From Investment Banking to Freelance Financial Modeling: The Undiscovered Exit Opportunity
But there’s another downside that receives far less attention: everyone tends to be boring.
Especially in areas like investment banking, people mostly come from similar backgrounds: well-off parents, private schools, top universities, and resumes with the same student clubs and internships as everyone else.
And they all tend to have the same career goals: private equity, or an important-sounding role at a prestigious company whose name will impress Ivy League alumni at cocktail parties.
But once in a while, you run into someone who marches to the beat of a different drummer.
A reader I recently spoke with falls into this category: he started in sales & trading in Hong Kong, switched to investment banking in Australia…
…and then quit to pursue stand-up comedy, followed by bartending, which led to a stint managing a hostel.
The entire time, he funded these adventures with freelance financial modeling work.
No, it’s not a traditional exit opportunity, but if you’re an outsider at a bank, it might be right up your alley:
Sales & Trading to Investment Banking to Quitting
Q: Can you start by giving us an overview of your story?
I didn’t win a full-time return offer (it’s extremely difficult in HK), so I kept networking with S&T and IB groups in Asia and eventually won a debt capital markets full-time role at a different bulge bracket bank in Sydney, Australia.
My hours weren’t too bad in Sydney – maybe 60-70 per week at first – but the job itself was quite dull because I was the only Analyst in the group.
They attempted to move me back to Hong Kong at one point, but then changed their minds and kept me in Sydney, shifting around someone else they had hired to replace me.
I was sick of the job and wanted to leave, but the bank had just imposed a global hiring freeze, so they were desperate to keep me.
So, I negotiated my way into working relaxed, 40-hour workweeks until the hiring freeze was lifted and they found someone to replace me.
After that, I applied to S&T roles elsewhere, but everything required a heavy math or coding background – plenty of people had Math Ph.D.’s – so I decided to travel and do odd jobs for a while (think: beach service and bartending).
I also pursued stand-up comedy for a bit, learned to ski, and became interested in hotel/hostel management.
Along the way, I met some former corporate executives who had quit to start a bar, and I helped them informally with some financial analysis.
That gave me the idea to look into freelance financial modeling work and start offering the services to clients.
I thought about applying to corporate finance jobs at normal companies, especially in areas like Treasury that had a relationship with DCM.
But recruiters always seemed skeptical that I would want to return to an office environment after a long absence – and they were right.
So, I expanded my freelancing efforts via Upwork and used my free time to do other things I was interested in (hostels, skiing, stand-up comedy, etc.).
Q: That is quite a story. I can’t see a “typical banker” ever doing this.
We’ve covered the shifts in the sales & trading market in previous articles, but what were your impressions of DCM in Sydney?
A: Australia is a small, peculiar market, but as with DCM in many other regions, financial institutions tend to dominate deal activity.
The Big 4 Australian banks (CBA, Westpac, ANZ, and NAB) are the biggest players, but they’re constantly raising capital from investors in the U.S. and Europe because there’s not enough funding in Australia to support them.
So, I spent a lot of my time there working on memos and other loan documents for those banks.
The non-FIG corporate side was smaller and quite boring because many corporations there issued a bond once every ~5 years, and they were all plain-vanilla investment-grade bonds.
The most interesting area was Fixed Income Derivatives, but I only spent part of my time there (see: more on fixed income trading).
I started to dislike it because the job became quite repetitive, just like DCM anywhere else: mindless market-update slides and nearly identical memos.
But after I negotiated my way into 40-hour workweeks following the hiring freeze, I couldn’t complain because I was earning an IB salary and bonus while working the hours of a government employee!
Q: OK. And then you tried a bunch of different things while pursuing the freelance financial modeling work.
I know this has nothing to do with finance, but can you tell us about the stand-up comedy?
A: In theory, it seemed like a great plan: I would write jokes each day, practice in front of the crowd at night, and do my contract work in between.
But the stand-up comedy scene is incredibly cliquey, and if you don’t know everyone at the comedy clubs, you won’t get a good performance slot no matter how good you are.
They always put me in the last slot of the night, right when there were about ~4 people left in the audience.
I was willing to do that at first, but after half a year of repeated performances and no real recognition, it felt like it was never going anywhere.
On the other hand, I kept getting more freelance work requests, so I took Mark Cuban’s advice to “follow your efforts, not your passion.”
Freelance Financial Modeling on Upwork
Q: I wish everyone would take that advice.
For those who are not familiar with Upwork, can you describe how it works?
A: Sure. Upwork is a platform where companies and individuals can search for freelance workers to perform different tasks: software development, design, writing, accounting, finance, marketing, data science, customer support, and more.
Very simple work, such as basic website updates, goes for ~$5 per hour and is often done by contractors in other countries.
On the other hand, complex legal, strategy, and finance tasks can go for $200+ per hour.
