Banking's Baptism by Fire: Surviving Your First Year as an Analyst
It’s no secret that the investment banking profession is cutthroat, where burnout is common and many flee to pursue MBAs or alternative careers – so, why stay the long, grueling course?
As you’ve probably heard from your family, friends, and/or colleagues, investment banking is notorious for its extreme working hours, often exceeding 100 hours per week. But why do so many young junior bankers burn out, leaving after just a few years?
Banker Burnout Crisis
According to recent studies, an alarming 85% of new banking analysts choosing to leave investment banking within their first two years due to burnout and the demanding nature of the industry.
This relentless schedule leads to chronic stress and sleep deprivation, which can severely impact mental health. Analysts frequently report feeling overwhelmed, with many experiencing anxiety and fatigue due to the constant pressure to meet tight deadlines and high expectations from senior management.
Yet for an industry notorious for these high turnover rates and burnout, why stay the course? Why even try to begin with?
What I can tell you is that you need more than a drive for a six-figure salary and fancy job title to show off to your friends and family.
You’re a First-Year Analyst, Now What?
I focused on being the best in my class, securing top bonuses, and climbing the corporate ladder. Naturally, with each promotion, came new challenges and opportunities to unravel.
My journey from first-year analyst to broker-dealer owner was not just about personal ambition; it was about defying the odds and appreciating the high rewards of perseverance – something I was no stranger to during my college tenure at the University of Notre Dame.
This commitment enabled me early on to discover why, for some, the rewards of a long-term banking career far outweigh the allure of an MBA or alternative career paths.
Landing the Job
Landing a first-year investment banking job is one of the hardest achievements in finance, with an increasingly competitive application process that offers only a few slots at top firms.
The rigorous interview process included campus rounds followed by in-person interviews at major banks ranging from New York to California, culminating in “Super-Days” for the top candidates nationwide. As a Division 1 athlete at Notre Dame, I faced the challenge of missing countless fall lacrosse practices and even some games while navigating this demanding selection process.
Choosing Your “Sacrifice”
As a first-year analyst in a new city (San Francisco), where I really didn’t know anyone, I dove headfirst into the demanding lifestyle of an investment banker.
The path was long and grueling: 120-hour work weeks, missed weddings, holidays with the family, and countless personal sacrifices. Yet, it was also immensely rewarding and I wouldn’t trade the experience for the world.
I ate breakfast, lunch, and dinner at my desk almost everyday. At one point in my first few months, I worked a 29 day in-office stretch with no days off. I attempted to play professional lacrosse for the San Francisco Dragons and it just couldn’t happen with the rigors of the banking schedule.
But, banking was my life now, plain and simple.
Mastering the 'Eat What You Kill' Mentality
While the all-in compensation for a first-year New York analyst in investment banking is competitive, ranging from $170,000 to $190,000, including bonuses, practicing the discipline to keep yourself motivated on even your worst days is even more critical for long-term success.
The motivation to stay in banking, rather than pursue an MBA or switch to private equity, was driven by a clear cost-benefit analysis. The opportunity cost of leaving for an MBA – both in terms of tuition and lost salary – was simply too high.
The key was always to be the best in your analyst class, get the top bonus of your class and eventually get promoted to Associate. I had no desire to go to PE or go back to get my MBA because of the opportunity cost of school tuition and missing out on a six-figure salary.
Developing Your Own “Rolodex”
After achieving the success I strived for as an analyst, I quickly realized that the next step involved not just hard work but also strategic networking. This led me to focus on developing my own rolodex of contacts, where I leveraged my existing relationships with the senior bankers in my group and started to garner a network of my own.
Trust: The Secret Ingredient for Corporate Ascent
After a couple years of being an associate, I was eventually promoted to Vice President, where I was continuously tested on my ability to manage junior bankers while driving my own deals.
Taking on the role of Vice President is probably the hardest few years for any banker. Not only are you required to manage the junior bankers, which includes the knowledge and ability to successfully perform and complete their tasks, but you’re also responsible for trying to generate revenues for your group.
As I navigated the demanding role of Vice President, I learned that effective leadership is not just about managing tasks but also about fostering relationships. Building trust with junior bankers not only improved team dynamics, but also enhanced our collective performance.
Over time as you continue to develop and nurture your own relationships, your generated revenues for the firm should start to increase. These experiences were invaluable, shaping my understanding of the industry and preparing me for future leadership roles.
And before I knew it, I was Co-Head of Global Investment Banking at a broker-dealer that had been in business for over 35 years. After rebuilding their banking department and striving, I realized how much money I was leaving on the table by not owning my own broker-dealer.
This led me to thinking, why not? I asked myself that question all the time – why not me? What was the worst thing that could happen?
With over a decade of investment banking experience under my belt, if my new broker-dealer didn’t work (which I knew it would), I always had the ability to go back and secure a senior level investment banking job on the street.
What Do You Stand For?
For those considering a career in this demanding field, remember: every challenge is an opportunity for growth, and staying the course can lead to extraordinary rewards so long as you remember to cherish your perseverance, embrace the right type of risk, and tap into your already existing network of colleagues, clients, friends, and most importantly, your alumni network.
All of this led me down the right pathway in deciding to launch my own firm during the COVID-19 pandemic in May 2020, a move many deemed crazy. Yet, by staying the course and continuously pushing myself, I proved all the naysayers wrong and had great success.
Reflecting back on the early days of my career, there are absolutely things I would have done differently. I’m loyal to a fault, and was extremely naive over the years in placing too much trust into the wrong people.
As you start your career, it’s important to acknowledge your core values and beliefs, as you will be tested over and over again. Forget ego and don’t get trapped within greed, which we’ve seen all too many fall victim to. I’ve always carved out a distinction between being greedy and what I call “long-term greedy,” a game to which most bankers don’t participate in.
For me, this meant investing the time to work on doing what's best for your clients and employees, and working on the right types of deals. Looking at the big picture and playing the long-game that doesn’t compromise your foundational ethics and morals.
Determining the type of individual you want to be will set the course for the type of professional you want to be perceived as. This requires maintaining the right balance in demonstrating your confidence and hunger with a sense of empathy and desire to understand others around you – specifically your clients and employees.