When you’re a junior banker on Wall Street, you’re expected to learn a lot — what a “discounted cash flow model” is, and how to use an Excel macro. That when you order a “Bear Fight” at a bar in Murray Hill, you get an Irish Car Bomb, followed by a Jäger Bomb. And, perhaps most importantly, you learn your place in the pecking order.
Wall Street has always been obsessed with status and hierarchy. Dare to break rank? You might as well set your boss’ Hermès tie on fire. In 2012, when a disgruntled Goldman Sachs employee named Greg Smith exploded his career with a tell-all op-ed, in which he called the bank’s culture “toxic and destructive,” many Wall Streeters reacted by mocking the fact that, at age 33, Smith had only made it to vice president.
“Everyone’s always measuring their d – – ks,” one young financier explains. “If I’m a Goldman banker, I go up to a McKinsey consultant and I’m like, ‘My d – – k’s bigger than yours.’ ” The Goldman banker is then scoffed at by a Blackstone analyst, who in turn gets reamed by a Greenlight Capital portfolio manager.
During the three years I spent interviewing young Wall Street workers for my new book, “Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits,” I saw fresh-faced recruits get taught where to live, how to dress, what to do after work and how to impress their superiors and move up the ladder.
The typical Wall Street food chain starts with interns, then moves up to analysts, associates, vice presidents, managing directors, partners and executives. “Front-office” investment bankers sit higher on the totem pole than “middle-office” compliance officers or “back-office” IT workers. And private equity and hedge fund workers command more respect (and money) than regular investment bankers.
The financial crisis of 2008 mixed things up a bit — for a few years, back-office workers were being promoted while front-office workers were being laid off. But now, five years later, the caste system has returned to normal — though, for junior bankers, some of the allure has faded due to shrinking bonuses and prestige. Some young guns came into the industry expecting Champagne and caviar but got Adderall and all-nighters instead. Here is what awaits them at every step:
Summer Analyst
Age: 21
Makes: About $15,000 for 10 weeks
Works: 70 hours a week, but tells college friends he works 100
Lives in: Company-provided housing
Wears: An off-the-rack Men’s Wearhouse suit bought for his high-school prom, coupled with a too-wide “power tie” and square-toed shoes (men), or a sensible shift dress with a J.Crew cardigan for when the air conditioning is set too high (women)
Plays at: Bank-sponsored cocktail parties
Status symbol: Being invited out to “Bro-J’s” (Brother Jimmy’s) with the first-year analysts
Biggest fear: Accidentally cc’ing the managing director on a recap of a drunken night
Spends Saturday night: Memorizing lines from “Wall Street: Money Never Sleeps”
Says things like: “Traders are probably the coolest people you’ll ever meet!”
Most bankers and traders start out as summer analysts — or, as everyone other than the HR department calls them, interns. Interns are a generally hapless bunch, having been enticed during their junior year of college by recruiters’ promises of “real-world responsibility” and a “collaborative work environment.” Quickly, they learn that they are simply grist for Wall Street’s labor mill. (Or, as some banks call their employees, “human capital.”) They’re also prone to make dumb mistakes — one intern at a major bank showed up for the first day of work in a houndstooth blazer with a black turtleneck underneath, the equivalent of tattooing “Don’t Hire Me” on his forehead.
Before the crash, being an intern was mainly a 10-week charm contest. Now, with smaller head counts at big banks, many interns are expected to do actual work. “The last two days, I’ve been here until 3 a.m.,” one summer intern complained to me in 2011.
Even though the percentage of graduates going into finance from Ivy League schools has dropped since the crash, it’s still not easy to get an internship on Wall Street. (17,000 people applied for 350 spots in Goldman Sachs’ summer analyst program last year.) But if you can beat the odds and make it to the junior-year internship, you’re much more likely to land a full-time offer than a senior who’s coming in cold.
Analyst
Age: 22 to 23
Makes: $90,000 to $140,000
Works: 100 to 110 hours a week
Lives in: Murray Hill, in a high-rise with three roommates and zero furniture
Wears: Tailored suits from Brooks Brothers (men) or Theory (women), dry-cleaned infrequently and accessorized with looks of perpetual exhaustion
Plays at: “J-Tree” (Joshua Tree), Tonic, 230 Fifth
Status symbol: Working the “banker nine-to-five” (9 a.m. until 5 a.m. the next day)
Biggest fear: Falling asleep during a client meeting
Spends Saturday night: At the office, wearily looking up college classmates who have sold their tech startups for millions of dollars while waiting for a pitch book to finish printing
Says things like: “Banking is the best thing you never want to do again.”
