I see everyone complaining about how banking is not intellectually stimulating, while consulting is interesting, but I was wondering if there were anyone who actually enjoy that aspect of the job.
Honestly, I don’t think I’m smart enough to be in PE/consulting, which is why I want to be a career banker.
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Banking for sure does not require you to be very smart, it just requires you to have a decent understanding of accounting, valuation, how businesses work as well as have the ability to work a lot of hours while producing consistent results. I'm an analyst at GS and would say that 95% of the stuff I do in banking is not difficult and does not require much thought, it's just a question of experience. Once you have done something a couple of times, you just go through the motions.
I think IB is a very risk-averse career choice. You don't need to be that smart and you don't need to be an excellent performer to climb the ranks. I am yet to meet anyone who thinks that the job itself is even remotely difficult in IB. The difficult part about the job is the sleep deprivation, sacrificing everything else in your life and doing simple & boring stuff for 18 hours a day in an extremely hierarchical environment.
Remember that most people in PE are the same people who did braindead stuff in IB for 2 years, so you don't need to be an intellectual mastermind to land a position in PE. However, I genuinely do believe that you need to be smart for real to do well in consulting.
You lost me at consulting man
Found the undercover consultant
no one has ever said "consultant" and the word "smart" in the same sentence
unless its "consultants really aren't as smart as they think they are"
It seems like consultants are mostly 20-somethings talking out of their asses to business owners who have been in their industries for decades. I’ve yet to understand what the value add really is with consulting. One of my last companies hired one of the big 4 firms to put together a “M&A playbook” for our corp dev department, and the result was something a middle schooler could have made. Can’t imagine how much was spent on that powerpoint. Seems like a giant money laundering operation.
Isn't that the point of business? To make money disappear from one location and reappear in another without anyone figuring out how it got there?
so why do you think the consulting industry is still so pervasive
So this comment .... got so many MS for saying 95% of truth, but just 1 sentence of 'consultants are smart'? When that probably contains some grain of truth? You bankers are hilarious lol
You don't have to be smart to be an IB ANALYST. You're post would have made sense if you kept it to that. You absolutely need to be smart to be an effective MD / senior banker
You don't have to be smart in finance unless maybe you're a trader/quant where mathematical theory becomes a bit more abstract.
Finance is really nothing but simple algebra (+, -, * and /) and people hype it up.
Compare a guy in PE vs some average physicist/scientist and you'll realise how average finance folk really are.
If finance wasn't paid so excessively, people wouldn't put it on such a pedestal.
Exactly. Finance is extremely well-paid and people who have not worked in finance themselves think it's well-paid because it is extremely difficult. However, it is actually only well-paid because you work extreme hours doing stuff that is very repetitive, simple and boring.
I think that is also part of the reason that bankers are paid so well. People can work pretty long hours without being paid extremely well if they are doing something that is interesting and allows them to develop. However, I am yet to meet anyone below VP level who enjoys banking or even finds it remotely interesting (except for incoming interns of course).
it is a shame that so many genuinely smart people waste their brain on this silly job
I mean if it gets better at VP level and above then it's really not that bad? If you start as Analyst, that's only 6 years out of a 30-40 year career that sucks.
Wow I have to say this comment is insanely out of touch. Compare IB to 95%+ other corporate jobs. From a business perspective we are working on the most important event at that company. That’s inherently interesting to me but maybe I’m jaded bc I come from a big 4 accounting background which was assembly line level boring
Idk man, I think bankers underestimate the intelligence required for the job the same way we underestimate our own comp. You know the comments like "Pshhhh, the average MD only clears $1M-$2M these days, that's not even rich." Kinda reminds me of that when people are like "Pshhhh, yeah sure nearly everyone at an EB or BB went to a Top 25 school and graduated with honors, but a monkey could do this job". I mean yeah, maybe a monkey that had a 3.7 GPA at Wharton but otherwise I do think you have to be significantly above average in terms of motivation and intelligence to break in. My friends that work truly average jobs (Construction, payroll accounting, back office, etc.) get dizzy when they look at my little 30 tab financial models.
Are we top of the top? Fuck no, not even close. But definitely in the top quartile or decile and that's really all one can ask for, no?
Ending up in banking is a function of planning far in advance and having the stamina to follow the path rather than being intellectually smart. Having a high GPA is mostly a function of putting the time in to study rather than being some intellectual mastermind.
Those who end up in IB are most often people that just put the time in and planned far in advance. They knew that they wanted to get into a good university so they put the time in during high school. They knew that they wanted to pursue a high-paying career so they got good grades in university and applied for spring-weeks during the first year etc.
Yes, they would get dizzy looking at your 30-tab model but that is not because you are smarter than them. That is because you have spent your entire time during uni + years of 80+ hour weeks studying and working with finance. The same thing can be said about any profession. I would fail miserably at repairing a car. Just imagine that the average mechanic would be so much smarter than a guy working at GS.
