Wall Street Mastermind

Morgan Stanley Banker: Is Investment Banking Worth It?

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Sam Shiah

May 7, 2024

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Have to constantly check your inbox for new work emails from your boss?

Need to flake on your girlfriend on her own birthday?

Clients blowing up your weekend plans on a Friday night just as you were about to leave the office?

I’m sure you’ve all heard the horror stories that come out of people who have worked in investment banking.

So – is it ACTUALLY worth it?

If you do some research online:

You’ll find that people have VERY different opinions about whether investment banking is actually a career path worth pursuing.

In this newsletter, we’re going to talk about the 5 pros and cons of working as an investment banker, to help you decide whether this is for you.

The top investment banks have upwards of 100+ applicants for every job opening.

Based on that, you would think that it must be the best job ever, right?

Well actually, just like any other job, investment banking has its pros and cons.

Let’s talk about what they are so that you can decide if this is something worth pursuing.

Benefit #1: Money.

This is the most obvious reason that most people already know about.

As a fresh college graduate, you can make upwards of $150k to $200k+.

That’s compared to the average college grad in the US who’s making $55k a year.

In other words, you can start your career making 3-4x what your buddies are making, and that gap only increases from there as you move up the ladder.

I think most people understand that this is a big deal.

But at the same time, it’s hard for a college student who’s never had their own money to REALLY grasp JUST how big of a deal this really is, in terms of the impact it can have on your quality of life as an adult.

Not just your own quality of life, but your family’s as well.

Benefit #2: Prestige.

Investment banks are very hard to get into.

The top investment banks in the world will on average hire around just 1-2% of their applicant pool each year.

Anytime you are able to get something that’s highly selective – whether that’s getting into a top university, top MBA program, or a top job – there’s a lot of prestige that comes along with that.

And don’t get me wrong – I definitely don’t think that you should let the prestige of your school or job define your self-worth – in fact I think a lot of people fall into this trap.

But the reality is – regardless of whether you agree with it or not, the rest of society will try to define your worth based on how prestigious your past experiences have been.

And that WILL have real implications from a practical standpoint… as it affects what future opportunities are available to you.

Speaking of which…

Benefit #3: Exit Opportunities.

The truth is, most people who start their careers in investment banking, don’t even end up staying in investment banking for more than 2-3 years.

Most people just use investment banking to open up doors to even bigger and better things down the line – whether that’s top business schools like Harvard, Stanford, or Wharton, or top buyside jobs in private equity, hedge funds, or venture capital – all of which will only hire people who have previously done investment banking first.

Even a lot of the non-investing jobs at the hottest employers like to look for former investment bankers – speaking from experience, when I joined Square back when they were still a pre-IPO unicorn startup in Silicon Valley, the finance & strategy team there exclusively hired people who had done investment banking right out of college.

If you worked in other areas of finance that wasn’t investment banking, you had no shot at getting hired by the team.

To this day, that was still one of the best teams I’ve ever been a part of – so shoutout to Square F&S. But the bottom line is – by starting your career in investment banking, you will have access to opportunities for the rest of your career that you wouldn’t have been able to get otherwise. And that can change your entire career trajectory.

Benefit #4: Impact.

Aside from all the money, prestige, and exit opportunities, which are all nice and important – I would argue that for a job to be considered a GREAT job, you have to get fulfillment out of the work you’re doing.

Typically, fulfillment comes from feeling like the work you’re doing is meaningful and impactful. You want to feel like you’re actually making a difference.

Most entry-level jobs are simply not fulfilling.

A lot of times you work on super boring and meaningless tasks that make you want to fall asleep.

You spend 5 days a week looking forward to the weekend, and on the weekdays you have to drag yourself out of bed every morning because you dread going to work.

In investment banking, you are often working on industry-defining deals that are worth upwards of hundreds of millions, if not billions or even tens of billions or dollars.

You are giving advice to CEOs and CFOs of some of the largest and most successful companies in the world, on some of the most important and strategic transactions they’ll ever work on in their careers.

The deals you work on can land on the front page of the Wall Street Journal. It’s hard to not get up in the morning for that, even when you’re running on very little sleep.

Benefit #5: The Steepest Learning Curve.

This is in my opinion, probably the most important benefit of all.

Because when you’re young and you’re just starting out, your #1 priority is not to make as much money as possible – that will come later when you’re more senior.

The most important thing early on is actually to learn as much as you possibly can, as fast as you can.

The more you learn early on, the more valuable you become, which means the more successful you’ll become in the long run.

You’ll be working for bosses that are some of the smartest and most demanding people you’ll ever meet – so everything else you do after investment banking will feel like it’s a cakewalk.

And because you are working twice as long as someone with a normal 9-5 job, and you are getting so much more responsibility than what’s typically given to someone your age, you can learn in 2 years what would normally take you 5 years to learn in another job.

When I interviewed for my job at GitHub after leaving Square, I had only been out of school for 5.5 years.

But I was interviewing for a senior position that reported directly into the CFO of the business, and I ended up beating out several other candidates with 10-15 years of experience during the final round interviews.

The only reason I was able to beat out people who had worked for so much longer than me was because of the steep learning curve I got in investment banking and private equity.

OK now let’s talk about the downsides.

Downside #1: Hours.

Everyone already knows that the hours in investment banking are LONG.

You will often see headlines in the media claiming that investment bankers work 100 hours a week.

