Sunday, April 29, 2012

Can’t Buy Me Love

Say you don’t need no diamond ring
And I’ll be satisfied
Tell me that you want the kind of things
That money just can’t buy
I don’t care too much for money
Money can’t buy me love

— The Beatles, Can’t Buy Me Love (1964)

The best things in life are free
But you can keep ’em for the birds and bees
Now give me money (that’s what I want)
That’s what I want (that’s what I want)
That’s what I want (that’s what I want)
That’s what I want

Your lovin’ gives me a thrill
But your lovin’ don’t pay my bills
Now give me money (that’s what I want)
That’s what I want (that’s what I want)
That’s what I want (that’s what I want)
That’s what I want

Money don’t get everything, it’s true
What it don’t get, I can’t use

— The Beatles, Money (That’s What I Want) (1963)

Peter Thal Larsen called my attention this morning to a rather remarkable document published on Wall Street Oasis, a website which doubles as the virtual water cooler for junior professionals in my industry. The usual stock-in-trade there are articles which ask for and share advice, peer-to-peer, about jobs, banks, getting into the investment banking industry, and the like. As one might suspect for a website dominated by ambitious, competitive twenty-something males, in addition to genuine empathy and assistance the comment stream is shot through with boasting, insults, and other forms of social signaling common to communities overrun with testosterone and immaturity.

Hence the piece which Stephen Ridley (aka “anonymousman”) penned about his recent decision to leave investment banking for the life of an itinerant musician is remarkable for its candor. His assessment of the life of an investment banking analyst and his environment is unsparing, and spot-on:

Banking is fucking brutal. I knew this after my internship, but I didn’t care. I wanted money. I wanted respect. I wanted to be a somebody in the eyes of myself and others. But most of all, I wanted money. Why? Because money is freedom. Money means I can wear what I want, live where I want, go where I want, eat what I want, be who I want. Money would make me happy. Right? Well... not exactly I’m afraid. In fact, money didn’t seem to make any of the bankers happy. Not one person in the roughly 200 I got to know in banking were happy. Yet all earned multiples of the national average salary.

The reality of banking is this. Like everyone there, I worked my ass to the bone, working mind numbingly boring work. My life was emails, excel, powerpoint, meetings, endless drafts and markups about shit I couldn’t give less of a fuck about, edits, drafts, edits, drafts, edits, send to printers, pick up, courier, meetings, more work, multitasking, boredom, boredom, tired, boredom, avoiding the staffer on a friday, more work, depression, tired, tired, tired, fucking miserable. 15 hour days were a minimum, 16-17 were normal, 20+ were frequent and once or twice a month there would be the dreaded all nighter. I worked around 2 out of every 4 weekends in some form. I was never free, I always had my blackberry with me, and thus I could never truly [detach] myself from the job. These are the objective facts, contrary to what any “baller” wants to tell you. The only models were excel models, the only bottles were coca cola, which I drank a lot of to stay awake.

Stephen’s tale of woe is the norm among recent graduates who have landed coveted jobs on the corporate finance and M&A side of my industry. Sure, everybody I interview at university who is desperate for a position “knows,” in an intellectual sense, that investment banking is hard work, that it’s not really glamorous at entry levels (although they secretly hope it gets so higher up), and that the hours are punishing. But almost none of these bright, shiny-faced children has any clue how the routine, boredom, and isolation of the job can drain the life and happiness out of your early twenties, just when most of them expect to expand into their roles as newly independent adults in the “real world.” Nobody really groks the fact that spending 15–20 hours in the office, seven days a week, for months on end crushes your social life, alienates your friends, and ruins your love life or the chance to find someone new. No-one predicts they will get fat, unhealthy, pasty-faced, and cranky, or that these characteristics will undermine the supposed social attractiveness of a prestigious job and surplus spending money. These are life lessons you just can’t teach; they must be lived.

Besides, we on the other side of the hiring table have no incentive to describe the size and caliber of the cannons facing our prospective fodder. We need bodies.

* * *

Mr. Ridley’s motivation to get into the industry is not unusual, either. Few people I know, including first-year analysts, come into investment banking with the (honest) expectation and desire to make a lifelong career out of it, no matter what they tell their interviewers. They think they will trade their time and freedom for a few years for money, money which can buy them the freedom to buy, have, or do other things later. But forget the (an)hedonic treadmill: it turns out that no money is ever enough. You almost never “strike it rich” in my business. You often make lots of money, but unless you are a solitary, unmarried, childless hermit who thrives on macaroni and cheese and tap water, you soon find that those mouthwatering bonus checks disappear frighteningly quickly into the maw of a life of comfort. You buy a house, you get married, and you have children who simply must have expensive private educations (and expensive private tutors to help them get good grades). You indulge in a couple nice vacations every year “because you deserve it” for working so hard, and because you realize you need to spend more time with the increasingly distant spouse and children you never see the rest of the year. Of course the quality (and expense) of your clothes, food, and petty indulgences drift ever upward too. Because, well, they do, don’t they? Also, you simply cannot be seen not to keep up appearances with your peers and your social equals, can you? If not for yourself, think of the children. You want to give them every advantage, don’t you? Of course you do.

And if you live in one of the few ridiculously expensive global cities like London and New York where most of the investment banking jobs are located, the basic cost of living to maintain a comfortable but not lavish lifestyle escalates alarmingly alongside your earnings, until the thought of spending $500,000 (after tax) per year just to live becomes unremarkable, even conservative. There’s always somebody you know who enjoys a better apartment, a nicer vacation, a grander country house; you’re not being unreasonable. Talk about “a cage made of money and dreams and greed.” It starts early, and the bars only get thicker with time. Trust me on this.

Meanwhile, the longer you stay in investment banking, the more dependent you become on the income which, while never seeming enough, is clearly superior to what you could earn in any other profession. And, as Mr. Ridley discovered on the lower rungs of the career ladder, lower-paying professions are not immune to boredom, drab routine, or even crushing work schedules. The higher up you get as a corporate finance or M&A professional, the more you see of the grey flannel life of non-financial corporations. It ain’t pretty. Your clients’ cages have bars just as thick as yours, with only perhaps a little less gilding. No wonder Mr. Ridley could see no-one above him at his bank who seemed other than “sad middle class bland people, with unexciting lives, and unexciting prospects” or “pathetic old farts.” For most of us, there’s no way out.

There is a reason investment bankers nickname the nest egg they calculate they need to leave the business “Fuck You Money.” Spend a few decades rolling that boulder up the hill, and all most of us have left is hostility.

* * *

And yet, as I regale you with this litany of woe (to the tune of an orchestra of thousands of tiny violins, no doubt), it occurs to me that this situation is not much different than the situation most people face in their lives. Perhaps investment bankers have more money, and nicer toys, but it is not clear that our quiet desperation is much different from yours. People who have to work for a living, whatever their profession, have to work. And, as my old grandpapa told me, the reason they call it work is because no-one could mistake it for play. I suppose the envious can take comfort that my industry will likely suffer severe secular decline for many years. By the end of it, our calculus of misery may look very similar to yours.

But whatever your chosen path, Children, don’t buy the old canard that money buys you freedom. Money always comes with strings attached. If you are not careful, you just might find those strings have wound themselves into steel cables before you notice.

© 2012 The Epicurean Dealmaker. All rights reserved.