If You Don’t Get Into Investment Banking, Should You Become a Ski Bum Instead?
“I was speaking with a partner at a private equity firm recently and brought up how bad the market is. He sympathized with me and told me to take a year off and become a ski bum, then re-apply next year when hiring improves.
Do you think this is a good idea?”
With all that has happened over the past year and past few weeks, the thought of becoming a ski bum is quite tempting.
And there’s some truth to what the PE partner expressed here: it is worse to waste time with a dead-end job rather than taking a year off.
But should you become a ski bum?
The Gap Year
In many parts of the world it’s acceptable and even customary to take a year off in between graduation and the start of the “real world.”
This is known as the “gap year.” And if you backpack through Europe or Asia, you’ll find many students in the middle of their gap years.
Even in the US, it’s not uncommon to take a year off and travel after graduation. It’s just that you reduce your chances of getting into competitive fields like finance and consulting by doing so, which is why most prospective bankers rarely consider it.
Toys “R” Us or Tropical Beaches
If it comes down to working at Toys “R” Us or sitting on tropical beaches, the Caribbean is looking pretty good this time of year.
Taking a retail job will make it far more difficult to get into finance (or consulting/private equity/hedge funds) than a year of skiing in the Alps would.
But I suspect most people are not faced with this choice.
Most will choose between going into accounting (or IT consulting or customer support…) or taking a year off and trying for finance recruiting again next year.
So if you’re deciding between PricewaterhouseCoopers or Phuket, what should you choose?
The risk you take by going to an accounting-esque job is that it becomes more difficult to tell a convincing story about how you really wanted to do investment banking all along.
And it’s definitely harder to break in when you’re a few years out and already working compared to when you’re still in school – whether that’s university or business school.
If you take a year off, the key risk is that the market does not improve at all – or gets worse – and you “waste” a year in the process (although how anyone could consider sitting on tropical beaches being spoon-fed chocolate-covered strawberries a “waste” is beyond me).
The other risk is that if you’re at a “target” school (whether for your MBA or undergraduate program), you lose your window of opportunity for on-campus recruiting.
So will the market be better or worse in a year?
If I had to guess, I would say “the same or worse.” I don’t think we’ve hit the bottom yet, although it may be within sight.
Even if things do improve, we’re missing a few banks now… so bulge bracket recruiting won’t return to 2004-2006 levels anytime soon.
And while boutique and middle-market firms have been affected by the apocalypse, they are still hiring and even if the market “heats up” they’re not going to go on a recruiting spree and pick up hundreds of laid-off bankers.
Ski Bum or… Nothing?
I don’t think you should take year off unless you are faced with a “Toys “R” Us or Tropical Beaches” choice.
Taking a standard corporate job is not going to help you much, but if the hiring market does not improve, you’ll be in an even worse position a year from now.
But that brings up another question: are those the only options?
No, Of Course Not
The best alternative may be to think outside the box and do something different from either a vacation or a standard job.
One example: There are a lot of fellowships that look far better than spending a year as a ski bum.
Distressed with the credit crunch and prospects of lower bonuses?
Go apply for a Fulbright Scholarship to study “the impact of financial market turmoil on emerging economies.”
Sure, you still take the risk of the market not improving at all, but at least if you go down this path you could get an awesome experience that looks great on your resume.
And you improve your chances of getting into any industry – finance included.
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