Investment Banking 1

Investment banking: An overview

Andrew Zoblisein
Harrison High School STEM Program
Advanced Scientific Research
Curran
March 23, 2022
Investment Banking 2

Table of Contents
Chapter 1: Career Choice.................................................................................................................3
Introduction..................................................................................................................................3
Job Description............................................................................................................................3
A Day in the Life.........................................................................................................................3
Pros and Cons...............................................................................................................................3
Chapter 2: From Here to There........................................................................................................3
Professional Profile......................................................................................................................3
Education.....................................................................................................................................3
Budgeting.....................................................................................................................................3
Chapter 3: Personal Assessment......................................................................................................3
My Skills......................................................................................................................................3
My Personality.............................................................................................................................3
My Motivation.............................................................................................................................3
Chapter 4: Productivity....................................................................................................................3
My Project....................................................................................................................................3
Career Connection........................................................................................................................3
References........................................................................................................................................4
Investment Banking 3

Chapter 1: Career Choice

Introduction

I chose investment banking as a career I want to pursue due to my affinity for finance and

working with numbers. Investment bankers help companies make money by issuing their

company as stock on the stock market. A rise in the stock price once issued allows companies to

use their own shares that they kept as collateral to expand their business.

I have always been relatively money conscious, and every kid has dreamed of what money can

buy. This career is extremely fruitful yet fulfilling as you could be helping the next Apple or

Google get started in going public. I also feel the need to be very busy in the waking hours of the

day to feel productive, and there is no shortage of tasks to complete when you are an investment

banker.

The first few years of being an investment banker will be extremely hard for me. Starting out as

an analyst leads to lots of work and a not enough time but moving up to managing director or

possibly vice president is very possible within the first few years of working at an investment

bank. Once I achieve this role, I feel like I can enjoy the fruit of my labor more and I will have

excellent money management skills built from this career. This will lead to less stress in my

personal life as money will be less of an issue and I can focus on more pressing matters.

In relation to the previous research that I have conducted, my top two jobs in my Career OneStop

Interest Assessment were Accountant/Auditors, and then Actuaries. Both of these jobs require an

analytical mindset, which I believe that I have. This same assessment stated that I also am

investigative, which in the BLS’s terms means that I like to analyze things.
Investment Banking 4

Job Description

An investment banker is a very vague title for what entails in this job. Investment bankers do all

sorts of financial servicing for corporations and companies. An investment banker at the end of

the day is a financial advisor for a corporation, either private or public.

Some of the advising they do can be done to help raise capital via an initial public offering

(IPO). An IPO allows for the company to raise capital by allowing outside investors to buy stock

in the company. The corporation will hold onto some shares to gradually sell as their stock price

hopefully increases, but the money from the initial sale of stock allows for more expansion of

operations.

Investment bankers also can advise and facilitate mergers and acquisitions of two companies.

When one company wants to buy another, an investment banker can help set valuations and iron

out the final terms of the merger. They can also help contract a buyer if the company is willing to

sell themselves to another company.

Most investment bankers will work in New York City, Boston, or San Francisco. Most typically

work in a cubical but as promotions occur, and office on its own is more likely. (International

Finance Insitute, n.d.)

The salary of investment banking is definitely a huge draw for most people who move towards

this career. Bonuses are huge in this industry and can be anywhere from 10% to over 100% of

your current salary. Analysts are the lowest paid, making anywhere from $85,000 to $100,000 in

base salary with a bonus of $50,000 to $100,000. The highest paid role, a managing director,

makes $300,000 to $1,000,000 base salary and $200,000 to $10,000,000+ in bonuses. (Corporate

Finance Insitute, n.d.)

Investment Banking 5

The salary does not come completely for free, as most holidays and special events in your life are

overridden by work. 16-hour days are not uncommon and are most likely expected when you are

starting out as a show of work ethic. Getting this career let alone surviving in it is truly a show of

if someone has their life together or not. Every minute of their life is planned down to the

second.

