Post a new topic
    3 Replies Latest reply on Aug 16, 2011 9:44 AM by Moderator_MoniE

    Investment Banking vs starting a company.

    Newbie

      Hello.  I am in high school and I am looking seriously into my future career.  I love business and finance and have great grades.  I never back down from something until I acheive what I want.  My ultimate career goal would be to retire sometime in my 40's to 60's with a net worth of 10 million dollars or more.  I know it may sound crazy, but that is what I am trying to acheive.  Many people tell me in order to be rich, I have to start my own company.  The problem is, I see many small companies out there today doing well, yet the owners are making a lot less than what could be made in a job in finance.  What kind of company do you have to start in order to become rich?  Could I start a private equity firm, investment firm, financial advisory firm, or other sort of finance services firm and become rich if it is succesfull?  Do you have to take a company public to become rich?  Do you have to sell the company to become rich?

       

      What career path should I consider choosing?

       

      1.  Investment Banking - This career is great since the pay is outstanding.  Also, business and finance is what I like, so this job appeals to me.  This career sets me up for high level positions at Fortune 500 companies, private equity firms, hedge funds, venture capital firms, and also gives me knowledge for starting a financial services company.  Also, it may make more sense to focus on a long term investment banking career and make millions at high job positions such as VP and/or Managing Director.  The problem is, MANY PEOPLE SAY THAT INVESTMENT BANKING DAYS ARE ENDING.  Is this true?  Is it still worth it to go into investment banking?

       

      2.  Start a consulting type of company right out of college.  Since I wouldn't have any financial knowledge yet, I think it would make more sense to get experience first.

       

       

      But again, what type of companies do people talk about getting rich?  I mean, I cannot just start a carwash company or online business and expect to make 200k - 10 million dollars a year.  I mean, can't I get rich by working my way up the corporate ladder in investment banking and eventually make 2 million - 10 million dollars a year in investment banking?  Otherwise (after some experience), what company should I start to make me rich, and what should I do with it (sell, take it public, grow it, etc.)?  Or if investment banking is dieing, should I just become a real estate investor or real estate agent?

       

      Thanks.  I may sound annoying, but I'm just in high school and I'm really serious about a future career that could make me retire in my 40's to 60's with a net worth of 10 million dollars or more.

        • Investment Banking vs starting a company.
          JasonTees.com Scout

          I think it's great that you are thinking about your future.  If your sole goal is to make money, and you have the aptitude and work ethic to work in investment banking, I'd say you statistically have a better chance to make lots of money by going to work for Goldman Sachs.  Since something like 80% of startup small businesses fail within the first 3 years, working for an IB seems like your best bet to make lots of money with virtually no financial risk (although you can forget about a personal life).

           

          Now, with that said, you might want to consider finding something that interests you instead of thinking about how you can get your hands on the most money possible.  I know plenty of stories of very weathly, very miserable people.  I worked in corporate america (banking ) for 10+ years and left to start my own company.  Regardless of the money, I've never been happier and would gladly have taken a 50% pay cut.  To me, quality of life is more important that how much "stuff" you have.  Nobody ever layed on their death bed and said "I wish I could have spent more time at the office".  Plenty of people have regretted missing out on their families.

           

          In terms of starting a company, it will be hard to start a consulting firm when you don't have any level of expertise on any particular subject (apologies if you do, I'm basing that on the fact that I didn't have any specific knowledge when I was in high school).  My consulting company was born out of 10 years of various experiences within the banking world.  Remember, consulting is all about people paying you for what you know, and for people to part with their money you'd better know the subject VERY well.

           

          What other kind of company can you start that will make you gobs of money?  Well, my friend, that's the $10 Million question every entreprenuer in the world would like the answer to!

          • Re: Investment Banking vs starting a company.
            bj.nje.4life Wayfarer

            Hey,

            I will give my background first. I am a 25 years old black man and co-Chairman and CEO of a private equity firm in the NE area.

             

            Please understand this:


            1-Money isn't everything in life, but it sure helps with everything else to have a lot.


            2-What are you willing to sacrifice in your pursuit of money. Some things always got to give. So here I would recommend to set your priorities first and foremost. The pursuit of millionnaire status shouldn't be a number 1 priority because there are too many variables that could decide if you ever get there. However, wishing for a certain lifestyle is within most of us reach depending on the type of life style one chooses to have. I still do not own an airplane as it has never been a wish.


            3-You do not need to retire at 60 or even 40 if your goal is 10 Millions. What you will need to do is to make smart choices from the getgo. 10 Millions is a very reachable goal is you set your priorities right.


            4-Investment banking days are not ending. Wealthy individuals will always need places to put their money without wanting to invest the time and energy to daily make the best choices to increase their purchasing power. The days of fanstastical and extraordinary returns on the investments are what for most investors are over. The World is now much too connected and there are no real safe heavens...things just go according to a cycle.


