Why People Become Investment Bankers

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Written by: Topics: The Business

Why people become investment bankers

There are different reasons why individuals become investment bankers (ibankers). Why they yearn to practice the sacred art of investment banking (ibanking). Though some people enter this esoteric world of high finance by pure chance, and with little effort, they are anomalies. In the vast majority of cases deep-seated motivations propel the uninitiated to persevere until the gates of entry to that prestigious world open before them.

Most of those motivations can be grouped into a handful of categories (see diagram above for examples). They also explain why so many bankers agree to work unusually long hours, to put up with abnormally high levels of stress and to sacrifice personal and leisure time. Take a look at the faces of people who have been in the business for over 10 years, especially in a front office role. Many wear their sacrifice on their face, though few of them – sadly – realise this.

Those of you currently in the business, next time you attend the Monday morning meeting just take a nice, long look around the room at the seniors bankers present. Is it not unusual that many of them are probably 10 years younger than they look? I know it took me less than a year at the bank to give birth to most of the grey hairs I presently sport.

So why do so many people accept, amongst other things, the premature ageing that comes with the territory? Different reasons.

Hypnosis: dangling a shiny pendulum

For many university students it was psychological attraction. After being mesmerized by the words and countenance of recent graduates in polished suits at campus recruiting events they were propelled to put forth an application. Never mind that the speaker has had stress-induced diarrhoea for the past month, working round the clock to make a deal happen, and has been literally pissing out his @ss every morning at work.

Benjamins (US) / dosh (UK) / fric (French) / dinero (Spanish) / foulous (Arabic) / qián (Chinese)

Let there be no doubt that chief amongst the reasons is the motivation to earn a lot of money. See, for many bankers, and banker-wannabes, it’s a given that the entrepreneurial route is the path which ultimately leads to the greatest riches. However, entrepreneurship is beset with pitfalls and risks. Therefore, given the very calculating nature of bankers, the optimal choice is a career which is less risky than entrepreneurship yet at the same time relatively more lucrative than other roles.

If you consider it safe to be employed and risky to be an entrepreneur, then investment banking can be considered one of the best safe bets in terms of compensation.

There are bankers who spring out of bed at 6am every weekday to get ready for work as if called into a meeting by God. The raison d’être for this group is to toil through all the days of the year until one very particular day in the year. Bonus day.

Whether it is earned in €, $, £ or ¥, on a good bonus day it will feel as if God came down to earth and kissed him or her on the forehead.

On bonus day you may notice for the first time that some of your colleagues actually have teeth. Year-round glares turn into ear-to-ear smiles. During the year many of them will get engaged, marry, become parents and take off on week-long holidays to the Seychelles. However, you will not see them wear anything remotely close, i.e. as BIG, as the smile they’ll walk into work with that day in anticipation of the handout. The stress, grey hairs, hair loss, stomach ulcers, eczema, skin rashes, to name a few undesirable aspects of the job, are justified by the paper handed to them which contains their bonus for the year. If it is a great handout then the day after the beneficiary will glow like a prophet. Let’s hope it’s a good year.

The lifestyle: la dolce vita

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(Bustan Palace Hotel, Muscat – Oman)

From fine Asian restaurants serving mouth-watering black cod with miso and expensive French wine to luxury hotels nestled on hilltops in remote exotic islands, the list of activities enjoyed by bankers can be out of reach to some people in relatively lower-paying industries. Whether the bankers truly appreciate the $100 main or £275 bottle of red wine served at Chez Quelqu’un or rather enjoy the status associated with eating there when the restaurant next door offers more delectable food at a third the price, does not matter here. It’s the lifestyle the job affords that some gravitate towards.

Some chaps and chapettes want the opportunity to hang out with a Barbour quilted jacket-wearing crowd or a Brooks Brothers posse. Makes them feel special.

For others the right lifestyle includes being able to send their kids to a school which will prep them for entry into Eton College (UK), Philips Exeter Academy (US) or Le Rosey (Switzerland).

Many like doing the rich person’s routine such as attending niche art exhibits where you’re served champagne, engage in inane small talk and pretend that you’ve done the rounds in art circuits since birth. Reminds me of an ex-colleague who’d always take half an hour to peruse art reviews online, jot down a few key phrases and throw them around at the events like he did a post-doc at École des Beaux-Arts in Paris.

