What is Wall St Actually Like?
Level 1 - NGMI
Welcome Avatar! After 2010 or so the industry of Wall Street entered into secular decline. While there were some “banner years” most of them were fools gold. For example, the 2021 big bonus time was just due to COVID printing and a billion IPOs. Everyone made money, even scooter companies got good valuations.
Previously (back in early 2010) we’d say that Wall Street, Tech and Sales were the best options for intelligent people at top schools (also known as Target Schools). Now? It’s pretty much just Tech or Sales. We wouldn’t even bother with Wall Street unless you can’t get into Tech or Sales. It is a *distant* third since comp is down massive on an inflation adjusted basis. It is simply harder to spin up a WiFi biz while staring at a screen for 70 hours a week.
For Those That know how all this works you can just skip to Part 2 for the depressing reality of how Wall Street really works.
Quick Compensation Numbers
We’re not going to fight with people in the comments. Already went through it and roughly speaking if you’re good you’re looking at this for *total* compensation including bonus pre-tax (so minus 40% or so on all of this to be safe and conservative)
2010s:
Analyst: Around $180,000 a year
Associate: Around $300,000 a year
VP: Around $500,000 a year
Director: Around $700,000 a year
Managing Director: Around $1,000,000 to $1,100,000 a year
Around Today:
Analyst: Around $220,000 a year
Associate: Around $340,000 a year
VP: Around $400,000-$450,000 a year
Director: Around $650,000 a year
Managing Director: Around $850,000 a year
What Do You Notice: The junior levels are up a bit because they need to compete for talent. Junior levels have more protection because the banks can’t lose the most talented people out of college. The middle gets squeezed hard and the top end is entirely driven by deal activity (which is basically smoked after interest rates went up).
For those saying “not a big deal still looks good” you have to remember that these positions are in extremely high cost of living areas some 90% of the time. A rare energy banker in Texas can still make a killing. But. Making $500,000 a year in Manhattan with 2 kids and a wife doesn’t work… the math isn’t great when rent would be in the five figures (minimum)
In simple terms, the value of the position has dropped by 44% in about 14 years. For analyst and associate it isn’t as bad, but the career prospects are worse. If you go up the ladder you end up matching the above calculator which means the standard of living is down 40% vs. 2010. Not great.
Part 1: General Cast of Characters
The days of Gordon Gecko shilling penny stocks and people screaming at each other on the floor of the NYSE are long gone. Trades are made with differences that measure in the fractions of pennies. In fact, stock brokers as there were called back in the day don’t make any real money anymore. Less than a banking analyst (yes seriously - vast majority make nearly nothing - source)
Investment Banker: This is just Real Estate agent for companies. That’s the best way to explain it to normies. You find a buyer/seller for a company. Just like a real estate agent finds a buyer or helps sell a house. Same thing. They are paid 1-2% of the sale price and that is that.
The Cast of Characters (Age Bands are Rough Estimates):
Analyst (Age 22-25): Largely a bunch of intense type A people. The majority are honestly not particularly talented, they just grew up well off and were hand held through tutoring and other methods to make sure they could secure an entry into the industry. That said the highest *percentage* of talented people is right here (meaning probably around 20% of these individuals get super rich later - unrelated to Wall Street). Some of the young guns will end up being ultra wealthy. Just there to gather information to build a biz and leave - rarely do they stay longer than a couple of years
Rules of the game here: Females will always be preferred to men. This is simply how it goes. All the quota games and natural male oriented higher ups with unattractive wives hooking up with personal trainers leads you to this conclusion. You’re going to be doing meaningless grunt work: largely aligning logos and copy pasting numbers into pre-made models (the idea you build every model from scratch is a myth)
Associate (Age 26-30): Basically the same tasks as the analyst but they view you as a potential revenue generator later (VP to MD is revenue generation). The fact of the matter is, a lot of racism starts to come in around Associate/VP level for business and bias reasons. You’ll see a lot of minorities get stuck in the VP level or Senior associate level and put into “execution roles”. This means they don’t think the person can bring in actual deals/revenue. Before anyone gets offended, do you really believe a 5’1” girl who has english as as second language will source deals in midland Texas? We all know the truth there. It will be harder. Humans are herd creatures and everyone has prejudice even though they claim to be neutral.