I agree that people in IB tend to be smarter than average, but it's mainly just a function of putting an extremely high priority on your career / money and planning it far in advance rather than being an intellectual mastermind.
This just isn’t true at all. You can’t “just plan” your way into 99th percentile standardized testing and some ridiculously competitive school. Trust me I’d have gone to Harvard if this was the case. You still have to be disproportionately smart and work reasonably hard to even have a shot at half the banking jobs. Then, when you get to a place like Penn, you have to compete with all the other hardos who jerk off to daddy PJT rx but can’t all fit.
I agree that to a certain extent you just have to meet a baseline intelligence to be a reasonable banker but simplifying these kids’ lives to “just planning” is definitely an overstatement.
I worked my ass off in high school (perfect gpa only taking ib/ap courses, 36 act, captain of sports teams, good ECs), and still only got into a non-target. I planned well in advance for my future, and admissions said fuck that. Sometimes planning, and even results, isn’t enough.
Your friends get dizzy because they're not staring at models like that every day, it's not because your model is inherently complex, it's because they're unfamiliar with it. I myself would get dizzy looking at a 30 tab model too if I didn't get to spend a number of hours breaking back all the links and understanding how they interact.
Let's not also pretend that the model does anything intrinsically complex aside from a number of If functions, complimented by a number of simple algebraic formulas.
I don't know what field you're in, but assume your model has some growth forecasts. Let's not pretend you've run some regression analysis or stochastic modelling for your forecasts within your 30 tabs, you've simply looked at an average, or stuck your finger in the air, and assumed, "yup, let's grow this by 3%" ..... = variable * (1.03).... Done.
I feel you and good points. I do think some of the coding of formulas get's complex, mainly when working with messy data and have to find creative ways to write formulas to elicit specific insights. Or when you're trying to write a formula such that a certain value, which is an input and an output, can automatically change to accommodate a change in inputs while holding downstream output constant blah blah blah.
I guess more directly, do you really believe in terms of general population you sit right around 50th percentile? Just from your one response and the fact you read my entire post and are interested enough in analytical conversations to carry on with it, I would guess you're more of a top quartile guy who did well on his SATs haha. Purely anecdotal and a guess but I would think broadly the people on this forum tend to be smarter than average of a true general pop. Not limited to just IB obviously but anyone in a similar job like consulting, investing, etc.
Maybe the better way to put it is that while you don't need to be smart to do financial / professional services work, there certainly at least appears to be a correlation whereby the people that end up here are at least relatively bright. I guess my bottom line is just that I'd assume the average person on this forum would do better taking an IQ / SAT type test cold than the average of a few thousand people from the general pop.
Problem is that everything you said is more reliant on work ethic than intelligence. Getting into a top school is definitely more about optics than intelligence (one of the biggest tools in my high school went to Yale) and getting a high GPA is a matter of consistency.
fucking A
Don’t need to be smart in finance, just need to be willing to spend more time on difficult concepts if you don’t grasp everything as quickly.
Nah Im just doing it cuz it pays the most and not smart enough to be in quant and too much of a pussy to do startups
I think intelligence is measured in many ways. When I look back, I always thought I was one of the dumbest kids in my (very prestigious engineering program) but I was interested in a lot of different things (history, politics, literature), was pretty commercial and was a natural student leader.
20+ years later, I’ve come to the conclusion that the intelligence you need to be a successful banker is different than if you want to be a researcher or a quant or even a HF guy but it’s no less valid - clients pay tens of millions of fees for advice to advisory firms for single deals for a reason.
I view my job as a mix of strategic thinking (applying business skills to transactions), understanding local and geopolitics (nature of the industry I cover), hard nosed commercial negotiations (telling a bidder they need a material price increase and doing it convincingly when I know I have no other cards), playing psychologist to my clients and team members, occasional finance analytics and being an effective salesman pitching deals and achieving outcomes for my clients. Most days, I have to do and think about all of these things. That takes a different type of intellectual skill and one that’s sadly less valued in our excessively STEM world.
People choose IB because they want $$$$$ without having to exhaust their brain nor walk on the cliff. Sleep deprivation is the price they pay.
Yes. Had a soon to be an incoming first year associate tell me they would prefer to stay in client-facing roles because he's single/young and doesn't mind sacrificing the hours for now. Doesn't particularly find advisory work interesting but loves the money that comes with it (his firm historically pays in the EB range). Long term, he wants to either chose a more lifestyle friendly firm in a lower COL (works in NYC/LA/SF type of city) or jump to corporate after a few years. Also genuinely feel he would make a terrible MD as he's very blunt and tends to be very obvious when he enjoys someone else's company or doesn't (socially always thought the guy was a jerk but probably would be a great co-worker considering how direct / blunt he is).
