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I used to work for CSFB (now Credit Suisse) in London's Canary Wharf. It's the most I've earned in my entire career. Unless you've worked for an investment ban

I used to work for CSFB (now Credit Suisse) in London's Canary Wharf. It's the most I've earned in my entire career. Unless you've worked for an investment bank you have no idea how much money they have. It's like a giant gulf-of-mexico-style money gusher that doesn't quit. How do they make it? CSFB flies on the bleeding edge of what's legal and always have. I was there when Frank Quattrone was involved in the IPO of VA Linux. The share allocation resulted in the US vs Quattrone lawsuit. Imagine you facilitate an IPO and you get to hand out shares at $80 a piece to your buddies on and the first day it pops up to $300/share and you can sell - right then. http://bit.ly/cBMdqb http://bit.ly/cBMdqb I was also there when James Archer, Jeffrey Archer's son was found guilty of manipulating the swedish stock exchange and banned for life. http://news.bbc.co.uk/2/hi/business/1459638.stm http://news.bbc.co.uk/2/hi/business/1459638.stm In investment banks there is what's known as the Chinese Wall. It separates investment banking from the brokerage divisions to prevent conflicts of interest. Imagine you have a bunch of guys buying and selling stock for the bank's account and another group of guys recommending to customers which stock to buy and sell. They're all in the same building, using the same elevators, the same mens rooms and the same lunch hall. Quick entrepreneurial quiz: Anyone see a business model there? They take their licks though. I was there when the LTCM fund collapsed and they lost $600M. Also when the Russian economy collapsed and they lost another $600M. Layoffs? Nah - business as usual. If you're a developer or ops guy and get tired of startups, I strongly recommend going to work for an investment bank. It's very very hard to get your first job - you're going to have to network your ass off or have a seriously hot resume - probably both. But once you're in, provided you're good at what you do, it's very easy to move between banks and promote yourself into better jobs in other banks or divisions. So what the fk am I doing running a startup? Good question. I ask myself that sometimes. When you look at the opportunity cost from the "I could be in an investment bank" perspective it is scary. I don't have some magic answer or a bunch of bullet points. I guess what draws me to it is the fact that I own my own business. It's also completely honest. Your success is your own and so is your failure. Working in banking feels like cheating. Perhaps it is. But it pays cash and lots of it.

