How I Got Mixed Up With Finance
April 28th, 2010A few days ago, Ezra Klein had a fun post investigating the Ivy Leage to Wall Street connection. To do so, he interviewed a Harvard alum who ended up at Goldman Sachs. I related a lot to the post, as my experience had many similarities, but also many differences.
I didn’t go to Harvard, I went to Cornell. And I also happened to be interviewing at a time when finance was a complete disaster — just after 9/11. During one of my final round interviews (for Citigroup) I remember being downtown in November and you could still smell a stench, quite a few blocks away from ground zero. So I wasn’t in a situation where anyone who could use a calculator got a job, like it was a few years earlier and a few years later. Some bulge brackets weren’t even interviewing. Things were so bad that several were just taking their summer analysts for full time or fewer.
I was also stupidly selective, so I didn’t get the offer I wanted. Instead, I ended up getting a job in consulting in structured finance for a few years. But everything happens for a reason. It turned out to be a rich experience that shaped my future more than I could know. It led to an associate position in investment banking.
Since I wasn’t as heavily recruited as Klein’s subject, what led me to banking? A lack of better options. I was coming out of school with a fair number of loans. I felt like my expensive education should get me a decent paying job. I didn’t want to be a lawyer, doctor, engineer, or college professor — so what was left? Finance. I had never taken a finance class until my junior year in college. I added an economics major in my senior year to look more attractive in finance interviews.
So how exactly did I decide to pursue finance? I always had a knack for math and am a hard worker. That basically spells success in finance. And it worked. I did quite well. But I was never passionate about the work. Ever since college, I had dreamed about writing. But that always seemed like a pipe dream. I always heard the whole “no one wants to be a starving writer” line.
Yet, I grew bored with finance. The day to day didn’t challenge or interest me. But as Klein mentions, money is a trap. He calls this the “golden handcuffs” problem. The banker says:
There’s this notion of the accidental banker, people who get caught up in that world and get more and more pay and find it harder to justify leaving. But the cultural effect of all of this — and even with regulatory reform, we need to think about that — is that a lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they’re giving up so much time. It’s not malicious. But there are a lot of unhappy people who end up in that situation.
That’s exactly right. Once you start living in a certain way, it’s very, very difficult to imagine making a lot less money. I loved eating at the best restaurants, drinking the best wine, buying expensive things. Who doesn’t? I remember the incredible realization walking home from the subway one evening that I no longer had to budget — I didn’t have to worry about money. It was great. Except I didn’t like my job. So I had to eventually make a conscious decision that I’d rather be happy than rich. I feel I chose wisely. It turns out you can write for a living and not starve; you just have to live a little more modestly.
Klein also asks the banker whether banking pay is justified. That’s a fair question. Amusingly enough, when I was in banking I believed I was underpaid — because from banking standards, I was. I worked at a bank known for being at the bottom of the pay scale. I wasn’t promoted on the schedule promised. So even though I was probably in the top few percent of Americans in terms of compensation, I was bitter. I should have been making two or three times what I was. Naturally, even at that “inadequate” pay, I was making several times what I make now as a journalist.
But that was just the relative pay. In general, bankers are certainly overpaid. In general, they aren’t as smart as people think; it isn’t rocket science. In fact, I think the people I work with now are far more intelligent than those I worked with in finance. The service they provide is important, but no more important than that many other professions provide. I feel like having thousands of people reading my writing each day has far more impact on the world than a banking deal. I used to quip, “I’m changing the world, one large institutional investor at a time.” Bankers do work hard — no doubt about it. But so does a guy with two minimum wage jobs. Even though my hours are slightly less now, my days are far, far busier and more challenging. I think I ultimately work harder, though I feel my quality of life is much higher.
I’m not sure why bankers make so much money, but that’s just how the market works. And that’s fine. It’s only money; they can have it. You don’t need to look far to find filthy rich people who are miserable and dirt poor people who are happy. They can have their summers in the Hamptons, expensive French restaurants and Upper East Side penthouses. I’m perfectly happy with my quaint one-bedroom, a burger from Ray’s and the occasional trip home to South Florida. Because I leave for work after a decent night’s sleep with the sun up looking forward to my day, and I return with the sun still shining having felt like I did something I enjoyed that might have somehow made at least a small difference in the world. And that probably explains why I never fit into the banker mold.