In Defense of Working for Wall Street

At the end of this blog entry, you may be tempted to call me soul-less, morally bankrupt, and just a bad person in general. Let me explain.

By now you have probably heard about the New York Times OpEd resignation letter that caused quite the stir on Wall Street. Greg Smith’s editorial, “Why I Am Leaving Goldman Sachs,” discussed the toxic and destructive culture at his old firm (By the way, is anyone else picturing Greg Smith at his desk gleefully typing up his opinion piece knowing the firestorm that it will cause, all the while complying with pitchbook requests from his superiors with gritted teeth?). Greg said that he knew it was time to leave Goldman when he realized he “could no longer look students in the eye and tell them what a great place this was to work.” Indeed, for those of us who have done campus recruiting, someone did look at us in the eye and tell us what a great place investment banks are to launch our careers.

The flavor of the month for reporters seems to be this investment banking recruiting “crisis” at elite campuses around the country (I’m looking at you, Dealbook). These articles typically start off the same way: some reference to the heydays of investment banking, a reminder of whatever recent scandal that’s causing a firestorm, and then, the crowd favorite: a quote from an Ivy League student or an recent graduate from an elite college about how he/she used to want to work for Wall Street, but now found something actually meaningful and fulfilling. Don’t get me wrong, I have quite a bit of respect for people like them. It certainly takes resolve, and even courage, to look the other way when all your peers are printing resumes on ridiculous five-pound papers and flocking to bank recruitment sessions. Some articles finish on a high point, noting that the percentage of recent graduates heading to Wall Street have dropped significantly, hence the “crisis,” I suppose.

My question is this, is anyone defending working for Wall Street? Why have I not read a single account from a summer analyst/analyst/associate/VP/D/MD championing the Ivy League-to-Wall Street exodus? To the 20% or so Cornellians heading to Wall Street and all the junior people working in the industry, where is YOUR side of the story? I can think of three reasons for this silence.

  1. Everyone hates the job and would never publicly announce any inkling of love for it
  2. Everyone knows the perks and benefits of the jobs are so self-explanatory that there is no need to defend working on Wall Street
  3. Everyone signed confidentiality agreements

I have a feeling that it’s the last point. Given the lack of literature in this area, I have taken it upon myself to try to provide some insight to the casual observer. So with all those opportunities out there, why did people like me pick investment banking?

Disclaimer time: Notice I will say “some of us,” as these may or may not be my personal reasons for choosing investment banking. Everything from here on is coming from a new analyst’s perspective. I concede that my experience with this world is limited to a 10-week summer stint. The rest of the entry is based on my and other people’s experiences in recruiting. Also keep in mind that there is a large disconnect between what junior and senior people do at a bank. 

Even at an analyst level, some of us actually find the work fascinating. Believe it or not, some people enjoy finance. They like following the markets and finding undervalued companies and running analyses on them. Corporate raids and shareholder activism excites them (there are movies made about M&A, after all). Some of us go into finance because it’s our passion. Bullshit, you say. You’ve deluded yourself into thinking you actually enjoy this. How can you enjoy anything if you are working 100 hours a week? I would say that one’s enjoyment of something decreases incrementally because of the hours, but even with all the drawbacks, the leftover interest some of us have for finance still exceeds any interest we have in some other subject. In other words, benefits exceed costs.

I fully recognize why work is called “work” and not “play” – it’s because you have to do work! In college we are instilled with the belief that we have to find our “one true passion” and follow that passion and make it into a career. Society views it as a failing or even a waste of a life if someone is not doing something he/she absolutely loves. I think in some ways, that’s misguided. The alternative message is that our “one true passion” does not have to align with our career goals. We could have many interests and by turning one of those interests into a career, we have succeeded. My one true passion boils down to alternating between watching Survivor and eating ice cream for days on end, and maybe sneaking in a vacation to some exotic locale every other week. That would make me a lazy bum, you say. The lack of productivity would also probably drive me crazy. People in investment banking aren’t just interested in making a lot of money, but rather, they find reward in a career they have an interest in.