Rules of the Game: Figure out what track the company is putting you on. You’ll know within a year or two if you are in revenue generating role or in long-term execution role and capped out at VP-ish compensation for life.
VP (Age 28-32): Dreams go to die around here. Once someone gets to VP they are company men. Outside of extreme exceptions, they will be stuck in the corpo meat grinder for life. Hugh chunk of people get cut here and are forced to get some sort of Corp Dev job for life collecting $250K a year. Long-story short, outside of execution roles, you have to start generating revenue to get moved up/promoted at this point. You’re also expected to both generate revenue and help the most important MDs if they need something on a Live Deal (Live deal means an engagement was signed, other than your own pitch books you’re basically working on Live Deals to be a team player or you’re trying to ramp up your rev line)
Rules of the Game: Generate revenue ASAP or get fired ASAP. Also expected to do a lot of the grunt stuff on important deals for the firm. No one really leaves once they get here, they are in the Wall St. circle for life some 95%+ of the time
Director (Age 30-35): Firmly corpo guy. Probably living in some nearby suburb with a huge mortgage a kid or two and a wife who doesn’t work. You’re constantly fighting inflation and taxes while your deferred comp begins to pick up. Nowadays, they give you stock that vests over 4-5 years (old days was 3). The Aluminum handcuffs are locked into place
Rules of The Game: Basically trying to generate revs to justify MD promotion. Meanwhile most ignore their personal lives, end up divorced and lose half of everything they built up to this point
Managing Director (Age 34+): Majority established at this point and won’t leave until retirement. If they get cut it’ll be extremely hard to find anything that pays remotely close to what they are making. Typically high stress, family issues or out of shape. One of the three. Only the true killers have it easy and make a ton in the process (the “Super” MDs you end up hearing about in the WSJ or other major outlets)
Rules of The Game: Produce or die. The average is going to make around $850,000 these days (huge vest now with a chunk ~$300K or so over 3-5 years). As always exceptions to the rule but that’s the jist. The copper handcuffs are in, slight upgrade from aluminum
Part 2: What it is Actually Like
Day Begins (8-9am): Around 8-9am the day begins with some sort of meaningless meeting related to what everyone is working on. The smart analyst in the corner is checking to see if he made any affiliate sales while pretending to take notes, the star analyst (female) is actually taking notes while sitting directly next to the highest performing MD (assuming he is there that day).
Everyone talks about the items they are working on: 1) everyone hates the Associate with the MBA and no banking background since the analysts know he is lost and can’t do much, 2) the VP is making up all these stories about pitches he/she is making - practically none will go through, 3) one director or MD is yapping about how his deal is going to close and 4) the entire thing ends with everyone highlighting how amazing the group is because deal XYZ is going to close.
All the analysts return to the “bullpen”, stuck in cubicles with vantage point for everyone in the VP - MD role to see what they are working on.
9am-Noon: The Analysts are not doing much unless on a live deal. The majority are NPCs so they gossip with each other on the company chat system with caution (it’s all read and reported to HR). The smart analyst has his fingers on Windows+D and has his background set to some fake excel sheet (working on exiting)
The Associates are being yelled at for some meaningless edits to the pitchbook that has a 99% chance of not going through. There are tick marks on the graph, one of the pages have the logos out of order and there is a color scheme issue on slide number 29 which no one will actually look at.
Around Lunch time, one of the groups goes out to pitch this “idea” and the rest go out to eat together.
Group at Pitch: Typically just a Director & Associate or MD + Associate or MD + VP. They pitch their idea to combine two trash companies into one less trash company to collect that 1-2% fee on the $100M acquisition price. The pitchbook isn’t even opened by the CEO of the company (buyside or sell-side representation doesn’t matter). The entire conversation is largely talking about potential valuation (the comp sheet with P/E, P/Sales, P/E/G and other industry standard numbers for your sector - could be EBITDA, could be something else - doesn’t matter)
After talking about this idea for 30 mins and seeing a total of 2 slides on this 80 page deck, the team leaves the behemoth book. After you exit the building the CEO swiftly throws the pitch deck into the garbage.
