12/31/17

Disclaimer

This post isn't meant to be a salty venting, but more of a sharing some of my self-realizations from the past year on things that I wish I had fully understood 12 months ago.

"Congrats on closing your deal!"

"You were a rockstar on this one - we couldn't have done it without you!"

"You were the keystone of this transaction. This deal would have been dead in the water without your insights."

"Congrats. Is that project I asked you to do last night (while you were up at 2:30 am closing this deal) done yet?"

A Lost Rockstar

Ah, the closing of another sellside, one which is very meaningful to our firm. I'm told that I should be excited, yet, I'm not. Not in the least bit. The empty congratulatory words coming from distant senior bankers may have once tickled my fancy, but now they are just lip service. You can't eat or wear lip service. Of course the senior bankers are excited - they get paid on this! However, when they give me the same hugs and pats on the back and speak to me about the fee as if I had ANY economic interest in this, it's downright insulting. How stupid do they think I am? I get paid the same, whether or not the deal gets done and regardless of the amount of time that I spend on deals.

Sometimes guys argue that the economics from the firm trickle down to juniors. After multiple years, I can assure you that this is not the case unless you are at a firm like Qatalyst or Centerview. Let's be intellectually honest. Street pay, plus or minus a couple of percentage points each year is your ceiling, regardless of the performance of your firm.

Long Story Short,

the carrot is no longer enticing. Banking has been one of the best learning experiences that I have ever had, but that is about it. It's a stepping stone, nothing more, and I encourage everyone to view it as such. You will be hard pressed to find a better learning/pay platform coming out of school, so I will offer proper kudos for that. However, once you have your stamp of survival (e.g., resume experience) from your analyst program, get out and go utilize your newfound abilities.

Food For Thought

This may or may not be my last post on here, so with that, I just wanted to leave you incoming monkeys with some food for thought if you are considering staying in banking past the analyst role:

Talent vs Tenure

1) Unless you are an owner of the firm, you are just a resource, regardless of your abilities, experiences or talents (This will piss off a VP or Director but facts don't care about your feelings - look at how your seniors talk down to you). Right now you're probably thinking to yourself, "But they said I had a bright future here and that I had great potential! They care about me and say I'm a future leader!" Before you continue reading, please watch this ~30 second clip and see if it sounds familiar.

Please. Stop kidding yourself. Trying to prove that you are an equal to your seniors or that you add meaningful value to the revenue of the firm is akin to a younger sibling attempting to prove to the world that they are "mature". You will always be viewed as "little brother" or "little sister". Sorry, hate to break it to you. If you need some help further understanding this, please go read Monkey Business. Still don't believe me? Watch how your seniors treat people when a fee falls through or a deal is on the rocks. Fees come before everything - including people

Lifestyle

2) The lifestyle doesn't get better as you move up the chain. I can assure you of that from first hand observation. Yes, I'm even speaking about MD's and Partners. Have you ever seen a senior banker that more often than not isn't stressed out of his mind, can actually take vacations (real ones not working remotely), or doesn't have to put fees before everything (family, faith, relationships)? Now you're thinking, "Alright he's wrong here. I know they work less hours than an analyst." That's where you're wrong, kiddo. It's all relative. Are they at their desk 90 hours a week? Nope. But they are always online and let's say they work 65-70 hours a week, not counting travel. Not to mention that I've had partners and MD's on the phone on Thanksgiving, Christmas, Easter, Memorial Day weekend and even pull all-nighters with me. Awesome lifestyle huh? Give me a break

Is the pay really that good?

3) Whenever I bring up the two prior points, the typical response is, "But the money bro..." Hate to break it to you, but you are a W-2 employee, which is the WORST tax position that you could be in as a high wage earner. As a senior banker, you will still likely have a mortgage, a car payment and maybe a boat. They will just have an extra zero on the end compared to some of our blue-collared brethren. Are you really rich? Does your time belong to you? The best part, and yes I've verified this with 90% of senior bankers that I've spoken to 1-on-1... you will get hooked on the lifestyle and you will live beyond your salary, meaning you are stuck relying on your bonus (a.k.a. golden handcuffs). Have fun with that. Plus, the days of the big money MD's are essentially over. Major fee winners are the exception, not the rule. How many rainmakers ($20MM net worth or more) work at your bank/boutique? Yeah...figured