The financial sector is set to explode over the next 10 years, as the whole field is set to grow by

10% in the next 10 years from 2014. (Florida Tech, n.d.) The employment rate has plummeted

from 2010, likely due to mass closures of financial institutions in 2008. As of 2018, the

unemployment rate for investment bankers is 2.39%. (Zippa, n.d.)

This career is extremely demanding, but also extremely rewarding in terms of salary. There is a

lot expected of an analyst, but the compensation is there as motivation to get it done. The allure

of moving upwards towards manager also acts as great motivation, as more of the fees charged to

the corporations gets moved to them instead of an analyst.

A Day in the Life

An investment banker will start the day with an avalanche of emails, texts, and calls for work

that needs to be checked and double-checked from the previous day. Since most financial

markets open around 9:30am, they need to be in the office about an hour before to tend to these

calls and texts to ensure a start to a good day. After about 9:30, most entry level analysts will

start to analyze companies and edit models that the senior staff need to move forward with a

deal.

Lunch is a 45-minute break, either at a local restaurant or in the cafeteria at the investment bank.
Investment Banking 6

Afternoons consist of getting models that were updated by analysts sent back by associates so

they can be recorrected and re-edited. They then bounce back and forth to make sure that they

are good to be sent higher up, where the deal will start to be negotiated. Senior employees do not

have time to make revisions. When these deals are made, millions or billions of dollars move, so

these valuations and models must be perfect to the exact decimal point.

The evening half is where the hours can start to stack up very quickly. Before dinner work has

pressure has associates scrambling to ensure that they can get documents back to analysts for

revisions after dinner. Dinner is the same as lunch in terms of time and place. After dinner, the

morning work must be revised, from quick fixes to full overhauls of documents.

Most of this time is also spent with desktop publishing, who make large amounts of financial

information easier to read by making infographics and PowerPoints.

At 10pm, senior bankers get to leave at 10pm, while most others must stay until 12-1am. This

process is then repeated day in and day out.

Pros and Cons

There are a lot of advantages and disadvantages to being an investment banker, and it may be

worth to some and not worth to others. Some may chase it for the money and the bonuses, or

some might simply love doing anything finance related.

To start with the advantages, the total compensation is an extreme plus. You can very easily

make enough money to retire and live a steady life in under 15 years of working, although it may

feel as if you worked 20 years in 12. You also are able to live in huge financial cities and enjoy

what the city has to offer on your off hours. You also gain an in-depth and complete knowledge
Investment Banking 7

of financial instruments, and will have amazing money skills, which will allow for you to

manage the heaps of money that is being raked in.

There are some big disadvantages, however. The hours are extremely long, and it can feel as if

the only thing your existence consists of is modeling companies in excel. Also living in a big city

like New York could be a con due to the higher crime rates, higher rents, and cramped feeling

you can get while in such large metropolitan areas. It also takes a large amount of schooling and

networking to even make the job in the first place, so the hours put in throughout college and

internships must be worth it.

One of the biggest issues in investment banking is the long hours that you must work to be

successful in this job. There also is a high likelihood of being fired or laid off if there seems to be

shaky economic activity or the sentiment that there will be. After 2008, investment bankers had

an almost 10% unemployment rate as compared to their <3% in 2019. (Florida Tech, n.d.)

The job growth may soothe the long hours, as the need for these jobs grow, some companies may

over hire to account for people leaving abruptly, which could lead to less work in the short term.

Chapter 2: From Here to There

Professional Profile

A person who would choose to pursue investment banking would have to be extremely driven to

pursue the education and also work the long hours for weeks on end. Four words to describe a

person that is in investment banking are motivated, focused, analytical, and outgoing.

Motivated tends to be an understatement in the investment banking world and is thrown around

as a buzzword to entice people into all kinds of careers. When motivated comes to mind in the

sense of investment banking, one must almost from high school be in the upper quartiles of their
Investment Banking 8

class, and at least on track to transfer into a target school in college. A target school are ivy

leagues and other prestigious universities that banks, and broker/dealers will go to recruit highly

motivated students into summer internships. After a summer internship is acquired by showing

prowess and proficiency in school, one must show competency in their internship to get an offer

in the fall to finally work 70-80 hours a week with very little time off.