Let’s not forget the fine food:

“Yes, to start with I’ll take the caviar appetizer, followed by the veal fillet, cooked in aubergines, with confit of veal breast, with pepper and lemon, and…oh…as it appears divine I’d also like the artichoke and black truffle soup with the layered brioche and mushroom. Thank you.”

Status: symbol of financial success

For some it’s the prestige that comes with the job which matters most. Many bankers love knowing that their friends refer to them as a ‘high flying finance guy / gal.’ All of a sudden people around think of you as a financial whiz. Relatives and friends will call you and question you on how to get mortgages, successfully refinance loans, invest in gold, buy into a tech start-up or even how to tip in restaurants. Your opinion on all things monetary suddenly matters very much. That is, even if all you do in your day-to-day job is to give loans to handful of South African corporates and that in reality you’re as knowledgeable on mortgages or commodities as a tourist guide in Giza (Egypt) is about Norwegian forestry.

I’ve know some ibankers who’ll complain about the job on daily basis and carry their utter disdain for their work life on their foreheads. But when you run into them at a rooftop lounge on a Friday evening surrounded by a young crowd of non-finance people you’ll hear them describe what they do as if they’re Thomas Crown.

True love

Some people know they want to work in finance from a young age. True, it’s rare but when you meet them in a bank you’ll recognize it right away. More often than not they’re very sharp. Everyone in the team will either love or hate them. There is no in between. At a junior level (i.e. analyst / associate) they are typically the guys who make far fewer mistakes in presentations and models, digest information and data the quickest and generally appear to feel most at home in the building. It is almost a given that they’ve breezed through their finance studies in university. Some of them probably could have joined a bank straight from school rather than attend university.

When these worshippers of finance walk across the trading floor or past the Head of M&A’s office they’ll fight hard to keep a stupid smile from manifesting itself. They cannot help it. The trading floor is like a playground for them. The Head of M&A’s office like a throne. And if they receive a nod of acknowledgement from the man inside that office they may rush to the bathroom, lock themselves in a stall and cry out of joy for the job they consider a blessing. They probably hear Vivaldi’s Four Seasons (Spring) in their heads when they walk around the bank on a busy Monday morning, a difficult day for most humans. Or perhaps Beethoven’s Ode to Joy – the part where the entire ensemble comes together in joyous harmony.

For these special souls, the enjoyment they derive from reading the Financial Times on a Friday morning is tantamount to a sustained mini ejaculation.

I once spotted one of them in the bathroom. Thomas, who attended the UK’s leading boarding schools and spoke as if he were an earl, was an Equity Capital Markets (ECM) associate and we occasionally worked on deals together. He was probably headed over to chat to a Sales guy and decided to make a pit stop beforehand. He surely thought he was the only person inside the toilets. I was slightly out of his range of vision at the urinals. Anyway, he’d finished washing his hands and was now staring at himself in the mirror:

Thomas: “Star ECM associate ladies and gentlemen. Rain maker! ”

This catches my attention and I quickly notice he’s not on his phone. His smile reminds me of the smile on a friend’s face the day he became a father. He went on chatting to himself.

ECM associate: “Walkin down the trading floor. Smile at the FX guys, “hey Cyrus how’s cable*”, wave to the EM traders, ‘yo Ravi how the Abu Dhabi bonds doing?  Has the sheikh farted again?”
*note: cable is the exchange rate between the US Dollar and British Pound

He suddenly bit both lips and looked down. He was overwhelmed by it all. I nearly bit through my lower lip trying to hold myself from bursting with laughter.

Great expectations

For some, a career in finance is expected of them from a young age. That was certainly the case with Guillaume, a Swiss M&A analyst I met in London during training.

Guillaume: “Most of our family and friends are in finance. My father is a private banker. My older brother is a hedge fund analyst. The pay maintains the lifestyle we like. The lifestyle our friends also have, bien sur.”

He tells me this as he brandishes a ring with his family crest on it as if he were a 17th century musqueteer. Has anyone told him there are under 30-year old dotcom-ers who have made more in 5 years than his ancestry combined? And they wear flip-flops and Billabong shorts to work.

