Well-paid Trading job in an investment bank: slavery?

[alex64]

Hi,

I am a student in a well renowned American university. I am considering a career in finance (financial trading) but am also really interested in creating my own internet company.

If I get into finance, financial trading would be the only job i'd do. Do you think that getting a job in trading in the best investment bank is slavery? considering that it pays half a million, possibly a million a year after say, 5 years, if you're good..

Also, do you think that an MD (Managing Director) in such investment banks, who gets paid somewhere between 5 and 20 million bucks a year is a slave?

Interested in hearing from you

Regards,

A

[alex64]

Also, do you think that getting a job in trading is "trading time for money" or "trading money for money", since the bonus is results-driven?

[Curtis2011]

If you're doing something you enjoy, it's hard to call it slavery.

Plenty of people are happy at their jobs. And there's no reason why you can't work at a job and start an online business during your spare time, which is what I am doing and what probably what 90% of internet entrepreneurs actually chose to do.

The general outline for starting an online business seems to be:

1) Work at a job that pays the bills.
2) Build an online business in your spare time.
3) Once the online business is making the amount of money you want, quit the job.
4) Run your business full time.
5) OR, thanks to the beauty of the internet, automation, and passive income, just plain retire and go do whatever you want in life.

[Manomanman]

1) What are the odds of getting one of these jobs?

2) What is the REALITY of working at this job? Money always sounds good, but what do you actually have to do to get that money?

3) Is money what you truly desire?

[Isaac Ben]

Yes. It depends on what you want. A lot of people would like to quit their jobs to feel happier, to follow their passion. For other people, having a job in a big company is their passion.

When talking about having a job or business two things come to my mind:

- Financial freedom: enough money to live as you want to
- Free time: how busy you are in order to do what you want.

In your case, you seem interested in money. That is not bad. If making a lot of money is a goal, I think you can go ahead with that. The experience will tell you in the future how slavery a job can be, despite the money you can make:

- Some people are very well paied, but feel overloaded because of their jobs.
- Others would get bored if they were not that busy!

[SnerpGoodWord]

In general trading jobs can be very good. It all depends on what and how much you're trading, what the hours are, what the profit incentives are, how much of a pain in the ass your employers are, and whether or not you're allowed to trade your own account along with the managed money.

In general I would avoid jobs where you're trading funds that must by agreement be invested in all long positions for the long term, or worse yet, fully invested long stocks. Nothing sucks worse than having your income go away because the government or the fed screws up and causes a recession.

[CoolBee]

Well working hard in exchange for large sums of money as a personal choice is not slavery. Working hard for very little or no money with very little choice or no choice is slavery.

From what I understand of it, these financial jobs require a lot of physical stamina and put the entire rest of your life on hold while you're doing it.

If you are prepared to do that for a couple of years, and also make an effort to keep hold of your essential self while doing it, and can stash a nest egg behind you, why not?

If you do go this route, what steps would you take to make sure you didn't lose sight of what things are fundamentally important (to you - maybe not anyone else)?

What would your 'exit' strategy be - what sum of money, or possessions, or 'breach of personal moral codes' and so on would be the point at which you said "that's it - enough - I'm quitting".

[alex64]

Thank you all for your advice. Yes my goal is to make a large sum of money not to buy myself fancy cars etc.. but to reinvest it by building my own company.

One of the drawbacks of trading is that i dont learn anything other than making money, so i cant re-use most skills acquired in the business world, and also that i would like 50 by the time I'm 30..

[spirit4711]

Originally Posted by alex64

Hi,


Also, do you think that an MD (Managing Director) in such investment banks, who gets paid somewhere between 5 and 20 million bucks a year is a slave?

A slave is a slave, no matter how well paid.

The real question is: would YOU feel a slave?

BTW, a business owner can be a slave to his business just as well as an employee.

[Isaac Ben]

Originally Posted by alex64

Thank you all for your advice. Yes my goal is to make a large sum of money not to buy myself fancy cars etc.. but to reinvest it by building my own company.

One of the drawbacks of trading is that i dont learn anything other than making money, so i cant re-use most skills acquired in the business world, and also that i would like 50 by the time I'm 30..

If you learn how tom make money, you can use such knowledge to make money in different markets. I think you could use your skills in a lot of businesses.

[Isaac Ben]

Originally Posted by alex64

And also that i would like 50 by the time I'm 30..

That can be true. I have three rules for that:

1. Eating well.
2. Having enough rest.
3. Doing exersice.

I think you can always follow these rules, despite the job you have. There is always time. It is just to have the commitment to attach to them.

On top of that, it seems that you enjoy financial trading. I think you should give you the chance!

[Marko500]

Originally Posted by alex64

Hi,

I am a student in a well renowned American university. I am considering a career in finance (financial trading) but am also really interested in creating my own internet company.

If I get into finance, financial trading would be the only job i'd do. Do you think that getting a job in trading in the best investment bank is slavery? considering that it pays half a million, possibly a million a year after say, 5 years, if you're good..

Also, do you think that an MD (Managing Director) in such investment banks, who gets paid somewhere between 5 and 20 million bucks a year is a slave?

Interested in hearing from you

Regards,

A

Slavery is forced labour, when people are in property of others.

Simply because no one forces anyone to work, I would not say that the job is slavery. However, from my experience, I believe that business owners have believes that they own their employees.

