How Difficult is Investment Banking?

I suppose with all the focus on how difficult it is to get in in the first place, an the fact the hours are insane, people dont really talk about how challenging the actual work is.

I mean we know its a tough job with the pressure and hours but how difficult is it to build a model? Is it challenging in a quants way or is it more a case of doing what your told and if you can get it done on time your ok?

Just interested.

Is Investment Banking Hard?

While many undergraduates and perspective investment bankers spend their time wondering how hard it is to break into the industry - the difficulty of the job is equally important. Our users shared their thoughts below.

The difficult elements of banking are:

  • The hours and stress of the work
  • Non-regular models
  • Accounting work
  • Attitude

BankonBanking:
It depends on your group. Some groups there is a ton of cookie-cutter modeling - same thing each time. Other groups have different models every time, and you are building models from scratch regularly. It depends on your group, but assuming you're somewhere in the middle, the most challenging part of the job and the hardest part of the job is the part spoken of most - the hours/stress. Once you've built some models, torn through financials, etc, the work isn't usually terribly challenging - the hours and fire-drill work flow at times is what makes it hard.

Sterling Archer:
Whether or not banking is "difficult" depends on the level that you are. At the junior levels, the most difficult part by far is managing your time and not going crazy. The actual thinking involved is rarely that rigorous.

lifesgreatmystery:
Ibanking isn't hard, give me a kid with good working ethic who isn't completely stupid and it'll work. That said, everything is relative, and any job will be hard/take time if you want to be good at it.

What is Challenging About IB?

Billy Ray Valentine:
  • Building an LBO model with a complicated capital structure and revolver = hard
  • Changing the colors on a PowerPoint presentation = easy and mindless
  • Getting chewed out by your boss for screwing up changing the colors on a PowerPoint presentation at 1am = VERY HARD

The Phantom:
Same with modeling. Difficulty kicks in when you have to juggle speed, efficiency, attention to details, and obviously overall sexiness of a model.


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Comments (98)

Apr 13, 2011 - 9:56am

90% of it is easy
10% of it is actually hard, aka Lazard's M&A models. u wont be the same after creating one from scratch.

i guess other M&A models can be hard too depending on how u make 'em.

maybe at a crap bank like UBS u do what ur told. at elite boutiques u have to think and every single model is entirely different

Apr 13, 2011 - 10:00am

It depends on your group. Some groups there is a ton of cookie-cutter modeling - same thing each time. Other groups have different models every time, and you are building models from scratch regularly. It depends on your group, but assuming you're somewhere in the middle, the most challenging part of the job and the hardest part of the job is the part spoken of most - the hours/stress.

Once you've built some models, torn through financials, etc, the work isn't usually terribly challenging - the hours and fire-drill work flow at times is what makes it hard.

Apr 13, 2011 - 10:01am

The accounting is complex enough, I've always found it more complicated than revenue/eps forecasting (what I used to do) when I've seen my banking friends' work. The volume of work, short time frames and need to cover multiple eventualities for clients multiply the amount of work one would think one must do.

My boss, who ran one of the industry groups at MS fwiw, tells me the relationship building and maintenance processes at senior levels is grueling.

"Dude, not trying to be a dick here, but your shop looks like a frontrunner for the cover of Better Boilerrooms & Chophouses or Bucketshop Quarterly." -Uncle Eddie
  • 1
Apr 13, 2011 - 10:33am

Do you guys find it difficult in the sense of having to think about business/accounting or is it difficult in a quants way like working with complex forumlas and stuff?

Apr 13, 2011 - 10:35am

its the latter unless ur at UBS.

we were building multiple sensitivities and models off each part/segment of a company buying another company's segment and doing it in a matrix 3x5 format so basically 15 mini models sensitizing each other. it was an insane ride and megafunds were grabbing at me when i talked about it, begging me to join.

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Apr 13, 2011 - 10:57am
boutiquebank4life:
its the latter unless ur at UBS.

we were building multiple sensitivities and models off each part/segment of a company buying another company's segment and doing it in a matrix 3x5 format so basically 15 mini models sensitizing each other. it was an insane ride and megafunds were grabbing at me when i talked about it, begging me to join.

this is as close to pure bullshit as you can get

Apr 13, 2011 - 3:35pm
boutiquebank4life:
its the latter unless ur at UBS.

we were building multiple sensitivities and models off each part/segment of a company buying another company's segment and doing it in a matrix 3x5 format so basically 15 mini models sensitizing each other. it was an insane ride and megafunds were grabbing at me when i talked about it, begging me to join.

this might be the dumbest post i've ever read on here. "insane ride", "megafunds...begging me to join" just wow

Apr 13, 2011 - 7:32pm
it was an insane ride and megafunds were grabbing at me when i talked about it, begging me to join.