Tour of duty: Operations In & Out

The people in this group are those who’ve planned the mission from day 1. They have given themselves two or three years to immerse themselves in that world, work like a horse, learn as much as possible about finance, hone their PowerPoint presentation and Excel skills, add some eyebrow-raising bullet points in the resume / cv and get out before it’s too late. Once the tour of duty comes to an end they tend to head back to university for graduate studies, launch a start-up, spend a year backpacking around Latin America flirting with locals and smoking indigenous herbs, set about writing an eBook or move into an Ashram in Uttar Pradesh and massage each other thinking it will lead to enlightenment.

Sadly, only some of the people who swear an oath to the tour of duty on that very first day fulfill their mission. Everybody in finance reading this knows exactly what I’m talking about. To those in the business: how many times have you told yourself, ‘just one more year…just one more bonus’?  To those who have friends in the business: how many times have you heard them insist they’ll soon leave their job? Most end up MIA (missing in action). Once behind enemy lines and captured people slowly forget the original plan, which is easily overshadowed by the perks of the job inside the golden cage. That is precisely what happened to Carlos, a friend of a friend.

He was on a two year plan. So he said. Six years later – though you’d think it more like 15 years looking at his face and what’s left of his hair – he still insists departure is imminent. A few months ago I ran into him in a lounge in New York. Rihanna’s What’s My Name started to play and he began to dance. You could call it that, if you were looking through a kaleidoscope. I’m fairly certain in some part of the world he’d get violently beaten with a dead monkey and have his head shaved with a rock for looking that bad. He used to dance with a modicum of style I was told. But after sitting on a chair crunched over a computer 12+ hours per day modelling on Excel for six years shit happens.

The people

 

monkeyszz

One attraction of working in an investment bank is that you’re sure to work alongside some bright minds. The reason for that is very simple: investment banking promises enormous wealth and an exciting career and, therefore, it attracts some of the sharpest, most intelligent and driven individuals in academia and the workplace.

I can’t deny that I’ve met some impressive people in the bank. Having said that, I’ve also met a great deal of legendary imbeciles.

Nonetheless, some ibankers join and stay in the business because of the people.

Chance, circumstance or the alignment of the stars

Some stumble into the business by sheer chance, much like one accidentally steps in dogshit. It just happens. They’re at the right place, at the right time, and opportunity presents itself.

It just so happens that nerds (intelligent but single-minded persons obsessed with a nonsocial hobby or pursuit) are most likely to have this happen to them. Why? They’re natural chess masters, have an engineering degree from a top-ranked global university and, most important of all, give off the exact impression a managing director wants to see in a potential recruit: “I’m a geek, will work like a dog, make few mistakes and rip open my scrotum doing the splits on two chairs like Van Damn if you ask me to.”  Hired!

Why I became an ibanker

My goal objective was clear from day 1: learn as much as I can; work with some very talented and intelligent individuals; gain the relevant skills; make the right contacts; work on large deals; and when the time is right jump and do my own thing.

Having investment banking experience on a resume / cv no doubt strengthens your profile in the business world.

Of course money and the element of prestige also played roles. Yet they were not the sole driving factors for me. Besides, the big money you read about in the media only goes into the pockets of a select few in banks. It takes some time before you earn the big numbers. Also, they’ll always give you just enough to make sure you stay another year, and another, and another.

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{ 49 comments… read them below or add one }

Koyie October 27, 2011 at 12:07 am

You’re the greteast! JMHO

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Peter H October 28, 2011 at 9:21 am

I think cash is 98% of it…oh ya and the women that gravitate towards you once they realize where you work and assume you’re in the 1%.

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Budd January 11, 2012 at 6:34 am

Pin my tail and call me a donkey, that really helped :)

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L.M. March 9, 2012 at 3:49 pm

Enjoyed your ditzy irony. Thank you!)

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Lincoln August 20, 2012 at 4:21 am

I am a finance major and am striving to be an investment banker. This information on ibankers is very humorous and enlightening! It helped a load!!Thanks!

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Stan Getz September 8, 2012 at 4:32 pm

I guess the notion that you do something interesting, that you might be proud to do but also profitable is probably considered naive.

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Tae K September 26, 2012 at 6:49 am

Currently, I am 1st year of mba student preparing summer internship in I-Banking. Your blog enlightened me. Thank You.

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mbali d November 5, 2012 at 6:19 am

wow tnx so much…dis info has helped me……..someday i’ll also b an investment banker yae sumday

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thabani m March 24, 2013 at 5:44 am

Hey mbali,I also dream of becoming an investment banker one day hey,sumday as u put it hahaha,are u from S.A?