Banking is NOT a meritocracy

4) Lastly, Trigger Warning (did I write that correctly?) Banking is NOT a meritocracy. And please, for the love of everything that is right in the world, stop with the sports analogies. Banking is the complete opposite of sports and is more like a labor union at the local mine or steel mill. In sports, if a freshman has the ability to be a starter, he starts, regardless of the tenure or feelings of a senior bench-warmer. In banking, if an associate or VP is crushing it, sorry, still have to "pay your dues" and "accrue tenure" e.g., wait until the senior graduates and moves on. Banking emphasizes that hard work can beat talent and persistence overcomes this or that. However, in sports, when talent works hard...it's over. Anyone that has played in Division-1 level athletics or higher understands this very clearly

Further Advice

All in all, I hope that as you dive into the banking scene you follow this simple advice:

a) You are there to learn, so make an effort to learn something every day despite how crappy the work will be

b) Develop meaningful skillsets, even if they have to be on your own time

c) Listen more than you speak - everybody views you as a child anyways so stop trying to be the smartest guy in the room

d) Have an exit plan 12-18 months before your two years are up, be it PE, HF, startup, you name it

e) Try to have fun and smile whenever you can - make the most out of your two years and treat your fellow bullpen occupants like a band of brothers as you'll all need that support group

f) If you follow the "What I Wish Every First Year Analyst Knew" thread, and they offer you a third year or associate role, please refer to bullet 1

Mod Note (Andy): top 50 posts of 2017, this one ranks #9 (based on # of silver bananas)

Comments (76)

6/6/17

Couldnt agree with this more.

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6/6/17

Not on the IB side, but this couldn't get closer to the truth than it does. Wherever and whatever you're doing, read and understand this and know your place.

Best Response
12/31/17

Not as mad as the kid who's a non-target student and made a post about struggling to break into IB. Oh wait, that kid is you. Hold this monkey shit and gtfo.

EDIT: The user I originally replied to was banned across this whole thread. Please know I am not responding to the guy above me....

6/8/17

Wow...lmao

6/8/17

Damn.... You rocked his shit. I respect it though.

6/11/17

Only difference - He's in IB. You are still a student, which means you of all people should not be poke fun at the original poster.

Let me know if you're still confused.

6/11/17

When I joined @freeminimalist.ru I was told that by helping out other members of the WSO community, I could get silver bananas. Now silver bananas go to the best roasts of @my name is goldstein. We've strayed from your Design, Patrick. We have failed you. I'm so sorry

Make Idaho a Semi-Target Again 2016
Not an alumnus of Idaho

6/22/17

Savage
+1

7/24/17

:)

6/6/17

This post could be written for any "high-powered" career....banking, consulting, law, medicine, etc. Maybe you just need a vacation.

6/7/17

Not sure why you're getting so much MS, because that's the truth.. Big4 partners work around the clock, doctors don't sleep, and Big Law is just as much of a rat race as banking. If you want to be successful you're going to work a shitload, not sure why anyone would think otherwise. Even if you were to go the entrepreneurial route you're going to be stressed out of your mind because if your business/product doesn't work out you're fucked.

6/7/17

Replace "successful" with "makes a lot of money". I hate how America defines success as having a lot of money cause there is way more to life than that.

6/8/17

Wrong forum.

1/1/18

So true. My uncle is a doctor and my father is an entrepreneur. They both work insane hours (uncle is a "senior" doctor and still works 10+ hours a day) and my father has had his company for a little over a decade and works similar hours if not more. The only difference is that when my uncle comes home (excluding being on call, etc) his job is more or less over. When my father returns from a business trip he might have to go straight into the office to deal with another issue.

I forget what the exact quote is or where its from but it goes a little like "when your an entrepreneur you don't just run your company. If the toilet breaks, light bulbs blow out, etc its on you to find someone to fix it or fix it yourself."

At the end of the day there is really no "get rich quick" scheme. Hard work pays and it pays to work hard.

6/6/17

Even if all of your points are valid, where are you going post-banking that will allow you to make a comparable amount of money? Please enlighten those of us who still prioritize money over lifestyle, what better options are out there? And please don't say PE or hedge funds because we all know that's banking 2.0...

6/14/17

Q: Where are you going post-banking that will allow you to make a comparable amount of money?
A: Don't worry about what I'm doing. Your career path is for you to figure out. There is no set path and you are an agent unto yourself. However, I will tell you that the opportunities are out there.

Q: [For] those of us who still prioritize money over lifestyle, what better options are out there?
A: It's pretty simple. If you value money over lifestyle, then you are essentially choosing to stay in finance or other professional services. I already said in the post that you'd be hard pressed to find a better platform in terms of pay unless of course you want to be a business owner. However, keep in mind that I'm not necessarily saying to start a new company.

