“Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.”

Ben Bernanke, Public Servant

Pros and Cons of Working as an Investment Banker

advantages and disadvantages of being an investment banker

You dream about becoming an investment banker?

Make sure to read all the pros and cons of being an investment banker in this article to get a profound reality check.

It’s not all upside and you should make sure that you are also really willing to accept all the downsides related to this career path.

Without further ado, let’s jump right into the discussion.

Table of Contents

Investment Banker Job Profile

Job DescriptionInvestment bankers help their clients to raise money to finance their operations.
It can also include consulting clients regarding mergers and acquisitions or advising them regarding important investment decisions.
Many people think investment banking is all about trading financial instruments. And for sure, sales and trading is an important discipline of investment bankers.
Yet, as you can see, it is not the only one and you can work in many different fields as an investment banker.
Salary$145,000 per year on average, most investment bankers make between $110,000 – $235,000 per year.
Job SecurityRather low since you can be fired during financial crisis times and it may be hard to find another job in this field during those times.
Job SatisfactionRather poor since the pressure can be enormous and workloads can be ridiculous.
Work-Life BalancePoor work-life balance since you will have to work long hours and will have barely any leisure to spend with your family or friends.
Physically / Mentally Demanding?Mentally and emotionally demanding job.
Future OutlookPoor since machines will replace many investment bankers sooner or later.
RequirementsCollege degree with excellent grades.

Advantages of Being an Investment Banker

  1. Investment bankers can earn pretty good money
  2. You will be able to afford a fancy lifestyle
  3. You can brag in front of your friends
  4. Good exit options
  5. Investment bankers can join fancy parties
  6. You can build a strong business network
  7. You will meet many interesting people
  8. Investment bankers have an easy time in the dating market
  9. You can work with the best people
  10. Investment bankers can work indoors
  11. Being an investment banker can also benefit you in your private life
  12. You don’t have to worry about old-age poverty
  13. You will be able to afford to buy a nice home pretty early in your life
  14. Investment bankers can send their kids to good schools
  15. Working in the investment banking industry can be exciting
  16. Teleworking might be possible in big investment banks

Investment bankers can earn pretty good money

One important advantage of being an investment banker is that you will be able to make really good money.

In fact, investment bankers are among the top earners and there is barely any other industry that pays that much money on average.

Even youngsters who start as analysts right after college are able to make six figures in their first year at major investment banks and after around five years, you should earn $200,000 per year or even more.

Thus, if money is really important to you and one main criteria for your job selection, going for a career in investment banking will definitely be the way to go for you.

You will be able to afford a fancy lifestyle

You will also be able to afford many nice things from working as an investment banker.

Many investment bankers don’t have to care that much about money since they simply have plenty of it and can buy nice things almost every day if they want to.

This includes nice clothes and latest electronics as well as a fancy car.

All those things don’t make you happy in the long run, yet they can give you a good feeling and can make your life just more interesting.

Thus, becoming an investment banker can also make sense if you want to have the opportunity to buy all those things that many other people are not able to afford.

You can brag in front of your friends

Another upside to being an investment banker is that you can also brag in front of your friends about your jobs and the nice things that come along with it.

For instance, you can just invite them over to your home and show them all the things you are able to afford.

You can also tell them tales about your exciting work and how good you just feel right now.

In fact, many of your friends will become quite jealous and secretly wish they were you.

Working in investment banking is still quite popular among young people, yet most of them will never get the chance to get into this industry since it is so competitive.

Good exit options

You will also have pretty decent exit options as an investment banker.

Since you will have to work pretty hard, you will also learn a lot and this knowledge can be pretty valuable in many other branches of the financial industry.

Many investment bankers just quit their jobs after a few years and pursue a leading corporate career.

Therefore, don’t be afraid if you don’t want to work in this industry forever.

It can also just be a nice springboard to get into a leading position in the corporate world pretty soon in your life.

