Investment Banking: Is It Worth It?
Is It Worth It?
My Experience in Investment Banking
Many of the world’s brightest young minds are lured into investment banking (IB), and often it’s for the wrong reasons. I worked as an M&A IB Analyst at Bank of America Merrill Lynch (BofAML) for 18 months, and I remember feeling there wasn’t enough unbiased and genuine insight about being an IB analyst when I was deciding whether to pursue such a position and when I was weighing my offer. I hope my story helps clarify some of the misconceptions and questions others might have in considering this career. Is investment banking worth it? My answer is: it might be — it depends on who you are and what you want to do with your life.
Accepting The Offer
I received my offer from BofAML a month into my senior year at Bentley University. I was ecstatic that day, but eventually the excitement faded — I realized it felt great to say I was going into IB at a big bank in New York City, but was it really? It seemed like a bittersweet proposition: sacrifice your health, free time and social life in exchange for money, learning, prestige and many opportunities that become available after IB. I decided to accept because while I knew it would be tough, the learning opportunities were immense. Further, I figured I’d only be there for one to two years, like most analysts who then leave for some other lucrative endeavor, using their “IB badge” as a credential.
I spent around 80–100 hours per week in the office. I’d get in around 10 am and leave around 1–2 am on average. I worked most Saturdays & Sundays too. But when there was a “live deal,” meaning we had important deadlines to meet for an ongoing deal, those hours could become much worse, and sometimes we worked 25–35 hours straight. On Fridays, we’d typically leave a little earlier, around 8–10pm. Needless to say, a full night’s sleep was rare, even when I didn’t work weekends because I felt like I needed to go out and be social after spending so much time in the office, which translated into sleeping poorly most weekends too.
At one point, I was on a very intense deal where we worked around 17 hours a day for roughly three months, seven days a week, including about 20+ nights where we stayed in the office past 5 am. Because of this, I spent three or four months sick, mostly from lack of rest. Moreover, I was the guy pushing for gym time and eating healthy in my group, and still I think I didn’t set foot in a gym until my fourth month on the job, and after that I only went once or twice per week, which were mostly on weekends where I could get in to the office later than usual. Overall, my life was mostly consumed by work, and that work was roughly split in the following way:
1. Time Spent Making “Pretty” Slides: About 80% of my time. Almost all IB work is displayed on PowerPoint slides, so there is a huge emphasis on making sure everything is pretty and well-formatted.
2. Time Spent on Financial Models and Quantitative Analysis: About 15% of my time. This is the skill that all analysts crave to learn and master. This is also what many in IB like to brag they do all day, but that’s not the reality for most. If you are given the chance to work on deals and pitches where you are actually required to use your brain, and do something interesting with numbers, you will feel fulfilled as an analyst; furthermore, developing these skills is extremely important if you want to go into private equity or hedge funds afterwards.
3. Time Spent Waiting for Work: Around 5% of my time. I have repeatedly heard of people saying they waited around doing nothing for work while they waited for their superiors to give them “comments” in the evening, but that’s not how it went down for me.
Life After IB
I’ve found most people are in IB for the money, and ironically, I happen to think the money you make isn’t great considering what you sacrifice. Even if the money was better, I realized that I am passionate about projects and initiatives that contribute to society, even if in a small way. Now that I’m pursuing entrepreneurial endeavors at The Lobby, there is no roadmap of how things need to be done or how to figure out next steps. No one tells me how to organize my day or how to deal with the uncertainty of what will happen tomorrow or next month or next year. But I know I can figure things out, one day at a time, just like I did in IB. Although in IB you have senior bankers that tell you what to do, there is an overarching expectation that IB analysts can and will figure things out quickly. They won’t complain and they’ll always portray strength, even though they haven’t slept properly in weeks or months.
I should acknowledge that large banks have been making an effort to improve the experiences of analysts in recent years, and I know many bankers who have positive experiences much more manageable than the one I had. Yet, if I went back in time, I’d still accept the offer. Now that I’ve quit, I feel as though I’m capable of figuring pretty much anything out and that I can work hard and efficiently when I set my mind to it. I’m confident of this because that’s what I had to do my entire time in IB.
Part of my life after quitting has been, and will continue to be, finding a balance. The work-pace, structure and efficiency in IB makes you a machine designed to get things done quickly and properly, but I also know there is a limit, and that I’ll give myself time for the important parts of life: family, friends, health, and hobbies. I appreciate a lot of things that I did not appreciate before, like good sleep, dinner with a friend on a Tuesday, and regular exercise, among others. Moreover, after quitting everything seems to be easier for me, and that feeling would not exist if I hadn’t gone through IB.
Based on my experience, I’m sure IB is not right for most people, but it still can be for some. I chose to look at the best aspects that came from this experience. If you think this way, any experience can turn into something more meaningful, which is something I learnt from my college friends. But if you want to do IB, first find out as much as possible about who you’re going to be working with, what the industry is like and if it maps with your personality & ambitions, because that really does shape your experience to an inexplicable degree. If you are considering whether IB is a good fit for you, I hope my story provides helpful context to your particular situation.