If you want to get solid work there, you need to find people with money to spend who can’t do the work themselves.
There isn’t a huge amount of competition for freelance financial modeling work, and most workers there do not have the pedigree of a bulge bracket bank on their resumes.
So, I’ve never had trouble finding work – the trick is earning a good hourly rate with it, such as something in the $50 – $100 range.
I’ve completed projects ranging from 3-statement models for early-stage startups seeking venture funding to homework assignments for students.
No joke: One guy paid me $300 to complete his finance homework, which took me about 3 hours.
Upwork takes a 20% commission on your first $500, 10% between $500 and $10,000, and then 5% above $10,000.
So, it’s in your interest to make it a long-term project so that you get the best rate.
Q: I don’t mean to be rude, but you worked in DCM, which is a group that’s not known for intense technical skills.
Were you confident enough in Excel and financial modeling to take on these projects?
A: I was concerned about that at first, but I stopped worrying when I saw the types of projects that people needed help with.
Most people are really, really bad at Excel.
Forget about more complex features like VBA, Power BI, Power Pivot, or integrations with Python libraries – most people cannot even write INDEX/MATCH functions or navigate without using the mouse.
I started out building 3-statement models, and since I worked with small startups with no debt, it wasn’t exactly rocket science.
It was mostly a question of figuring out the cash flows by looking at the timing of receivables and payables.
Also, pedigree goes a long way on the site.
If your profile says that you worked at a bank like GS, MS, or JPM, people without any finance background will assume that you’re a guru.
They don’t understand the nuances of different groups or how different individuals might have dramatically different modeling skills.
Q: How important is it to pick a specific niche, such as startups? And what’s the most in-demand area?
A: In the long term, you want to focus on a specific industry or company type, but you should start broad and see what sticks.
Startups on the site often need help with accounting, finance, and forecasting tasks, and they can be easy to work with because they’re often spending other peoples’ money.
Real estate is also very popular, but it tends to attract a higher percentage of crazy/unrealistic people.
For example, I’ve gotten inquiries from medical doctors with 0 experience who suddenly decide they want to start RV parks or build hotels in Hawaii.
Or, they’ll come up with an idea for a $20 million project and have no idea how to get funding for it, or even the amount of equity they’ll need to contribute.
Sometimes it’s difficult to charge people because they don’t know what they want.
Finally, simple accounting, bookkeeping, and QuickBooks work is also popular, and there’s quite a bit of demand for part-time CFOs.
Q: On that note, about payments: how do you ensure a reasonable hourly rate?
You mentioned $50 – $100 per hour before, but don’t you run into issues with clients not wanting to pay the full amount?
A: I list a specific rate ($50 / hour) in my profile, but I always speak with the person on the phone first and then charge them for the entire project.
One problem is that people often come to me with existing models and want me to modify them, which sometimes takes more time than building them from scratch.
People also tend to underestimate the time required, even for simple models.
So, charging based on the specific project has been the best strategy for me. It gives me a bit of “wiggle room” in case the client changes the task, or it takes more time for some reason.
The biggest mistake freelancers make is not factoring in the time required to negotiate, define the task, and work out the logistics.
That’s why it can be dangerous to charge a fixed hourly rate, especially on simpler, shorter-term projects.
Q: Let’s say that someone else reading this article wants to do the same thing and do freelance financial modeling work after quitting their job.
Should they follow your path? Would you recommend doing anything differently?
A: I think it’s a good strategy to do it informally first, win a few clients, get recommendations from them, and then start marketing yourself online.
However, I might recommend starting before you quit – if that doesn’t present any legal or compliance issues (probably more of an issue at the big banks).
You want to get a sense of how it works before you jump into the field more seriously.
If you’re currently working 80+ hours per week, this won’t be possible, but if you have a job with normal hours, you could do it.
Finally, if you want to make freelance financial modeling your full-time job, it’s probably better to market yourself to growing-but-not-yet-super-large companies that need more of a “part-time CFO.”
Otherwise, you’ll spend far too much time on logistics and negotiations for contracts that don’t last that long.
Q: Great, thanks for those tips.
What is your long-term plan? Do you think you’ll ever go back to banking or finance?
A: I enjoy my current lifestyle, where I spend 20-30 hours per week as an assistant manager at a hostel in a ski resort town and then spend the rest of my week on freelance work.
I get to interact with people from all walks of life and do outdoor activities whenever I want.
Eventually, I want to start something on my own – not necessarily a tech startup, but maybe something like a hotel, resort, or other offline business.
I don’t see myself ever going back to a finance role in a corporate environment, but “never say never.”
Once you get used to a flexible lifestyle, it’s tough to go back to an office job, no matter how much they pay you.
Q: Agreed! Thanks for your time and sharing your story.
A: My pleasure.
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