Investment bankers can join fancy parties

Another benefit of a career in investment banking is that you will also have the opportunity to join many fancy parties.

In fact, investment bankers are known to work hard, but they are also known to party hard to deal with all the stress that comes along during their workdays.

Partying with your peers will indeed be the thing that will come to your mind when you will tell tales of your banking career later on in your life and going this career path can also make quite a lot of sense if you are the type of character who loves good parties.

You can build a strong business network

During your career as an investment banker, you will also work with many important people.

Once you got a few years of experience, you will often directly work with management staff of companies when it comes to raising capital or other investment banking related things.

While this implies high levels of responsibility and can also be quite stressful, it also gives you the chance to build a strong business network over time.

Contacts are pretty important when it comes to finding a new job and if you aspire to a leading position in your investment bank or also in the corporate world, you need those contacts to maximize your chances.

While many other people will never get the opportunity to build this sort of strong network, you can naturally do so through your daily work.

You will meet many interesting people

Investment banking is a glamorous industry where you will also find many exotic and interesting characters.

In fact, you will not only meet the guy with the fancy suit.

You will also meet some guys who are exceptionally good at what they are doing, yet they don’t want to comply with social norms at all and will have a completely different appearance than you might expect.

This makes working in investment banking pretty interesting.

Not only will you be able to talk to numerous different people to hear their opinion about the world, but you will also become really good friends with some of them.

Investment bankers have an easy time in the dating market

Since investment bankers make really good money, they also have a pretty easy time in the dating market.

In fact, investment bankers often have a huge variety of potential partners lining up for them and you will just be able to choose the one who fits best to your preferences.

You will also have the opportunity to have multiple affairs at the same time if this is the kind of life you want to have.

Opportunities are almost endless in this regard and you really don’t have to worry to stay single for too long if you become part of this world.

You can work with the best people

The investment banking industry is still pretty competitive and only the best people of a generation are able to get into this field.

95% of people who aspire to a career in investment banking will fail and will have to work in other industries instead.

This means that only the best people will be left and if you have the opportunity to work for one of the major investment banks, you can be sure that you will be envied by many people.

It also implies that you will be able to work with the best people and this can give you the great opportunity to make many important connections that can be valuable for you for a lifetime.

You may even be able to get into leading political positions or work in leading positions for Central Banks if you get friends with many important and influential people who can support you to succeed on this career path.

Investment bankers can work indoors

As an investment banker, you also don’t have to worry about working outdoors in the cold or during extreme heat.

You will just work in your office or from home where you can control temperatures and your overall working environment will be pretty cozy compared to the conditions of many people who work outdoors and are therefore not protected from extreme climatic conditions at all.

Being an investment banker can also benefit you in your private life

Not only will you be able to make quite a lot of money through your professional life as an investment banker, but you will also be able to build a decent financial understanding and this knowledge can greatly help you when it comes to financial decisions in your personal life.

In turn, chances are that you will invest your money wisely and that you will be able to build up significant wealth pretty early on in your life.

You don’t have to worry about old-age poverty

Another advantage of becoming an investment banker is that you also don’t have to worry about old-age poverty that much.

Since you will earn pretty good money, you will be able to set aside enough money for retirement funds and you can also invest in real estate or the stock market to build a portfolio of assets that can deliver passive income.

You will also be able to get a pretty decent pension and you will therefore be able to afford a really decent lifestyle while many other people will suffer from old-age poverty and will even struggle to pay their basic bills.

You will be able to afford to buy a nice home pretty early in your life

While many of your friends struggle to save up enough money for their down payment for buying their own home, you will be able to save up your down payment pretty soon in your life.

In fact, many investment bankers are able to afford to buy their own homes in their early 30s or even already in their 20s.

Hence, you can also become independent of your parents pretty soon and can also afford a pretty decent lifestyle inside your own four walls at a relatively young age.

Investment bankers can send their kids to good schools

Also when you take a look in the future, you will have a pretty comfortable position as an investment banker.

