by Brian DeChesare Comments (46)

How to Achieve an 8-Figure Net Worth, Banking in Asia vs. NY, Business School, and More Questions… and Answers

In this edition of New Year’s Q&A, we cover everything from the ever-persistent questions on pay and fashion to banking in different regions, business school, different strategies for breaking in, and even some more questions on the new interview guide.

Some of the interviews and other content planned for 2009 will address these questions in more detail, but hey, why not get started early and kick off the New Year with a bang?

Pay & Fashion

I’ve already said I don’t have a crystal ball, but that doesn’t stop readers from thinking I can predict the future when it comes to bonuses… and somehow I’m a fashion expert now?

1. I just graduated from my college. I would like to own my own mansion in downtown Manhattan, and have a net worth of at least 8 figures by the time I am 30. Is it better to join an existing finance firm to do this, or should I start a fund or business on my own?

You stand to make a lot more money when you own an equity stake in something, whether it’s an investment or your own business. Just be aware that if you want to start a hedge fund or other investment firm one day, you’ll need a track record so that you can actually raise capital.

I would work somewhere for a year or two, use that to build a track record and develop relationships, and take it from there.

It’s very difficult to be worth $10 million+ within 8 years if you work for someone else so keep that in mind as well.

2. What do you think bonuses will be this year? Some people are speculating it will be $0 across all levels – could that happen?

Without having done any of the necessary research yet as I did for 2008, I would say that’s unlikely.

This is all based on intuition, but I think 2001-2003 levels are the more likely scenario – so maybe $10K-$20K range for 1st Year Analysts?

It might actually be a bit higher than that, but a steep drop from 2008 bonuses seems likely.

3. I have a summer internship lined up at a bulge bracket bank – should I spend $500+ on shoes?

I think that’s a bit too much to spend on shoes, especially these days with lots of sales and clearance events. You can find good shoes for way cheaper than that at outlets.

4. What do you think of brown suits? Can I wear them or should I stick to traditional colors?

Personally I’m not a fan – I would stick with charcoal, grey, and navy blue instead. But if they look fine on you, go ahead I suppose.

5. Do you think it’s better to wear white shirts with conservative colored ties, or should I go for more creative combinations, like red shirts with maroon ties?

I would never wear a red shirt with a maroon tie. I mostly wore white and blue shirts of different shades, and if I had to wear a suit the tie was also be conservative.

Note: I addressed many common fashion questions a long time ago in an article on the basics of men’s wardrobe. You may want to consult that before asking your fashion-related questions.

Investment Banking in Different Regions

As I mentioned, this is one question we’ll be addressing in more detail in 2009. With the way the market is these days, going elsewhere to work is something everyone has to think about.

6. What do you think about going to the Middle East / Dubai vs. Asia for banking? I’m trying to decide which region to focus on right now.

Although Dubai is traditionally thought of as a “hot region,” keep in mind that it has been hurting lately with oil and real estate prices falling. Everywhere in the world has been affected by the crisis, but Asia is a bit better diversified so I would definitely think about that as well.

7. What are the differences between working in Hong Kong and New York?

I’ll address this one in more detail in the coming weeks, but the basic difference is that HK is more about mainland Chinese companies while New York is more general. Also, HK is more focused on capital raises (IPOs and debt) since M&A is not as developed in the region.

For more on pay, culture, and other differences, stay tuned…

To MBA or Not to MBA

With the current state of the economy, going to business school may be on your mind. The best reason to go is if you need to re-brand yourself because you’re changing careers – so make sure you’re not going just to time the market.

8. I’ve been in retail banking for the past 5 years, went to a non-target school, had poor grades, and have missed recruiting for this year – should I go back to business school?

Yes, and make sure you get into a top program or else it will be a waste.

9. I’ve been a professional athlete off and on for the past 2 years, in between doing a few finance internships – do I need to go to business school to have a shot at getting in?

If you’ve been out of school for 2 years or less, not necessarily – especially if you’ve had finance internships in the meantime. I would continue to network your way in.

Breaking Into the Industry

With today’s market, some aspiring financiers are using some unconventional methods for getting in – from jumping into PE “early” to delaying graduation dates.

10. If I didn’t get a full-time offer this time around, should I delay my graduation by a semester or a year and go for summer recruiting again?

You could do this, but you need to have a good story about why you’re doing it – “to improve my chances of getting a job” will not work well.