Some of us are not qualified to do the other things people have suggested. I observed over the summer that the common denominator amongst all the interns was this raw willingness to work hard – whatever it took to get the job done. Beyond that, we’re a pretty normal, albeit overachieving, bunch. This means some of us do not possess the keen minds of our colleagues on the Engineering School or the literary skills of those who are pursuing writing or the dramatic arts. A lot of commentators stated that students should go into start-ups. Having visited Stanford two years ago and seeing first-hand the entrepreneurial culture there, I say go for it. What’s holding us back? Well, some of us may not have ideas for start-ups. Some of us may not know enough programming languages to crank out an app. Some of us are just risk-averse (more on the ironic nature of this later). I read a study a while back that said the most successful and most common type of entrepreneurs are people in their 40s. These are folks that have already worked for bigger companies and through experience, figured out a better way to do things and started their own businesses. I’m not making excuses for not doing start-ups. I’m just saying that some of us don’t have brilliant ideas right now and are picking a business in which we want to gain more experiences. What about other fields? Marketing? Nope, don’t have an inkling of creativity in me. HR? Tried, didn’t work out. Non-profit or the government? See below.

Some of us have circumstances that limit the opportunities that we have. I’m not going to sugar-coat it: a big part of my decision boils down to financial reasons. Ironically, I chose banking because I’m risk-averse when it comes to my own finances. I was once in a situation where I was denied the opportunity of my dreams because of finances. I promised myself one thing: I will never let finances be the reason I, or my children, cannot seize upon an opportunity. To do this, I must make a financial security net with enough cushion to handle any fall, because I realized that I could depend on no one but myself. Investment banking is one of the means to this end as well as an end in itself. I am risk-averse in the sense that I am not willing to gamble with a start-up or a more so-called “rewarding” career when I lack the financial cushioning and the certainty of job security (that is not to say there is job security in banking, I fully accept the possibility that my “marriage to work” could totally backfire, but I’m OK with that having learned from the experience). Coming from an Asian family, I know one day I will have to support my parents and this is not something I take lightly.

The cynics among you will say, why don’t you do something else that pays a decent, but not obscene amount that will guarantee success, like Teach for America or any stable job with the federal government? While I do want to work for the government at some point doing financial regulations and reform, right now the government does not want me. Some of us do not qualify for Teach for America positions, Rhodes or Marshall Scholarships, or any paying gig within the state or federal government. I can’t even stay in this country if the boutique firm I’m working for doesn’t sponsor my visa, for goodness’s sake. So yes, some of us have circumstances that limit the opportunities that we have and I’ve only barely scratched the surface here. Within what we can do, Wall Street comes out as a winner.

If investment banking did not pay me a cent, would I do it? No, but I would still be making models projecting my personal income and expense streams and case it up with clever levers so I can play with different financial scenarios. I would still follow the market. I would still read about big deals that are going down in the Fortune 500 and secretly wish that I could be a part of the action. Before you call us a bunch of greedy bastards, ask yourself, would you do YOUR job if it was unpaid? Some of you would still do it. Most wouldn’t.

This list is by no means comprehensive. These reasons could even be entirely misguided; but as someone who has gone through the process, this is why we are heading to Wall Street. We are not special. We are not better than anyone else. Some of us come from immigrant families and we are immensely grateful for the opportunities. We are willing to sacrifice a lot to get the job done.

So stop condemning everyone who is working on Wall Street. Stop assuming we are immoral sell-outs. Stop expressing your “disappointment” that as “elite” graduates we are not doing something better with our time. Many of us did not choose this path lightly and we will find out in our ways if we’re meant to do this for the rest of our lives. We are hungry and ambitious. Not all of us will stay in finance or even love this industry after it chews us up and spits us out, but in the mean time, we’re here to prove ourselves. Let us.

Further readings from campus newspapers / other sources

9 thoughts on “In Defense of Working for Wall Street”

