Investment banking is arguably the most desired field in finance right now. Large investment banks such as Goldman Sachs, Morgan Stanley and J.P. Morgan had investment banking internship acceptance rates below 3% in 2023. The demand for these prestigious internships is off the walls, and even the most exceptional students receive rejections in their inbox every year. So, why do students pressure themselves to such high standards? What is it about investment banking that makes everyone want to be one?
The answer is simple: Money. Investment bankers make a lot of money. Some first-year investment bankers make up to $190,000, which is outstandingly large compared to the average salary of an American one year out of undergraduate, around $70,000. Investment banking also provides great exit opportunities. Many investment bankers leave the field after a couple of years and work in areas such as private equity, venture capital and hedge funds.
To get an investment banking job out of undergrad, students often must receive a return offer from a bank they interned at during the summer after their junior year. This puts a lot of pressure on students who want to work in investment banking. Considering the internship recruitment cycle begins earlier every year, students competing for the most prestigious internships may begin preparing as early as the start of their sophomore year for internships after their junior year.
The competitive nature of the field, combined with its high demand and early recruitment cycle, leads to students becoming hyper-focused on their career rather than their education. College is intended to be a place where students can learn and grow both professionally and socially. But students who become absorbed into the investment banking “grind” often miss out on enjoying their college experience the way it was intended. Many first and second-year students spend their time preparing for interviews and networking with professionals rather than immersing themselves in their courses and exploring different career paths.
Once students secure a full-time offer in investment banking, their hard work is far from over. Not only is investment banking extremely cutthroat, but fresh graduates often work close to 90-hour weeks. A leaked Goldman Sachs work conditions survey revealed that analysts worked 98 hours per week, going to bed at 3 a.m. and receiving five hours of sleep on average. Quotes from analysts in the survey include “I’ve been through foster care and this is arguably worse” and “this is inhumane/abuse.” These young adults spend their first years out of college with their heads buried in their work rather than enjoying their youth and ambition.
Why are so many students drawn to investment banking? In my opinion, it comes down to two major factors.
First, for students interested in finance, investment banking is picture-perfect. As portrayed in movies like “American Psycho” and “The Big Short,” investment banking is notoriously fast-paced, high energy and elite. While it is true that investment banking has a specific culture and is known for being intensive, these movies glorify the culture and give young and impressionable teens a picture-perfect adult life to swoon over. It is clear that these movies have made their impact — go ask 10 Tulane University frat brothers their favorite movie, and I can almost assure you that at least one will say “The Wolf of Wall Street.”
The second reason is pressure. Every student wants to leave college with a steady job with good pay. It is easy for Tulane students to feel pressure to be successful: Most students are dedicated to academics, well-connected and accomplishing awesome things. There is often a feeling that you should know what you want to do with your life after college before it begins, and this can fuel anxiety and pressure for students who are unsure of their plans. Many anxious, high-achieving students look towards investment banking rather than taking time to discover what interests them.
I am not aiming to discredit the accomplishments of Tulane students who find success in investment banking. In fact, I have nothing but respect. The amount of time and dedication required to secure investment banking internships and jobs is beyond my capacity, and the students who find success are extremely intelligent and hardworking. Despite this, investment banking does not seem worth the struggles that come with it.