Due to your good salary, you will be able to send your kids to the best schools and will also be able to pay for the best college education.

While many other kids will have to take on student loans to finance their degree, you can take away this financial pressure from them and can easily pay for their education.

Working in the investment banking industry can be exciting

Since you will work with the best people and will also be able to work on many interesting projects, your life as an investment banker will be pretty exciting in general.

You will also have to adapt to new circumstances almost every day and will also be forced out of your comfort zone.

While this can be stressful, it can also give you the opportunity to really grow in character and to overcome your fears.

Teleworking might be possible in big investment banks

Many investment banks will also offer you the opportunity to work from home, at least for some days of the week.

While you will still have to work a lot, you will have more flexibility to organize your private and your professional life since you will be able to pick up your kids from school and continue work after that.

Now that I have shown you all the advantages of a career in investment banking, it is time to talk about the downsides related to this profession.

Disadvantages of Being an Investment Banker

  1. Being an investment banker means working quite long hours
  2. You may even have to work on weekends
  3. Poor work-life balance
  4. Many investment bankers suffer from mental issues like burnout
  5. You may get fired during economic crisis situations
  6. Investment bankers often don’t have enough time to spend with their families
  7. Pressure can be enormous
  8. Hard to get in
  9. Investment banking as pretty competitive environment
  10. You have to deal with immense workloads
  11. Most investment bankers quit after a few years
  12. Some jobs will be replaced by machines in the near future
  13. Investment bankers don’t have a high reputation anymore

Being an investment banker means working quite long hours

One problem with being an investment banker is that you just have to work quite long hours.

In fact, the investment banking industry is known for extreme working hours and many investment bankers will work 70 hours per week or even more.

This means that you will have to go to work pretty soon in the morning and will often come home late in the evening.

While this might be acceptable for a few days or weeks, working those hours for months or even years can be pretty problematic and you should really ask yourself whether the money that comes along with it is really worth those efforts to you.

You may even have to work on weekends

Not only will you work long hours as an investment banker, but you will also have to work on Saturdays or Sundays pretty often.

Especially if you have important meetings on Monday and there is still plenty of work to do on Friday, chances are that you will have no other choice but to work on weekends to get your work done.

This can be really annoying since you will not have the opportunity to make nice weekend trips with your family like many other people who have free weekends.

Poor work-life balance

In general, if you decide for a career in the investment banking industry, you will often have a pretty poor work-life balance.

Due to the long working hours and the lack of leisure, you will just not have enough time to follow your hobbies or your dreams.

Your life will just consist of working all day long and while you will make lots of money, you will still often ask yourself whether the price you pay for it is really worth it.

Many investment bankers suffer from mental issues like burnout

Another downside of working as an investment banker is that you will be at great risk to suffer from burnout or other mental problems sooner or later.

Everyone of us has a certain mental limit and if the workload is too high, we will simply no longer be able to process all this information and our brain will no longer work properly.

Working excessive hours for an extended period of time can really make you sick and you should ask yourself whether you really want to put your health at risk by working in this industry.

You may get fired during economic crisis situations

Being an investment banker is also not that safe as you might think.

For instance, in past financial crisis times, many investment bankers just lost their jobs and became unemployed from one day to the other.

Hence, if you still want to work in this industry, at least make sure that you save enough money so that you have an emergency fund in case this happens to you.

Investment bankers often don’t have enough time to spend with their families

Working in the investment banking industry can also be pretty problematic in case you have kids.

Your children will want to play with you on a regular basis, yet you will often just not be there since you will have to do important things at work.

You will also not have enough time to spend with your spouse and the risk for cheating and divorce also increases significantly due to that.

This can also lead to a state where you will barely see your kids grow up and you may even miss the birthdays of your children.

In turn, your kids may even resent you later on in their lives and you should make sure that your professional life is worth it to you to put your private life at risk.

