Why the hell do people work in NYC/SF IBD?

It makes absolutely no sense to me. I've heard a lot of people try to defend it, but it's simply indefensible.

100 hour weeks working at a BB making 150k (high end). 50% of income goes to Taxes, 30-40% is rent, 10% is food and 0-10% is savings.

If you're 28 years only and you only have $50K saved, there is a problem. If you have to go to business school at 28 years only and get into debt, just for a shot at making a living in your 30's, there is a problem.

You've sold 6 years of your life, and what the hell do you have to show for it?

If you put 6 years of 100 hr weeks into anything else, you would be massively successful to say the least.

So why the hell would you do IBD?

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Comments (100)

Feb 27, 2017 - 7:27pm

He finally snapped out of the "teen IB delusion" after getting some real experience. Now he's going through a crises regretting all the sacrifices he made.

Absolute truths don't exist... celebrated opinions do.
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Feb 20, 2017 - 2:25am

"Success is doing what you want to do, when you want, where you want, with whom you want, as much as you want."-Robbins

Live and let live. I understand you are trying to wrap your head around this, but there are so many reasons to counter what you said that I'm not even gonna start.

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Feb 20, 2017 - 3:19am

You're quoting the salary of an entry level analyst, which is typically a 2 year stint. They leave with a prestigious former employer to put on their CV, a solid professional network, quite a bit of money in the bank (as you aptly pointed out, they don't have time to spend it), highly trained and long working hours no longer phase them. It gets more attention than it probably should on this site but there's a reason it does. Very few entry level roles provide that much opportunity.

You also made a good point, which is that taking that work ethic to another employer would put you on the fast track. There was a paper measuring the outcome of people who attended top universities and people who got in but turned them down (or had the same profile to get in) and over time both groups were essentially just as successful as the other. The same can probably be said for those who get into investment banking and those just as capable of getting there...but I'd still take Stanford and starting at Goldman for the leg up it provides.

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Feb 20, 2017 - 3:58am
xgozax:
100 hour weeks working at a BB making 150k (high end). 50% of income goes to Taxes, 30-40% is rent, 10% is food and 0-10% is savings.

This. In the end what really matters is what you saves (and the returns from the investments you make with your savings). Everything else is subjective. Still, you seem to give too little importance from the experience of working in these cities and the "prestige" people give to it.

"Never believe in anything until it has been officially denied"
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Feb 20, 2017 - 10:59am

"Prestige" is the only thing keeping these analysts sane nowadays, isn't it?

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!
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Feb 20, 2017 - 3:59am

PRESTIGE NEGRO

What concert costs 45 cents? 50 Cent feat. Nickelback.

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Feb 20, 2017 - 10:58am

Do you live in NY/SF?

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!
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Feb 20, 2017 - 11:21am
xgozax:
It makes absolutely no sense to me. I've heard a lot of people try to defend it, but it's simply indefensible.

It's almost like people have different opinions, priorities, interests, etc...

Commercial Real Estate Developer

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Feb 20, 2017 - 11:46am

Let me tell you a story.

In my first job (a failing family biz doing translations for personal documents and those little instruction leaflets for chinese crap), there was this girl who had a salary of BRL 1,200 (around USD400) like the rest of us. She was always telling how she had massive debt problems. How she would get into fights at home to get loans from parents and relatives (not to pay down debt, but to go to shows and buy booze). She was not a totally incompetent worker, however, and even got invited to work at other larger companies where she could, in theory, make more money and improve her quality of life a little bit.

She never bothered, though.

When asked why, she would shrug and say "well, I'm satisfied. I live with my boyfriend, I don't earn enough to pay income tax and I can drink and go to shows. Why would I waste my time with something more demanding?"

Stupid, right? Well, in her opinion it was a good deal. She saw advantages in that life style.

People who decide to go into ÏBD in NY/SF" made that choice too - It's a good deal for them. Maybe some will see along the way that this is not for them. Others will enjoy and go on ( I won't even go into things like compensation, prestige etc). It's what they like to do. Why do people become lawyers in those big-name firms? Why do people become doctors? They also work like dogs and many die, as you classified, as "followers".

I bet they enjoyed what they did, though. This is what matters IMO.

Feb 20, 2017 - 12:08pm

Definitely chose the wrong forum for your argument, but I'll bite as I am not in the industry myself.

Look at the job requisitions at any company for the high-end positions. (Corp Strat, Biz Dev, Finance leads, etc.). When I say high-end I mean roles that have high level decision making. What you do has a relatively strong role in shaping the company.

Under desired experience, 2 industries will be listed. Consulting and Investment Banking. It is an "easy" path if you decide that one day you want to manage people and influence the company you work for. The jobs give great experience in terms of learning what drives a company forward (and backwards).

