Do investment bankers really make a lot of money?
Can you become a millionaire as an investment banker? It is possible to become a millionaire as an investment banker, but it is not easy. Investment bankers typically earn salaries in the $200,000 to $700,000 range, with bonuses that can bring their total income up to several million dollars per year.
Ways to make a lot of money in this world
Sure, anybody can make a good living being a doctor or a lawyer or an investment banker where you can make ~$200-500K per year a few years after you finish with your studies, but you hit a ceiling very quickly unless you start your own practice (aka start your own business).
Total compensation is often in the $150K – $250K range (as of 2022). Investment Banking Analyst Hours: You'll be in the office for 70-85 hours per week, but you won't be working for that entire time. Investment banking hours are long, but there's also significant “downtime.”
How can you earn a six-figure salary at top investment banking firms without any experience in 2023. On average, a first-year investment banker makes a 5-digit salary, in the range of $70,000 – $90,000, while a 7-digit salary is considered above average and is difficult to achieve for most people in their careers.
Most former bankers have reported that it is quite uncommon for an analyst to hit the 100-hour mark. Apparently, this only happens occasionally (once a month) when an analyst is working on multiple live deals or poorly aligned international projects.
- Entrepreneur.
- Entertainer.
- Law Firm Partner.
- Pro Athlete.
- Hedge Fund Manager.
- Real Estate Agent.
- Software Developer.
- E-commerce Business Owner.
Investment bankers make money through the fees charged to their clients. As discussed above, this includes underwriting fees for arranging the sale of securities and advisory fees for providing strategic guidance.
The lucrative and fast-paced career of an investment banker is a highly competitive one. For instance, in a recent year, 236,000 applicants competed for roughly 3,500 internships at Goldman Sachs. This is common across the industry where acceptance rates for programs are typically less than 2%.
An investment banker's life is considered to have long working hours, working on weekends, a lot of hard work, and little sleep.
Age plays a huge factor in the decision-making process. Wall Street is an up-and-out industry. Unless the goal is senior management, most people in finance are out of there by age 50. That's not at just the biggest investment banks, either.
Can an investment banker be a millionaire?
It is fairly common for front-office investment bankers to be earning over US$1m after 8 years in the industry. But it caps out at around US$20m, which is how much a top-performing investment banking CEO gets.
- Portfolio manager. ...
- Investment banker. ...
- Asset manager. ...
- Wealth manager. ...
- Equity trader. ...
- Equity analyst. ...
- Hedge fund analyst. ...
- Foreign exchange trader.
- Chief financial officer. ...
- Private equity associate. ...
- Hedge fund manager. ...
- Insurance advisor. ...
- Financial advisor. ...
- Compliance analyst. ...
- Information technology auditor. ...
- Investment banker. Investment bankers help businesses and government groups invest their money.
Have you ever heard of Goldman Sachs' 15-minute rule at Goldman Sachs? It means you have to respond to an email in 15 minutes or less no matter what. It doesn't matter if you: - showering - hiking in the mountains - attending your son's wedding - saving someone from a drowning vehicle Unreasonable?
While working in Investment Banking, the average bedtime on weekdays for me was 1:29 AM, with an average sleep duration of 5 hours and 56 minutes. On weekends, the average bedtime was 12:02 AM, with an average sleep duration of 8 hours and 29 minutes. However, behind these figures are large fluctuations day by day.
A Week in the Life of an Investment Banker
In an average week, you will not have much free time on weekdays. Many Analysts are in the office from 9 AM to 1 AM each day, and sometimes a bit less than that on Friday or other “slow days.”
- Actor.
- Author.
- Accountant.
- Insurance agent.
- Investment banker.
- Professional athlete.
- Entrepreneur.
- Hedge fund manager.
Those earning over $10m per year mostly work in management and finance, though there are significant numbers in sales, real estate, operations, medicine, law, engineering and art at this level. In fact, art has a bulge both at the bottom and at the very highest level of earnings – the celebrities.
In broader terms, the finance and investment profession has the most millionaires. It also has the most billionaires, with 371.
1. Goldman Sachs is the highest paying bank overall - $398k in combined salaries and bonuses, on average. Goldman Sachs, which paid average salaries of $200k and average bonuses of $199k for 2023, was the highest paying bank we polled.
Why doesn t everyone become an investment banker?
Even with education, experience, and enthusiasm, investment banking might not be for you. Investment bankers work long hours and often earn a high income. Lack of work-life balance is one reason to avoid becoming an investment banker. Investment bankers must also be able to manage high-pressure situations.
That said, investment banking is a highly competitive field. Because the pay is so high and the job is so prestigious, particularly in cities such as New York, applicants far outnumber job openings every year.
Investment banking is a quantitative field, and having a strong foundation in mathematics is essential. If you're considering a career in investment banking, it's important to have a deep understanding of mathematical concepts such as calculus, probability, and statistics.
The U.S. Bureau of Labor Statistics (BLS) projects that securities, commodities and financial services sales careers—which include investment bankers—will grow by 7% from 2022 to 2032. This projected growth is faster than the 3% growth projected for all occupations nationwide.
Due to high demand and a scarce talent pool, investment banks have significantly increased wages for investment bankers in order to secure and retain top talent. With wages rising even at the lower pay scales, entry-level investors can expect six-figure salaries at leading firms.