This is actually funny.

Whether or not banking is "difficult" depends on the level that you are. At the junior levels, the most difficult part by far is managing your time and not going crazy. The actual thinking involved is rarely that rigorous.

Apr 13, 2011 - 8:24pm

everything that comes out of boutique bank's mouth is bullshit

kid has like 5 different wso accounts that he goes on to talk shit about UBS cuz he got rejected

ibanking isn't hard, give me a kid with good working ethic who isn't completely retarded and it'll work

that said, everything is relative, and any job will be hard/take time if you want to be good at it.

i.e., you probably think quant modeling is hard, but to a quant analyst he probably thinks it's not that hard because he does it all the time. see?

Apr 13, 2011 - 9:16pm
ibhopeful532:
Someone out Boutiquebank4life, seriously, it can't be that hard to figure out.

Whats the point he probably goes to a random school in idaho.... no point

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

Apr 13, 2011 - 9:19pm

True - but to the admins on here... from a perspective of a long-time user, trolls like boutique are single-handedly destroying this forum because the information presented is no longer that credible due to the flame 'contributions'.

You guys seriously need to take care of this infestation problem...

Apr 13, 2011 - 9:25pm

Some is hard, some is easy.

Building an lbo model with a complicated capital structure and revolver = hard

Changing the colors on a PowerPoint presentation = easy and mindless

Getting chewed out by your boss for fucking up changing the colors on a PowerPoint presentation at 1am = VERY HARD

  • 2
Apr 19, 2011 - 4:58pm

Its not "that " difficult.

It is physically demanding, hours are long... and usually because there will always be one a55hole who likes to work really slow, and doesnt mind sleeping in the office all night if he has to. Infact, that might even be exciting for him. When you have an entire team of people like that , then you have real problems .......

"Life is too short to think small."
Apr 19, 2011 - 5:21pm

no. its grueling though. there's a difference.

I didn't say it was your fault, I said I was blaming you.
  • 1
Apr 19, 2011 - 5:16pm

Do you find formatting and going to the printers to be hard? I'm dead serious, I have a friend that claims that the majority of his time is spent on these two things. He gets to have beers while waiting for 100^10 copies are being made of pitch books.

That being said, I think some of them underplay just how much actual financial analysis they get to do just because it is usually the same types of analyses just on different companies or with 1 different assumption. But I'd be interested to hear more analysts views on what work you guys are honestly doing.

Apr 19, 2011 - 5:17pm

100 hours a week doing a ton of shit that would normally take you twice as long as the time they give you while trying to achieve 100% accuracy... doesn't sound very easy to me

Just imagine taking a class exam that would take you an hour at normal speed. But instead you only have half an hour and you absolutely have to get 100%. And you do that all week on a random schedule with 4-hour sleep.

Apr 19, 2011 - 5:18pm

IB2001 is deadon.

I would say no the job isn't difficult, but what is difficult is it is all on the job training. One can do some things to make it easier, but you will grind it like the rest of us did to get to be 100% accurate the first time all the time, given time constraints, lack of sleep, all that IB2001 said. It is a lot of fun and wouldn't trade it for the world, but you got to grind and make mistakes to get better. It is the only, albeit painful, way. I always look at as people doing me a favor when I get more work, it is like I won a trophy every time.

Apr 19, 2011 - 5:20pm

No, as you said, grueling is the right word...

The greatest difficulties you'll encounter are when your product and your superiors' vision don't match. Ambiguity is often responsible. Also, the physical demands of the job take their toll...doing even simple stuff is hard when you are drunk from sleep deprivation. You know you are a banker when you have fallen asleep standing up.

Apr 19, 2011 - 5:27pm

You hear a lot of idiots say "it's not rocket science" and while it's not rocket science it's still very challenging. If you work somewhere semi-legit and not a low level boutique the sheer volume of work and razor thin deadlines you are given to complete said work make it very challenging. On top of that you have a lot of MDs you may work with that will try and make you reinvent the wheel. In IB you are thought of as a slave who is on call 24/7 hence the reason you are given a blackberry. I don't care how many all nighters you pulled in college nothing can prepare you for actually being in IB it's fukin brutal.

