Wall Street is a career of stages and rites of passage. First, you’re an intern, then you’re an analyst, and after analyst you’re an associate … and then there comes a fork in the road, and with that fork comes a crisis.
The fork looks like this: If you continue with your career in finance, either you will become one of the few hundred people who make a real difference in markets or you will become a part of an army of modelers, deal builders, and paper pushers.
Either you’re confident you’ll be in the former or you must be content with being in the latter. If not, prepare for a crisis.
“I don’t know how anyone works for Blackstone, or Bank of America, or Goldman Sachs. I don’t think I could ever do that,” said one private equity analyst in his late 20s who preferred not to give his name. “You’re just like one cog in this enormous machine … I guess the smaller the machine, the less you feel like a cog. I’m a small gear. I’d like to be a bigger gear. Or at best, run my own machine.”
This goes especially for the type A people. The ones who made it a point to do everything right: the right school, the right job, the right life. They want to leave a legacy, and on Wall Street that’s incredibly hard to do.
People usually only talk about this after a few drinks. The conversation starts like this: “I’m thinking of joining a startup.”
The tech sector has created a new kind of highly paid alternative to finance. It’s one with fewer formalities and red tape and busy work. It’s more creative because you get to create something tangible — at least that’s the dream.
In reality, finance people in the tech sector are using the same skills they were using on Wall Street. The difference is culture.
“Paying your dues” is a part of Wall Street culture at a lot of firms. Everyone is meant to know his or her place, especially those at the bottom. This can make young people feel as if they have no stake in the firm.
“You need formal mentoring that is taken seriously, and everyone has to be treated like they could run the firm one day,” said another young analyst at a buy-side firm. “I think at startups and smaller companies you can see yourself progressing as the company progresses.”
The analyst said at one of the bulge-bracket banks, the career-development officer did little more than play favourites.
“It actually harmed morale more than it helped,” the analyst said.
Now, the Googles of the world need deal structures and financial modelers. However, especially for those with jobs that require specific skills, such as trading credit derivatives, leaving Wall Street is more of a pipe dream than anything else.
“The fear of unknown tends to keep people in their place,” said Jesse Marrus, founder of financial career matching site StreetID. “It definitely does seem to me that there is frustration … It’s kind of silly to hear them [Wall Streeters] complain about compensation, but some of these guys … the money becomes a trap.”
The trap isn’t necessarily the money; it’s the lifestyle.
“People that are satisfied with money are inside their head and view the world from a ‘me’ perspective,” said the buy-side analyst. “They’re happy with their ability to have a nice wedding and have a sweet apartment … for them the means is the end.”
For others, it can just be money without meaning. And then there’s the question of time.
As one happy trader told Business Insider, “My perception of investment bankers has always been that they want to make a lot of money without a lot of risk, but they all fail to realise that wasting time is the biggest risk of all.”
Hope you all can figure it out.