How to Make Sure You're Earning the Right Amount of Money as an Investment Banker
Investment bankers work with money; they take money from their clients and invest it in companies and stocks that they feel will result in big returns. They do lots of research, must justify their choices to both client and employer and try to build a great reputation of being successful. Bonuses and commissions that investment bankers earn from successful investing makes the difference between highly paid investment bankers and those in the median range.
Just because the career choice involves money, does not necessarily mean that entry level bankers will be highly paid. The chart below shows the low-end, average and high-end salary for entry-level investment banking positions in London (all in GBP):
Investment banking analyst: 14,000 45,000 65,000
Those with MBAs can 'leapfrog' the three years of being an analyst and begin as an associate, resulting in higher salaries:
Investment banking associate: 20,000 70,000 150,000
Salaries in investment banking are result-fuelled. Millions can be made for the top investment bankers in high-profile firms in places such as London, New York, Paris and Frankfurt.
Summer interns in the banking business can afford to work in London by staying at university dorms to save housing money, and by only working three months will qualify for tax refunds. An average pay for three months is approximately GBP 1,200. However, after graduation, a young, single person could probably do best in compensation by avoiding the large cities of London and New York and trying for a start up position either in Texas in the US or overseas in Dubai, Saudi Arabia or Hong Kong. The larger the firm, the better for earning money; and although larger cities may be the most expensive to live in, they offer the best options for networking and future compensation.
Until one has established a good reputation and client base, saving money on a regular basis after expenses and taxes will be hard. Fortunately, investment bankers earn yearly bonuses that can be put into savings in one lump. In the US, in the past years, top investment firms like Morgan Stanley, Goldman Sachs and JP Morgan Chase have all tightened belts by cutting jobs and/or compensation. Of the three giants, only Morgan Stanley managed to show an increase to their employees of 6%.
In summary, for one to be sure that they are making the most of their career as an investment banker, several things come to mind. It takes a particular type of individual to do well in this field and one must always be in the right place at the right time. A top of the line investment banker who will reap the richest rewards and live the best lifestyle will possess all or at least the majority of these characteristics:
- Willing and able to work hard with long unpredictable hours.
- Able to withstand high stress levels, while at the same time keeping exceptional mental stamina and emotional durability.
- Have high energy, enthusiasm and be extremely pro-active; not only adaptable to long hours but can make quick accurate decisions.
- Extremely focused on personal career goals and succeeding in all efforts to please clients.
- Highly intelligent with degrees from the best colleges and universities such as Oxford, Cambridge, Harvard or Stanford.
- Be extremely observant, analytic, personable, strong in mathematical skills, have good business intuitions and have a cool temper.
That said, the successful investment banker who meets these qualifications will enjoy an exceptional life style, be able to own many material things and travel the world if they wish. Fat cheques and monetary bonuses are at the proverbial end of the rainbow for financial wizards. It is well worth a young person's sacrifices in the early years to obtain the educational requirements needed and to put off personal pleasures for the sake of building a sound base for a career in investment banking if that is their desire.
Related: JPMorgan and Goldman Sachs Pay Better than European Rivals
Emolument provides bonus and salary statistics based on data submitted directly by professionals like you. It is free, anonymous, and already a trusted tool for thousands of professionals worldwide. Are you paid enough? Click here to find out now.
Are you an employer?
Hire and retain the best talent with accurate and reliable dataBenchmark Your Teams
Know what you're worth
Compare your compensation with peers in your industry