'We're bigger than U.S. Steel"
  • 1
Apr 19, 2011 - 5:28pm

the work is not difficult its just long hours, just need alot of endurance, not much thinking required.

big issue is making sure everythings right, as your creating slides for people that know alot more about the industry and can instantly spot mistakes.

most useful banking skill is finding where you can fudge stuff and get away with it and save as much time as possible that way. if no1 spots it, its not a mistake.

Apr 19, 2011 - 5:29pm

long hours, accuracy/attention to detail makes it tough, I agree with what was said above about making mistakes, everyone does it but the pressure you feel not to make a single one is what keeps you up at night. To me, It always seems the MD remembers the mistake you made in the first draft somewhere.....but maybe im alone here.

its one way or the other: hate me or admire.
Apr 19, 2011 - 5:30pm

first drafts are the fkin worst, cause people still get pissed about formatting mistakes and minor things, its a first draft for the love on god im not gonna make pages perfect if 95% of them get replaced and changed massively anyway/

Apr 19, 2011 - 5:32pm

I have never worked for a BB, but I get the feeling in groups like mine in boutiques and MMs the IB experience is significantly different. When you're on a deal team of 3 people you WILL need to do some analyzing and using your brain. Deals vary greatly in complexity also i.e. a small capital raise vs. a demutualization merger conversion.

Also keep in mind that this is the internet. I'd say 90% of the people who post here will never work in IB. Additionally, many people go out of their way to say how easy banking is because it prob makes them feel smart. Have you ever noticed every gmat thread here has avg scores of ~775.

Best Response
Apr 19, 2011 - 5:36pm

The other thing to realize is that in i-banking, you lose the ability to put in more time to cure your other shortcomings. Think back to all of the exams you took in school. I would reckon that there is a high degree of correlation between the folks who dedicated the most time to their studies and those who received the best grades (outliers aside). Similarly, those who spent the most time training/practicing sports were the ones who were usually the best. In banking you no longer have the flexibility of time. You can't say: "I'm going to put in an extra two hours to ensure that my work is flawless" because you don't have an extra two hours to spare. The result is that your ability to complete the job well depends on competence and endurance rather than effort. For some people this can pose a very significant challenge.

CompBanker

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Apr 19, 2011 - 5:40pm

Why banking seems hard... (Originally Posted: 08/08/2012)

Good morning everyone.

I think, all too often, we put the investment banking career path on a pedestal and consider it to be infallible. We talk about our exit opportunities before we've worked in a full-time FO role for even one single day. When we think about working 90-100 hours per week, week in and week out, we think we can do it -- no problem at all, we've been groomed and pruned to be investment bankers since we got to college, and this is the opportunity we've all been waiting for.

Well, I don't know what it's like to give up your entire life either, but I try to at least be cognizant of the fact that every time I have fun in my very carefree, quasi-unemployed life, this will all soon end.

And it won't end in the "oh my God I have to work 40 hours a week and can only have fun on weekends" manner. It will end with the "it will be very difficult to have fun for the next 2-3 years of your life, period" train careening into my personal and social life. I guess I'm okay with that (but not really, I just think I'm okay with it, because in reality I don't have a clue), but sometimes I catch myself in the middle of doing something I really enjoy, and quickly think "better kiss ________ goodbye in a few months".

Let me now reflect on the last week of my life and why having a very demanding job seems so difficult:

1. Sleeping at least ten hours every night

I love sleeping. I am physically capable of surviving on 6 hours per night for extended periods of time (i.e. college), but 8-10 hours has always been my MO. This will be the first thing to go, not necessarily because the long hours don't allow for 8-10 hours a night, but because sleep can be sidelined at any time because an Analyst is always on-call. Again, I managed fine on 6 hours per week, catching up on weekends, during college, so I don't think this is an impossibility, but I'll miss having a flexible sleep schedule.

2. Weekend trips

Last Friday I drove up to Washington DC to visit some friends from school. I decided to take this trip on Friday morning, and because I don't have a whole lot holding me back, hopped in the car and was in DC in the afternoon. I stayed the entire weekend, and had an absolute blast. This will never happen again.