Focused entails staying efficient and on task when on the job, after it has been secured. This can

be from ensuring that all work is ready and other work is revised earlier than normal, thus freeing

up more time in the evening to help associates, or it could be as simple as getting everything

done on time and ensuring that senior bankers are happy with the work being done.

An investment banker must be very analytical, as they will be using excel to make spreadsheets

and models with hundreds of data points and figures scattered all over them. They then must take

this data they have modeled and interpret that, whether its from profitability to projected growth

given the current economic climate. A person who is analytical is extremely well versed in math

and science and knows how to get results that have meaning.

Even though an investment banker spends the majority of their time in a cubicle, they must be

extremely outgoing, as they interact with all kinds of people every day. Everyone in the office is

running on fumes constantly, so drama or any kind of hostility will not be blown off and that can

affect someone’s reputation. An investment banker could hope to have positive and enjoyable co

workers to keep morale in the office up when it gets very high stress.

Education

The intensive education requirements of an investment banker start in high school. The main

goal of this future investment banker is to get into a target school. A target school is where banks
Investment Banking 9

have either a heavy presence or hire lots of their employees from these universities. Some

examples of target schools are the University of Pennsylvania, Harvard, and Yale. (Matt, n.d.)

These are some of the top schools in the United States and one needs to be very competitive to

get into such an accredited university.

Once a future investment banker is in this prestigious institution, they need to excel in preferably

a finance or business degree to be noticed by big banks and to be given an internship. The

internship is the way to be “entry level” in this job.

Although they may have seemingly secured the job via an internship, it is highly recommended

that they go get an MBA or another graduate degree to increase pay and job offers. This step is

optional, as one becoming an investment banker is not dependent on a graduate degree, although

it does help. (Indeed Editorial Team, 2022)

An aspiring investment banker also needs to register with the Financial Industry Regulatory

Authority (FINRA) (Indeed Editorial Team, 2022) This ensures fair play in the markets and that

no one can commit fraud on behalf of their respective bank. Becoming a Chartered Financial

Analyst (CFA) is an optional but great way to increase expertise in the financial world.

An entry level career will require on the job training, which starts a new banker out as an

“analyst.” Training covers accounting, risk management, analysis, and other financial tools that

are necessary to be a successful banker. (Indeed Editorial Team, 2022)

Budgeting

Assuming an aspiring banker does not receive any financial aid, it will cost them $81,110 a year

to receive just their undergraduate. This equates to $324,440 for their entry into investment

banking. However, most of these students are highly competitive, and on average will pay
Investment Banking 10

$25,802 (US Dept of Education, n.d.) This leads to a cost of $103,208 for a career in investment

banking.

Assuming an entry level investment banker will start out at $85,000 base salary and with a

$50,000 bonus, loans could theoretically be paid off assuming one could live on the difference.

That is extremely unlikely, and a new banker may choose to take 10 years to pay it off, allowing

for the wealth to grow via investments and raises as they climb the ladder.

It is a very good return on the investment to become an investment banker. Even more so if one

is proficient enough to climb the ranks quickly, as the salary and bonuses seem to exponentially

increase.

However, it must be noted that the real cost in investment banking is the sacrifice of one’s time

and mental health if not upkept correctly. While money at first may seem to buy happiness, the

stress of this job will outweigh any monetary compensation acquired as a result of their early

20’s consisting of making excel models and studying for exams.

This alone is why some people choose not to go into a job like investment banking, as budgeting

is not solely arranging assets and incomes to your benefit but making sure one has enough time

to enjoy what life has to offer outside of the cubicle. The compensation can help with that, but

very seldom will one get a long break to take time off and enjoy the spoils of their career.

Chapter 3: Personal Assessment

My Skills

I feel as if I have a great foundation in terms of skills for investment banking. While I do not

have the necessary job skills yet, I feel as if I have the learning capacity to obtain such skills
Investment Banking 11

when required. Some soft skills I have are interpersonal skills, an analytical mindset, and a fast-

paced work ethic.

