Getting a job in finance or investment banking does not guarantee you $5 million and your own private island.
A Quote to Remember
Life is either a daring adventure or nothing. Security is mostly a superstition. It does not exist in nature.”
- Helen Keller
This is what I have discovered even with me being a finance guy and loving every moment of it. I am starting to enjoy HubPages and it is going to be another one of those long posts, so go get yourself that bag of chips and pay attention for one very enlightening post!
Sorry to disappoint you folks, but there is no way to become multi-millionaire without embracing some risk and also working 100-hour weeks. Basically, remember that you’ll have to be going home at 2AM every night and then be back and bright and early the next day. This is the sort of life you will have to live. But if you have sold your soul for riches, this is really not a big deal at all.
As for the prestige, I can tell this from some of my own experience. Most people in the real world really do not care about your high-flying finance career if you do manage to make it. I’ve also noticed that often times saying that you went to a “prestigious” school doesn’t always do wonders with the opposite sex. You might even attract the wrong kind.
I have actually done a lot of research and the whole idea of becoming a deca-millionaire by the time you reach age 35 is pretty exaggerated. Finance has a lot repetitive tasks and what we call grunt work, so a lot of people will get bored out of their mind. I am just trying to warn you of the trade-offs as you look at finance and investment banking and compare with other alternative careers. Finance and investment banking is business at the end of the day and you are not really using the part of the brain that is creative when writing a novel or some such thing like that.
Additionally, the problem is that even when you make a lot in investment banking and finance, the peer pressure makes it hard to be able to actually look to save a lot. When looking at the social aspect, there is a lot of loneliness of course but you tend to become close friends with the people you work with all the time at the bank. It really all depends on your personality and those around you, I guess.
The lifestyle can take a toll from what I have been hearing from friends and other senior investment bankers. Clients and live transactions mean that you will always be on call. Even MDs who are on vacation will be answering email a lot and taking a look at their Blackberries for work-related stuff.
One thing that I want to talk about here that a lot of you non-finance people might enjoy and may be even some finance people. This is the fact that when one of these guys and girls who attends a ‘prestigious’ university gets an internship at a large investment bank, what they really do is a lot of grunt work and coffee-fetching.
So how does all this compare to something like entrepreneurship? And let’s face it the startup is the hot thing right now. The problems I have with entrepreneurship are what seems to be playing on everyone’s mind. It is a huge risk in the sense that you could do something and just go nowhere with it. This is unlike in investment banking and finance where you get the work experience and exit opportunities and even good preparation for a top b-school.
But there are entrepreneurs who also enroll at some of the top MBA programs. It is pretty daunting and we have all heard of failures that are really so common in Silicon Valley. But there are those that went through many troubles and were able to succeed beyond their wildest dreams too.
But the thing with entrepreneurship is that it gives you some flexibility and control over your life. I could work 100 hour-weeks consistently if I enjoyed what I did, but there is that other part of me that aspires to be great and finds it very difficult to focus when things just aren’t going the way you want them to go. But then again this happens all the time in investment banking and finance and especially when you have to stare at a computer screen continuously and keep taking orders from senior bankers.
There is no such thing as a ‘perfect career’, but investment banking is actually not great prep for entrepreneurship. Entrepreneurship requires a totally different set of skills like researching market opportunities, making a great product and those people skills that are very necessary like being able to bring the right people in and be able to inspire them and manage them.
I guess investment banking and finance is good prep for entrepreneurship simply because of the hours involved and you are also motivating yourself to keep going which is what you will have to do with a team of workers, anyway. But when it comes to any real skills, I mean all that people do in investment banking is to create pitch books and do all types of administrative tasks that are assigned to you.
Sales and Trading is an option that could be great for those of you who want to avoid the stress that finance and investment banking brings. In sales and trading, it will be mostly be market hours that you will be working. If you’re really good at trading, it has the potential to be very lucrative and I know of people that made millions of dollars year after year with ease. They were that good.
There is also the little known world of private equity, but since the industry is fairly small it will be very hard to make top dollar. As for the lifestyle, it depends on the deals and when there are some good deals especially at a big fund, then you can say hello to those dreaded all-nighters again.
The other exit opportunity is the golden world of hedge funds where a lot of people in finance believe will get them that yacht and private jet. The pay tends to be higher, but as usual there is a lot of work involved. But the problem is that it has a high probability of failing. The other thing with hedge funds is also that if you work in a very specialized hedge fund then it will be difficult to go to a fund that utilizes totally different strategies. I hate to be negative because I am always such an optimistic person, but this whole Hub was created to give people a good idea of what to expect.
But there are some important things that I want you to take away from this Hub. You can definitely get lucky and there are some rare stories of people really doing well in a short span of time. But it usually doesn’t happen in a short period and it is generally a period of 10-20 years of doing great work and studying and networking, etc that will get you making top dollar and retiring with $5 million and your own private island.
But hey! Who am I to stop you? You can do anything you set your mind to. I just want to make you fully aware with this Hub!
Did this Hub change your view of finance and investment banking?See results without voting
More by this Author
Most Americans feel that the Vietnam War was lost due to the press. The United States offers more freedom than any other country. Sometimes this freedom is taken for granted, which may have been the case in Vietnam. No...
My aim with this hub is to not only provide a guide for future quants but also to do it in a way that someone can relate to by providing my own experiences with the career and coursework and how it can be useful...
Equity Swaps, Interest Rate Swaps, Currency Swaps, Commodity Swaps and Credit Swaps are the five different types. An equity swap can be comprised of a basket of stocks or a single stock or a stock index. In terms of...