Investment banking. The drawbacks of being an investment banker
David Jaffee with BestStockStrategy.com and in this video I'm going to talk about the drawbacks
of being an investment banker and I know that a lot of people want to say that working on
Wall Street is so amazing that they make so much money and that they learn things extremely quickly
and all that stuff but I'm going to tell you the real deal drawbacks of being an investment banker
so the first thing and this is by far the most important and deleterious
aspect of working as an investment banker and that is the amount of stress that you endure now the
hours are bad when you work as an investment banker but even if iI'm working like 85 hours
a week if I'm in front of the computer and I'm watching sports or on my espn.com that's not going
to stress me out the stress of investment banking is by far the worst thing that you have to endure
and one of the main reasons why it's so stressful is that you can't go home too early even if you're
not working on something so even if i didn't have anything to do the earliest that i can leave would
be 10 o'clock because i remember that one time i left before 10 o'clock and then the next day
my managing director thought that i didn't have enough work to do and then he hit me with a ton
of assignments that pretty much cluttered up my calendar over the next month so the stress of not
knowing when you're going to leave and also the fear of knowing that at any time even if it's 11
pm at night you can receive an email that's going to keep you there until 4 o'clock in the morning
that constant fear and the stress just slowly erodes your mental health to the point where
you become extremely unhealthy the next thing is like i said earlier i touched upon the hours
and the hours are really bad the problem with the hours is that it pretty much necessitates
that you sacrifice everything so as far as relationships or having a girlfriend
or anything like that your work is always going to take priority over anything that you do and
as a result because of the hours it's going to be very difficult for you to actually have
any social life whatsoever well i guess it depends upon what group you're in but for the most part
if you're in like m a leveraged finance or in the groups that i was in such as industrial growth and
services or CIBC world markets you really are not going to have any social life because all
your time is going to be spent at work even on the weekends the next thing is that even though you're
making a lot of money from a dollar per hour basis you're really not making that much you're probably
making around $20- $25 an hour and because i was living in New York City and New York City has some
of the highest taxes in the country my bonuses were taxed at about 52 to 54 percent and also
my salary was taxed pretty heavily so on a dollar per hour basis you're really not making that much
the next negative is your co-workers i remember working with uh this director at the time his
name was Geoff O'malley i think right now he's like an executive vice president at Santander
he was so miserable everyone hated him the analysts the associates hated him
and he had such negative energy that no one wanted to be near him and the problem with that
is that he wasn't the only one because all of your co-workers are miserable and the majority of them
regret actually becoming an investment banker then there's going to be so much negativity and stress
in your work environment that it's just going to act as like a constant self-fulfilling prophecy
where you start hating your life well and i'm sure some of you gonna ask well if you hate it so much
and it's so horrible why don't you just quit well here's the thing they play psychological games
at the investment bank where they convince you that you're so lucky to even have an investment
banking job and that there are a thousand people who would gladly take your position
that even though you're miserable because everyone that you're with and that you're working with is
also miserable it's like a group of deplorables who are struggling towards a common goal together
and everyone there is miserable and no one wants to defect from the group and no one wants to seem
like they're weak and everyone's being brainwashed and told that they're so lucky to have that job
where you'd be pretty surprised that a lot of people don't quit as much as you would think
that they would obviously there's a very high burnout rate probably 50 percent of the first year
analysts do not make it to a second year however i can tell you that many people watching this
video from the way that i'm describing investment banking think that the number of analysts who quit
would be closer to about 90 but it's not a lot of people do not quit because they get brainwashed
into thinking that they're actually lucky to endure their suffering and they simply accept
that this is going to be their new life from now on they're going to have to endure constant stress
constant depression and just a lot of negativity in their life for as long as they're an investment
banker the next thing is that there's a lot of coping mechanisms i never got into drugs
or alcohol ironically i've never been drunk before but i did start taking antidepressants so i guess
i did start taking drugs but i never took any illegal drugs but i do know that some of my
friends in investment banking were taking adderall a lot of them were also taking cocaine alcohol is
not that prevalent with analysts and associates alcohol is more prevalent with managing directors
and the reason is that if you come in drunk as an analyst or associate you're going to get spoken to
and if you do that like two or three times you're going to get fired whereas with managing directors
who are not at the office as much they can engage in alcohol abuse much more readily than an analyst
for an analyst it was much more prevalent for them to take adderall or cocaine in the bathroom
because that would enable them to get their work done and it wouldn't necessarily be something that
many of their other analysts would be able to pick up on so yeah these are the cons and the drawbacks
of being an investment banker i made a prior video of what the pros are of working as an investment
banker my overall thoughts are that if you have the opportunity i do believe that you should be an
investment banker for about six months and after that time your learning curve is going to start to
plateau and i do believe that after about six to 12 months it is in your best interest to move over
to the buy side the buy side would be something like working at a private equity shop or working
at a hedge fund because the lifestyle at a private equity shop or at a hedge fund is better how much
better i think it really depends upon which shop you go to and i do think that it's overstated how
much better life on the buy side is i can tell you there's probably about 20 or 30 percent
better it's not significantly better because i remember when i was working on the Metals USA deal
and we were working with Apollo management and the other analysts and associates from Apollo were at
the office at three or four in the morning as well so it's not significantly better but it's probably
about 20 or 30 percent better and 20 or 30 percent less stress when you're working on the buy side
David Jaffee with Beststockstrategy.com let me know your thoughts on whether
you believe that it's best to be an investment banker let me know your thoughts on whether
you want to be an investment banker whether it's not a career choice that you would ever
indulge in if you have any questions then leave a comment below