rwmj 16y ago
Before you start that bank job you should also think about whether what you're doing is moral and right. Whether by doing that job you're contributing to making the world a better place.
- alextp 16y ago
  I do worry about this, when I consider working a few years at banks after graduating to save up some fuck-you money.
- robryan 16y ago
  Also consider that you didn't create the system and are just a part of it, if you don't take the job someone else will. Depends what stage of your life your at, the money could be a primary concern or a secondary one with flexibility, personal interest and creating something valuable higher.
  - raganwald 16y ago
    > you didn't create the system and are just a part of it, if you don't take the job someone else will. Exactly why I moonlight as a crack dealer, with the odd stint pimping adolescents I meet at the bus terminal. Sorry for the lame attempt at the witty reply... I guess the point is that not doing something doesn't mean it won't happen, but it does mean you won't do it, and that matters to some people.
    - mattmaroon 16y ago
      I have far fewer moral qualms about crack dealing than investment banking.
      - neilc 16y ago
        I know you're joking, but I don't see the moral concern about investment banking. You may not be making the world a better place (although that is very debatable), but you're not making it worse, either.
pmjoyce 16y ago
I've contracted exclusively for investment banks in London for the past 6 years (with the exception of a brief stint at the FSA). The reason I stick with it is the exact reason you specify: the money, or more accurately for me, what the money allows me to do. The majority of the developers I work with have painted themselves into a corner with the money they've made working at banks such that they have no other option but to keep working at banks to maintain the lifestyle they've come to take for granted. The money allowed them to buy large houses, nice cars and good things but it also means they'll have to face a significant downturn in lifestyle if they ever want to move to a different sector not to mind starting a startup. From the outset I was always conscious of not falling into the same subtle but dangerous trap. I'm not sure why, probably because I never felt 100% comfortable in a corporate environment and knew a some level that I didn't want to be trapped by it. The upshot is that we don't live a lavish lifestyle such that when the income is throttled down the adjustment isn't as severe. We don't own our house, we rent (we're actually quite nomadic so this decision is only partly financially related), no fancy car, we don't tend to spend money on fine dining and entertainment or a lot of the trappings that people often face. This has allowed me to make choices that were right for me like taking a full 3 months off on the birth of our first child and only going back to work (for an IB I contracted with previously) for 3 days per week for the subsequent 9 months. This really allowed us the time as a family to adjust to our new circumstances. It also allowed me to experiment with a few projects that had been on my mind for a while - nothing significant just the first dip of my toes into the world of startups. Since then we've had another child - again I was able to spend a lot of time with him. I've also been able to try out a few more projects which, although not successful, have allowed me to further experiment and find my feet conceiving and building products. As a result I'm now on the brink throwing myself full time into my own bootstrapped startup which is about to open to beta. So yes, while I agree that the money to be made from working in investment banks is great, I'd warn against getting too sucked in with the cash if you ever want to keep the door ajar for other things. Well done for making the jump into the startup world, it's a brave move I hope to join you soon. Don't pine for working at a bank, if you value creativity and and the opportunity to strike out on your own (which you clearly do), you've made the right choice whatever the outcome.
- mvalle 16y ago
phony_identity 16y ago
But it pays cash and lots of it How much? Can you be more, uh, quantitative here?
- swombat 16y ago
  Starting salary for typical IT roles (dev, etc) are about £35-45k p.a. in London depending on how well you negotiate. That's straight out of uni. It goes up rapidly as you go up the ladder. Within a couple of years, if you do well, you should be up to £65k or so, and probably start getting a bonus on top of it too (probably about £10-20k or so in IT). It's not that unusual for the salary to go up by about £10k per year if you do very well, which isn't necessarily that hard, because there are a lot of blasé, bored people who don't have any energy anymore (the environment saps it out of you). If you're on the business side rather than IT, the equation changes dramatically upwards. I have a friend who's 5 years into a front office, commodities sales job, starting from the lowest possible rank, and who's now earning £150k per year plus bonus. She started on £30k because she really wanted the job - so her salary has gone up 500% in 5 years. That's not counting the bonus either. That's not fuck-you money. Few people earn that even at banks. But it is a very comfortable salary. It's cheap to get that salary, too. All you have to give up is your dreams. My friend who earns £150k hates her job, and used to tell me that every time I saw her.
  - Silhouette 16y ago