Additionally, the notion that 1 year in Consulting / IB is equal to somewhere between 2-4 years of industry is very true. Join a company straight out of school in industry in an entry level role, and see how long it will take you at minimum to get in to these top roles. Minimum is probably ~6 years. You can join and be an asset to the company after 2 years in Consulting / IB.

Your 6 years at 100 hours statement is trash unless you are an AMAZING salesperson.

TL, DR; Yes the hours are shit, but the pay balances out when you look at your worth in the marketplace to industry.

...
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Feb 20, 2017 - 12:22pm

No one would do this job if you worked 100 hours a week for 150k your entire life. By the time you're a VP, you're working 60 hours a week and making $400-$600k...and that's if you stay in banking...many go to even more lucrative (and similar or better hour) jobs on the buyside.

Feb 25, 2017 - 12:22am

As if life is all about being 28 with half a mill in the bank.

People live and work in NYC because it's fucking amazing. If you like sitting at home and are married at 22, sure, NYC is gonna suck. If you're young, enjoy going out and meeting people, you'll find a lot missing outside of major cities.

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Feb 25, 2017 - 2:18pm

Disagree. Only sucks if your significant other sucks. Got married at 23, 28 now and my wife and my favorite days are sitting at a bar together crushing IPAs and doing all the same shit that everyone who isn't married does. The only difference is I have a 100% chance of getting laid when I get home...

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Feb 25, 2017 - 6:10pm

You don't need a wife to get laid when you get home. Lift hard, dress well, surround yourself w cool people, and have a little game. Most important of all, don't talk about FINANCE(S). Girls are easy especially in 2017.

Work hard, work clean, & most of all do not give up.
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Feb 25, 2017 - 5:13am

I'll just summon aspiringchimp here to continue from the previous thread. As they say in Mortal Kombat, FINISH HIM!!

I would unload all the wso credits I have, to throw MS into this community college trashcan, were it not for the MS limits. Fucking hoity-toity PE peasant in Fucksville.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
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Feb 25, 2017 - 8:38am

even though you're obviously a kid looking through a very narrow lens, you're making the right points.

it's a very hard trade. i went to Goldman Sachs because it was the absolute best job i could get out of school, and it set me up for the rest of my life.

if you think PE is exit opportunities you're missing the point: when you have these skills and experience, you can walk into any job in business, years ahead of where you might starting straight out of school.

i also wanted to start in a job that would best prepare me for any role in business, and I still believe IB is that.

But, if you're looking for some get rich quick. or you think that it inevitably leads you to your yacht and 6 homes you/re just as delusional as this kid who hasn't figured out that life is about relative trades.

you may think ib is a bad trade, so why not go get a "regular" job where you can just work away in boring mundanity for hte next 40 years?

or you could figure out what you truly love and just do it every day, and stop wasting our time whining about what jobs you think suck

Former banker and investor, advisor to senior Wall Street pros. Learn more at geoffblades.com
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Feb 25, 2017 - 2:48pm

I would say also one of the few times Carlyle wasn't mentioned with Goldman Sachs. Solid points throughout.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
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Jul 21, 2019 - 1:24pm

When someone serious is in the white house, the chairman of the fed will consistently be someone with an economics Ph.D. The U.S./world economy is too fragile to have a bunch of investment bankers making interest rate decisions. That being said, I would much rather prefer a bunch of investment bankers making open market operation decisions rather than Trump's recent picks Cain and Stephen Moore. If Moore's policy ideas were implemented the world would consistently deal with highly variable inflation and run of the mill recessions would turn into great depressions. He's said that he would tie the target fed funds rate to commodity prices to stabilize inflation, but this is exactly the opposite of what students are taught in macroecon 101. Core PCE strips out Energy and Food because energy and food price changes don't necessarily reflect core inflation that is affected by centralized monetary authorities.

IBD is a decent career path, but you would be far more impressive as a candidate with a background in economic consulting from Analysis Group, NERA, or Cornerstone Research, etc. Also note that most of the positions that become available at the Fed are for Ph.D.s so your window to work there in a research role before you have a doctorate is small, think within the first 5 years out of college.

The type of person that will do well in the Fed is intellectually curious, and genuinely interested in economic thought. Debating currently pressing issues will be a big portion of your work at the Fed, as well as interpreting economic indicators far in advance of the actual effects of interest rate decisions.

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Feb 28, 2017 - 2:09am

Hate to be that guy, but making a fuck load of money isn't the same as getting to enjoy a fuck load of money. It doesn't do much for your quality of life it's all going to things like NYC/SV cost of living, a wife that has a taste for $20,000 dresses, and the like. A lot of the guys at regional banking shops in tier 2 cities have a lot more cash in the bank, live in a nice house while the NYC guys live in an apartment, and can afford to splurge on luxury expenses that people in the larger cities can't due to cost of living.