3. Trouble staying up very late

This is related to both of the above, as I had to return Sunday night from DC, driving the 6-7 hours from 11pm to about 6:30am. This was excruciatingly difficult, and involved many cigarettes (I don't normally smoke ever), No-Snooze pills, coffee, and soda drinks. On several occasions I felt myself falling asleep and had to pull over to rest my eyes for a few minutes and stretch. The next day I was an absolute wreck: massive headache, burning eyes, every part of my body ached...on sleeping from 6:30 to 9:30am. Three hours of sleep and I was no longer a functioning human being.

4. Reading for pleasure

Last night around 10pm I pulled out my copy of "A Game of Thrones" and dove into that epic world for about 3 hours. Reading for pleasure was something entirely missing from my life during college, and I've really enjoyed being able to pick up a novel and just read it, without the added pressure of finishing it before a certain date or reading it "closely" because I know I'll have to write a paper on it or discuss it during class. No one is going to ask me to discuss or write a paper about Game of Thrones at work, but having time to read as much as I like to is dubious in and of itself.

5. Exercising whenever I please

I'm not too in love with exercising, but I like to run every once in a while, and am more susceptible to having an exercise routine when my life is more structured (like when I'm working or in school). I've read a lot of posts here on WSO about people going to the gym at very odd hours in the night or in the middle of the day, and while those are certainly find methods of exercising, they seem really inconvenient. That's not to say that I don't plan on exercising if/when I begin a banking stint, but I don't doubt that it'll be very difficult to convince myself to go to the gym at 12am when I could instead be catching up on the all-important first thing on this list.

Now, of course, I operate at the opposite extreme of people who work 90-100 hours a week. Networking is my full-time job right now, and while I spend many hours per week networking, it's still something that I do on my own time, allowing me plenty of opportunities to do things that are personally fulfilling and drivers of my overall happiness levels. Yet and still, I try to remain aware of the fact that, most of the time, I won't have the free time to just chill out and watch a bunch of movies, or watch the entire first season of LOST in one day -- and this doesn't really even apply only to careers in banking, but any career with good pay and high upward-mobility.

The point of this post isn't for you all to call me a wuss (guaranteed to happen), but to remind all of the prospective monkeys out there that you should enjoy the free time you have now, be it in college or in the real world if you're already here. You don't know what it's like to work 100 hours per week until you've done it (and I certainly don't claim to know), and it probably really sucks and you won't be thrilled with it, so join your friends for a couple of brews and a movie NOW, because soon enough it might be too late.

Am I being overly-dramatic? Do you really not have to give up all the things you love when you're pulling insane hours? How do you guys make time for hobbies and other things that are personally fulfilling?

Apr 19, 2011 - 6:00pm
WallStreetOasis.com:
Simple answer. Yes, you have to give up almost everything when you work 90-110hrs per week.

I agree... you can keep a few things that you view as critical to keeping your sanity (working out, a meal out with your friends or a night or 2 out per week) but one of the things you have to come to terms with is that things are no longer done on your time frame and you have very little control over most of your life. Most of the time this is frustrating and causes you to miss out on things you would rather be doing, but remember to use it to your advantage every now and then so it doesn't go to waste. If there is ever a social engagement you would rather not attend, you can always credibly use the "work" excuse.

Don't get too worried about it if you do end up going the banking route. You will forge some great friendships and identify opportunities to move your career in a variety of directions, but you will also get to have fun. I have partied with millionaires and billionaires, gone to excessive parties, and met many interesting people, which has served to put a lot of the absurdity and long hours into perspective. Take comfort in the fact that it WILL get better and that anything worth doing requires a bit of sacrifice.

Apr 19, 2011 - 5:44pm

Hahaha you really over exaggerated how bad it's going to be. So yes, you are being overly dramatic, and no, you won't have to give up all those things. You make time for hobbies when you have more free time, not every single week will be 100+ hrs.

"Well, you know, I was a human being before I became a businessman." -- George Soros
Apr 19, 2011 - 5:45pm
Futures Trader Man:
Hahaha you really over exaggerated how bad it's going to be. So yes, you are being overly dramatic, and no, you won't have to give up all those things. You make time for hobbies when you have more free time, not every single week will be 100+ hrs.