  1. I would challenge you Phoebe that the biggest problem with working for an iBank is not any of the ones you (or most media) list. The biggest problem is frankly that investment banks (1) create inefficiencies (you can’t make outsize profits in an efficient market so iBanks create arbitrage opportunities where none existed), (2) because risk is bad for an iBank, as much as possible, the financial instruments created ultimately lay the risk at someone else’s footsteps (this can sometimes be unintentional, but with the last financial crisis as an example, I refuse to believe that smart people didn’t see that coming); (3) because investment bank partners and staff don’t own the capital they play with, but still outsized profits from using that capital, investment bankers are turning the world into a semi-truck that has no brakes – i.e. when partners put up only their own capital, they were significantly more careful, the same when companies put up their capital to expand overseas for example, they make sure that things won’t blow up in their face easily; this doesn’t happen anymore and iBanks profit from companies taking the breaks off, making the whole world swirl into a frenzy of fake wealth creation that is only based on money circulating, not the creation of any hard assets. Given all these things, you are basically saying that it’s OK to screw the rest of the world over because you want to make sure you and your family have money. If you’re OK with purposefully making the economy but unhinged and inefficient at the same time, all the while risking only other people’s livelihood, never your own, then you can safely claim that it’s OK to go into iBanking. So while from memory you’re a nice person, you are choosing to help the world be a worse place on purpose just to line your pockets.

    As a funny sidenote, your blog engine didn’t let me post my comment when it had the word m.o.r.t.g.a.g.e. in it….

  2. Hey Phoebe,
    I agree with you that there is nothing fundamentally or morally wrong with investment banking. The only criticisms I can think of are: 1) its ungodly hundred-hour weeks, 2) general mindlessness/futility of the work (who really looks at those pitch books anyways?), and 3) the disproportionately high pay for a glorified excel monkey/coffee slave. And let’s not kid ourselves–nobody does IBD for the passion, or even the pay; they do it for the exit opportunities on the buy side. Other than that, investment banking and M&A advisory are necessary services in our economy, and a completely defensible career choice for financially risk-averse professionals.

    The problem is, the Goldman that Greg Smith criticized is not an investment bank. Rather, it is a diversified financial services firm, and IBD only consists ~15% of its annual revenues/profits. The other portions, S&T, asset management, and private equity are much more morally murky. This is where the CDOs, the credit default swaps, the securities fraud, the structure finance, the “muppets”, and the vampire squids lurk.

    And I say this as a guy going into prop trading, for much the same reasons as the ones you listed above. I understand completely. But before you turn on that persecution complex, remember that the public has very valid, and very potent reasons to be mad.

    This is why we must always be mindful: that much of the economic hardships that have hurt people around the world have resulted from the financial industry, and that we do not deserve the high pay any more than the engineers, manual laborers, teachers, firefighters, and entrepreneurs that built this great economy.

    Good luck in your career,

  3. Hi Phoebe,

    Great post, you raise some meaningful questions and offer a perspective a lot of people ignore (namely why so many embark on a wall st career).

    You’ve touched upon a lot of points I can personally relate to, and it’s my opinion that you are headed for the right reasons. For the time I’ve known you, you’ve remained down to earth and I’m sure this will help you a great deal in your career!

  4. Client alignment is much better in asset management and private equity. Managers make money if their clients make money. S&T, on the other hand, you make money from transactions and commissions. That is where the conflict comes into play.

    S&T as we know it today will change dramatically. Public outcry and computer algorithm facilitated trading will continue to cut into profits. Hopefully banks can stick to IBD and managing money.

  5. Dude. DUDE, thank you for delivering this message. Much needed to hear the other side.

    Came upon your article by accident when i was googling something else, but could not have said it better myself. And happily surprised it’s by a fellow Cornellian. As someone who worked in finance for 3 years, I can attest to the benefits of a wall st job and yes the passion, the excitement, adrenaline of following stocks, following deals (especially real ones you’re working on though yessss I too have spent hours of my own time pouring over 10Qs 10Ks building models on companies that I have been personally interested/invested in).

    And you are right that finance does not have to be the end all be all, but it certainly allows us to prove ourselves, that is, let it break us down, so that we may build ourselves up anew. i.e. I graduated from Ag 07 with a bio degree, but dreadfully wanted to try my hand in finance. I am now a 3rd year medical student. Ha. Ha.

  6. It is about damn time that someone holds their peers accountable. Because Goldman Sachs did see this coming and could have done something more about it then they are guilty enough.

  7. Because it’s much better to work in tech…at a company like Google/Facebook, you get financial stability, a pretty comparable pay check to Wall Street, way better working hours, cool perks like free food and free housing, and way more interesting and challenging work. Investment banking is doable by a monkey/high school student…that’s the primary reason why I think it sucks. Disclaimer: I am a computer science student currently working at a fixed income trading desk at a bulge bracket bank in New York, looking to jump to Silicon Valley

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