Mar 3, 2017 - 12:37pm

I have my own apartment in NYC and pay under $1,000/mo and make six figures. It's a nice place, too, and I'm never really there anyway. Want to save more, go to Brooklyn, Queens, or NJ. People need to stop parroting this "cost of living" shit like it's some kind of mantra. If you're spending a lot of money in a discretionary sense that's your own damn fault. If you don't make 40x-45x times the monthly rent in terms of annual salary, landlords won't rent to you anyway. The thing that people should bitch about are the taxes.

Btw, not having to own a car in NYC/SF saves a shit ton of money. I almost think of it as free rent. Whereas in LA or some spread out midwestern city it's almost a requirement to have one.

Feb 25, 2017 - 12:44pm

I think despite the negative feedback you are getting on this thread (mostly from people who never seemed to actually have worked in the industry) I will say you are touching on exactly the right points (I know as I did my analyst stint, so college kids can stfup on here).

You absolutely slave away like a bitch for very long hours and a shit lifestyle. A lot of people gunning for these spots will rationalize the shitty lifestyle no matter what. But if you are smart then there is a high opportunity cost to slaving for some MD who dgaf about you, and you should absolutely question whether the payoff is worth it.

Feb 25, 2017 - 3:00pm
5 million:

Good reason to live in NYC Manhattan:

SF is trash though.


Need explanation, why so?
GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Feb 25, 2017 - 10:10pm

SF is trash? Lol, sure kid.

"I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant."
Feb 25, 2017 - 2:11pm

NYC is the best place for an active life in your early 20s in my opinion. No car needed to hit up 20 different spots in a day or night, surplus of women, no identity requirements because everyone is vastly different with diverse backgrounds, great and unique places to explore all the time, international dining, late hours, close and intimate proximity with everything needed, 24 hour accessible transportation, plenty of people sharing your similar place in life no matter what it is, etc.

Having money in your pocket to access it when you can and want is great. If you know where to look, you can find housing solutions for less than $1k a month, or if you have the money you can live in the bustling inner city for more. It's a great place to spend what free time you have in the ways that best suit your own lifestyle preferences. Small towns come with much more simplicity but also a lot less tailoring to certain and specific interests.

Feb 25, 2017 - 2:14pm

Hit it on the nail, especially with the surplus of women. NYC is great for anybody, but especially young people. Some sacrifices may be taken to live there but if done well a few years in NYC will do you well and separate you, its where everything is done at the highest level IMO.

Feb 25, 2017 - 3:21pm

I think this point has been hit on a couple times here but it is all about perspective, and perspective is different for everyone.

When I was a junior in college I interned in a BO role for a large insurance company and was given a spiffy "Business Analyst" title. One day my manager asked me to job shadow another analyst (who was actually a 60 year old guy who had essentially been doing the same task for 20 years). I sat down at his desk and essentially he pressed a button on Microsoft Access and a report would compile for about an hour while we just sat there. That was more of less the extent of the job. For him he was close to retirement, left at 4pm every day, and lived in a low cost area. But for me I realized I could never do a job like that and in fact it honestly feels like some of the 15 hour days in IB go by faster than the 7 hour ones during that internship.

Regarding NY, it's not for everyone, it is for me though. It was always my dream to live there after growing up in a rural town of 6K people and finally go the opportunity to do so after undergrad. After a year I moved to Chicago to chase the IB dream and after 3 years elected to move back to NYC. I've mentioned it in another thread but the cost of living would make anyone question the decision (3x rent I paid in Chi, 15K more in taxes alone, etc.). That said there is no other city like NYC. The variety of people, opportunities, etc. is unmatched in an city - you get a little taste of it in Chicago but it's not the same. There's just something about the trash in the streets, the hustle, and the diversity of people that makes it amazing. Again it's not for everyone, I realized it was for me.

Feb 25, 2017 - 3:25pm

"Title: Intern"

/thread

"There's nothing you can do if you're too scared to try." - Nickel Creek
Feb 25, 2017 - 3:33pm

Ok, anyone care to explain the skewed sex ratio in NYC?

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Mar 3, 2017 - 3:30am

Very simple:

1) Many women from all over the world moving to NY to prospect rich men. NY is a great place to be a woman. You have culture, nightlife, fashion. All you need to do is pay rent and food. For men it's a different story. You are expected to be the breadwinner and be able to support a household. You have to slave away at banking or a similar vocation and be able to do it not just for an analyst stint -- but on a 40 year horizon

2) US education systems are grossly favoring women. They treat men as defective women. Hence you see low education manual jobs for men in the boroughs and college jobs for women in manhattan

3) NYC industries favor women. Law, medicine, fashion, and ads. There are literally no careers for alpha males outside of finance. Around the country you can be a CEO, engineer, sports athlete, all sorts of things. But in new york. It must be finance.

