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Five reasons why you should want to be an investment banker

M&A banker

There is plenty of chatter, on this site and on others, about why investment banking is a difficult career path. The hours are brutal, pay isn’t what it was and there is still a bit of a stigma attached to the industry following the financial crisis.

Yet, tens of thousand of people still apply to analyst programs, with only a few hundred being accepted. Only 4% of the roughly 43,000 people who applied to Goldman’s program were accepted, as an example. Around 90,000 applied to Morgan Stanley, with just 2% receiving offers.

Clearly, the interest is still there. Why so? The money is most obvious reason. Earning $80k plus bonus right out of college is not possible in most every other industry. But there are other reasons besides money. We talked to a few investment bankers in and out of the industry about some of the non-monetary benefits that they enjoy. You won’t have a great work-life balance, that’s for sure, but you have a few other things to look forward to.

Required vacations

No, investment bankers don’t work 365 days a year. In fact, their vacations are likely more enjoyable than those the rest of us take, simply because they are forced to completely unplug from work for two full weeks.

“You’re not allowed on conference calls, you can’t talk to clients, you can’t even respond to email,” said one VP. “There is a zero percent chance of someone bothering you.”

Known as mandatory block leave at some banks, the two weeks are indeed required. You are literally forced to take them.

Adaptable skillset

Most jobs create somewhat defined career paths. Investment banking doesn’t. “It’s the most laterally applicable skill set imaginable,” said a former banker. The analytical tool chest earned in investment banking can be leveraged to move to the buy side, consulting or corporate finance, among other options.

Many former investment bankers successfully launch their own companies, even in completely different industries, simply because of their understanding of finance and how companies operate.

“There’s something to be said about doing the hardest thing first [in your career],” he said. “Then everything else becomes easier.”

Long hours add up

Clearly a glass-full type of argument, but one that’s still accurate. Working longer hours provides more experience during a compressed period of time. In many industries, employees are still a pup three years into their career.

“Three years is a lifetime of experience in investment banking,” said the VP, referencing the 10,000-hour rule of becoming an expert at something.

Someone might be prone to wonder how Kunal Shah, age 31, was just named partner at Goldman Sachs, or how such young people are responsible for managing hundreds of millions of dollars. The likely answer is that they have put in the lifetime hours of a 50-year-old. Experience comes fast in investment banking.

Gardening leave

It may be a frustration for some workaholics, but it’s a nice long paid vacation for others. If you leave one bank for another, you’ll likely be required to take between one and six months off before starting your new job.

Most gardening leave periods for analysts, associates and VPs are three months to make sure that all proprietary information that a person would know would become public during quarterly reports. MDs often get six months of gardening leave – all paid by their former employer – to ensure they can’t take deals to their new firm.

It’s not a bad side effect of quitting a job, if you can get it.

Smart people make you smarter

“You’re surrounding by smart, driven, tenacious people,” said the VP. “The benefits of long, concentrated interactions would those people can’t be overlooked,” he added, comparing it to the improvement rate of playing tennis with someone who’s better than you.

Comments (6)

Comments
  1. >“It’s the most laterally applicable skill set imaginable,” said a former banker.

    McKinsey, BCG et al would probably disagree.

  2. Mandatory Vacation exists for sales and trading, market roles.. not IB

  3. Yeah, tell me about it… Psycho people, sociopaths, ego, a shrinking industry, no career after trading, people hating you for the crisis, hire and fire faster than in the wild west, eugenism after 35 years old…

  4. There are many more reasons to do not become an investment banker:
    Looking back I see myself as a I naïve model that fall in love with young investment banking analyst. It was in 2007 when he asked me to buy a naked option and he promised to become a very successful banker. He was just promoted to the associate level as he did not blow up a deal that was inherited from the senior director who had recently left. He became a director at the top tier American bank and a head of smth in January 2014. I spent all these years next to him and saw a dramatic transformation… We separated shortly after his final promotion and he was actually fired just after that…If the full story ever comes out it could be quite damaging for many parties…

    Why not:
    1) Long hours of stressful job, travelling, jet lags and client entertainments do affect you physical and physiological well being, your sexual health and your fertility. And you won’t be able to buy this after. People often end up by taking different type of drugs, antidepressants, drinking… they have insomnia, eczemas and digestion problems.. They can jump at night up to the ceiling and landed to their knees, because they were looking for 40 mln..;
    2) You get gray hair /or nor hair much quicker than any other person and look much older than your peers
    3) Your ego became so big that your friends or families avoid to communicate with you. You make people very unhappy around you. But you do not care, because you have just recently become the elite person and as a result even your underwear should be branded. Your significant party is no longer willing to go back home and she is actually happy when you are away
    4) You can not plan any holidays and if even you try to do so you will spend your Christmas with your legal team over the conference calls and not with your family
    5) When your mother has a heart attack you can’t stay with her as your career at risk. So you just hope that she won’t die this time. When your wife has a surgery, you can only take a half day during the surgery, but half a day means that you are nearly late to collect her from the hospital and you have to go to a business trip next day… So nurses from the hospital will call your wife and ask she if she is still alive..
    6) If you have finally decided to have a child…this can be challenging because it is practically impossible to achieve with someone who is travelling permanently.. If you finally managed to do it… forget about the law, parental leave and other benefits… your boss won’t understand it even if he has three kinds by his own
    7) You become aggressive and violent emotional cheater with your significant others because the stress should go out somehow as a result you end up by yourself depressed and unhappy and in order to eliminate this vacuum you start to live your life as a caricature of the Wolf from the Wall Street
    8) Your career can be terminated as quickly it started, because someone can decide that this desk is no longer producing as much as they are willing to or there is a head count initiative or.. Someone just decided to retire at their 40s and to take the bonus pool from his team..
    9) The time of creasy bonuses is over and there is no return. They are many other jobs in life where you can be happy, healthy and rich. You can choose to have a long term career and actually build something instead of a “football player”s career

  5. Amen Mrs Banker..

  6. The point on vacations is completely untrue. To understand – its important to breakdown the 3 areas of what could be called investment banking. 1.) Sales and Trading – these employees are market facing, communicate with investors, and are responsible for connecting debt and equity investors with debt and equity “borrowers” – i.e. ppl that have cash to invest and people that need to borrow that cash to run their businesses. 2.) a. Product investment banking – these people do debt (bonds and loans), equity (stocks through IPOs or follow ons), leveraged finance (debt to companies that suck), other capital raising activities 2.) b M&A – valuation, determining how much a company is worth 3.) coverage banking – running a relationship and making recommendations about the entire business – capital structure, shoudl I expand, cap ex, etc etc THERE IS NO SUCH THING AS A TRUE VACATION IN PRODUCT AND COVERAGE BANKING. YOU ARE ALWAYS REQUIRED TO RESPOND TO EMAILS

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