Life as an investment banker - the truth

This is my most recent blog post on my site, ThoughtsOnFinancedotcom, "The Working in Finance Series, Part 1: So you want to be an investment banker?". I've been on the sell-side and buy-side for a decade now and am reflecting on my time moving up the ladder. It's the full truth of how I spent my time in college at a non-target to get the job, and what the job actually ended up being. I'm thinking of writing a few other posts in the series walking through my time in IB and PE. Think it might be helpful to dispel certain myths we've been told, that I think most people realize after years and I wish I knew going in.

Curious for feedback / thoughts from others.

The Working in Finance Series, Part 1: So you want to be an investment banker?

Life got in the way over the past few months and I just wasn't able to get back on the blogging horse. It has a way of kicking you when you're down and kicking the ladder when you're up, as well. It was hard for me to focus on new blogs about the economy or business, markets, etc. as I am going through a career transition at the moment,  leaving behind the cushy / bureaucratic / militaristic traditional finance career that I've been working within for the last decade or so. Instead, what I thought I'd pivot this blog into are posts about my experiences within the Wall Street world, which may be of interest to those that want to get into a career. This is the unvarnished and honest truth.

A new NCAA sport – The rat race

It all started at college, a non-target but one that was gaining significant traction on Wall Street. Each year, we had a few lucky souls make it into the vaunted ranks of the Bulge Brackets, which are the biggest and baddest names on Wall Street – Goldman, Morgan Stanley, JP, BofA. We all looked up to these upperclassmen who got these internships / FT jobs as if they were star athletes on the football team, because let's face it, we had no sports teams of any consequence. This was not a college with a dorm, or one with any "college spirit". This was a commuter school, where the ultimate goal was getting a full-time job that paid well, and everything else was a waste of time. The competition for internships and programs within investment banking, asset management, sales & trading, hedge funds, and the like amounted to a lot of deceitful and backstabbing behavior among classmates, you couldn't trust anyone. 

We joined finance clubs to get the information / skills to determine what internships to apply to and when. The camaraderie was, in some ways, a mirage. If you were helping someone and they were suddenly competing with you for the same opportunities, it was a problem. People would sabotage those they were competing against by giving them incorrect information, or using tidbits gleaned from their conversations to their advantage in their respective interviews, particularly if one person interviewed after the other and was able to get the questions in advance. We had the advantage of being centrally located in NYC, one of the only real advantages of our situation, so we would intern during the school year.

Bob the resume builder

I had 5 internships in my time at college, only one of them was during a summer. The first step, at least based upon conventional wisdom at the time, was to intern in wealth management in your freshman / sophomore year. This job involved the most mind-numbing work I had done since a post-high school internship doing SEO, which amounted to looking at 2,000 google results a day and entering them into a spreadsheet. Wealth management makes it sound much more distinguished than what these internships entail; you go to the office after a full day of classes, you're given a list of numbers for corporate directories, and you call every single one waiting for an answering machine to say the employee's name, which you record for the financial advisor. This all so the financial advisor can cold call the numbers and say the employee's name, implying one of their coworkers referred him to the company. If you're lucky, they'll let you make the cold calls to the clients yourself. "Bob, we're going to be in your office tomorrow with a few of your coworkers walking through our unique investment products". If somebody says that to you, hang up the phone, seriously.

As exciting as that was, other internships prior to junior year all involve some form of data entry or other very simple and unfulfilling roles which get slightly more difficult. These are all stepping stones to the true goal, investment banking. Yes, nearly every college kid in the finance or economics major dreams of the mythical land of investment bankers, with their tailored suits and rolex's, telling CEOs what to do! This stereotype is perpetuated by both the firms on Wall Street and college professors, as well as alumni who come back to speak. The alumni usually describe how they broke into investment banking something to the effect of: "Make sure you get several internships while getting awesome grades, practice your interview skills and network with alumni, and you too can become an investment banker!" The reality of the matter, though, is that investment banking as an analyst involves only slightly more brain power than calling those numbers and getting the employee names for the financial advisor.

The Exciting Life Of Investment Banking

What is life as an investment banker really?

Similar to wealth management, the title of investment banking sounds both majestic and powerful at the same time. However, as an analyst 75% of what you do involves moving logos on pages, changing colors on charts, and reading footnotes of 100+ page 10Ks until 3 AM 5-7 days a week. You're part of an army of analysts, who are all miserable and either half asleep or on performance enhancing drugs (Adderall?), and you'd be lucky if your bosses can pick you out of a lineup. There are 5 layers on every team, and you're always on the bottom of the totem pole. Your opinion is not necessary, your complaints are not heard. You are intoxicated by the amount of money you're making, and the carrot you get is the huge potential bonus you could get if you shut your mouth and worked those extra 5-10 hours a week which seems impossible when 5 PM signifies the half-way mark of your average day.

Somehow, when you go back on campus, instead of being honest about how miserable it all is, you feel like the big man on campus and you continue to perpetuate the lie. You don't want to tell people that you wasted all this time to be a glorified paper pusher, that you spend every waking moment of your life (there aren't many non-waking ones…) anxious that your associate is emailing you to update the comps or league tables in the pitch deck (if you show a client stale information from 2 days before, how will they ever hire you!).  Why is there an obsession with investment banking, and why does it continue to perpetuate? 