6/7/17

Great responses. Although, I want to point out that entrepreneurial pursuits aren't the only things that will allow you to make a comfortable living. In fact, the entrepreneurship route is a way to get an excellent payout for your efforts and risk taking. I mean that there are jobs that will allow you to make ~100K, which is a comfortable lifestyle that can be or not be in finance.

Banking is awesome, but let's be honest about what it is: it's a continuation of HS-->>College. Even post-banking jobs like PE represent that. No risk is involved, no ideas, no creativity, just a straight and narrow path. The pay is almost abhorrent, since it's such a distraction to how mundane and boring your life is. But, working a job my whole life is not my goal, so that description is probably very subjective.

"Loser terrorists" & "bad hombres"

"Typical candidates are those who attended a top-tier academic institution"
-Most job applications

6/14/17

Can you explain how PE involves no risk or ideas or creativity? You are literally taking massive amounts of capital and choosing investments in companies that may go bust or may grow exponentially. Not too mention all the creative ways to finance the transaction. I'm a college student but am trying to understand what you mean by that.

7/24/17

"You" are not doing anything but combing through the diligence files that I choose to post to the data room at 2 am. "You" aren't making any decisions or creating financing options and "You" are not to speak in meetings unless spoken to. Heck, "You" are lucky if I bring you to a meeting and don't just simply take credit for your work.

8/4/17

so where do you work? why do you mention Qatalyst and Centerview? guessing you're in tech and must be from a boutique since you're not mentioning names like MS or GS; I definitely like to hear what other opportunities there are out in bay area and know what firm is making you very disgruntled

6/7/17

My two cents / my opinion:

Owning your own small business / entrepreneurship. A small business allows for way, way better tax bracket, lifestyle, money. If you look at studies the highest net worth individuals in the U.S. have most of their net worth in business equity aka their own business. Real estate is pretty good too. Most of the wealthy people I know (net worth upwards of 10mm) are either blue collar people who started their own little small business selling stuff ranging from pipes to stuff like a supermarket to stuff like windows and doors. Others got lucky with real estate back in the 70's and early 80's. Heck, I even know of associates in well known MF's doing real estate as a '2nd job'.

6/7/17

Survivorship bias and power laws. Sure, the VERY wealthiest own businesses, but the step below that is highly paid professionals. There are plenty of small business owners barely scraping by.

Most finance types I know simply don't have the stomach for entrepreneurship (nothing wrong with that).

6/7/17

Yeah you're right on both fronts, not all small businesses are created equally. Either route one (or OP takes) will lead to wealth some form or another

6/12/17

I will make substantially more money from my portfolio than I will from banking. Can become a trader, work in BD for smaller companies which tend to offer more equity, could work in real estate (assuming you have the experience and ability and connections to sell units for high net worth individuals), plenty of other options. But you will always have to work hard.

6/28/17

I agree, the wealthiest individuals are the ones who take their experience working in various industries, firms, etc. and diversify their income based off of it. The one thing that ties them together is the mindset and determination.

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6/7/17

very interesting post, great for the younger crowd to read, thanks for posting

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6/7/17

Thank you. Not trying to ruin anyone's dreams here - just trying to help folks manage their expectations and have a more realistic sense of what they are getting into.

6/7/17

Meaningful advice: Try to join Centerview or Qatalyst

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."

6/7/17

LOL! I see what you did there.

6/8/17

Strong agree.

6/7/17

Yeah.

In sales, if you don't get compensated for a deal you normally don't give a shit if it closes or not (unless the sales guy gives you shit as a thank you).

6/7/17

But the MD has a hot bih, though. So hot, she won't say not one word. Ever.

"Loser terrorists" & "bad hombres"

"Typical candidates are those who attended a top-tier academic institution"
-Most job applications

6/7/17

All. Very. Accurate.

For the people that stay in banking, or those that value money over time and relationships. You will regret it. You may never admit it to anyone (I believe only people with some type of personality disorder stay in banking long-term).

I promise one day you will regret it. All the money in the world can't buy back time or experiences you missed out on.

C.R.E.A.M.

6/7/17

I really enjoy your writing and your un-sugarcoated style, but I'm not really seeing the point to your thread, which may very well be because I've become so jaded that I just assume that people know that IB will not lead to great wealth.

One thing that I really appreciate you pointing out is how senior bankers do not in fact work less hours than analysts do. I found this true in IB and am now finding this true in corp dev, but the most senior employees at a firm are almost always also working the longest hours. As you said, sure they are not in the office for long periods of the time, but they are always online, always plugged in, and always on call. The idea that it gets easier as you move up in a firm is not true.

6/7/17

Agree with your point on corp dev.