I work at my job for almost 2 years. I would not repeat this experience even for 20,000,000 dollars. You can believe me or not, I do not care. It's up to my experiences. Maybe someone had a good experience on the job, I do not know.

[Manomanman]

Originally Posted by alex64

Thank you all for your advice. Yes my goal is to make a large sum of money not to buy myself fancy cars etc.. but to reinvest it by building my own company.

One of the drawbacks of trading is that i dont learn anything other than making money, so i cant re-use most skills acquired in the business world, and also that i would like 50 by the time I'm 30..

Isn't making money like...the most important skill in the world???

[Requiem]

Originally Posted by alex64

Hi,

I am a student in a well renowned American university. I am considering a career in finance (financial trading) but am also really interested in creating my own internet company.

If I get into finance, financial trading would be the only job i'd do. Do you think that getting a job in trading in the best investment bank is slavery? considering that it pays half a million, possibly a million a year after say, 5 years, if you're good..

Also, do you think that an MD (Managing Director) in such investment banks, who gets paid somewhere between 5 and 20 million bucks a year is a slave?

Interested in hearing from you

Regards,

A

Hi Alex,

I think it comes down to whether you like what you do or not. I'm into finance myself, though it's only a knowledgeable past-time of mine, not my full-time job. I'm an engineer by profession. This means that for me, I'm truly in control when it comes to finance- I manage my own assets and I have a website about wealth building and dividends, but I'm not personally responsible for other peoples' money and I'm not surrounded by extremely competitive, potentially greedy, cut-throat people. I don't think I'd like it in finance as a profession, but hey, if I was making half a million per year, I'd probably do it for a few years and then retire.

So do you love it or do you just want the money?

[stealth87]

To get back to the original question. I recently graduated from college and have some experience with investment banks. I did two internships, one with Merrill Lynch and the other with Lehman Bros. on trading.

Personally, I find this kind of job and career to be over glamorized. The main appeal is the compensation followed by high status and reputation. The "smartest" people work at these institutions and get compensated accordingly.

A career move like this definitely helps you out in case you want to branch out into other areas within business, such as consulting. There are many college graduates who do just that, they work for a couple of years and quit to go some place else with a big name on their resume.

That being said, if you have an innate love for this type of work. If you love trading and making money, then it´s definitely something to consider. If your heart is some place else, then I would advise against it. If you know deep inside that your passion lies elsewhere, then trading is a futile pursuit. The trading environment will toughen you up, as it´s survival of the fittest at it´s prime: there is no room for weaklings, and stepping over others to make a buck is the standard. You need to have a thick skin and be able to stomach gut-wrenching losses.

Hours are not as long as Investment Banking, but it depends on the securities being traded. For example, trading desks specializing in international markets have to accommodate to different time zones. I would say on average, traders are working 10-12 hours a day, which include going in early before the market opens and staying about an hour or two after it closes.

There is only one investment bank that will pay the amounts of money you included in your original post for first year hires: Goldman Sachs. They tend to be known for working longer hours than all the other banks, which can be attributed to their success. Work-life balance gets tough at this point. First year hires, usually cap out at a max of about $100k to $150k on average at most investment banks including bonus.

My boss who was a Managing Director was anything but a slave. In fact he worked only market hours and would spend most of his time out with "big shot" clients including frequent golf outings and charity events. However, he had spent over 20 years in the firm to get there and he was held in high regard.

I met all kinds of personalities, meeting great people and supreme ass**** alike. My general observation was a clear lack of passion, and in its place I sensed an omnipresent quest for more. The main motivation and drive is to make money and climb up the ranks. Most of the traders are definitely driven by these principles and I could not find the heart in this profession, despite my obnoxious probing of their intentions.

It all could be best summed up by the advice I got from one of the coolest traders I met. He was a family man. A nice, friendly and overly enthusiastic guy who made his presence be felt. He told me that most traders make big bucks as expected. But if you take into account the years of work that are required to get there, the hefty tax deductions and living expenses (assuming that you work and live in NYC), then that initial amount drastically reduces and is not as glamorous as it is made out to be. He told me to start a business instead, if I wanted the "big bucks". How ironic! I was dumbfounded by his sincerity.

I hope this should not detract you from pursuing this career path if it´s what you want. But I certainly wish someone would have exposed this industry for what it really is before I fully dove in blinded by its perks.

P.S - The best two books you can read to get a feel for the day to day life in the industry are "Liar´s Poker" and "Monkey Business: Swinging Through the Wall Street Jungle".

Diego

[alex64]

Hey,

I would like to thank all of you for great advice, I read everyone of your posts carefully. Thank you Diego for your great post, you made a fair description of trading and yes, i was actually talking about Goldman in my original post!

I should point out that on top of my studies, I'm playing poker professionally and am making decent money out of it. I am not the kind who wants to buy some fancy stuff with it but who rather wants to start a business and is willing to lose most of it if I have faith in my business idea.

Even though trading apparently requires the same skillset as poker (according to Wall Street banks who look to hire poker players), I am not sure I want to commit myself to a 7 to 7 trading job to make money that is cut in half because of income tax, while poker winnings are not taxable in my country

My plan is to use my winnings to finance my company. Anyone has any experience in a similar situation?