Is IBD worth the pain and suffering?
After reading this article [http://www.wallstreetoasis.com/forums/life-after-…] I had an internal crisis about my dream career, investment banking. Is what this anon said actually true? Is the pay, the exclusivity, and the lifestyle blown out of proportion? I would assume that most of us like money in at least some aspect given that we want a job in finance, whether it be investing it or spending it. Of course the life of an analyst is brutal, but I plan on justifying this suffering by looking at the light at the end of the tunnel, which. So is what this guy is saying true, or was he just not tough enough to keep the eye on the prize?
Summary for people that didn't feel like reading the whole article I linked:
-the anon was an analyst when he decided to quit
-stated that the pay was shit relative to the amount of effort required
-everyone was miserable (including the MD's), and that IB was "boring"
-after he quit he became a pianist
.
You definitely learn a lot. I am now an expert at fudging valuations, formatting in excel, powerpoint and word, explaining simple concepts over and over again (until the associate understands). You also learn how to restrain yourself from laughing out loud when your MD says something completely idiotic in front of a client... all in all, a gerat skillset :)
"LIVING THE DREAM 24/7 ON http://THEALLNIGHTER.BLOGSPOT.COM"
I-banking exit opportunities/IB experience worthwhile? (Originally Posted: 08/08/2007)
I will be attending LSE this fall for their Masters of Finance program.
I am very interested in IB but am deathly scared of the hours. However, I don't think any other aspect of finance can provide the same type of exit opportunities that ibanking does (unless you do PE at KKR/Blackstone/Carlyle e.t.c which is almost impossible without IB exp)
I am curious to hear from people that have done the 2-3 year IB stint whether they feel that 2-3 year sacrifice has paid off both from a financial as well as learning standpoint. Would you do something differently if you could do it over?
Though analysts are stuck doing a lot of the grunt work, I hear that you do learn a lot as an analyst.
Do whatever you want. Don't get caught in the rat race of jumping to IB. If you don't genuinely like it you will burn out fast
Many people who join IB are actually interested in finance while others are in it for the money. You need to find your own motivations and decide what is best for you
Apart from PE/HF, IS IB WORTH IT? (Originally Posted: 12/18/2015)
If someone isn't interested in PE/HF, is investment banking still the best path out of undergrad? I would assume that most IB analysts who leave banking end up at B-school eventually, where everyone is more or less on equal footing for recruiting (minus PE/IM jobs). SO, lets say that I have a solid undergrad record ( 3.6 at a target, 720 GMAT), would I be better off joining a non-profit/teaching/work in industry for a few years while actually enjoy life before bschool? 30-40% of most top b-schools are students from industries other than finance/consulting, not to mention it would be much easier to stand out as an applicant in these pools.. Any thoughts?? Seems weird to me that so many IB analysts go through the grind of IB for 2-3 years, then those that dont get PE/HF exit to corp-fin/dev only to end up at B-school right alongside teach for america alums/manufacturing/consumer goods workers. Any thoughts?
There are so many threads discussing lifestyle... man it comes down to you. Nobody is going to love every day on the job. But if you find the end result of your work interesting (M&A, Debt, IPO, your industry, whatever it is), then you'll persevere and you'll learn a lot. But you absolutely cannot enter IB with your eyes set on exit opportunities from day one. You'll be miserable.
When you're done you'll more than likely appreciate the experience and stamp on your CV. Can be hell to live through at times though.
Any thing you enjoy working on is worth your time. (If not now then you will eventually agree with this)
Every single job that pays well will require a significant amount of hours worked. Doctors, lawyers, entrepreneurs, investment bankers, pharmacists, etc. all work long hours. What makes investment banking special is that it requires no advanced degree and no real knowledge about anything, yet it pays six figures right out of school.
This is not to mention the extreme intangibles that you get from the job- critical thinking, finance and accounting knowledge, industry knowledge, and an established work ethic. Just the way of thinking that investment banking teaches you alone is worth it.
