There are a lot of myths floating around about what it means to be an investment banker, which make choosing that career look anything from glamorous to a little scary. Do investment bankers work incredibly long hours? Yes, most of the time. The demands of the profession are unpredictable and it’s hard to divide labor, so most investment bankers work 14-hour days, including most weekends. Does the pay make up for it? Well, you could earn between $90,000 and $150,000 your first year before bonuses. According to the Harvard Business Review, the average banker at Goldman Sachs makes $700,000 a year. Invest bankers are basically middle men, selling stocks and bonds on behalf of companies and overseeing mergers and acquisitions of smaller companies. But what does that really mean?
1. The Morning
The most important thing to remember in investment banking is that the unpredictability will more likely stress you out before the long hours do. Investment bankers are always on call, and they can come into the office at all hours to create pitches for last-minute deals or simply do some extra work for a client. Your clients are paying the bank millions of dollars, so if they call you in the middle of the night, you’re obligated to answer. But if you’re lucky, you can roll into the office at 9am, check your emails, and get on a conference call. You’ll be collaborating with other bankers on how to handle a client, including how to deal with potential problems. If you’re involved in issuing stocks or bonds, you’ll draw up a prospectus illustrating the risks and benefits of the purchase. In mergers and acquisitions, you’ll be trying to sell the client to perspective buyers.
2. The Afternoon
The trading and sales staff at investment banks usually stick together. Investment banking is a very social profession, and chatting, hanging out, or grabbing lunch with your co-workers in the middle of the day can be one of the best things about the job. After lunch, you might finish presentation of the pitch book to send to the Vice President or Managing Director of the bank. If you’re executing deals in mergers and acquisitions, you will either be focused on a self-side deal, where a smaller company wants to be sold to a larger company, or buy-side deals, where a client comes to you looking to buy a company. The deals will either be targeted, where two specific companies are already in negotiations, or broad, where a range of potential buyers or sellers is looked at.
3. The Evening (And the Night)
This is where the variety comes in. Like many jobs, some weeks in investment banking are much busier than others, but in investment banking, a slow week still equals around 60 hours and you won’t be home earlier than 7pm. On a busy week? You could work until 3am and have to be back by 6am to meet a deadline. If another account comes up in the evening, banking analysts and associates will order dinner and work through the night, if necessary. Sometimes the first draft of a pitchbook is due to the Vice President by morning. In between, you’ll be dealing with lots of administrative grunt work, no matter how fancy your bank is or how long you’ve been working there. You might have to fax a draft to a traveling MD, consult with research analysts, or even pick up a client’s dry cleaning.
You might wonder why people choose to become investment bankers. Sure, it’s a lot of money but the 7-day work weeks combined with the lack of sleep, not to mention free time, can seem a little daunting. The Bureau of Labor Statistics estimates investment banking jobs will grow 15 percent by 2020, with increased globalization causing demand for bankers who know the ropes. Most people who brave the investment firm office are interested in retiring early, or they want a good jumping off career for something more glamorous down the line. But some of them are in it for the long haul. Chron magazine claims bankers with 10 years of experience make about $2 million a year, which is nothing if not incentive for the fast-paced lifestyle.
About the Author: Author Jena Daniels likes to blog about investments and how to manage your money wisely. If banking is a career that interest you, check out the MBA online degree programs offered by several schools.