But what a lazy generation to think everyone deserves to work less and get paid more just because of seniority. You get paid for your valuable contributions to a business - contribute more (relationships, fees, etc), you get paid more - that's life. No one deserves to get paid more for contributing less, we are not kings.

6/7/17

I mean long hours are true no matter what way you go. If you want to make a ton of money, you have to work all the time. My grandfather founded an engineering company that went public back in like 2000 or something and I swear he never slept. But he was pulling in like over a mil every year, so no one complained and he loved it. And we still saw him on the weekends. So if you love what you do, then long hours aren't an issue. But if you hate what you do, which in your case it seems like you weren't too fond of banking, then of course the hours and work seem like a waste of your life.

6/7/17

What if you get a genuine rush from having completed the deal, independent of seeing a bump in wages related to the deal completion?

6/7/17

Get a job that you get a % of the deal. Bam, living your passion.

6/8/17

SHIT never thought about it that way. What boutiques actually let me share the economics of the deal nowadays..

6/8/17

If you can really close a deal start your own.

6/7/17

Great post except it was missing the nose beer phase....

6/12/17

SB for being honest.
I felt like this is a crucial phase.

'I'm jacked... JACKED TO THE TITS!!'

6/7/17

Some good points, but for all your years in banking, you fail to understand something basic about it. Which is: originating is way, way harder than executing. Comp reflects this.

6/7/17

Wow i hope you take some ownership of your life and make a bold change. it sounds like you've been given the keys to your golden handcuffs but for some reason have decided not to free yourself..

Do somethign that supports the quality of life that makes you happy. No amount of $ should convince you to live through this kind of misery.

6/7/17

Great post! definitely too many people go into finance out of college with the wrong mentality. Nonetheless, I don't think IB is as gloomy as you say. You have to remember how many people dream of making 6 figures in america.... and right out of college-no ib analyst should be ungrateful that they are within the top 5% or even 1% of earners in their age group. The only other place you can gain a secure, high paying job with your undergrad degree is on Silicon Valley (which typically involves complete different skillset than IB). IB is still one of the best ways into PE, HF, and other more lucrative career paths so I wouldn't underplay exit opportunities. What I'm saying is IB is still undoubtedly the best option out there for CERTAIN career-minded grads. You're not going to be a super star athelete, celebrity, youtuber, or even the pre-crisis IB prop traders in your 20s but you'll definitely see high pay offs in the long run in PE or watever. So my take on it is this: if you want to be a rainmaker in finance, you really have to be passionate about it enough to stick with it for decades - don't expect to "make it" at a young age by feigning a passion for finance & investing. Lastly, i want to emphasize that a job in IB has one of the best risk vs return profiles in terms of earnings potential. If you want to make anymore more than 200k at 23, you're going to need to take exponentially MORE risk of failure (startups, trying to make it as an celebrity, etc.) so if ur not ready to take the risk at the time of graduation (especially with student debt on your back and other financial pressures), IB is one of the best options you got. Finally, this is underplayed but you can always call it quits from finance (completely) but you'll never know if its for you if you never try.

6/8/17

Dead on. Banking doesn't reward you for what truly matters in life: initiative.

Sad that I also see a lot of schmucks that come out of top banks with excellent work ethic, but are absolutely useless if there isn't someone around telling them what to do.

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

6/8/17

Great post, OP. I have close friends at all levels of IB BBs and they unilaterally hate it. The ones higher up in the pecking order recognize all the bullshit you laid out yet have no plans to leave. The same is especially true of MBBs.

And a post earlier mentioned how this is the case in other careers like law, consulting, medicine, etc. Guy got ton of monkey shit but was right. It is the exact same shit.

It boils down to Labor vs. Capital, Workers vs. Capitalists. All the aforementioned groups go into the Workers category, all work for someone. The other group does not. And wealth has been moving increasingly in only one direction.

6/8/17

Great post. I've realized for awhile how miserable I will be in banking, but I just don't know what else I would possibly do and make the same amount and have the same opportunities. I'm thinking, like a lot of people, that I'll tough it out for the two years, and then get out, but I'm gradually coming to the realization that this might all not even be worth it.

6/8/17

I didn't read most of this, but I'll assume rainmakers is referring to jobs that give you money to throw at strippers

6/8/17

Thank you for a great post. 1st year undergrad here just been trying my best to gather information on IB. I appreciate the honesty here. I have a question, if you don't mind me asking:

Is IB still a reasonable industry to break into after undergraduate? I know it takes busting your bunnies to get in, in the first place, but I'm more asking if it's still the best starting point if one plans to exit into PE/HF/etc. in the future?