    > It's cheap to get that salary, too. All you have to give up is your dreams. Don't forget the effect of compound interest: they want your soul as well, and you burn out more every year for as long as you stay. In my early career, a headhunter came after me to interview with his London bank client. I did a few quick sums at that point, and it's not nearly as attractive a package as it looks. I'm in Cambridge, UK, so we have quite a few guys around here who get approached by the big London banks or who choose to interview there; a few of my friends did. Without exception, the ones who took the jobs get up early, commute down on overcrowded trains, work long hours during the day itself, and then commute home on overcrowded trains. By the time they've done that, they are so tired that they often don't want to do much on weekday evenings any more. The only thing that might improve the situation is moving to London, but that pushes your cost of living way up. I don't earn as much money on my decent IT contracts as your £150k+bonus friend, and I've been working a bit longer. On the other hand, by the time you figure out an hourly rate including things like commuting time, I bet I'm not that far off. By the time you factor in the costs of commuting or getting London accommodation, I'm even closer. Oh, and I still have a life Monday-Friday. I can understand people who go straight into that kind of environment for a couple of years after university, when you're young enough to take it and you're basically making an investment of 2-3 years of having no life in exchange for more comfort for the rest of your life. But I can't understand why anyone would want to stay there for much longer, even with all the financial reward: money is only worth anything if you have time to enjoy spending it.
yummyfajitas 16y ago
They take their licks though. I was there when the LTCM fund collapsed and they lost $600M. Also when the Russian economy collapsed and they lost another $600M. Layoffs? Nah - business as usual. The finance industry doesn't need as many layoffs as other industries because they solved the stick wage problem.
- erikpukinskis 16y ago
  What's the stick wage problem?
  - nostrademons 16y ago
    It's easy to raise wages when times are good, but it's hard to drop wages when times are bad, because it results in the whole office getting demoralized and productivity dropping. So companies will resort to laying people off entirely when revenues drop, because the morale hit from cutting people off entirely is less than the morale hit from dropping everyone's salary. Finance presumably solves this by paying out the majority of compensation in bonuses, which are explicitly tied to the firm's performance. If the company does well, you do well, if the company does poorly, you knew ahead of time that you'd be taking a haircut, so it doesn't feel as much like a broken promise as when wages are cut. They're not completely immune from layoffs though - when a firm goes under entirely, most of the employee base is let go by the acquirer. And financial firms tend to blow up completely more than other types of firms, because they operate with more leverage. That's why luxury businesses in NYC took a big hit this financial crisis.
    - silverlake 16y ago
      This is exactly right. Relative to 2007, my friend's 2008 income fell 40%. In 2009 it was 50% higher than 2007. Layoffs are less likely when wages are flexible.
      - borism 16y ago
        This is not unique to finance!
mattmaroon 16y ago
I don't think if I could live with myself if I worked at an investment bank. Most of what they do provides no benefit to humanity, in fact on the whole they're probably parasitic. Shuffling money around senselessly while taking a cut might be extremely profitable if you do enough of it, but it's just a drain on modern capitalism.
- yummyfajitas 16y ago
  Tell that to Southwest Airways. http://en.wikipedia.org/wiki/Southwest_Airlines#Hedging_fuel http://en.wikipedia.org/wiki/Southwest_Airlines#Hedging_fuel Shuffling money around is also useful for making public what would otherwise be private information. Greece can profess to the world how solvent they are, but the swap market tells a different story.
  - mattmaroon 16y ago
    I said "most of what they do" rather than "all of what they do" because some of it coincidentally helps others. The ratio of parasitic behavior to useful is unfortunately growing, and hasn't stopped just because it caused an economic meltdown.
    - yummyfajitas 16y ago
      What specific behavior do you believe is parasitic?
    - dtby 16y ago
      I wonder how you square this with your past, as I understand, as an online poker pro? As a former professional poker player myself, it never would occur to me to denigrate the work of financiers or suggest that what they were doing was immoral. I was able to morally justify my occupation to myself.. and, as such, it is orders of magnitude easier to justify theirs.
      - richcollins 16y ago
        Online poker is a consentual exchange. Inflating the money supply and taking taxpayer bailouts is akin to coercive theft.
seldo 16y ago
It's worth pointing out that this is really only a viable career option if you are a straight, white, anglo-saxon male ready to work long hours, drink hard, and put up with a machismo-dominated culture. The financial sector and investment banking in particular, even in their tech departments, have the kind of corporate culture that sends me running.
- pmjoyce 16y ago
  I disagree somewhat although I am a contractor not a permanent employee seeking promotion so that might be the reason for the difference. I am straight and white but otherwise I don't fit what you describe. I arrive at 08:00 and leave at 16:30 sharp unless exceptional circumstances arise. I make it clear from the first day that I'm not there to socialise and I won't routinely work outside my contracted hours. My theory is I have the length of my first contract (usually 3 to 6 months) to prove that I'm worth sticking with in spite of not being the proverbial round peg. So far it's worked and I've always been extended multiple times at each institution. They eventually stop offering you out to get drunk if you're politely constant with your rejection - I do get a bit of a ribbing and feel pressure in this respect but it doesn't impact me. Currently my team is made up of 2x French men, 1x Nigerian man, 1x Indian Man and me (Irish man) the team leader is an English man so there certainly could and should be better female representation but that was also the case (but to a lesser extent) when I used to work in the telecoms sector. There is a lot of arrogance and machismo on display but it's less prevalent in the back office - certainly more than what I experienced in other sectors. It is hard to stomach though.
  - seldo 16y ago
    So by "better female representation" you mean "less than 100% male". And the team is 50% white, and 100% straight (I assume you'd have mentioned otherwise). And you admit they pressure you to drink with them. So it sounds like you agree with almost everything I said about the makeup of the workforce at these places.
- erikpukinskis 16y ago
  If I could I would mod this up like 50 times.

