Why would wealthy college students want to do investment banking?
Some of the most wealthiest international guys I know are working for investment banks this following fall. I don't understand why. Being rich, wouldn't you just want to work for your father's company instead of slaving yourself in IBanking? Exit opportunities are continuing to decline and finance is continuing to shrink. Many of them want to eventually return to their their fathers' companies (think large businesses - steel manufactories, coffee suppliers, etc. ), however don't see how an IB skill set would be valuable for something of that sort. Maybe someone can shed light on this?
Perceived status, looks good on a resume no matter what you do, when you go back to work at said family company employees will respect you more because they know the hours and work that go into IB.
To a lesser extent your observation is like saying why do rich kids even go to school, in order to be an effective manager you have to have some credibility behind your name. Also, maybe they want to prove themselves and not live off family connections; there is nothing wrong with a kid wanting to make it on his or her own.
I've also seen a lot of these kids bust their asses just as hard or harder than kids who didn't get in on connections. At least the ones that were smart enough to realize that they weren't given a job/internship on merit. Of course, for every 5 that have enough self-awareness to not embarrass themselves, there's the one who flaunts his daddy's money.
Honestly, this is unfair but I don't like when people critize it. Coming from someone who had 0 connections to anything relating to finance/business, if someone I know (and I like) was interested in this world I would do the same.
You can start building connections by yourself, plenty of people are out there willing to help.
Rich kids go to school to party, at least that's what I've seen. I also feel that going to a top target already provides that credibility behind ones name. Graduating from wharton says that you're smart dedicated and hard working. I just dont understand the mentality of "I'm going to do investment banking for two years and then work with my father again." Maybe the two year stint provides analysts with lifetime connections that can later be leveraged?
http://www.youtube.com/watch?v=vCicqORi8Mc&feature=youtu.be&t=30s
Mitt Romney totally agrees. Not.
because many times, the rich parents put pressure on the kids by expecting them to be "high-society" from a young age, to be a doctor, lawyer, or i-banker and sometimes the youngster wants to live up to the legacy. Even among the "rich," if you're not talking the super .7%, even the .3% between them and the top 1% overall don't have enough money to support their kids forever AND simultaneously live a lifestyle comparable with what they got.
Also, by working in i-Banking, medicine, biglaw, they'll make connections with people who went to elite schools and work at elite places which can secure the family future, whereas you won't make those kind of connections as a coffee store owner or factory owner, etc.
Maybe because your father wants you to do some real job before trying to manage his company or you are ambitious and you don't want to look just like you have everything because of your dad. Finally, don't think that these people are going to work the hours that the average analyst will put in. I've seen 2 people that where linked to some of the richest people in their country (top 10 (not percent)) and, although they may have worked till 11 pm every day (which, btw, is not 2-3am),, doing what they were required to do, no one was going to shit something on their desks at midnight...
Not only rich people... I saw this the other day: http://en.wikipedia.org/wiki/Jean-Christophe,_Prince_Napol%C3%A9on
He's pretty much royalty but still working at MS... I wonder if he has his say with group placement...
Jamie Dimon's daughter works in investment banking. Maybe she's next in line for CEO of JPM.
Well, most do not go into investment banking.
I grew up very rich and got over that IB phase and switched to something more creative. I woke up in a cold sweat one night and wondered why a creative minded, good looking guy like me was wasting my brain shuffling paper all day w/ the corporate drones. I hated the environment, I hated the hilarious faux-elite attitudes, I hated the work and the money was never impressive. I have a trust and I pulled in a lot w/ my business.
If you like it - ok - but it was not for me. But I like to help so I'm here..
Edited your original post that said you grew up in a 500mm net worth family, huh?
That really didn't matter. Too much info but yes.. I am very lucky.
From a pretty rich family here as well - my parents always let me live an amazing life(style) as long as I gave my 100 % at school / career. This simply goes for a lot of other rich 'kids' as well. Don't get me wrong, my parents never pressured me to become a lawyer, but if I would only attend a school to party, they would for sure not pay for my tuition / rent / suits / etc... It's more than fair to be honest.
Thought "suits" said "sluts". Lol'd
Agree with what others have said - feeling like they have to prove something, maintain social status, etc.
Not that I want to take over my father's business, but if I did I would have to put in minimum 10 years work experience before having the reins (his words.) That being said, I genuinely enjoy finance and contrary to what some people think money is only a portion of the motivation for some people to go into finance.
The desire to not have things simply handed to you, but rather that you worked hard for it yourself
It is quite common to try to reach something during your own life. It has always been like this even when "wealthy-people-career-path" was much harder/riskier (ie. Military career) than banking.
I think some of them do it to prove that they are capable of great things themselves -- without having to rely on their parents.
But of course, after they have "proven" themselves, if they have the opportunity to rise quickly in ranks in their father's company, I don't see why they wouldn't switch over.
rcm - why not respect the edit?
It is pretty simple minded to think that every person born into wealth would just sit back the rest of their lives and not work for something. People are wired to want to produce and create. The question as to why specifically investment bank is along the lines of other challenging professions that demand time sacrifices early on.
I do agree that trying to prove to pops that you are capable of working hard is probably a major driver in choosing banking for some one from a very wealthy family.
also don't forget that girls like Wall Street guys more than factory-guys lol
Go to a target - good buddy of mine's dad is a MD at a BB.. he didn't utilize him at all in this recruiting process and actually got shot down from the same workplace. Trust me, if you raise your kids right, regardless of your wealth they will have similar drive to someone who came from nothing. I guess the advantage that 'rich' kids have is they can be bit more reckless - they have something to fall back on.
Back to my example, my buddy has followed WSJ for a considerable amount of time and his market knowledge is impeccable. People need to realize that target kids aren't just a bunch of kids who had things spoonfed to them. These types of kids exist, and they are scarily hard to compete with in the classroom, and during recruiting season.
Good for your friend for wanting to make his own name, but to not utilize his dad at all is stupid. I'm not saying rely on him to land a sweet gig, but I wouldn't frown on using some of Dad's network to land interviews - after all the network isn't going to help much once you're actually in the room interviewing. It's sink or swim there.
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This is a prime example of why I love being from a more collectivist culture - there is no notion of parents "giving up" their income. The income earned by the kids (or at the very least, the son) and the parents is part of the exact same family pool.
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I'm not from a "wealthy" background in the 'never have to work a day' sense, but I'm still from a well off (albeit broken) family. The reason I pursue IB is the crippling fear of not being able to maintain the lifestyle my parents afforded me. Also, someone in my family who is very cruel sometimes to me has motivated me to make more money than they will at all costs
I am deeply sorry you suffered from someone with that mentality/behaviour, would you say he/her is part of the reason why you are afraid of not being able to maintain your lifestyle? ( btw I would try restraining yourself of thinking this materialistic, you can do whatever you want with your money but it doesn't look like it's doing you any good)
When I first joined university I joined the finance/investment society/club. I met some kids that knew they wanted to cover healthcare in IB while I didn't know the difference between a debit and a credit card.
From personal experience, many (not most) are attracted to it because they know someone working in it (not necessarily IB, but maybe Corporate Banking or AM).
I also have to say that I have met people who wanted to do consulting because, quote: "I haven't really considered IB".
Basically just prestige / social capital
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