Why is investment banking so competitive?

Money.

^I've seen so many people talking about whether or not they have a chance at IB and I wanna know why.

it's one of the worst jobs in every aspect. lifestyle pay per hour etc. but u get a job out of Uni at 21 on 60k plus starting and can be on over a mil a year after years of working within the field. but 100 hours plus weeks etc, many suicides drugs etc. but it shows what people do for a good bank balance

All for money? But I'm sure it's not the only job that offers good pay, so why is it so popular?

Exit Opportunities. Many leave after 2 or 3 years in the field to go into Private Equity or Hedge Funds where u can earn stupid I mean 50 mil plus a year and Hedge Funds basically only hire from the IBs

Ahhh, so what they really want is a job at a Hedge fund. Wait, 50mill+/year? That seems ridiculously high, why do they pay that much?

Hedge Funds are High Risk stupidly High risk. Imagine an ultra high net worth client gives them 300 million to invest. Hedge Fuhds only exist for max a year for most. Many don't stay. Why cuz they try and get as much money as they can in a short period of time. So they will take another 300 mil out on leverage from a Bank so they have 600 mil and try and make say like another 200 mil or more in a year. Also when they Bankrupt they take as much put against the company just before and take millions for themselves. Finance is just really corrupt lol but hey who cares

Ahhh, so what they really want is a job at a Hedge fund. Wait, 50mill+/year? That seems ridiculously high, why do they pay that much?

50 mil a year is kinda nonsensical ngl, its only the really established portfolio managers (becoming one is sorta akin to becoming a football player in terms of luck:skill relative to the job) who make anything close to that and of course the owners themselves. Its not a figure most reach, afaik there aren't a ton of hedge funds in London that pay explicitly more than investment banking unless you're actually a top earner (this could be wrong though, just what I've seen from people on WSO). People in finance have a p misguided idea of how much hedge funds make but there are certainly some, tiger cubs especially, that are very successful.

It does seem pretty unethical but thank you for clarifying why IB is so competitive and popular, it seems like it's people following the money. I know this may have been obvious to some but I found it hard to see why people would choose IB specifically over other high paying careers and I guess it comes down to the hedge fund- pays even more but stay for a short amount of time.

Investment banking is well paid (but per hour, pre recent salary raises, is something closeish to mcdonald's) because its one of the highest paying jobs you can get out of school with total comp nowadays looking around 90-100k in first year. Obviously you're gonna lose a fair amount to tax and london isn't cheap but its way more than most other jobs and the key thing is that it gives you a skillset that helps in corporate environments. You build connections and get exit opportunities which can sometimes offer better money and work-life-balance, IB for many is just a launchpad into these industries. Private equity, hedge funds, corporate development (think senior/junior management/corporate finance at any FTSE 100-500 company). A lot of these people come from investment banking backgrounds due to the large amount of skills and work ethic you develop in a short period of time - and so they hire people from banks to make up their own teams. Realistically, wolf of wallstreet levels of wealth - 100mil a year or something, is exceptionally rare to the point where you can't really associate it with a career itself as its moreso a hyper minority of people doing that because they were really good and also very lucky.

IB and its associated paths generally commit someone to being around a mid 6 fig to low 7 fig lifestyle from the compensation reports I've seen, its certainly a lot of money and so many go for it - ofc there will be a few stars who shoot towards 8 figs/9figs+ but i genuinely think its so rare that you can't associate it with the product as a whole. There are many other high paid jobs - consulting, corporate law etc which offer similar things but generally to a lesser extent, the exit opportunities sometimes tend to be different but there's a lot of overlap. In the UK, people who apply to IBs will also shoot applications to MBB consulting firms a lot of the time.

Proprietary trading is, as far as I'm aware, the highest paying job you can get out of school - companies like Jane Steet, Optiver etc pay closer to 200k-300k for fresh grads (21 yr olds) and progression is much more meritocratic, that's how you end up getting 26 year old senior traders at these firms making more than a 40 year old MD at Morgan Stanley. As someone who wants to work in finance and also had misconceptions about how much you make and what its like, I can say that a lot of people get too obsessed with chasing the money rather than finding a niche area in finance that they generally enjoy. A lot of universtiy students don't really know what investment banking is, or how much they really make, but still apply because of some misguided idea from Billions that if they get into a hedge fund they'll become multi millionaires. It sets people up to go into other lucrative fields and enjoy a prestigious and wealthy life, that's why its competitive.

The main reason why people go into IB is because they enjoy reformatting PowerPoint slides to the house font and using Pivot Tables...