Being an investment banker is one of the best-paying jobs available today, excellently.
Meaning, when it comes to salary, it surpasses other jobs by far.
It's also one of the hardest jobs possible, in every way you can think of.
You need to start your education for this job as early as high school; you need to attend an Ivy League college, finish top of your class, and participate in all kinds of internships on wall street and training afterwards.
Getting a job isn't easy either, the competition being fierce. So fierce that investment banks don't even bother advertising their open positions, seeing as there are usually 10 candidates per slot.
Working hours are tremendously long, the learning process is never-ending, and the list could go on and on.
All these things put the right job into balance and make us wonder – is investment banking worth it? Are there ways in which we can objectively determine the answer to this question or is it genuinely subjective?
Here are details on the pros and cons, which might make it all easier to comprehend.
Before we get to the actual pros and cons that we set out to list, you must become aware of some aspects regarding this job. The first and foremost is one particularly simple yet powerful question that you need to ask yourself. Not only that, but you also need to answer honestly: Why do you want to get into investment banking?
There are many answers to this question. There are as many answers as there are people interested in this field because it's such a subjective answer. Remember the 'models and bottles' guy?
In case you don't know him, he's a banking analyst who became famous a while ago, because, when asked why did he get into investment banking, he answered 'models and bottles.' The whole video, which you can see below, is about him partying.
This might sound good, but you'll change your opinion when you find out he got fired when the HR department of the company he worked for saw this video online.
What can you learn from his mistake? The fact that the answer is entirely subjective. Some get into this field for the money, others for the experience, career, the chance to a truly outstanding job, doing business on a high level, and so on. But you have to be true to yourself. When you have an answer to this particular question, try to see if your reasoning is worth it. What does that mean? It means don't be the 'models and bottles' guy. His argument was not worth it, which is why he got fired as well.
Take the time to quiz yourself to see if all the long working hours, all the studying, and all stress are worth doing for you.
Ideally, as many investment bankers themselves put it, you should love the job, not its outcome. You should enjoy financing, investing, doing business, travelling, and meeting new and exciting people. Not money, partying or a name tag that says you're an investment banker.
Another topic that should be covered when it comes to discussing whether or not a job in investment banking is worth it is the urban myth that has always hovered around it – working as an investment banker will destroy your health.
As far as this one goes, it's somewhat is a grey area, just like everything regarding health is.
The problem arises from the fact that an IB job is shrouded in an entirely negative vibe. However, it shouldn't be like that. Simply because working hours, schedules, and job requirements themselves differ from one bank to another, because some people are better suited than others to perform this job, and because environments are different as well.
There are also a lot of exaggerations when it comes to performing this job. This is why the health issue is considered more or less an urban myth.
For example, you can find many resources online stating that, in an investment bank, you have to work 100 hours per week, which is highly exaggerated. By only doing the math, you'll quickly conclude that 100 hours per week would mean 20 hours per day for a five business day-week or approximately 14 hours a day for a 7 business day week. That's a myth. No one will ask you to work 20 hours per day or 14 hours every single day of the week. A schedule like that is not even legal.
Indeed, working as an investment banker will mean you have to work longer hours than anybody else. But this comes closer to 60 or 65 hours a week, not 100, which comes down to 13 hours on a 5-day week and 9 hours for a 7-day week.
In 2012, The University of Southern California conducted a study on investment bankers. They followed 24 entry-level bankers for two years and monitored everything they did.
The study claimed they worked 100 hours per week all through their first year and 80 all through the second. In their fourth year of banking, they were followed up with some interviews.
Shockingly enough, researchers found that the persons they followed suffered from insomnia, heart palpitations, eating disorders, bad temper, and alcohol and medicine addiction.
Building on the shocking premise, the study also shows how, when interviewed in their fourth year, the 24 investment bankers suffered from sleep deprivation, but blamed their bodies for not letting them work as much as they would like to.
Going even further, some of them had developed diseases because of this hectic lifestyle, such as psoriasis, rheumatoid arthritis, thyroid problems, and Crohn's disease.
Everything seems excruciating and, after reading this, you might wonder why would anybody do this to themselves. However, before you jump to any conclusions, this all has to be looked upon objectively and, more importantly, debunked.
First of all, the study only focused on 24 bankers, out of the millions out there. Simply put, the ratio is far too little for this study to have any relevance. It's almost like conducting a study in France on drinking coffee. France has some 66 million inhabitants. Finding 100 who say they don't drink coffee doesn't mean the entire population doesn't drink it either.
Second of all, there are 100 hour-week ideas, which we've already covered. This, according to many investment bankers, is a crude exaggeration. Even if it were true, again, just like in the example above, doesn't mean it happens regularly.
Thirdly, it's difficult to believe people would go to such extreme lengths to blame their bodies for not letting them work as much as they would like to. There might be some people out there who have this kind of work ethic, but it does not happen regularly.
And, last but not least, some of the diseases listed have nothing to do with working long hours or anything related to this aspect. Rheumatoid arthritis, for example, is an autoimmune condition. This means that your body's immune system attacks itself, leading to this disease. There is no known reason yet why our bodies do this. Therefore, blaming it on long hours seems a bit of an overstretch.
Crohn's disease is another autoimmune condition that has no known cause. Scientists believe it has something to do with food or bacteria that render intestines prone to inflammation.
How exactly has this study linked this disease with long and hard-working hours is not exactly clear. Of course, one might advocate that it all comes down to bad eating habits, but this has nothing to do with your working schedule. It's an entirely personal choice.
Even if an investment banker works long hours into the night, he or she could still eat a salad and drink a healthy smoothie.
Therefore, considering all this, you must take all health studies with a pinch of salt. This is the exact reason we have referred to the 'health issue' as a myth.
Conclusive studies that can link investment banking jobs to substantially poor health are yet to appear.
Another aspect worth considering in the 'is investment banking worth it' debate is testimonials and personal experience of investment bankers who have published work on this. Some have written articles; others have spoken out in interviews while even more have written books on it.
One example is Polly Courtney, a Cambridge graduate who had a dreadful time as an IB and decided to write about that. In short, here are a few things she had to say about her experience as an investment banker.
Although some of these allegations are bad, such as sexism, inappropriate comments, working a lot more than she had been contracted for, and being called into work in the middle of the night, others should be viewed objectively.
For example, she complains about not being sent to enough parties after she was employed or being sent to the company's data centre in the Netherlands.
But, when you look at it, this is what business trips actually involve. Data centres are not located on sunny islands, and the fact that this is what she had expected does not make it the job's fault.
She also complains about not being invited to 'nights out.' However, it's challenging to accommodate everyone on such occasions and, being the only girl, plainly advocates for that.
Also, it was a special night out, which meant the company did not organize it. Her not getting invited is, again, not due to the job she had.
This is the main reason personal experiences and testimonials should not be viewed as objective information on the quality of a job. The fact that they are 'personal' utterly keeps them from being entirely relevant.
Now that we have analyzed some of the crucial aspects that come with this job, you can look at the pros and cons of being an investment banker in a completely objective way. Here they are.
Is investment banking worth it in the end?
This is a question many people in the field have asked themselves routinely. Although it's an excellent idea to question everything you do and especially your daily work, the bad thing is that this question, as you might have noticed from all the aspects, we detailed above, doesn't have an answer. Or, if it does, it's entirely subjective.
What can you do? Read our article as carefully as you can and decide if a job in investment banking is worth it for you.