Investment banking vs s&t in 2021
I’m a junior in high school and I’m considering Investment banking or s&t. While I’m still young and there’s a hell of a lot of time for things to change, after doing research it seems as if a job in something finance related is what i want to do. As someone who is ultimately driven by money, investment banking and s&t are both very interesting. My first question is, are either of these jobs obtainable by starting at a community college, then transferring to a target school? I’m asking this because my school has a program where you get two years free at a local community college. My next question is, as someone who wants to achieve making $500k+ a year, which route would be better? Ive read that at a large investment bank that top earning investment bankers and top earning s&t people make near the same, is that true? Which one is easier to move of the corporate ladder? Does the work life balance of s&t make it the better option? What exit options does an invesment banker have that someone in s&t doesn’t? These are just alot of questions and if anyone would like to answer them that would be much appreciated.
At least he's honest
Wonder if he’s looked into operations roles at local power plants, might not make $500k but still pretty good when adjusted for LCOL in Springfield
If you believe you are smart enough go the Quant or FAANG route and you will outclear IB and S&T salaries by a land slide- I will get monkey shit tho as salty IB people will disagree (I am in IB lol)
I find money and the stock market more interesting then tech, which is what faang is right?
I find money and the stock market more interesting then tech, which is what faang is right?
IB has very little to do with stocks or the stock market. S&T can be, but it depends on the product.
Nonsense on FAANG. Way easier to get past $500k in IB by being a mediocre career banker. Unless you're counting on continued tech stock appreciation into perpetuity, which you shouldn't. Definitely start out higher in FAANG though.
True, I am in IB and thinking about quant TC sucks all the life energy from me knowing that they work 1/10 of my working hours and make 10x of what I make.
Depends what you want to do, right? Because to be frank - the vast majority of people in IB wouldn’t stand a shot at being a passable FX options or vol trader.. But what do you intend to do from there? I think it is more dependent on you as an individual than S&T vs IB. To the people here who shit on S&T for exit ops you just have to look at all the HFs started by those in research/trading to see IB isn’t the only path (and in my experience I met far more former traders running funds than bankers).
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I’m not sure I could make it into an ivy, but I’m considering ut Austin because I’ve read that McCombs school of business is a target school for banks in the Houston area
McCombs is a regional target for the Houston banks for sure. That said, you need to get into McCombs (not just UT), which isn't that easy (I'd say its on par with getting into one of the top 30-40 schools in the country). On top of that, you really want to be in BHP, since they get the vast majority of looks come interview season. At that point, it's just about as hard as getting into a top 15 school anyways.
Not saying it's impossible, but getting into that isn't a walk in the park.
You've gotten good advice on here so I'll add
- look up the target or semi target list on here, its called like comprehensive school list or something. UT Austin is great for Houston, SMU is pretty generous too, maybe Rice. Lots of semi target schools for banking that aren't rated that high on the college rankings, so find arbitrage where you can
- Community college program isn't a good idea since recruiting happens at the end of the second year, you'll have missed the boat. Go find a semi target that will give you generous aid (see above)
- S&T and IBD are very very different and something to figure out later on in school. You will easily make 500k in your mid 30s if you stay in either of those paths.
The only reason I’m even considering the community college is fear of going off to college and it’s just kinda been a plan for me and my homies to go there and get us an apartment and idk just live.
Common fear, college is a big change, but you need to start your life at some point. You have a ton of free time in college so you guys can all come back together frequently
HS student watches Wolf of Wall Street once...
You're way too young to craft your entire education/internships around IB/S&T (both extremely different jobs). If you want to be successful no matter the career, obvious first step would be to attend an Ivy+ school. You'll be introduced to other driven minds there and can decide what is right for you as you mature.
I’ve watched the wolf of wall-street way more than once.
IB and S&T are in no way, shape, or form the only paths to $500k in finance
Your odds of staying in these roles long enough to make $500k is less than 5%.
Everyone in IB does it as a resume builder and then they’re gone in 2 years. The hours required for the job (even at the senior levels) are unsustainable. Trade off is you will make good income but it will cost your happiness and personal life. This also extends to the exit opps of IB (PE/HFs) which offer marginally better comp for same brutal hours.
As for S&T, majority of aspiring finance students have strayed away from it because of the long-term headwinds the job is facing from automation. There’s been several job cuts in the past and the glory days are long over in terms of comp. You can still make $500k but you better be in an illiquid desk (not FX, equities, commodities). Also S&T it isn’t a cerebral role where you make investing decisions. Ever since the last financial crisis, the job has evolved to just being a monkey making trade executions for clients. Before banks had prop trading desks where you essentially gambled the firms money for a profit. Now you’re just mostly an intermediary.
All this to say that the two paths above are most discussed because they hire the LARGEST amount of undergrads. This is materially different than the BEST jobs in finance to make good money.
If you are interested in the financial markets and coming up with investing ideas, I’d strongly encourage you to look into Equity Research (both sell side and buy side). Comp is the same as S&T pretty much (albeit there are a few wizard traders who clear fuck you money but it’s better to assume that will never happen) and hours are somewhere in the middle between S&T and IB. ER doesn’t get talked about as much because it’s a much SMALLER industry. BB will hire 50 IB guys for every 1 ER guy.
Also recommend checking out private banking too if you’re a more sales-oriented person
Is equity research harder to break into?
Because there are way fewer spots, it is very competitive. However, there are definitely fewer people applying for ER jobs than banking because it's smaller and some are not interested in the public markets.
That said, I'd weigh it as being equally as competitive as IB, and perhaps more competitive than S&T.
ER recruiting is also less structured and some banks hire on a as-need basis so it's vital to network and see what's good.
Equity research is not hard at all to break into. Disregard what that guy 'Biden's Puppet Master' indicated. The comp is absolutely NOT the same and if you're a sell-side ER analyst or associate, you're just covering the same select portfolio of companies within the sector you were hired for. ER is mostly for people that enjoy doing nothing more than updating financial models in excel and publishing BS reports on stocks. It would suck to be in ER these last 2 years considering how irrational market behavior has been.
This is just false. You are still prop trading technically when you make a market. You have to take the other side and you can anticipate how the market will trade by placing your bids / asks directionally. Couple distressed traders over the years made a couple hundred million in S&T
This is a very inaccurate description of s&t. You are absolutely making investment decisions - I trade investment grade credit on the sell side and prop trading is really the main way to make money… bid/ask has all but disappeared. It is not an execution role. Execution trading jobs do exist (mostly on buy side) but that is not the job of a sell side trader at all
Focus on getting into a good school. Do not under any circumstances go to community college. You need to be at a good university during your second year to recruit effectively. Also don't forget to enjoy yourself, you're probably still a teenager and you won't be recruiting until 2025.
The personalities required for a good junior analyst in IB and S&T are vastly different.
Take the word money out of your vocabulary, it will reduce your career longevity and thus your career earnings. If you hate the job and only do it for money, there’s no way you will be able to do it for 30 years without quitting
I truly think I’d enjoy a job in finance
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