30. 3rd Year

30. 3rd Year

As an investment banking analyst I signed a 2 year contract. I am able to break the contract before the time is up, and as a few of my friends have come to learn, the firm is able to terminate the contract early as well. So, what to do after your two years in banking are up (if you are not laid off before)? The opportunities are endless. The classic routes are hedge funds and Private Equity. These paths are both the roads more traveled, and allow analysts to continue on the paths of finance and “get rich quick.” Another route involves staying with your investment banking firm in some capacity, whether it be to continue as a whipping boy, or move to some other, less painful for your rear, position within the firm. And, if you want to go nuts, you can do something completely different than these three paths, but that would imply some extra effort and veering from the set paths, so let’s play it safe.

The craze about a third year begins in January of the first year of being an analyst. It is completely crazy and as they like to say, “it happens earlier every year.” Well this year, after the New Year struck we were off to the races. Unlike years past where everyone was putting on the PE or hedge fund hat, people have legitimately been considering staying put. If you are an analyst at a bulge bracket bank, it is definitely the safest place to be, and if you are one of the ones laid off you get a pretty sweet severance package of a few months salary and a bonus. Not too shabby, especially if you can manage to find a new job within a few months time. There are also those who consider a third year somewhere at the bank because they may have not been a true, hardcore investment banker, but instead wallowed their days away in capital markets, sales & trading, or a smaller, less baller firm. The headhunters don’t actually knock down the doors for these folks, so they are “lucky” enough to be able to learn more about the wonderful world of investment banking. Woo hoo!

As the end of the first year for some analysts approaches, and the exit door for some second year analysts draws near, we all converse about what each other’s plan is for the third year. It’s the hot gossip on the street and will change the marketplace for the coming year. If more analysts stay put, investment banks can hire less in the coming year and continue their cost cutting affair. This will mean a shortage of talent for the hedge funds and PE shops, but who really cares since half of them will go under in this bear market anyways. The real warriors of this game are the ones who step out of the box and shoot for the stars. Just because you went to an ivy league school, got to choose between consulting and i-banking, and can now choose between hedge funds, private equity, and more i-banking, does not mean you have to continue to follow this path. Break the mold! There is more out there, it just requires some effort. These high paying, high hour jobs come calling for the top students because they know these kids are smart and willing to put in the hours. But what if we are smart enough to know that we can earn a little less money for a lot less hours, thus increasing our happiness and maybe only slightly decreasing our pay per hour? Sounds like a great deal to me! So be a rebel and go for the gold (Yes the Olympics are coming up).