11. Should I apply to multiple groups at a bank to maximize my chances?

In general this is a bad idea because you seem unfocused. Applying to banking, sales & trading, and wealth management, for example, makes it seem like you don’t know what you want.

It might be ok to apply to 2 different industry groups within banking, for example, but I would try to focus in on one.

12. How can I get a private equity internship as an undergraduate? Would that give me an advantage over anyone?

You’ll have to do a lot of networking and get lucky, because most firms (a few exceptions aside) do not do on-campus recruiting.

It’s definitely an advantage, but wouldn’t help you much more than doing a banking internship.

13. Help! I only have an offer at a local boutique, but I’m afraid to take it because it will hurt me in the long-run. What should I do?

Would you rather be unemployed and watching CNBC all day? Take the offer, be glad you have it, and stop complaining.

Interviews & Interview Guide

With summer recruiting coming up, questions continue to come in both on interviews in general and the recently released guide.

14. For the “biggest weakness” question, can I say “lack of banking experience?”

This is not the best answer, but it’s better than saying, “I WORK TOO HARD!” or something else that’s really stupid. I would still try to find more of a “real” weakness that isn’t too serious and show how you’ve improved on it.

15. Do I need to know what LIBOR and the different market indices are at before my interviews? Is that something they’ll ask me?

I think these types of questions are stupid, but some interviewers like to ask them. I’d have at least a general idea of what LIBOR and major indices in your region (for the US, S&P 500, Nasdaq, and Dow Jones) are at.

16. You say in your guide that you can’t have negative equity, but someone told me you can have negative equity in an LBO – how does that work?

There is a difference between equity value and shareholders’ equity. Equity value means market capitalization – share price * shares outstanding – and cannot be negative because you can’t have negative shares and you can’t have negative share prices.

Shareholders’ equity, however, is a paper value and can turn negative following net losses or a dividend recap, for example.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Does my undergrad gpa matter if I am currently in a top MBA and trying to apply for an IB position?

    1. M&I - Nicole

      Not as much I believe. Your work experience and current MBA matter most

  2. hi, I have a question about MBA and promotion.

    If I become an IB analyst out of undergrad school do I have to leave after 2-3 years and get my MBA or is that just what some people do?
    Can I get promoted to associate then Vp without an MBA?
    Can i move up the ladder the same as someone who left and got their MBA?
    is there any point of getting an MBA if i am already in the industry?

    1. M&I - Nicole

      – Some people do that not everyone has to do that
      – Yes you can
      – Yes you can
      – Not really unless you want to do something else, advance to senior management level, retool yourself, got let go

  3. Is the University Of Florida a bad college to go to if I am trying to be an Investment Banker? What College in Florida do you suggest is the best?

    1. Forgot to say that I am an undergraduate in my sophomore year

      1. M&I - Nicole

        To increase your chances, you can always transfer to a target school.

    2. M&I - Nicole

      I know one person from UF who got into banking. It isn’t a target school, that’s all I can say. I think its probably one of the best in Florida though I may be wrong.

  4. Victor Mikhailovsky

    My name is Victor Mikhailovsky. Currently I’m 17 years old, and love finiance. Ever since I was 13, I read about economics from great books like Economics in One Lesson by Henry Hazzlit, to Adam Smith’s Wealth of Nation to gain a world view on government and economic issues. For the past 2 1/2 years I have helped my folks trade equities on the market on a daily basis. I currently wake up at 3:30 am and do research for upcoming trading day till 7:00 , when I have to attend High School. I short and long equites on a day, week, and month basis. Also, I’m studying for my FINRA exams, series 7 and 63 to help me trade securities across state lines for clients elsewhere around the USA. I kow, it may be odd or weird that I’m I. This stuff, it told myself at a young age, Why Not? …. Yes I guess I have no life since I do this day and night and balance this with a online radio show and Best Buy job, but like you say, hard work is everything. But since I got that off my chest, I would like to know I’m on the right track to let’s say becoming a part of a asset management,p group, hedge fund etc….? I know, this is a lot, I really appreciate you answering, I typed this all at 10:00pm, got to get sleep or ill go nuts. Thanks for responding ahead of time!

    1. Victor Mikhailovsky

      Typing off an iPhone is not easy :)

    2. Sure, but it’s very dependent on the type of university you can get into… you need to get into the best school possible to have a good shot.

  5. I recently graduated and am working as a Finacial representative for Northwestern Mutual. Do you feel this is a good place to gain experience for a year and use it as a bridge to private equity?

