Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    2
    ReputationRep:
    Are there opportunities to make huge amounts of wealth in investment banking?

    Would you be able to make massive money by learning how the big banks invest and applying it to your own capital?

    And how would this happen?
    Offline

    18
    ReputationRep:
    ...Yes.
    Offline

    21
    ReputationRep:
    (Original post by King Scorchy)
    Are there opportunities to make huge amounts of wealth in investment banking?Would you be able to make massive money by learning how the big banks invest and applying it to your own capital?And how would this happen?
    I think you need to learn what investment banks do. They don't focus on investing in shares like the average Joe does. They work on multi-million pound deals between companies (called mergers and acquisitions) which take tens of people in a team for each transaction. Basically they advise companies on how to take over another company or how to raise capital by releasing shares on to the stock market. They also trade shares for clients and advise clients on investment opportunities (equity research and sales). They don't actually invest in the traditional sense.

    Of course people who work in investment banking earn a lot of money but it is an ultra competitive industry and very few people get selected. Also, you will have to work long hours, often working though the night to complete Excel models and administrative work (this is for mergers and acquisitions in particular). Traders, salesmen and equity researchers work shorter hours but don't usually earn as much or have as many exit opportunities (btw, for most people, investment banking is not a long term career- they tend to move on to other financial jobs where their experience is valued).
    Offline

    2
    ReputationRep:
    (Original post by Trapz99)
    I think you need to learn what investment banks do. They don't focus on investing in shares like the average Joe does, they work on mulit-million pound deals between companies (called mergers and acquisitions) which take tens of people in a team for each transaction. Basically they advise companies on how to take over another company or how to raise capital by releasing shares on to the stock market. They don't actually invest in the traditional sense.
    murders and executions?
    • TSR Support Team
    Offline

    20
    ReputationRep:
    TSR Support Team
    (Original post by King Scorchy)
    Are there opportunities to make huge amounts of wealth in investment banking?

    Would you be able to make massive money by learning how the big banks invest and applying it to your own capital?

    And how would this happen?
    Research what investment banks actually do, then come back and ask the question again.

    Posted from TSR Mobile
    Offline

    2
    ReputationRep:
    (Original post by Princepieman)
    Research what investment banks actually do, then come back and ask the question again.

    Posted from TSR Mobile
    I do always find it odd when BBC news refers to it as 'casino banking'
    Offline

    21
    ReputationRep:
    (Original post by Feel Tha Bern)
    murders and executions?
    Mergers= when two companies basically join together to form one
    Acquisitions= when a company buys a smaller company
    Offline

    2
    ReputationRep:
    (Original post by Trapz99)
    Mergers= when two companies basically join together to form one
    Acquisitions= when a company buys a smaller company
    • TSR Support Team
    Offline

    20
    ReputationRep:
    TSR Support Team
    (Original post by Trapz99)
    Mergers= when two companies basically join together to form one
    Acquisitions= when a company buys a smaller company
    They were referencing American Psycho..

    Posted from TSR Mobile
    • TSR Support Team
    Offline

    20
    ReputationRep:
    TSR Support Team
    (Original post by Feel Tha Bern)
    I do always find it odd when BBC news refers to it as 'casino banking'
    Hahahaha, it's so inaccurate because they can't even prop trade anymore.

    Posted from TSR Mobile
    Offline

    21
    ReputationRep:
    (Original post by Princepieman)
    They were referencing American Psycho..

    Posted from TSR Mobile
    Lol i only realised that a few seconds after posting my response.
    Offline

    21
    ReputationRep:
    (Original post by Feel Tha Bern)
    Yeah I was a bit late to get that joke. Its been a while since i watched it

    didn't really like the film anyway
    • Thread Starter
    Offline

    2
    ReputationRep:
    (Original post by Trapz99)
    I think you need to learn what investment banks do. They don't focus on investing in shares like the average Joe does. They work on multi-million pound deals between companies (called mergers and acquisitions) which take tens of people in a team for each transaction. Basically they advise companies on how to take over another company or how to raise capital by releasing shares on to the stock market. They also trade shares for clients and advise clients on investment opportunities (equity research and sales). They don't actually invest in the traditional sense.