No other career position has the exit opportunities, the pay, or the intangibles that banking has relative to what is required to break in. If 80-hour work weeks scare you, you may want to look at 9-5 jobs, but don't expect to be making boat loads of money either. There's nothing wrong with a 9-5, but generally speaking, if you want the money, you have to make the sacrifice. Personally, I love my job and hope to stay on as an associate, but I know that I am in the (large) minority here.
you have been reading too much WSO
Personally I'm not saying a 80-100 week scares me. I'm just saying it better be worth something, whether it be the atmosphere, money, or exit ops.
Look, I complain a lot on this forum about banking and the lifestyle. But you know what? I think it'll be worth it. Sure, when you're in the office super late at night you think banking sucks. On the other hand, having headhunters and recruiters reach out to you starting at like 3 months into the job is pretty sweet. I believe that the opportunities that will be presented to you post-banking will make those 2 years worth it. And I'm at a MM, not even a BB.
With all due respect, you are very naive. If you think that joining a non-profit/teaching/working in industry for no other reason than MBA options will be easier, you are kidding yourself. At least with IB, you might be under an incredible amount of stress, but you will earn significantly more many than people working in the aforementioned three career fields and probably have a better shot at a top MBA program. That is not to mention the intangibles that IB gives you, such as highly advanced critical thinking skills, a thorough knowledge of accounting and finance, etc. You are HEAVILY discounting those intangibles with your last comment about ending up in the same position as Teach for America/manufacturing/consumer goods workers.
Very few people do IB just for the exit ops. WSO gives a skewed perception of this.
The value in banking is the optionality it creates (IBD, HF, PE, Corp Dev, VC, Startups) and the fact the pay is pretty awesome for a first job out of college / usually NYC definitely doesn't hurt
Ok so obviously there are some good points and some omissions in the story:
1: Not everyone has a skill like this to fall back on. Obviously being a successful musician is a great gig. Most people don't have the opportunity.
2: It gets better when you advance to higher levels (generally higher pay / fewer hours) but you are still grinding constantly, stressed out, lacking in free time, etc. If you aren't super committed then you are going to have pretty frequent doubts about what the fuck you're doing with your life (like our OP), even after you get to the "promised land" in the eyes of a banking analyst. Money with the time to enjoy it can buy happiness, but not many people have this apart from inheritance / winning the lottery.
3: No one can tell you what's right for you. You just have to try it out and make the best decision with the information you have at the time.
4: Like many careers, the compensation/benefits at the top are commensurate with how difficult it is to get there. Many people kill themselves and do everything they can / jump through all the hoops just for it to not work out for a random, unforeseen reason. If you don't want to put in the work to roll the dice on making it, then don't.
Solid. Thanks
The dude is a musician. Of course he didn't like being a banker. I wouldn't like being a fancy little poet either. If you are asking this question you may be in need of some introspection, not the advice of a bunch of strangers online. Besides the advice I just gave you, that shit is gold.
I enjoy finance, but the guy described the entire field of finance in such a negative manner that it shocked me. I guess I failed to take into account that he hated finance because his only attraction towards it was the salary. And why wouldn't I ask for advice? Clearly you have provided me with a form of confirmation to my previous beliefs about IB haha. But thank's for the input.
i honestly don't think life as a banking analyst is that bad or even difficult at all once you're past the first 3-4 month ramp up, as long as you actually enjoy the finance and company analysis.
lifestyle sucks (i consistently actually worked 90 to 100 hours a week my entire first year, whether you think i'm exaggerating or not), but honestly, it's doable for two years. plus making 160k+ as a 23 year old out of college if you're top bucket your first year is pretty ridiculous.
the only thing you need to really watch out for is making sure you work for the right people. working for shitty vps and mds my first year made me seriously depressed and pissed off 24/7.
most mid / senior level bankers (vp+) are either: 1. brain-dead execution monkeys that will keep you there at 3am on a friday making asinine text edits to a deck for a pitch just so they can get their value-add in. 2. real sales guys who'll make sure you get a solid analyst experience (these guys can grind the shit out of you too, but they're not retarded to work for, at least).
become favored son of a non-shit human being MD who brings in deals and banking is actually semi-bearable.
