5 things I learned working in Investment Banking

Throughout my 10+ years career in equities research in investment banking, there were many lessons I learned. These are some of the key takeaways.

Never, ever take things for granted

This is probably the first and foremost thing I learned and I think it took me nearly 3 years to completely iron in this mindset. Practically, it means asking questions over and over again and to different people to make sure something goes right. Checking over and over again your model, calculations, wording in reports. In life, it means nothing comes easy, don’t expect reward simply because you put in the effort. I always like this analogy of battlefield.

Treat people with respect especially those with lower status 

Early on in my career, I took a lot of pride in myself. I had a lot of ego. I thought I was much much better than I actually was and I only respected those that were better than me. It is so easy to fall into this trap when you are on a rising path. The secretaries at investment banks taught me a lot of lessons on this. Now, I know that treating people with respect and kindness not only make them feel happy but also myself. It also saves me a lot of hassles and random good things can happen because people like you. Even if the person has lower status than you, they could tell you many things you don’t know that could help you because they talk to people with higher status than you. And to treat people without respect is simply a sign of insecurity and people will see through that.

Money doesn’t buy happiness

Banking is quite a fun job when you are young because it is quite challenging so you are learning a lot. You will get to travel quite a bit, which is very cool when you are single and looking to explore the world. It is a very steep learning curve in the beginning and what this implies is that, you plateaued after 3-5 years. The work becomes tedious and mind numbing. The travelling means you are just getting away from your family. The hours don’t get shorter though you have more flexibility. The biggest reward is the money and so you try to think of all the ways you can exchange that for happiness. I think there are genuinely people that are just materialistic so they still get a high after buying their 12th handbag or 5th car but for some of us who are looking for a bit of spirituality (or it could be just a function of marginal utility in economics), this simply won’t work . So it is pretty much a downward spiral from there.

Office politics

This is VIRAL in banking and my opinion is because it is a shrinking industry. Compressing commission rates, more regulatory scrutiny, information access and technology all made the traditional banking model very difficult to survive. And when it is a shrinking pie where nobody is growing, everyone is just defending their own share or killing the other person to take over their shares. It is not a nice scenery. I still remember when I started, the seniors will help grow the juniors. People actually cried when a very well respected banker died unexpectedly because he had a reputation of looking after subordinates. By the end of my career, I could actually sense a sneaky smile when people are fired. Empathy was scarce.

Management

This is one of the most valuable lesson I learned after witnessing so many rounds of firing and trying to make sense of it.

As a manager, it is important to have a team for performance and a team of loyal guards. All you are doing each day is balancing the interests of these 2 groups. And as an employee, you should manage externally during an upcycle and internally during a downcycle. You are also just part of the process so you are not there to solve problems like you think you are.

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Categories:careers, investment banking, personal growth

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