rwmj 16y ago

Before you start that bank job you should also think about whether what you're doing is moral and right. Whether by doing that job you're contributing to making the world a better place.

alextp 16y ago
I do worry about this, when I consider working a few years at banks after graduating to save up some fuck-you money.
robryan 16y ago
Also consider that you didn't create the system and are just a part of it, if you don't take the job someone else will. Depends what stage of your life your at, the money could be a primary concern or a secondary one with flexibility, personal interest and creating something valuable higher.
- raganwald 16y ago
  > you didn't create the system and are just a part of it, if you don't take the job someone else will. Exactly why I moonlight as a crack dealer, with the odd stint pimping adolescents I meet at the bus terminal. Sorry for the lame attempt at the witty reply... I guess the point is that not doing something doesn't mean it won't happen, but it does mean you won't do it, and that matters to some people.
  - mattmaroon 16y ago
    I have far fewer moral qualms about crack dealing than investment banking.
    - neilc 16y ago
      I know you're joking, but I don't see the moral concern about investment banking. You may not be making the world a better place (although that is very debatable), but you're not making it worse, either.

pmjoyce 16y ago

I've contracted exclusively for investment banks in London for the past 6 years (with the exception of a brief stint at the FSA). The reason I stick with it is the exact reason you specify: the money, or more accurately for me, what the money allows me to do. The majority of the developers I work with have painted themselves into a corner with the money they've made working at banks such that they have no other option but to keep working at banks to maintain the lifestyle they've come to take for granted. The money allowed them to buy large houses, nice cars and good things but it also means they'll have to face a significant downturn in lifestyle if they ever want to move to a different sector not to mind starting a startup. From the outset I was always conscious of not falling into the same subtle but dangerous trap. I'm not sure why, probably because I never felt 100% comfortable in a corporate environment and knew a some level that I didn't want to be trapped by it. The upshot is that we don't live a lavish lifestyle such that when the income is throttled down the adjustment isn't as severe. We don't own our house, we rent (we're actually quite nomadic so this decision is only partly financially related), no fancy car, we don't tend to spend money on fine dining and entertainment or a lot of the trappings that people often face. This has allowed me to make choices that were right for me like taking a full 3 months off on the birth of our first child and only going back to work (for an IB I contracted with previously) for 3 days per week for the subsequent 9 months. This really allowed us the time as a family to adjust to our new circumstances. It also allowed me to experiment with a few projects that had been on my mind for a while - nothing significant just the first dip of my toes into the world of startups. Since then we've had another child - again I was able to spend a lot of time with him. I've also been able to try out a few more projects which, although not successful, have allowed me to further experiment and find my feet conceiving and building products. As a result I'm now on the brink throwing myself full time into my own bootstrapped startup which is about to open to beta. So yes, while I agree that the money to be made from working in investment banks is great, I'd warn against getting too sucked in with the cash if you ever want to keep the door ajar for other things. Well done for making the jump into the startup world, it's a brave move I hope to join you soon. Don't pine for working at a bank, if you value creativity and and the opportunity to strike out on your own (which you clearly do), you've made the right choice whatever the outcome.

mvalle 16y ago

phony_identity 16y ago

But it pays cash and lots of it How much? Can you be more, uh, quantitative here?

swombat 16y ago
Starting salary for typical IT roles (dev, etc) are about £35-45k p.a. in London depending on how well you negotiate. That's straight out of uni. It goes up rapidly as you go up the ladder. Within a couple of years, if you do well, you should be up to £65k or so, and probably start getting a bonus on top of it too (probably about £10-20k or so in IT). It's not that unusual for the salary to go up by about £10k per year if you do very well, which isn't necessarily that hard, because there are a lot of blasé, bored people who don't have any energy anymore (the environment saps it out of you). If you're on the business side rather than IT, the equation changes dramatically upwards. I have a friend who's 5 years into a front office, commodities sales job, starting from the lowest possible rank, and who's now earning £150k per year plus bonus. She started on £30k because she really wanted the job - so her salary has gone up 500% in 5 years. That's not counting the bonus either. That's not fuck-you money. Few people earn that even at banks. But it is a very comfortable salary. It's cheap to get that salary, too. All you have to give up is your dreams. My friend who earns £150k hates her job, and used to tell me that every time I saw her.
- Silhouette 16y ago
  > It's cheap to get that salary, too. All you have to give up is your dreams. Don't forget the effect of compound interest: they want your soul as well, and you burn out more every year for as long as you stay. In my early career, a headhunter came after me to interview with his London bank client. I did a few quick sums at that point, and it's not nearly as attractive a package as it looks. I'm in Cambridge, UK, so we have quite a few guys around here who get approached by the big London banks or who choose to interview there; a few of my friends did. Without exception, the ones who took the jobs get up early, commute down on overcrowded trains, work long hours during the day itself, and then commute home on overcrowded trains. By the time they've done that, they are so tired that they often don't want to do much on weekday evenings any more. The only thing that might improve the situation is moving to London, but that pushes your cost of living way up. I don't earn as much money on my decent IT contracts as your £150k+bonus friend, and I've been working a bit longer. On the other hand, by the time you figure out an hourly rate including things like commuting time, I bet I'm not that far off. By the time you factor in the costs of commuting or getting London accommodation, I'm even closer. Oh, and I still have a life Monday-Friday. I can understand people who go straight into that kind of environment for a couple of years after university, when you're young enough to take it and you're basically making an investment of 2-3 years of having no life in exchange for more comfort for the rest of your life. But I can't understand why anyone would want to stay there for much longer, even with all the financial reward: money is only worth anything if you have time to enjoy spending it.