SHUTUP U BETA SHEEP HAHA LOSER

I hate victims who respect their executioners
  • 1
Apr 19, 2011 - 5:46pm
Vontropnats:
3. Trouble staying up very late

This is related to both of the above, as I had to return Sunday night from DC, driving the 6-7 hours from 11pm to about 6:30am. This was excruciatingly difficult, and involved many cigarettes (I don't normally smoke ever), No-Snooze pills, coffee, and soda drinks. On several occasions I felt myself falling asleep and had to pull over to rest my eyes for a few minutes and stretch. The next day I was an absolute wreck: massive headache, burning eyes, every part of my body ached...on sleeping from 6:30 to 9:30am. Three hours of sleep and I was no longer a functioning human being.

Next time you're faced with all night driving or working late, here's a pro tip that might sound a little crazy but it will help you get through it: Soak your socks in gasoline.

Will it help keep you awake? Naw. Will it help with the body aches the next day? Nope. Will it improve your mental function on less sleep? Almost certainly not.

What it will do, however, is keep the ants off your candy ass.

Apr 19, 2011 - 5:50pm
Edmundo Braverman:
Vontropnats:
3. Trouble staying up very late

This is related to both of the above, as I had to return Sunday night from DC, driving the 6-7 hours from 11pm to about 6:30am. This was excruciatingly difficult, and involved many cigarettes (I don't normally smoke ever), No-Snooze pills, coffee, and soda drinks. On several occasions I felt myself falling asleep and had to pull over to rest my eyes for a few minutes and stretch. The next day I was an absolute wreck: massive headache, burning eyes, every part of my body ached...on sleeping from 6:30 to 9:30am. Three hours of sleep and I was no longer a functioning human being.

Next time you're faced with all night driving or working late, here's a pro tip that might sound a little crazy but it will help you get through it: Soak your socks in gasoline.

Will it help keep you awake? Naw. Will it help with the body aches the next day? Nope. Will it improve your mental function on less sleep? Almost certainly not.

What it will do, however, is keep the ants off your candy ass.

It will really go well with all the cigarettes he smokes on long rides

Apr 19, 2011 - 5:51pm

You could complain all you want but the next guy is more than happy to take your job and eat your sandwich.

It's not the Harvard MBA, but what you *do* that defines you. But who are we kidding, it's all HBS.
Apr 19, 2011 - 5:52pm

I can really relate to this post. I've had the same thought process a lot lately. I've always heard about how much I would have to give up, but never experienced it until this year. A lot of close friends of mine have just started their first year in IB, and just seeing how much our friendship has diminished already - I wonder if I could really give that up when it was my turn to.

Apr 19, 2011 - 5:54pm

I don't get all of the hard-ons for IBD. Being an Excel monkey, creating pitch books, no value for your thoughts, giving up your life all for what is pretty miserable comp right now. Being an analyst doesn't even prepare you to become a managing director...that is all about sales skills. It seems crazy to me that so many people are falling over themselves to get these positions out of school.

Apr 19, 2011 - 5:55pm
SirTradesaLot:
I don't get all of the hard-ons for IBD. Being an Excel monkey, creating pitch books, no value for your thoughts, giving up your life all for what is pretty miserable comp right now. Being an analyst doesn't even prepare you to become a managing director...that is all about sales skills. It seems crazy to me that so many people are falling over themselves to get these positions out of school.

The very reasons you just mentioned are the very reasons why.

I hate victims who respect their executioners
  • 2
Apr 19, 2011 - 6:08pm

I wonder what the average lifespan of an ibanker that stuck around for a while is...but then again I guess they earned enough money to pay for the best medical care to offset the years lost from the caffeine, coke, lack of sleep, lack of exercise, heavy binge drinking on certain weeks, ciggerettes...am i missing anything?

Apr 19, 2011 - 6:09pm
ladubs111:
I wonder what the average lifespan of an ibanker that stuck around for a while is...but then again I guess they earned enough money to pay for the best medical care to offset the years lost from the caffeine, coke, lack of sleep, lack of exercise, heavy binge drinking on certain weeks, ciggerettes...am i missing anything?

go back to the yahoo message boards

I hate victims who respect their executioners
  • 1
Apr 19, 2011 - 6:10pm
ladubs111:
I wonder what the average lifespan of an ibanker that stuck around for a while is...but then again I guess they earned enough money to pay for the best medical care to offset the years lost from the caffeine, coke, lack of sleep, lack of exercise, heavy binge drinking on certain weeks, ciggerettes...am i missing anything?

A Y-chromosome, by the look of it.

Apr 19, 2011 - 6:12pm

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