    1. No, because you don’t work on transactions at all there. IB/PE –> PE.

  6. hello,

    I am a Taiwanese-American at my final year in a udnergrad business school. I want to do sales and trading or banking, and seeing as the american economy is very weak, I am thinking about working in Asia for a year or two. My mandarin is okay at best, but I know for cities like Hong Kong english will suffice. I know Hong Kong is a major business hub but I would like to know if there is any major difference in culture, pay, hours, lifestyle, visas, employment papers and laws, that I don’t know about that would be crucial in my decision in working abroad. Being an asian american, I’m fascinated by business in Asia and would love to work abroad for a while.

    Another question I have is about my GPA. It is low by IB standards, but my university is the second most deflated school on the east coast where the average GPA is just a 3.0. Do Banks see this or do they just look at it as a nominal value.

    I realize this is a lot but it would be tremendously helpful in helping me make a career decision. Thanks.

    1. They may take it into account but 3.0 is still quite low for finance so you will have to network a lot.

      1. Sorry I think I was unclear about the GPA thing, my GPA is higher than a 3.0 but not where it should be for banking. The average GPA at my school is a 3.0 which is very low, just wondering if banks would factor that in since some Ivys have an average GPA of 3.6.

        Thanks

        1. They may but again 3.5 is the usual cut-off, or at least the point below which it’s harder to get noticed via normal recruiting.

  7. 8. I’ve been in retail banking for the past 5 years, went to a non-target school, had poor grades, and have missed recruiting for this year – should I go back to business school?

    Yes, and make sure you get into a top program or else it will be a waste.

    What schools do you consider top programs? I know I can look up US News and World Report, but what is your cutoff? Is Finance the best choice while at Grad School?

    1. At most MBA programs major is irrelevant, it’s just about the brand name of the school. The top programs in the US are HSW, after that you see recruiting at others in the top 10 but it varies more by school; internationally INSEAD and LBS are probably the best http://rankings.ft.com/businessschoolrankings/global-mba-rankings On that list once you go beyond the top 30-35 or so at least in the US the recruiting isn’t as good

  8. I had a question regarding slacks. What’s your take on Khakis? On other posts, including a blog from leveraged sell out, it seems that Khakis are despised.

    1. Definitely do not wear them for interviews and do not wear them on the job unless you somehow have an extremely relaxed office

  9. Misshighnetworth

    When asked what stocks do you follow/buy/pitch me a stock…what three stocks would you talk about. In other words, what three stocks would you suggest I follow to prepare for an interview

    1. Pick uncommon stocks… not companies everyone has heard of. And make sure you know basic financial metrics, something about competitive advantage, etc. when presenting your case.

  10. Hi Inquisitor,

    Great site!

    At what stage would you consider it too late to shoot for an Analyst program (1,2,3 years after graduation?). If you have to resort to working in an unrelated industry, would you still be continually going for an Analyst spot after a few years, or cut your loss and aim for Business school and then look for an Associate role?

    Thanks!

    1. 3 years is probably too late i would try to do it before then. If you can’t get in by then I would go to business school instead.

  11. Constance

    Hi Inquisitor!
    I just turned in my app to GS, MS for summer internship. But I have a really low GPA (2.9)because I screwed up one semester in my sophomore yr and I am an intl student, athlete and involved in many extracurricular activities. So when I applied, I chose not to imply my GPA(which is disclosure). I don’t if that is even a good option, and i am really worried right now and don’t know what to do. Would you offer some advice on it?

    1. Woah you NEED to list GPA or else they will assume it’s really bad, like 1.0-2.0 range. If you’ve already applied there’s not much you can do since it’s over and done with – I would focus on networking and look at smaller firms because GS/MS will be near impossible with a low GPA combined with an awful market these days.

      1. Constance

        Thanks a lot for the comment! :) it really helps. By smaller companies, do you mean like boutique ones? Do you have any suggestions that you can direct me to? Thanks. P.s.I do know an alum who works at UBS and GS and AllianceB, should I still give it a try or just focus on the smaller ones? Thanks a lot!

        1. Constance

          Also there is one more question that I forgot: can i round my GPA up to 3.0 if it is higher than 2.95? Would that be count as cheating for background check?Thanks!