Perpetuating the myth

The truth is, like most things, money. You can make over $100K right out of college, which is very hard to replicate in many other jobs. However, based on the amount of hours you work it ends up being an essentially minimum wage job. You don't have time to sleep, let alone workout, meet friends or significant others or family; in effect work becomes your life. So you've sold your soul to the devil, but what are you getting out of it? Are you telling CEOs what to do? No. Are you coming up with interesting ideas that are highly influential? Definitely not. Typically, you're jammed in a bullpen with the other zombie analysts who complain about their lives (or lack thereof) until 2 AM each night. You order seamless with them, and you discuss exit strategies because you all are desperate to leave.

Surely, the 2 years you spent every waking hour hunched over and getting yelled at by older zombies would be worth it? While you were deceived into a life into investment banking, surely the private equity or hedge fund waters are warmer, it's the next "promised land". Next post we'll delve into the high stakes, high class, world of the buy-side. Spoiler alert, it's not as glamorous as you might think.

Comments (15)

Most Helpful
  • Analyst 1 in S&T - Equities
Dec 12, 2020 - 2:43pm

Speaking of myths....IBD is in no way, shape or form a minimum wage job. $150k/4k hours a year is ~$40/hr. Isn't federal min wage $8 or something? That's one that needs to die off. 

Dec 12, 2020 - 2:46pm

ok maybe not literally but it is a pretty empty existence and people act like it's the best job in the world when it's actually unspeakably awful. I think focusing on one point is just a way of saying, yeah I am selling my soul to the devil, and it's not cheap! 

A blog deep-diving into key finance topics you should be aware of. From a seasoned industry professional.

Bloghttps://thoughtsonfinance.com/

Twitterhttps://twitter.com/ThoughtFinance

 

  • 1
  • Analyst 1 in S&T - Equities
Dec 12, 2020 - 2:59pm

I mean...this is your opinion. I don't know what the obsession is with calling IB 'good' or 'bad.' It's a matter of if the person likes it or not and you won't be able to tell until you at minimum are an SA

Ive been finding over time that the people who have the view that the money isn't worth it may be coming from a position where they don't necessarily need the money. If you're completely on your own, no help from anyone else, it is a game changer it terms of paying off loans, setting up your career, etc. Just looking at the hours you work during analyst years is incredibly shortsighted. 

Dec 12, 2020 - 4:23pm

I think people that consider it minimum wage are those that have never actually worked a minimum wage job and to those who may have family money or other financial security because I can't see how anyone can think its even close to $7.25 an hour. I think saying its essentially two 75k/yr jobs at once is reasonable and maybe working regular hours for 70-80k/yr is better which is a view I can understand, but calling it anywhere near minimum wage is laughable. 

Dec 12, 2020 - 4:26pm

Again your focusing on one point but not disputing the fact that it is a very low skill and miserable job, solely focusing on the money that cones from it. Most people in it only think about their bank accounts, but there are some who actually think about their capacity for taking it up the ass everyday for some Chad who's the son of a client or a MD

A blog deep-diving into key finance topics you should be aware of. From a seasoned industry professional.

Bloghttps://thoughtsonfinance.com/

Twitterhttps://twitter.com/ThoughtFinance

 

  • 2
  • Analyst 1 in IB-M&A
Dec 12, 2020 - 4:31pm

This is so FALSE. IB is like college. you work hard somedays you play other days. You never know when the professor is going to drop a pop quiz so you always keep your Fridays open for a random study session and sometimes you get a random pop quiz but you say screw it and go to the bars for a little too long. (happens in banking ALL the time) because of crap like this, I thought IB would be grinding all day! THAT IS FALSE. You grind in the morning, you go out to lunch, hang out w/ your team, get an email head back to the desk work, someone grabs dinner you eat in the office, you grind some more till midnight or later then you head out. It isn't a straight non-stop grind. from 5p-7p you are usually waiting for edits. It's just like college with more money and a different name... 

Dec 12, 2020 - 5:44pm

sounds like you had a pretty cushy experience. You're right that you're not literally working nonstop, but because of facetime (at least in the olden days of in person office), you had to sit there until everyone you worked under left, in many cases that could be past 10, then you get comments, work til 2, sleep for 4 hours, rinse, repeat. I guess it makes sense a site that is pure Wall Street propoganda would have Ibankers in denial over how horrible the job actually is, when everyone I've ever known to be in IB was thankful when they left and would not have repeated the experience.

A blog deep-diving into key finance topics you should be aware of. From a seasoned industry professional.

Bloghttps://thoughtsonfinance.com/

Twitterhttps://twitter.com/ThoughtFinance

 

  • 1
  • 3
Dec 12, 2020 - 6:49pm

Exactly. The job offers a great foundation for finance and general corporate life. Yeah the hours suck and you spend a lot of time on bullshit work that goes nowhere, but it's an entry level job that pays like $150k out of college. Idk the exact stats but that's like 3x the median income in the US and you're only 22. For people with student loans, that's a good enough reason on its own. 
 

Are you curing cancer? No but some of the work, especially if you're able to take a step back and look at the bigger picture as far as deal structures, strategy, etc. is genuinely interesting (to me anyway). Not to mention it puts you on the path for a number of other careers that you might find more interesting and rewarding (intellectually and monetarily) down the road. Maybe OP and his friends worked at a bank with poor culture or deal flow or something, but I would absolutely make the same choice over again. 

Dec 12, 2020 - 6:16pm

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