If you want intellectual stimulating ER, AM, and HF are the way to go.
Guys I get that it's cool to be aggressively understated, but I've habitually tested in the top 90% of any SAT / Pre-SAT / Prep School Readiness / Other Aptitude test I've ever taken, and I am not remotely unique or intelligent among my SA peers.
If we're going full abstract and redefining what intelligence means in today's society, okay sure it's inconclusive and a toss up. But if you keep the definition of intelligence fixed as just practical ability to score high on an IQ / aptitude type of intelligence test, most of the people in high finance be it IB, PE, HF, etc. are pretty damn smart.
Most of these "smart" people will bomb those tests without any preparation. Just look at the forums for people asking for modelling case studies on this forum, it's all preparation and regurgitation. Sure there's probably one savant out there who can crush it without any prep but I would bet good money that those "smart" people in finance wouldn't score very highly without any prep. Scoring highly doesn't mean you're smart/intelligent, it just means your brain works in a certain way or you've prepared so much that you know exactly what steps to take to get to the answer.
Those of us who are saying it how it is are not attempting to look cool by understanding our qualities, we're just being realistic.
I failed most of those stupid IB psychometric tests (because I couldn't figure out why the triangle rotated and changed shades....), and I got a shit GPA, but I tell you what, I can probably do your job as good as you. Not because I'm somehow smarter than you, or that you're not as smart as you think you are, or anything to do with our personal levels of intelligence; it is simply because what we do doesn't require much brains.
I never did so much as a single prep class for Uni aptitude tests and scored in the top range. I don't think this is a unique outcome for someone in finance or those who attend Cambridge/Oxford or the Ivies. Definitely there is a large contingency of people who aren't naturally smart but went to insanely attentive prep schools and had private tutors growing up, but if I had to guess it's pretty 50/50 between those types and people who are naturally smart.
We're likely both overestimating the extent to which other people's experiences reflect our own. I forget the psychology term for that specific type of bias, but it seems to be at play because I don't agree with your experience that it's normal for bankers to do quite poorly in school and on aptitude tests.
Additionally, different schools and companies have different cultures. Perhaps there are IB groups or real estate firms out there for which the majority of employees are sub-average intelligence. Doesn't match my experience but I'm sure it exists.
True. I scored in the top 1% in those university aptitude tests with a solid 2 months of preparation and I do retarded shit all the time
I swear anyone who thinks this must either exist in an alternate parallel universe or have no comprehension of any of the work that gets done above the analyst level.
I fully agree with your opinon - not sure how this job is "dull" when you are creating a fully dynamic model with five different funding sources with flexible assumptions while splitting debt tranches into different buckets so that they are refinanced differently to meet certain rating criteria. Even just beyond technical sense, managing the client and egos when doing public M&A is incredibly sensitive and dicey on how to word certain email or presentation, which can kill or make the deal depending on the client or the perception of the acquiror.
All my friends who are doing banking just put in the extra hours to do the 400 question guide and networked a bunch. I even asked a buddy of mine going to a BB and said that any normal dude who can have a conversation during their interviews can land a job in IB. Don't get me wrong I think doing banking requires intelligence but the work is not rocket science. I don't even work in banking but talking to my friends that are in it, I feel like my work is way more exciting. All my buddies say they are moving logos 75% of the day. Its crazy to me how many kids from my university landed BB and they are low key stupid. Apart from that, some of these kids literally look like they have never opened excel before.
What does your job in RE entail and whats the career path like?
I work in development so my day to day deals with looking at investment opportunities to build (usually multifamily). There is lots of moving pieces from working in the models to see what the returns will look like, hoping on calls with GCs, architects, and designers. It's not rocket science at all, but from what my baking friends tell me about their jobs, I would say I am given a lot more responsibility and my job just has more variety day to day.
I also love the culture in RE. I work maybe 40 hours a week and clear 100k a year first year out of college and live in a very low cost of living city where my money can go a long way. Obviously some people would hate that and want to live in NYC and work long hours, and that's great for them, that's why there is banking.
Honestly if I didn't fall in love with real estate through past internships I probably would have done banking because it really does set people up to go into whatever field / industry they want. In the end real estate is super niche and I know I'm "pigeon-holed" into it, but that's fine because I absolutely love it. Two of the guys I work with are ex-IB and they say they learned great skills, but if they could go back they would have just jumped straight into RE. Obviously that's easy to say when their banking probably set them up for the other amazing opportunities they had before here.
I would say that the career path is different for everyone, but in RE where you make generational wealth is going out and doing your own deals. That takes time, and it is very risky, but that's why I am learning how to do it with other peoples money and hopefully ten years from now, I'll have the knowledge to go out and do it.
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