Feb 25, 2017 - 7:41pm

I will give my opinion -

I agree with, what I believe to be, your underlying statement. That is, IBD is not "the only/best career path". There are a plethora of alternative career paths that can similarly lead to being wealthy, if that is your ultimate goal. That being said, you are being naive if you think IBD is not one of the top career paths in finance. From a financial perspective you are correct, first year analysts traditionally do not have that much money at the end of the year. However they begin to save significantly more and more each year quickly surpassing any low cost of living high entry level salary position. It also provides phenomenal exit opportunities from B-school to other careers. I did not go the IBD route, but by % I am in the top 3% for people in my age group.

A few other small notes, by 28 anyone who was IBD 2 years -> B School -> IBD 2 Years, would have way more than 50K saved up. Also your breakout of the income is inaccurate.

You should choose the career path that provides you with what you want from a salary and work/life perspective. Don't hate on people who decide to go into IBD, there are more than a handful of reasons why IBD is an excellent choice in career.

Feb 25, 2017 - 9:33pm

I agree if you have the talent to start the next facebook, google etc why in the world would you do such a thing. Not everyone has that kind of talent though so slogging away in IBD doing a lot of mundane tasks is what a lot of people will need to do to become wealthy fairly young if they save etc.

Feb 27, 2017 - 3:54pm

40% of 150k for rent? That's around 5k / month, seems a bit steep don't you think? I don't know many IB analysts in NYC (even at top BBs) that pay more than 2k per month. Assuming 24k annual rent expense that's around 15% of the income, not 40%... lol (meaning that based on your numbers, that's already an uptick of 25% in savings all things equal, which is close to 40k / year).

Mar 3, 2017 - 12:51pm

The OP is obviously full of shit and has probably never even been to NYC. There's a rule in place where landlords won't rent to you unless your yearly salary is at least 40x-45x your monthly rent, which means you're limited to a ceiling of 26%-30% of your salary going toward rent. You can also rent a room at $500-$600/mo if you're open to housemates.

With no need for a car, NYC is actually cheaper than bumblefuck places unless you're a person that needs to spend $$$ for whatever reason.

Jul 22, 2019 - 3:07pm

I think most major cities have a similar regulation--in my city landlords can't rent to you unless your monthly income is 3x your rent amount. Issue is there are a ton of ways to get around this (and many apartments are lenient on income checks).

Mar 1, 2017 - 11:52am

To each their own I guess. Do you, but don't let jealousy fuel your emotions against a position you seem to want to be in just because you might have not gotten it. Get back out there and remember, there are always opportunities beyond IB to make good coin.

Mar 3, 2017 - 2:25am
  1. 100 hours / week (high end likely 70-80 week on average - likely working those hours for 2-3 years)

  2. 150k high end (? - you mention a band of 6 years - high end for that band would be 180 - 500+ / yr)

  3. 50% income to taxes (just, no); 30-40% to rent ($2-$2.5k/mo is less than 30% rule of thumb even if you're mid buck first year taking home $125); 0-10% savings (you should save your bonus - for a nation where the avg. national HH income is ~$55k, you're killing it)

  4. $50k of savings at 28 (not a great situation - either have a spending issue, as you're eluding to, or assuming you graduated with significant student debt you've saved yourself decades of interest, secured yourself a 6-8% return on paying off that debt earlier, and have set yourself up for an explosive 3rd decade)

  5. Sold six years of your life and have nothing to show for it (...other than a massively inflated earnings potential, a financial and legal education that allows you to run circles around people years older than you, a flexibility to pivot in just about any direction from a career perspective, an ability to intelligently invest your money so that when you inevitably build up that golden nest egg in the next 10-15 years you can successfully invest it in private/public investments that yield you a return such that you can reliably count on future cash flows to supplement or fund your lifestyle with a higher degree of confidence than your counterparts who sold tech software and did marketing for an F1000, set yourself up for a career where you can reasonably expect to be able to afford supporting a family where you can vacation internationally 1-2 times / year, go on ski vacation and send the kids to private school without having to take out a second mortgage on your house)

Maybe if you majored in computer science and economics, have been a serial entrepreneur since you were 12, have a trust fund to access and fund your current aspirations and a family business to fall back on, then you can argue that its a waste of time and you'd be wildly successful doing something else with your life for 6 years, but the 20-somethings forging ahead in tech or other endeavors aren't working 40 hours a week, taking rogue Mondays off and chilling with 350k in their bank by 28. They're busting their balls just as hard, if not harder, than the kids slugging it through the lower rungs of IBD.

Success rewards skill and there are few better places to curate such a versatile, applicable and sought-after skill set than in IBD.

Good luck though. For some people, money and the things it lets you afford don't matter much.

P.S. forgot to mention the future value of forming relationships with the leagues of incredibly intelligent, ambitions people you'll be meeting along the way

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