The only benefit of being the guy going to the pitch is that you probably got a stale sammy, a oversized cookie and a sparkling water for free (sparkling water makes everyone feel more important or something). Hint if you’re constantly going to meetings, you’re probably in line for promo track to VP.
Group at Lunch: Usually separated by analyst class or race. Yes seriously. Either class of 2023 all go out or class of 2024. Doesn’t matter. Then the cliques all end up being in the same spot.
Since lunch is usually not comped, ends up being something cheap like Chicken and Rice and instantly taken back to the prison cell/bullpen just in case an email is sent out.
Noon to 4PM: Starts to get hectic here, people start throwing out all these ideas. Analyst/Associate has to make edits to some pitch deck reviewed in the morning by VP/Director/MD. All these edits are dumped on everyone after lunch.
VP-MD go back to making phone calls and trying to build relationships and sell companies on going public or getting an M&A deal done. This sucks (if you are a junior) because some crazy idea will be made by one of the revenue producers. This means its Russian roulette to get staffed at 5-6pm.
4pm-7pm: At this point the following is happening. The MDs are already being hit by their nagging wives (around 80-90% of the time the wife wears the pants in the family - this is why the majority are passive aggressive). They express their passive aggressive behavior in meetings by talking to the group and specifically not looking or making eye contact (at all) with the one person they hate.
Directors and VPs are still grinding, perhaps a lucky director is already on track to hit his quote but the VP is pulling hairs out or screaming at some hard coded excel error in a live deal. God forbid the calculation is 15.1% return instead of 15.0% return due to the rounding function in excel.
Analysts and associates pray. The smart ones are just doing the minimum still grinding on their exit plan (people who love it are trying to go to PE or a hedge fund), people who recognize this is all a sham (end up starting businesses).
Plop.
Now all the associates and analysts get even more edits or new projects. Some chosen VP staffer has to divvy up the work. Since he/she knows a few of the analysts have no shot at being promoted long-term they get the brunt of the garbage work: Pitch with no shot, doing research on some insanely niche topic and updating all these comp decks that have not been touched in years.
Brutal living.
7pm to 2am: Just a ton of grinding for the juniors. This would be primarily analyst, associate and he recently promoted VP who wakes up every day praying he/she isn’t fired.
Align logos, type SEC documents into pre-made excel sheet, if working with a private company copy paste all their number edits into the excel model. So on and so forth.
Majority of all actions at this time
Copy Paste
Hot key to align logos left, right, center, middle
Hot key to copy formula or format
Copy pasting things sent to you via email into excel or ppt
Checking off every single edit to a power point with a red pen. If the bullet point has a period at the end of it you’ll hear about it!
Updating comp sheets because some 8-K came out with new numbers
Email back and forth with MD/VP on the pitch/deal. Have to try and make all the changes even if they conflict. If they conflict always go with the MD one
This goes on for hours. By the time you’re done, hopefully Midnight, you’ve got enough time to leave the edits on their desk/chair and leave.
You will be yelled at regardless at around noon when the edits come back. You better have the documentation that says you followed everything correctly and the yelling was unnecessary because baller MD over-rode them. If you can say “I followed everything excatly as written” you will survive the office catch up. If you cannot say this a mouse or keyboard will slammed or you’ll get a bunch of passive aggressive remarks about being dumber than the VP/Director. One of the two.
This goes on for years (depending on how long you survive or stay). The smartest ones are the weird ones that exit with a biz. The second smartest end up in private equity or a hedge fund that performs well - or in an extremely rare case they find a super growth company and land a seat on the rocket (Corp dev or something similar). The third group just stays and slowly loses their will to live - becoming more passive aggressive over time and believing anyone better than them got lucky. The fourth group? Just gives up or has a mental breakdown going to travel the world or work in the wilderness or something insane like that.
Anyway. That’s the reality of the industry.
This was supposed to be comical but now reading it, it just feels sad. There is just no real way to make it in a high cost of living area and declining number of seats over time.
The good news is you’re here and already know the drill. All in on WiFi replacing W-2 net income (quit at 2x).
Once you do that, you quit and forget about it within months.
It was all a dream.
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.
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