    Of course people who work in investment banking earn a lot of money but it is an ultra competitive industry and very few people get selected. Also, you will have to work long hours, often working though the night to complete Excel models and administrative work (this is for mergers and acquisitions in particular). Traders, salesmen and equity researchers work shorter hours but don't usually earn as much or have as many exit opportunities (btw, for most people, investment banking is not a long term career- they tend to move on to other financial jobs where their experience is valued).
    Thanks for the fantastic reply!
    Offline

    20
    ReputationRep:
    (Original post by Feel Tha Bern)
    I do always find it odd when BBC news refers to it as 'casino banking'
    This use to drive me insane as well. I would literally scream at the TV.

    Posted from TSR Mobile
    • TSR Support Team
    Offline

    20
    ReputationRep:
    TSR Support Team
    (Original post by Trapz99)
    I think you need to learn what investment banks do. They don't focus on investing in shares like the average Joe does. They work on multi-million pound deals between companies (called mergers and acquisitions) which take tens of people in a team for each transaction. Basically they advise companies on how to take over another company or how to raise capital by releasing shares on to the stock market. They also trade shares for clients and advise clients on investment opportunities (equity research and sales). They don't actually invest in the traditional sense.

    Of course people who work in investment banking earn a lot of money but it is an ultra competitive industry and very few people get selected. Also, you will have to work long hours, often working though the night to complete Excel models and administrative work (this is for mergers and acquisitions in particular). Traders, salesmen and equity researchers work shorter hours but don't usually earn as much or have as many exit opportunities (btw, for most people, investment banking is not a long term career- they tend to move on to other financial jobs where their experience is valued).
    (Original post by King Scorchy)
    Thanks for the fantastic reply!
    S&T guys and gals have similar all-in comp to IBD people in the analyst years. What happens after that is that the top of the range in S&T is generally greater than IBD but the average is less than the average payout in IBD. ER is usually less overall, but can touch S&T/IBD for a stellar researcher (or as they're technically called 'Analyst').

    Although most people move on, banks have been incentivising sticking to banking by pushing forward the analyst -> associate promotion timeframe from the original 3 years to 2 years. As well as the emphasis on 'protected weekends' and monitoring weekly hours to make sure they don't reach obscene levels.

    However, yes, this is all pretty correct - except you forgot that they help source/issue debt and advise wealthy individuals on how to protect their assets too.

    To the OP, you can understand now that it would be pretty much impossible to replicate the way banks make money by yourself: you need the platform (i.e. capital base, infrastructure), team, expertise and track record to even get anywhere near this scale of operation.

    Of course bankers make money - their job is to sit near a gargantuan waterfall of it trying to advise/understand/structure/research it, are all tasks that will get you 'wet' (read: remunerated).

    Posted from TSR Mobile
    Offline

    2
    ReputationRep:
    (Original post by Commercial Paper)
    This use to drive me insane as well. I would literally scream at the TV.

    Posted from TSR Mobile
    I don't even want to go into IB, but given that the BBC is publicly funded, I feel it has a duty to inform people what is going on, in a way which even if it isn't in full depth, is at least true and factual, because the media is what shapes most people's opinions.
    Offline

    12
    ReputationRep:
    yes but its not as rewarding as baking your own cakes and selling them for profit
    Offline

    20
    ReputationRep:
    (Original post by Feel Tha Bern)
    I don't even want to go into IB, but given that the BBC is publicly funded, I feel it has a duty to inform people what is going on, in a way which even if it isn't in full depth, is at least true and factual, because the media is what shapes most people's opinions.
    That's the problem. It wasn't true or factual, in any way at all. Banks cannot prop trade anymore.

    I have no issue with it being referred to as risky but don't go and claim on national TV that the whole thing is some kind of 'casino' when in reality, this is not the case. It's nothing like a casino.

    Posted from TSR Mobile
    Offline

    11
    ReputationRep:
    How much do investment bankers realistically earn relative to experience?
    • TSR Support Team
    Offline

    20
    ReputationRep:
    TSR Support Team
    (Original post by kieran12321LFC)
    How much do investment bankers realistically earn relative to experience?


    These figures are about 2 years old (base for graduates a.k.a Analyst 1 is now £50k) but it gives you a ballpark. All-in figures would be base + bonus (i.e. base*(1 + percentage)).

    Posted from TSR Mobile
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Brussels sprouts
    Useful resources

    Articles:

    Guide to investment bankingGuide to consultancy

    Featured recruiter profiles:

    Deutsche Bank logo

    Deutsche Bank is recruiting

    "Thrive in an international banking environment"

    Quick link:

    Unanswered investment banking and consultancy threads

    Groups associated with this forum:

    View associated groups
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.