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Rahul Yadav November 6, 2012 at 12:53 pm

Dude !! Seriously, That was some “Real” insight about how it’s all gonna be once u r a banker.
Tnx..

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Harikrishnan November 22, 2012 at 3:30 am

It was really AWESOME!!!!!!
Helped a lot…
Thanks!!!

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Santhosh November 25, 2012 at 9:07 am

Great insight,

thanx

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cece December 5, 2012 at 5:58 pm

I have a question. When you work as in an Ibank. My friend told me he is not allowed to bring phones to the washroom because it is secured. Is this a lie? He works in an Ibank in Cleveland.

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ParkAvenue_equities March 14, 2013 at 12:39 pm

Never heard of that and I work in a bulge bracket bank in nyc.

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Leopold October 28, 2013 at 4:36 am

There are ibanks in Cleveland? No, seriously? That sounds like the worst of all worlds: The only attractive features of ibanking (the possibility of earning 1%-style money, the excitement of big deals in exotic locations, surrounding yourself with bright individuals, the glamour of big city living) would all be missing in Cleveland, so what kind of idiot would do go into ibank there?

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Banana January 12, 2013 at 9:13 am

haha, great stuff. I’m working in canary wharf at the moment on a gap year! I have a feeling I’ll stick big 4 and climb the ladder instead!

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Ying Ying S. January 29, 2013 at 11:59 am

No wonder you entered ibanking; just look at how many ways you can express money! :)

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Kaleb B. February 9, 2013 at 11:28 am

Working hard so I can get this job, however I have a while.
#15yearsold

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Louis B. February 26, 2013 at 3:02 pm

#15yearsold as well, can’t wait! And yes, reading the Financial Times is a time of great enjoyment!

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Harrison Stewart July 18, 2013 at 4:21 am

How are you working hard? (This isn’t meant as an insult).

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Ariel R. November 6, 2013 at 3:27 pm

Likewise, I am sixteen years old and I am also going to be an investment banker. I would like to know how you are preparing, too. Personally, I have been trading and researching stocks with my dad.

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Nwanro Ursula February 19, 2013 at 4:22 pm

Not just becoming an ibanker,but an innovative entrepreneur.

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zainab m h February 24, 2013 at 8:00 am

I am a student of MBF preparing for interview in ibanking, ur blog enlightened me, it was real usful insight about how it’s all going to be when he or she is a banker. was really educating. Thanks alot

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Sims March 13, 2013 at 6:31 am

Fantastic piece! Just became a fan of this blog!

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amit March 19, 2013 at 10:02 am

What is criteria of ibanker?
I did it mba in finance can in eligible for ib criteria?

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Andrew May 16, 2013 at 1:12 am

I wish to become an Investment banker I live in Islamabad Pakistan .. Plzz guys tell me from where and how can we do it

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Equity Research May 17, 2013 at 8:50 am

Most people become investment bankers because they are over-achievers but lack a personal vision or project to direct all that ambition, so they default to investment banking because that’s where they have been told the ceiling is (at least in terms of first job out of college). At least that the case for most graduates joining the top 10 houses (http://equity-research.com/list-of-top-200-investment-banks-and-boutiques/). The rest I guess they just need the money. :)

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Sherlock June 12, 2013 at 7:55 pm

Yep, that’s exactly why I’m pursuing a career in investment banking. A sad but true reality. I suppose some people are just cursed with ambition and drive but no vision of their own to direct it towards….

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Li Jiang May 17, 2013 at 5:51 pm

I truly hope this is a horribly bad joke filled with extreme irony. The author better be working very hard on staying un-brainwashed so that he/she can do his/her “own thing”.

I think the following article is a good representation of life after investment banking: http://www.wallstreetoasis.com/forums/life-after-investment-banking

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Sue July 1, 2013 at 8:54 pm

Well a great article and something I can really relate too with a lot of friends in investment banking !

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littlekay July 27, 2013 at 2:20 am

hi there,
I’ve been an investment banker for 26 years. I enjoyed your funny way of describing the industry as a whole. But you missed to point out the most important reason why people become ibankers: helping other people and their businesses! It doesn’t matter how big or how small of the bonus ibanker gets at the end of the year. It doesn’t matter the social prestige that ibanking brings(you don’t need your relative’s envy anyway). The only thing that matters is helping the community, helping other people succeed in their own endeavors!