I feel as if my interpersonal skills are well rounded and can help further my career in investment

banking by allowing me to effectively communicate with coworkers and representatives from

companies to help strike a deal both parties are happy with.

My analytical mindset will help me in investment banking by allowing me to naturally think in

the same manner that I will be working. My brain does not work the same ways an artist would,

so I would have to change my way of thinking to successfully paint. Same goes for investment

banking, an artist would have to change the way they think to successfully be an investment

banker. I do not have to do this going into my career, as my way of thinking currently matches

the job I want to pursue.

I have a fast-paced work ethic, it may not seem like that at times, but when tasks need

completed, they will get completed. This fast-paced work ethic will allow for me to stay afloat in

investment banking and also allow for me to move higher up faster as I can show efficiency in

the workplace.

Generally speaking, some skills I need to work on include more office related etiquette. I need to

know email etiquette and how office machinery works like copiers and all related things. This

should follow naturally as I transition into the office.

My Personality

I feel as if I do match my personality to this career. I feel as if I am motivated, focused,

analytical, and relatively outgoing. These qualities, which were previously expanded upon are

extremely important to be successful in a career in investment banking.

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While this semester may be an outlier, I feel as if once I am set on a career like investment

banking, I will be able to do the necessary prerequisites and requirements to obtain such a career.

When I truly see the light at the end of the tunnel, I can put my head down and get to work

relatively efficiently. However, if I do not see a point to put my head down, it is very hard for me

to get things done which can get in my way.

Referring back to the previous paragraph, I feel as if I can be very focused if I am able to see

what I will be rewarded with. If the reward is diluted through multiple tasks that are not straight

forward, then it will be hard for me to focus, but over time this habit can be broken and reformed

to a more optimal one.

I think with numbers all the time. I quantify almost everything in my life, and I try to see trends

that may arise because of that. I also try to scale any growth, either it be in the gym or managing

small amounts of capital, by a percentage that increases over time. This model is not necessarily

obtainable, as that would be exponential growth, but it allows for me to have a framework of

progression in my life and helps me stay focused.

I feel as if I am a very outgoing person, as long as I know who I’m talking to. It takes me time to

warm up and get comfortable around people to act outgoing, but once I do I feel as if I could

build professional relationships very quickly and use that to my advantage when trying to

progress in an investment bank.

My Motivation

The research conducted has left me with a very split opinion on investment banking. On one

side, I would love the career and the compensation that I will be receiving, but I also do not seem

very excited for long hours and lots of work.

Investment Banking 13

To start on a positive note, I love the idea of working with companies to help manage their

financial needs and to take them public. That sounds like a fun and fulfilling career, as I can help

drive innovation in the world indirectly by freeing up money for the next Apple, Google, Ford,

or Amazon. I could go to my grandchildren or my children and brag about meeting the

executives of these companies and how they are in person.

I also would be excited for the pay that I would be receiving. I could enjoy the fruits of my labor

and be considered a very high-class person. I could pay for my children to get some of the best

education in the world and take them on trips only some can dream about. I also would never

have to worry about bills, have money left over to invest, and buy things for myself that I could

enjoy in my off time.

This, however, comes with the fact that the education is extremely challenging. I would need to

transfer into a target school, which may prove to be a challenge if I go to Georgia Southern. I

would then have to balance loans, an internship, and possibly a master’s degree all at the same

time which can be very stressful.

The career itself is very stressful. I do not know how long I would last without burning out and

crashing just to be fired due to performance. Investment banking is the best of the best, which

means that my coworkers are also my competitors, and I need to do better than them to ensure

that I get the promotion, and not them.

All of this needs to be considered when I start my higher education, which is very soon. I am

split on whether or not I should try to continue this path or find something else I’m passionate

about.
Investment Banking 14

Chapter 4: Productivity

My Project

My project will be a website made through weebly. This website will educate 6th graders to 12th

graders with a general overview of the stock market and all of the numbers associated with it.