Ok this is what I previously thought. Thanks for the confirmation.
If you think the comp isn't worth the grind, think about public accounting guys. Auditors work pretty damn hard hours to and make absolutely dick. In many cases about as much as a top bucket 1st years bonus or less on an all-in basis.
On an hourly basis, it's probably a better deal. The only real "shit storm" is after year end financials. They don't put as much effort into the quarterlies. Even the shit storm is only 60 hours a week. You're probably talking 8,9 to 6,7 normal days with maybe an hour or two add on. Because these firms have started essentially auditing books year round it doesn't necessarily add a ton of work to do. (Anecdotal small batch evidence from people I know doing it) Also, there are some intangibles to working with the B4. Other than IB, VC, PE, most businesses really like B4 people.
"Businesses" will generally like them for controllers, accounting director, or audit director positions. Not for CFO's, CEO's, other higher paid and more interesting roles. Many of the guys in big four I know still work 80+ hours a week during busy season. Yeah, they get half the year that's relaxed etc. but you are still in client service and basically will get down and suck if the client tells you to. Therefore my statement that the comp ratio is much much worse still stands.
I wouldn't completely freak out because you read one person's online post about how he hated IB. Are IB and most finance careers hard work with long hours, stress and working with some jackasses who don't know what they're doing and/or who are gigantic egos? Definitely. Is it for everyone? Definitely not. You can put your 2 years in as an analyst and have a pretty decent resume to land a job in tons of other fields (not just what people on WSO aim for in PE or HF's, which is kind of a continuation of IB with different details for the first few years at least) and have your choice of jobs if you play your cards right. Will you give up your early 20's to work? Yes, but as someone who did that 2 decades ago I can look back and it seems like nothing now. But it's definitely not the only career option out there by far.
Like BeastMode said, it gets better if you stay in for the long term but this isn't a field for someone who wants to go home at 5 pm regardless of how senior you become. It takes a certain type of person to basically be willing to work all the time. I'm never in the office until 2 am but I, and every senior person I know in PE, HF's, IB, c-level guys, senior consultants, lawyers, etc., are on all the time. And it takes a certain type of person to do that over the span of not just 2 years but 20 or 30 years.
It all depends on what your goals are, granted no one REALLY knows or goals may change often (as does life). Here are my 2 cents:
If there is an end goal you have in mind that IB can help you achieve (PE, Corp Dev, etc.) then its worth the suffering just to better position yourself and potentially make that transition easier.
If $ chasing is all you're looking for, like many people already mentioned, IB is a GREAT way to make a lot of $ without any real advanced degree. The issue is if $ is purely all you're looking for, you'll probably burn out pretty quickly. You're essentially busting your ass for 363 days,for 2 days of actual happiness (the fist day when your bonus is communicated, and when it hits your bank account). I just don't think that's a sustainable path if $ is all you're pursing.
If you're just not sure what you want to do, IB is also a pretty safe bet as its a highly competitive field to enter and tends to open a decent amount of doors down the road. Granted, if you find out you have 0 interest in finance down the line this may not be that helpful, but I know of many people that go into Business Development, or Startups in a Strat/Ops or analytics role.
I'll be honest in that I left Big 4 Consulting to partially $ chase, but also to better position myself with opportunities that aligned with my interest more down the line. After my first year, and having another career to compare to, i began asking how much money does one REALLY need? Its a difficult answer, and I dont even think there is a right one. Sure I make more now, but I also have a lot less free time and can't spend the money the way I want to as easily (e.g. international and domestic trips), solely because I don't have the time.
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