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John July 29, 2013 at 7:22 am

AHAHA ‘helping’… you mean ‘milking’ with all the fees, its all about the fees bro…

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The ibanker July 30, 2013 at 3:57 am

@littlekay

Thanks for the comment.

Everyone would certainly be better off if all bankers were firstly driven by that very motivation…helping others.

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M&A Banker September 12, 2013 at 1:13 am

M&A banker for 12 years now, at 3 bulge brackets, and I can say what Littlekay said is complete BS.
But the reader should bear in mind that people get brainwashed in banking and frankly, are increasingly delusional over time.
Unless of course Littlekay was in charge of public lending to social enterprises and micro businesses? They don’t get a bonus or social prestige there, though…

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Aviral August 21, 2013 at 12:22 am

Hi ,

I am a Software Engineer by profession working in an MNC .
Due to interest in investment banking I want to direct my career in that direction and I am working on that as well .
But due to lack of resources I am not able to move in that direction in a stream-lined way .
Also cannot afford education in very reputed college due to financial reasons .
It is requested to please help and suggest some free sites where I can get some study material with good examples in it .
If this can be done then it will be a great help because currently I am studing through google only and that’s in very irregular fashion .

Seeking your support , Thanks in advance .
Aviral

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bob August 23, 2013 at 9:19 pm

Great article. I’m 17 and at college and actually love finance – I’ve been buying and selling shares since I was 10!

It’s a shame that when I go to banking events for college kids everyone else just talks about the money and no-one actually seems to find it interesting. I love how markets are so fluid and volatile, and linked so closely to events in the real world, and that I could be working on some of the biggest mergers or IPOs in decades. I would do the job for peanuts pay – seriously.

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Ariel R. November 6, 2013 at 3:32 pm

How well does the whole, “I’ve been trading for X years” play when you are in a college interview? I am just wondering because that is kind of my Ace in the whole. Not that i am not intelligent, i have a 3.8 Average with the most difficult classes my high school has to offer, but so does everyone else.

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isa joshua September 2, 2013 at 5:14 am

I want to be a banker…I need someone to tell me what course should I study in the university….am from nigeria….and tell me how many years am I to do in the university before I graduate?

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Stephen R September 18, 2013 at 10:12 pm

This was really funny! Thanks!

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Manish November 23, 2013 at 10:44 am

What ever guys …………Its not a essay like bread and butter. By the way nice Articles

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Basavaraj M February 1, 2014 at 5:11 am

It is very interesting & awesome blog for the guys looking for an investment banking career. I will surely be an ibanker oneday.

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Harrison February 14, 2014 at 7:53 am

Hello people..pls I’m looking at becoming an intern in an ib..
I am a fresh graduate. What are the skills that I need to possess before getting accepted as an intern in an ib..??
Please I need your honest and candid response and advice.

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investing-world March 4, 2014 at 10:46 pm

Its important to consider that, as a beginner in the investment world, you are sure to make mistakes. Everyone does, but its your ability to learn from these mistakes that will give you the experience necessary to carry on and improve your results. The only logical way to learn from your mistakes is to write down everything you do, and evaluate it thoroughly. This way you will be able to acknowledge what mistakes you make, and help you avoid repeating them.

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Zaraza May 25, 2014 at 1:33 pm

Hey, why why no name no photo of you? you are indian?

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Lorenzo July 24, 2014 at 4:41 am

This is the best article on why banking. Perfect.
Ciao. L

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Jake Williams August 28, 2014 at 5:41 pm

Your line about hearing Vivaldi’s Four Seasons (Spring) made me chuckle. But it really puts into perspective that there are a different breed of people that thrive in the stress that kills the rest of us.

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Bernardo Vanterpool October 11, 2014 at 10:13 pm

Marvelously put together. I’m only at the commence of pursuing a degree in accounting but after reading about investment bankers, I sure will try my hardest to adapt and become one.

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theresa muzondo October 12, 2014 at 12:58 am

With all the stress and pressure that comes with investment banking, it is good to see that you still have a sense of humour so i guess investment banking is not as bad as people make it out to be. I enjoyed reading this article.

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Theresa Muzondo October 12, 2014 at 4:06 am

with all the stress and pressure that comes with investment banking, it is good to see that you still have a sense of humor so i guess investment banking is not as bad as people make it out to be. i enjoyed reading this article.

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