even if reality and numbers entirely point the opposite direction, to go into the collapsing industry that is high finance.
I get the jist of the post and don’t disagree in part, because too many people pile into the job without understanding all their options and there are some other lucrative options for some of the very smart people who do banking. But it also completely ignores the long term outlook, the discount rate / likelihood of success, the credentialing and the personal growth that comes with a few years of being a young person rubbing shoulders with CEOs.
On the first, no one thinks banking is “worth it” for what they make their first two years of their career - it’s the path it puts you on and the fact that, ten years into your career, you’ve now significantly outpaced everyone in the other “corporate” paths. As a senior associate / junior VP, there is basically no non-finance job (even in tech) that makes anywhere near the amount of money I do without double the years of experience I have. As an MD? It’s even starker. And the risk weighted ability / likelihood to get to those levels vs. in finance tilts the scales even further towards finance. And you can’t even compare the amount of wannabe e-commerce entrepreneurs or youtubers that make a sustainable half a mil or more a year. I also, if I want to exit to a more corporate job, can do so years ahead of similar experienced corporate colleagues because of the breadth experience.
That said, have I thought about trying to do my own thing, or exiting to a client, or doing anything to spend more time with family? Of course. The grind sucks, even as you get more senior. I have less to do than those below me, but now I have public companies who entirely rely on me to decide if they should do a transformative deal or sell themselves. I’m fully in charge of making sure the team does the right financial analysis, puts together the right pages, and runs the process appropriately to maximize value / diligence appropriately. So while I spend less time at my computer, the stress is often higher.
All that to say, the job is tough and there are pros and cons no matter how senior you get, but you certainly get monetarily rewarded for it in a way that makes it worth it for, at least, a lot of people. But it’s absolutely not for everyone.
I'm on this path. But just to play devils advocate. One could argue you're significantly ahead in your career because you've given up those ten years on a relative basis. IMO you need to be pretty confident you can reach those outsized outcomes down the line for this to eventually be worth it. Practically you've worked 10-20 more years (in hours) relative to your peers, so comp being significantly higher shouldn't really be surprising.
The big question is do those hours ever come down. I haven't actually seen that to be the case. A lot of PE clients, the senior principals are still very much grinding away. Maybe this is worth it, but eventually this lifestyle will become all you know. That I think, is the scariest part of this career choice to me.
It’s not linear, though. I don’t work twice as much as my FAANG peers (on the business side, maybe software developers it’s different but totally different skill set and ability to be successful so don’t think it’s reasonable to compare) but I do earn twice as much as my peers there. No long term successful business employee at FAANG is working 45 hours a week, they are working more like 55 while I’m working 70. And every year I stay in finance that gap widens, in a few years it’ll be three times as much. And every year you spend in finance is worth two years of experience to your eventual jumping off point, if you do, over those in corporate (it’s really more of a step function by levels, but essentially this is the case). Meaning, essentially, finance has an option value that doesn’t exist once you start down the other corporate paths.
And in terms of reaching those levels of success in finance? Let’s be clear, on the sell side anyone can make it up to MD. There are all these stats about how only x% people make VP/Director and it all ignores the war of attrition that happens and the amount of people who simple don’t care enough to put in the work or just get burnt out. That’s not to say they don’t make valid choices, but it’s not until MD where people with any modicum of talent truly start to not get promoted and forced out. That means you have probably ten years, 5mm+ in earnings, and the ability to leave to a corporate senior Director/VP level role paying $400k+ before you have to worry about getting pushed out.
Does it suck at times? Of course. Is it worth it for everyone? No. Does it put you in a much better trajectory for your future self than almost every other corporate job? Easily, and on a risk weighted basis more than any other career listed here, as well.
The real questions aren’t “does someone have an e-commerce business that sustains them” but more “even with the hours do I like the work enough to make it tolerable, or even enjoyable” and “does getting ahead compensation wise and in my career actually matter that much to me and my family or would I be happier having my time back but be less financially independent, not just at 25 or 30 but significantly so at 45 and 50”. And maybe any one specific person might find that success in their e-commerce business that means having both time and money, but on a risk weighted scale, your average analyst/associate/VP is making that trade off and you have to decide for yourself what your hierarchy of needs are.
I think a lot of this can be avoided if you don’t chose a bank and group full of cut-throats as a tradeoff for more prestige. Most DCM/ECM roles are pretty chill and coverage groups within certain banks can be more/less demanding. Can’t have it all though.
I think your post is focused on the prestige and pay in finance. Your forgetting that the junior levels of IB teach young men and women how to shovel shit whilst learning how to find value from companies financial statements.
It’s no wonder why many people from IB go onto become entrepreneurs or C level execs. It’s a pipeline for the best of the best, that has ultimately stood the test of time. The fact that banking is still as relevant post 2008 means a lot. When big tech gets hit with the reform that’s coming, I don’t think you’ll be singing it’s praises much longer.
ps. In 2020 not many young people are comfortable being told what to do, and when to do it. Simply being an order taker even for a few years is a valuable skill.