This will also include an example analysis of a company, most likely a large cap company like

Microsoft or Google to show how these numbers can be used to predict possible movement in

prices.

This website will answer the following questions, “What is the stock market? What is a good

company to buy? What is a company I shouldn’t buy? What are options? How can I set myself

up for retirement, or make quicker money? What is risk?” These questions will have their own

section with subsections that answers all of these questions thoroughly.

A project like this requires no budget and can be planned in advance with “due dates” to ensure

completion. I will give myself 1.5-2 days to complete each section, with time for brief revisions.

This project is extremely important as most people do not have a good grip on the largest and

most important financial tool in the world right now. Everyday people are missing out on gold

mines and fortunes, as long as they make the right decision.

A section about dealing with loss may be included, but also may simply be a subsection in the

risk section.

Career Connection

This project relates to investment banking down to the very core. Investment bankers manage

capital and put companies on the exchange every day. They are directly correlated to the stock

market in everything they do.

Investment Banking 15

This project is important as it can spark interest for more investment bankers. While it is simply

a guide for beginning investing, it can also be seen as an ad for the financial sector as a whole

and could drive more traffic there.

Investment banking consists of researching publicly traded companies, and this project teaches

the beginning of such research. While on a much more rudimentary level, I hope for the thought

process and ideas to be aligned with the way an investment banker would think in their job.

This project has given me some ideas to further this profession when I am able to work. I will

work to make financial markets free and fair, so people’s effort and research can be accurately

displayed and rewarded for.

I can do this by protesting payment for order flow, where institutions scrape orders from brokers

to make fractions of a cent a million times a second. This is bad for free markets as these shares

do not hit the actual market, which does not reflect the stock price accurately. This

internalization of markets inside an organization is a direct threat to the freedom of the markets.

I also learned a lot about what it means to be an investment banker, and how I need to shape my

career path to succeed in such a role when I get there. The best way to make money, is to go the

money itself, and you do in such a stressful career.

Investment Banking 16

References

Adam, P. (2018, June 4). M&A 101: What investment bankers do in mergers and acquisitions. Retrieved
from Pitchbook: https://pitchbook.com/news/articles/ma-101-investment-banking

Ben, S. (2017, February 3). Contino . Retrieved from Challenges in Investment Banking and Why
Software-Driven Innovation Is the New Source of Competitive Advantage:
https://www.contino.io/insights/challenges-in-investment-banking-and-why-software-driven-
innovation-is-the-new-source-of-competitive-advantage

Corporate Finance Insitute. (n.d.). How much is an investment banker salary? Retrieved from Corporate
Finance Insitute: https://corporatefinanceinstitute.com/resources/careers/compensation/
investment-banker-salary/

Florida Tech. (n.d.). Investment banker career and salary profile. Retrieved from Florida Tech Online:
https://www.floridatechonline.com/blog/accounting-finance/investment-banker-career-and-
salary-profile/#:~:text=The%20U.S.%20Bureau%20of%20Labor,than%20the%20average%20for
%20occupations.

International Finance Insitute. (n.d.). Top cities for investment banking careers. Retrieved from
International Finance Insitute: http://www.financeinstitute.com/blog/top-cities-investment-
banking-careers/

Nancy, C. (2021). Oh the places you will go: A review. Acworth: The Harrison Times.

Pooknkulali, T. (2020, December` 6). Investment Banker. Retrieved from Investopedia:

https://www.investopedia.com/articles/personal-finance/042215/what-do-investment-bankers-
really-do.asp#:~:text=Essentially%2C%20investment%20bankers%20are%20financial,sale%20of
%20the%20company%20itself.

Sean, R. (2021, July 26). A day in the life of an investment banker. Retrieved from Investopedia:
https://www.investopedia.com/articles/professionals/111715/day-life-investment-banker.asp

Zippa. (n.d.). Investment banker: Demographics and statistics in the us. Retrieved from Zippa.com:
https://www.zippia.com/investment-banker-jobs/