6/12/17

I'd say yes, I have a friend in PE who only worked in IB for 1 year before he made the switch, he would say yes. I think it offers the best options in terms of BD, PE, HF, ER, etc.

6/12/17

Does it also lead to corporate strategy and management consulting roles? I know these aren't common exits, but is that just due to lack of interest?

6/13/17

Id think its definitely possible, I would think that corporate strategy roles could be possible just by cultivating relationships and making connections as an analyst. But I am merely an incoming first year analyst, so I can't say for certain in that regard. But I have spoken to analysts who did just that, so its certainly possible

6/8/17

Great post and as an incoming 1st year undergraduate, really provides much food for thought. Lately I have been considering if I even want to go into investment banking after undergraduate. I most likely will though as from what I can gather, you gain quite a valuable skillset, make more money (close to if not six figures) out of undergrad compared to other college grads, and can leverage that experience to other lucrative fields. Personally I would like to leverage it towards a career in venture capital and get onto the general partner track.

6/8/17

Sick! Is there any way you can PM me and give me your entire life story as well?

6/9/17

What's your problem lmao. Wasn't really giving out my life story. But since you seem to care so much that you feel the need to reply to my comment then why not! Oh wait, that's pointless, just like your reply. You can go be a cunt somewhere else.

6/11/17

Very few top-notch venture capitalists got to their position by starting their careers in IB/VC. They're former entrepreneurs and tech executives. Just food for thought.

6/8/17

Do it for a couple years then get out, unless to your surprise you love it (gravy for you). Two years may seem like an eternity when you are 21 or 22. Trust me, it is not. It is the blink of an eye in your career and life. And if being a miserable analyst sets you up for opportunities that you wouldn't get anywhere else - and usually it does - it is worth it.
Just don't coast your way deep into the VP/Director years just b/c you haven't gotten fired. That's a mistake.

6/8/17

Why is that a mistake? At least you are almost guaranteed a good financial life

6/9/17

Please tell me you are joking. Being a VP or Director in IB these days guarantees nothing. (The money isn't that great, trust me). Unless you are really passionate about the work, you aren't going to make MD, and the associate/VP/Director years are spent accumulating skills that are in very low demand outside banking. In other words, if you aren't pretty GD sure you want and are good enough to be a career banker, don't stick with it past the analyst program.

6/9/17

Interesting. So what skills/careers are better to be in outside of banking at that level. I mean the same problem happens to everyone as you move up, be it law, etc. You learn a trade and become more specialized and there is never a guarantee you make it to the top.

6/9/17

Would you rather be a mid-level at an accounting or law firm? What about at a random corporation or in some other profession? I do not see the alternatives. Everyone knows nothing isn't what it used to be, but that doesn't mean banking is above most other professions.

6/11/17

Banking is much more of a grind than being a mid-level accountant. If you don't like it enough to stick with it in the long run, then get out. Your skills after your analyst stint would be more valued at other, potentially more lucrative fields within finance.

6/11/17

Banking=/= all finance. I assume he meant PE/HF/corp dev exits aka not banking.

6/9/17

Yes. 2 years can pass like flashlight. or 4.

, that's why they win.

6/9/17

Lol. Don't say 4.

6/9/17

+1 SB for you.

All solid points. As someone who became VP albeit at GASP a Tier 2 investment bank and no longer worked 70-80hrs a week, but travelled 4-5 days a week (sometimes 2+ flights a day)--the work never gets easier. If anything your technical skills begin to matter much less and it becomes about generating top-line which means... Sales. Banking is brokerage my friends. It is also turning--has turned--into a perfect competition economy which makes getting fees all the harder.

And to the politics, yes. Unless you're in the top 1% of performers, at bonus/promote time its all about the most senior guy batting for you. If someone senior to them says 'I don't think so' you are proper fucked.

6/9/17

GASP!

6/9/17

Great post, everything certainly rings true from my perspective.

6/9/17

Thank you for this post! You have affirmed what I felt to be the truth after even just a week at the bank. We (the analysts, and probably associates too) are just tiny little clogs in a huge machine that churns and burns. I've seen and known people who have massive amounts of passive income, and essentially spend all their time doing whatever they want (traveling, spending with family, etc.) which is stuff that money absolutely cannot buy. I have no plans to waste my entire youth in this machine.

If I had any doubts before, you've cleared it. I hope you will take your valuable skill set with you and be happy where you are going (I'm sure you will be). :)

6/14/17

I must say, this post is excellent.

6/22/17

I love your post.

What is your take on joining a smaller M&A shop (20 - 300M transaction size) and having/earning say 1-5% of your "production" (deals you generate)?

6/27/17

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