Pressure can be enormous

Another disadvantage of being an investment banker is that the pressure that comes along with it can be enormous.

You will have to do plenty of work in a rather short period of time and if you are not able to get your work done, you may simply get fired and will have no future in this industry anymore.

Dealing with this fact can be emotionally difficult and you should make sure that you really have the stomach to deal with these kinds of issues.

Hard to get in

Major investment banks only accept the best of the best.

It is well known that those investment banks are pretty selective regarding whom they want to employ and you have to be excellent on many different levels.

Therefore, this also implies that your chances to get one of those jobs will be pretty low and you should just have a backup plan in case you will be rejected.

Investment banking as pretty competitive environment

You should also know that the investment banking world is a pretty competitive environment.

While you will be able to make many good friends, you will also meet many people who seem to be friends but who will talk poorly about you behind your back since they feel that they get a certain career advantage by doing so.

You have to deal with immense workloads

Working as an investment banker also implies dealing with enormous workloads.

Many investment bankers, especially if they come directly from college and haven’t got any experience in this field before really struggle to get things done and many of them even take certain substances to become more efficient in the short run, even though the consumption of those substances may have pretty detrimental effects in the long run.

Most investment bankers quit after a few years

High levels of pressure and enormous workloads are also the main reasons why many investment bankers just quit their jobs sooner or later.

In fact, the majority of people just stay a few years in this industry and then quit since there is just no satisfying work-life balance and your boss will take it for granted that you put work first.

Some jobs will be replaced by machines in the near future

Also future job prospects will be rather poor as an investment banker.

Many jobs in this industry will just be replaced by machines sooner or later and many investment bankers will lose their jobs due to this technological revolution.

Investment bankers don’t have a high reputation anymore

Due to many scandals in the past, investment bankers also have a rather dodgy image in our current state of the world.

While they had been rock stars just a few decades ago, their overall reputation in society is rather poor and many people will just not accept you for what you are doing for a living.

Top 10 Being an Investment Banker Pros & Cons – Summary

Being an Investment Banker ProsBeing an Investment Banker Cons
Realtors can make really good moneyYour income greatly varies over time
You can build a strong networkSome realtors barely make a living
Being a realtor is pretty relaxedYou have to deal with difficult clients
Realtors can work indoorsReal estate agents may get sued
Your salary depends on your performanceConflicts of interest are quite common
Every day will be differentRather poor future job prospects
You don’t have to go to collegeYou may work for free
You can start your own realtor businessYou have to do some paperwork
Some realtors only work part-timeReal estate agents need a license
Great level of flexibilityMany realtors fail in the long run

Should You Become An Investment Banker?

As you can see from the previous analysis, there are many advantages and disadvantages of being an investment banker.

In the end, you have to evaluate all the pros and cons of an investment banking career by yourself to make a profound decision in this regard.

If you are still interested in becoming an investment banker, you should also get detailed information on the salary, future outlook, working hours, work-life balance, duties and educational requirements of investment bankers.

Also make sure to check out the following articles:

Advantages and disadvantages of a career as a financial controller

Advantages and disadvantages of a career as an accountant

Sources

https://www.investopedia.com/terms/i/investmentbanker.asp

https://www.mergersandinquisitions.com/investment-banker-salary/

About the author

My name is Andreas and my mission is to educate people about the different career paths that are possible in our current state of the world. In my opinion, people often make the mistake to choose their profession solely based on how much money they can earn from it instead of doing what makes them really happy.

This is quite sad and I just want to give people a more objective picture of how a fulfilling career could look like. I did the same when I started working in consulting after finishing my Master’s degree in Economics. However, I’ve quit pretty soon after that since I haven’t found true meaning in my job.

Now I can do what I really love to do and I want to enable as many other people as well to go this exciting path towards happiness instead of money.

I conducted various interviews with employees to give you a good impression of what working in different fields will look like and that you can make the best possible decision regarding your future career choice.

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