yummyfajitas 16y ago

They take their licks though. I was there when the LTCM fund collapsed and they lost $600M. Also when the Russian economy collapsed and they lost another $600M. Layoffs? Nah - business as usual. The finance industry doesn't need as many layoffs as other industries because they solved the stick wage problem.

erikpukinskis 16y ago
What's the stick wage problem?
- nostrademons 16y ago
  It's easy to raise wages when times are good, but it's hard to drop wages when times are bad, because it results in the whole office getting demoralized and productivity dropping. So companies will resort to laying people off entirely when revenues drop, because the morale hit from cutting people off entirely is less than the morale hit from dropping everyone's salary. Finance presumably solves this by paying out the majority of compensation in bonuses, which are explicitly tied to the firm's performance. If the company does well, you do well, if the company does poorly, you knew ahead of time that you'd be taking a haircut, so it doesn't feel as much like a broken promise as when wages are cut. They're not completely immune from layoffs though - when a firm goes under entirely, most of the employee base is let go by the acquirer. And financial firms tend to blow up completely more than other types of firms, because they operate with more leverage. That's why luxury businesses in NYC took a big hit this financial crisis.
  - silverlake 16y ago
    This is exactly right. Relative to 2007, my friend's 2008 income fell 40%. In 2009 it was 50% higher than 2007. Layoffs are less likely when wages are flexible.
    - borism 16y ago
      This is not unique to finance!

mattmaroon 16y ago

I don't think if I could live with myself if I worked at an investment bank. Most of what they do provides no benefit to humanity, in fact on the whole they're probably parasitic. Shuffling money around senselessly while taking a cut might be extremely profitable if you do enough of it, but it's just a drain on modern capitalism.

yummyfajitas 16y ago
Tell that to Southwest Airways. http://en.wikipedia.org/wiki/Southwest_Airlines#Hedging_fuel http://en.wikipedia.org/wiki/Southwest_Airlines#Hedging_fuel Shuffling money around is also useful for making public what would otherwise be private information. Greece can profess to the world how solvent they are, but the swap market tells a different story.
- mattmaroon 16y ago
  I said "most of what they do" rather than "all of what they do" because some of it coincidentally helps others. The ratio of parasitic behavior to useful is unfortunately growing, and hasn't stopped just because it caused an economic meltdown.
  - yummyfajitas 16y ago
    What specific behavior do you believe is parasitic?
  - dtby 16y ago
    I wonder how you square this with your past, as I understand, as an online poker pro? As a former professional poker player myself, it never would occur to me to denigrate the work of financiers or suggest that what they were doing was immoral. I was able to morally justify my occupation to myself.. and, as such, it is orders of magnitude easier to justify theirs.
    - richcollins 16y ago
      Online poker is a consentual exchange. Inflating the money supply and taking taxpayer bailouts is akin to coercive theft.

seldo 16y ago

It's worth pointing out that this is really only a viable career option if you are a straight, white, anglo-saxon male ready to work long hours, drink hard, and put up with a machismo-dominated culture. The financial sector and investment banking in particular, even in their tech departments, have the kind of corporate culture that sends me running.

pmjoyce 16y ago
I disagree somewhat although I am a contractor not a permanent employee seeking promotion so that might be the reason for the difference. I am straight and white but otherwise I don't fit what you describe. I arrive at 08:00 and leave at 16:30 sharp unless exceptional circumstances arise. I make it clear from the first day that I'm not there to socialise and I won't routinely work outside my contracted hours. My theory is I have the length of my first contract (usually 3 to 6 months) to prove that I'm worth sticking with in spite of not being the proverbial round peg. So far it's worked and I've always been extended multiple times at each institution. They eventually stop offering you out to get drunk if you're politely constant with your rejection - I do get a bit of a ribbing and feel pressure in this respect but it doesn't impact me. Currently my team is made up of 2x French men, 1x Nigerian man, 1x Indian Man and me (Irish man) the team leader is an English man so there certainly could and should be better female representation but that was also the case (but to a lesser extent) when I used to work in the telecoms sector. There is a lot of arrogance and machismo on display but it's less prevalent in the back office - certainly more than what I experienced in other sectors. It is hard to stomach though.
- seldo 16y ago
  So by "better female representation" you mean "less than 100% male". And the team is 50% white, and 100% straight (I assume you'd have mentioned otherwise). And you admit they pressure you to drink with them. So it sounds like you agree with almost everything I said about the makeup of the workforce at these places.
erikpukinskis 16y ago
If I could I would mod this up like 50 times.