As you probably already know though, the media likes to sensationalize things.

The reality is that if you’re an analyst in investment banking, you’ll probably average between 65-80 hours a week depending on the firm you’re at.

That usually means 12+ hour days during the weekdays, plus the occasional weekend work.

If you don’t have a strong work ethic, then investment banking is definitely not the right job for you.

Downside #2: Unpredictability.

To be honest, having experienced it personally, the hours actually aren’t the worst part.

Even though you spend a lot of hours in the office, there’s actually a lot of downtime during work because you spend a lot of time waiting for feedback from your senior bankers.

Senior bankers are usually out meeting clients during business hours, so a lot of times they don’t give you any comments on your work until later in the day.

So during the day, it can actually be relatively slow.

But what’s worse than the hours is actually the lack of control you have – because it’s very unpredictable when the work will come up, and when you’ll actually be busy.

Because investment banking is a client servicing business, you don’t get to set your own deadlines.

If your clients ask you to do some work on Friday evening right before you were able to leave for the weekend, and they say they want to see the analysis first thing Monday morning – well guess what, your weekend plans are now shot.

I’ll never forget the time when I had planned to take my ex-girlfriend to Napa, which is wine country for those of you who don’t live in the Bay Area.

We were going to go for her birthday, and I had to cancel on her at the last minute because I got an email asking me to go into the office.

As I started to turn the car around to drop her off back at home, she burst into tears in the car. So yea… that was NOT fun.

Downside #3: Relationships.

And that’s a good segue into this next downside, which is that it can be extremely difficult to maintain your relationships while you’re working these long and unpredictable hours.

A lot of people end up breaking up with their boyfriends or girlfriends, or if you don’t have one yet then it certainly becomes harder to enter into a serious relationship.

It’s also harder to invest into your friendships, because you can never commit to any plans, so over time people learn that about you and start to invite you out less and less.

I will say though – from my personal experience of going through 3 years of investment banking, I did still have a girlfriend for most of that time.

And I did still maintain my friendships, but only with the closest friends that I really cared about.

It definitely took a lot of effort though, and I definitely had to sacrifice a lot of sleep to reallocate the little bit of time I had to my relationships, but personally for me that was worth it.

And one last thing is you do also become really close friends with the people you work with.

A couple of the other analysts I worked with in investment banking became some of my closest friends during that time – because anytime you’re going through something so challenging together, you’re going to bond over that experience and become closer.

It’s kind of like pledging a fraternity or sorority.

Downside #4: Stress.

If you don’t handle stress well, this isn’t the best environment for you and can even potentially cause mental health issues.

So you really have to know yourself.

Everyone likes to think that they work well under a lot of stress, but it’s just not true.

Think back to other high-stress environments you’ve been in; how did you perform? Don’t try to be a tough guy, be honest.

Personally for me, I actually do work well under stress, so it wasn’t a big deal for me and I never experienced the mental health issues that some other people have talked about.

If anything, I think investment banking helped me build my stress tolerance level to be even higher, which has benefited me greatly as I decided to pursue entrepreneurship, which comes with a level of stress that most people simply can’t handle.

And last but not least…

Downside #5: Health.

This may be the biggest downside of all in my opinion – because in banking you spend most of your day sitting at your desk, you get very little sleep, and personally for me when I was in banking, I ended up gaining a lot of weight.

So you really have to make an extra effort to stay healthy.

That means not blowing your daily dinner stipend from the bank on super unhealthy foods, or not drinking excessive amounts of alcohol on the weekend when you go out and are trying to blow off steam, and squeezing out an hour a day at least a few times a week to just hit the gym, possibly during slower parts of the day when you’re waiting for comments from your boss.

If I had one regret from my banking days, it’s that I didn’t take better care of my body.

But then again, when you’re 21 years old, you feel like you’re invincible and you don’t think about these types of things until you’re my age and you have a wife and 2 kids and want to live as long as you possibly can.

So anyway, those are the top 5 pros and cons of investment banking, speaking as someone who has not only personally worked in investment banking for 3 years, but has also helped over 1,200 students with their own investment banking recruiting processes.

I hope this newsletter gave you a balanced view of what investment banking actually is.

Like any other job out there, it comes with its own set of tradeoffs, and it’s definitely NOT for everyone.

Speaking personally for myself, I believe it is one of the best career options out there for someone who’s just starting out.

I’m super grateful that I was fortunate enough to be able to break into investment banking back in 2008, because the pros have far outweighed the cons for me, and investment banking not only changed my career trajectory, but it helped me achieve financial security and as a result changed my life – not just for myself, but for my wife and two kids as well.

Need help navigating through this process?

If you’re someone who’s struggled to break into investment banking on your own but you’re still holding out hope, I hope I gave you more clarity on some of the different paths you might want to consider.

If you ever need help navigating through this complicated process — please don’t hesitate to reach out to our team here: wallstmastermind.com/apply

Wall Street Mastermind, Banking on Success Event NYC 2023

About me

As a former Morgan Stanley banker, my mission through starting Wall Street Mastermind—the original and premier Wall Street coaching program since 2018—is to help our students secure the highest-paying, most prestigious jobs on Wall Street.

Connect with me

📍Linkedin www.linkedin.com/in/samshiah/

📍Youtube www.youtube.com/@SamShiahTalksFinance/

📍Instagram www.instagram.com/wallstreetmastermind/

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