        2. Yes rounding is fine in that case. For boutiques look here:

          http://www.wallstreetoasis.com/forums/regional-boutiques

          Definitely contact the alum at those banks, it’s always worth a shot esp. if you have a connection already.

  12. Hi Inquisitor,

    What is the general timeline for summer internships? Have I already missed the boat?

    1. Application deadlines for most places have passed but there might still be a few openings, depends on where you’re applying… may still catch smaller firms

  13. What should you wear to campus presentations?

    1. Business casual, I don’t think suit/tie necessary

  14. Hey Inquisitor,

    I was just wondering, what are the chances of getting into a hedge fund straight out of undergrad ? I’m at a pretty good school but I don’t know of any on campus recruiting except a few big investment banks. Should I start googling and cold emailing ?

    …or should I stay focused the whole ibanking stepping stone path ?

    Thanks again.

    1. Yeah unless they recruit there its always difficult. Your chances improve substantially if you have a technical background and go for more quant-oriented funds. But otherwise cold-calling is your best bet – it can be done but probably easier to do banking first.

  15. A quick question:

    As an undergrad (specifically, a junior trying to find a summer internship) hat’s the value of contacting recently alums at certain banks/firms? I’d imagine they don’t have much to do with the hiring process and all they could really do is give advice on what to say and how to interview, but would keeping in contact with them and letting them know you’re applying be of any use, other than for the reasons I just stated? Can they have any impact on who interviews you/whether or not you might get hired?

    Also – is it necessary to go to every campus recruiting event? It seems like they have been holding about two a night for various banks and other financial services firms, and it’s kind of a pain to dress up and attend all of them. Do they actual care if you go? Does having your name down on their list mean anything? Or should one just attend events for one’s top choice of banks?

    1. Yes, contacting alumni has a huge impact and it’s something you need to be doing in any networking effort. Real relationships are how you get into the industry, so you need to focus on developing them and using everything you can to your advantage.

      You don’t need to go to every single event, I would just pick the ones you’re most interested in… but yes, it does make a difference and banks definitely notice anyone who stood out and asked intelligent questions.

  16. HAH i think its funny how u get stuck with all these fashion questions despite your claim of little knowledge

    When you’re poor taxes seem all right….u barely pay any..But as soon as you make a little money…….

  17. […] & Inquisitions tackles everything from pay and fashion to banking in different regions, business school, different […]

  18. How accurate were your 2008 bonus estimates?

    1. For the most part they were wildly optimistic and everyone was off. I think the numbers I predicted based on banks’ revenue #’s were much closer but those might have been a bit higher than real #’s as well.

  19. Couple of quick questions that are semi-related.

    1. I am receiving a $10,000 signing bonus from the bank I will be working for come summer time. In the employee agreement form, it is listed as a “relocation bonus.” Will this be taxed any differently than a typical bonus would be taxed? Basically, is this $10,000 going to be cut nearly in half because of taxes? I’m trying to plan out a budget since I will receive the bonus at some point in the first quarter, and I would like to gauge what I’ll actually be receiving.

    2. I plan on buying two pairs of shoes. I actually have already purchased a great pair of black loafers/moccasins (I had to – 40% off at Nordstrom saved me some money). I am debating between purchasing a pair of black lace-ups and a pair of brown loafers/lace-ups. I’m not sure I’d have much use for the browns – I’ll be wearing all gray and navy pants, so black would be the more conservative approach – but do you think it would be a good idea to buy a second pair of black shoes? Thanks for your fashion advice.

    Oh, and for those bankers looking to add to their wardrobe: Check out Charles Tyrwhitt’s online store. Some really good sales on all their stuff, especially their shirts.

    1. 1. Yes, it will be taxed as if you made $10,000 every 2 weeks so you will fall into a higher income bracket and you will lose 40-50% of it I believe.

      2. Yeah a second pair of black is a good idea, mine fell apart midway through my first year and I looked really stupid since I didn’t have time to get a new pair right away. I never wore brown shoes once.

      Thanks for the tips on the online store, I’ll be adding some more fashion advice soon…

  20. Hi Inquisitor, hope your new year is going well so far!

    Is there a particular way we should start off our story/pitch during an interview? Right now, I’m saying “Hi, my name is X. I’m a third year at Y University majoring in Z”

    What do you think is the best way to start off the pitch?

    Thanks!

    1. It’s fine to start off like that – then you would dive into your earliest experience that’s relevant and go up to the present in chronological order. You would want to say something slightly different if you’re an MBA or already working.

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