Interns who make a good impression are invited to become full-time analysts. They’re tested on their financial skills, as well as their ability to pass the “airport test” — basically, being likable enough that if a senior banker were stuck in an airport with them for a day, he wouldn’t want to wring their necks. If they make the cut, banking analysts spend two years after college plugging away at spreadsheets and making dense, boring pitch books for clients who may never read them. They serve at the mercy of their bosses, who can call on them at any moment. And although they make good money, they eventually start feeling entitled to more: “Last year, some first-year bonuses were about $20,000 after tax,” one first-year banker complains. “That’s an insulting number.”
Over the course of their two-year stints, analysts start to change. They learn to pronounce “finance” like a real banker. (“Fin- ANCE,” not “FI-nance.”) They gain weight from too many Seamless meals eaten at their desks, and they start speaking in business school jargon. They grow apart from their non-finance friends.
“I’m an optimistic, positive, happy person,” says a first-year analyst. “But I feel myself becoming a lot more bitter.”
Analysts generally have two years to prove their worth on the open market. But if they don’t land a position in private equity, they may have to settle for less prestigious jobs — or even return to school in the hopes of eventually moving up the ladder.
Buy-Side Analyst
Age: 24 to 26
Makes: $150,000 to $250,000+
Works: 80 hours a week
Lives in: Soho
Wears: Made-to-measure Paul Stuart suits and Turnbull & Asser shirts (men), Diane von Furstenberg dresses and Chanel flats (women, both private equity); Zegna blazer and raw-denim jeans with Ferragamo loafers (hedge fund)
Plays at: Avenue, Southside, Hamptons house parties
Status symbol: Panerai watch (men) or Birkin bag (women)
Biggest fear: Being recognized on Tinder by a co-worker
Spends Saturday night: Buying shots for everyone
Says things like: “I could be working in the Peace Corps, and I chose not to, because for natural, selfish reasons I’m maximizing my own utility like any other person does.”
For those who make it through the two-year analyst gantlet and want to keep working in finance, the next step is often applying for jobs on the “buy side” — normally a private equity firm or a hedge fund. Buy siders are more elite than their banking brethren, and landing a job on the buy side after banking is the equivalent of getting drafted by the NFL from a Division I college. “The private equity recruiting process is where a lot of really accomplished people deal with failure for the first time,” one former bank analyst explains to me. “You take a kid who was summa cum laude at Yale, get him a job at Goldman, then put him through private equity recruiting, and you see what he’s made of.”
To make it to the buy side, analysts have to compete not only with their direct co-workers, but also with every other hard-nosed youngster on Wall Street. The pressure is intense, and the payoffs can be huge for the winners. “I heard one guy in my group already has three offers,” one jealous analyst said during recruiting season. “I’m kind of freaking out.”
But if they nail the application, ace the interview and make it to the greener pastures of the buy side, analysts are nearly guaranteed a bigger paycheck and more lucrative opportunities. They go from being worker bees to joining the cream of the crop, and once they’re in, they can often become Masters of the Universe simply by hanging on, avoiding mistakes and burnout, and continuing the ride up the golden escalator.
“Here I am on this path,” one private equity analyst says. “And if I don’t f – – k it up, I’ll be wealthy.”
Finance Dropout
Age: 24 to 26
Makes: $50,000, plus stock options
Works: In tech, probably
Lives: Williamsburg
Wears: Warby Parker glasses, plaid shirt, American Apparel hoodie
Plays at: Ace Hotel, Rose Bar
Status symbol: Getting retweeted by a TechCrunch blogger
Biggest fear: Not getting venture capital
Spends Saturday night: Drinking with jealous ex-colleagues who want advice on making the jump out of finance
Says things like: “Free at last, free at last, thank God almighty, I’m free at last.”
Wall Street isn’t a good fit for every young gun. Some bankers get jealous of their peers in tech — who can make similar amounts of money, get more flexibility in their schedules, and are allowed to wear jeans to work — and set off for Silicon Valley. Others simply hate the finance lifestyle, or feel moral qualms about working in such a cutthroat industry. And others get laid off, or don’t get offers for their third year.
Whatever the cause, it’s no longer the case that the only young bankers who leave their jobs are the ones who can’t hack it. “People are saying, ‘I don’t need to sacrifice 20 years of my life to get where I want to be,’ ” says Trevor Nelson, a former banker and instructor at Training the Street.
Before the crash, dropping out of finance was considered giving up on success. But these days, the dropouts are the ones declaring victory.
“I basically didn’t have time to talk to people for two years,” one former analyst reflects. “I felt antsy or guilty whenever I took any time off. And frankly, some of my friends were making the same exact amount of money I was in other industries. So a lot of nights, I sat there in the office trying to rationalize why I possibly decided to subject myself to this.”
“After a certain point in banking, things become extremely repetitive,” says one ex-banker working in Silicon Valley. “Most of my analyst friends were pretty jealous that I moved.”
Photographer: Rene Cervantes; Stylist: Mindy Saad; Grooming: T. Cooper; Models: Brett Ferguson, Chase Conner, Madison Hatch and Tanner Sarff from CESD Models