Totally agree with this point. Big Tech is still fairly new and hasn't seen any backlash/reform within our society (like almost every other booming industry) thus far. This will definitely be more apparent in the next few years with the rise of political/societal pushback that any booming industry (banks, energy, automotive, etc.) in the US has faced in history. As time has shown, what goes up must come down.
I think it's time for you to lose your virginity!
Latter part has some elements of truth. The idea that there's a ton of roles paying people $200k in mid 20s is a farce.
One thing I've always questioned is IB is the elements of self fulfilling prophecy. If all of the best non-tech grads usher themselves into financial services then financial services will always lead to better outcomes later on. It's a bit difficult to judge what the alternative route of just starting in something more interesting looks like. This is particularly amplified by the number of roles that require you to go through the IB boot camp. Realistically, it's nearly a requirement to do interesting things (focusing on transactions / corp dev). Albeit certainly not required nor desirable as a permanent career.
These threads are becoming more and more frequent on here as of late. The majority of the workforce - law, medicine, finance - many see it as a paycheck and risk/reward outcome in life. Every career are not so different from one another, since ultimately it comes out to a monetary paycheck we receive for all of our hard "work". It's fine if you do not find the work interesting, go pursue something that you find meaningful - not expedient.
You are not wrong either OP. There are plenty of ways to make a living. However, banking/financial institution services are still going to be required regardless of the independent actions of people going their own way. I know plenty of people who have started their own ventures out of pure passion and have made success out of it.
Good luck!
Good luck with you new adventure and I hope whoever hurt you in IB get what's coming for him. Keep us updated on your start-up journey?
Since I wasn't in the workforce pre-2008 and curious about differences this, what were the comp differences pre-GFC? Not that comp is everything but would be good to understand if we're talking about 50%+ differences or like 10%. Were associates making say 500k (even inflation adjusted) compared to 300k now, etc.?
I would appreciate any specific "so many other careers" that I could pursue
if you can't figure it out yourself then stay in IB for your entire life and don't worry about it
I had to give you a silver banana for that title alone. Now that I read the article I would have given you two if I could.
I would just note that the grass isn't always greener but it's important to figure out what's right for you. If it isn't clear then figure it out through taking educated risks and trial & error. It does sound like you're relatively in your understanding of other jobs, but the biggest risk in your early 20s is wasting your time.
You're going to get negative feedback on this naturally (as this is a forum for folks in investment banking), but you gotta do what's best for you.
OP is really going to prosper on OnlyFans
I found it astounding that people keep parroting the "techies only work 40 hours a week yada yada", making techies sound like they're some lazy fvcks who come to work at 11AM, smoke pot all day and collect their $200k paycheck at the end of the month. Fvck off. My girlfriend works in tech and she sleeps even less than me. Sure she gets to go home at 6, but guess what, work doesn't stop there bud. Always shuts off her laptop at 11-12PM and the to-do list still says 30+ tasks every single day.
They don't have asshole VPs emailing at 1AM though, so I'm gonna give you that.
Seen so many of you through my time in finance.
Yes - starting salaries are comparable for IB and STEM careers. No one does IB thinking it will be this way for 40 years. Your first couple of years are brutal and the pay isn't great. You chicken out, think of how great it is to make money as a tiktok celebrity and one day some associate gives you a bit of grief, and you quit to "make some easy money". You try some half assed ideas for a few years, put in tons of hours and get paid very little. Eventually join some crappy startup that was looking for burned out bankers and consultant they can underpay - take the shit job. Get paid nothing - stay frustrated, become a Bernie bro and go back to live in a damp basement. Finish your miserable life somewhere in a shit state and marry some obese tramp.
Then there are the ones that can put up with a bit of shit in their life, make it in finance - make good money - make more than 99% of the population for that matter, and that's essentially anyone who makes it past the associate level. Some keep on burning out and fall out, and some just keep at it, realise it's just a game make bucks and live a happy life making do with a 5 handle and having a pretty decent life.
Grass is always greener - there are a gazillion scenarios for your life. Banking helped me get a good base in my life and create a passive income stream - I'll never shit on it. It was easy to do relative to all over careers - and almost no job will pay you a 5 handle in your late twenties unless it's in banking.
So yea sometimes it sucks, I thought about quitting a million times when I was a junior getting insulted for nothing (I also worked in a time where people could hit you and mentally harass you, today you have HR up your ass in no time and are protected from any abuse - you have it so good). My friend who is now an MD at a large bank was looking last Friday on the floor and he was the last one, all the juniors had packed it in for the weekend - things have changed for the better for junior analyst today so just suck it up and go back to work.
Wait - "people could hit you"?!?! Are you being serious?! Hope the juniors hit back though. That'd be something.
I mean if you're putting up with getting "hit" and "mentally harassed" just for an upper middle class lifestyle, all power to you. But I fundamentally would never do that, and would risk making less doing my own thing to avoid that bullshit.
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