            5-On starting a company, I would discretly share some of my experiences with you and hopefully you will see what it takes.:

             

            At 7 yrs old, I was selling candies at school during lunch at 100% profits. The candies were gifts from my uncle who had a candy shop at the time. My dad would then take the money and put it in a trust fund all 100%. I gave myself no $ those days because my dad had a policy whereas anything that was not necessary that we wanted we had to justify it to him by oral arguments so I just didnot want to go through the hassles.

            At 12, I bought an old car. It was not working. It became my hanging out spot from where I was selling and storing cold bottles of water in the summer. I would buy the box at $1.29 those days and sell each bottle at $.50...Again my dad will cater the money.

            At 15, I had my first real job. I was going to HS full time and I was working from 2.30 P.M. till 12 A.M. All the money I made went to saving for future projects goals I had at the time: Car, house, company. I gave myself $100/month for cellphone and transportation (not even lunch was included).

            At 17, I bought my first house with some of the money saved as down payment. My dad helped with the papers and the loan from the bank and with putting renters there. At 17 1/2 I opened a !@##enterprises. This was a sole propriotorship doing anything that I could get my hands on: House Cleaning, Computer hardware repair, big TV installation, Snow removal, Car Cleaning, and Internet postings for non internet savvy people. However, I had a $2.000.000 personal liability insurance from Geico paying $235 to them/month. Today this company is an incorporated international holding company. I wouldn't do much work by myself, but I enlisted at the time an army of my friends that knew what they were doing as helpers/independent partners whereas I would devide the pay in half for all of us. We were all equal partners after I took the operating expenses. However, I was on paper the sole shareholder and owner.

             

            Keep in mind by this time I had graduated from HS with a 4.0 GPA and had applied for some 67 scholarships through my senior life. I received 7 which paid in full for my education until my MBA. This meant no school debt. I started applying for scholarship in my 10th grade. I had no sex life until until... I had time for nobody or nothing with the exception of the required family dinner on sunday night, the two weekly 2 hrs family bible study and congregation bible study, and a 20 minutes/Week required chat with my parents and siblings with no distraction. It was summer and there was no smimming or anything fun.

             

            At 18, I started college and only then did I buy a car. I bought an old saturn for a car at $500. I had money for much more, but I was frugal. My clothes were from old and shoes, I only had 2 for years though I was grossing a lot of $$$ for the typical college freshman. By now, from 12 yrs old till 18, I had gone to the movie theaters 2 times. At 18 I wanted a big job, but I had no experience so I understood networking was my solution. I spent countless nights and $$$ online tracking different venture capital clubs. I joined sorority clubs. I joined online social clubs (different than social sites). I became a member of local chanber of commerce. I wrote to people I never met. I asked for audience with some, though out of the 1089 audience requests, only 38 told me yes. But, of those 38, 2 became close friends until today. I traveled the USA like a mad man just to get a chance to meet some people if I thought I had a chance. I met with all the congressmen from my district. I applied to meet my state senator 8 times until he gave me a 5 minutes entrevue when I was 20. I had 3 filled books with business cards from everyone I met. I traveled to New York 12 times each saturday for 4 months nonstop until I met a particular wealthy guy at a country club in white plains by sneaking in the club through the wood since I could not afford the membership. He played there each saturday, but I could only sneak to a certain place without getting caught. I slept on average 2 hours per day until I graduated 3 1/2 yrs later with my MBA which was supposed to take 5 years. I was taking 18 credits each semester with no break and also taking summer 1 and 2.  I slept in my car many nights waiting trying to do market analysis to impress my managers at work since I couldnot afford Hotels nor could I pay the professional analysts for such reports. I constantly joked about my age because I could not tell the truth to any serious person. I dressed like an older man, spoke like an older man and did things just like older people. I read books on a skimming principle. I went through almost 4 years of University without having read a whole book, But I had my MBA with a 3.67 GPA.

             

            Anyway, In all these my priorities were God, Family, School, money so I never failed to attend my congregation bible study or go a day without praying. I always attended our family dinner. I keep up to date with my siblings and their kids by staying in touch through skype, and etc. For school I was done when I was 22. For money, here's the results of hard work, right priorities, and strong dedication:

            -At 19, a guy I met through a chamber of Commerce in DC hired me at JP Morgan Chase Bank as an independent clients finder. My job was to find business owners who wanted to apply for small business cash advances or loans. In 2010, I quit JP Morgan Investment Division as a Director of Small Business Owners Money Market Funds for the XXXXregion. Though I made a lot of money there, it is not what made most of my money. By then, I was 64% Co-owner and Chairman of !@#$Enterprises, I started from high school. The company has 5 subsidiaries in 3 countries under its wing today.

            My first house's equity combined with renter's money I bought in 2004 helped to pay for the mortgage as well as to provide for down payment for 5 additional investment normal houses. In early 2011, we opened a private equity firm totally based in emerging markets venture capital and distressed funds. The company in 8 months of operation manages 8 Millions. Though I am only a co-owner and co-chairman, I put down $4.000.000 of my own to get through on board with the other investors. Based on my IRS Fillings, IRS considers me a high net worth investor which means they expect me to make 1 million + a year and to have assets of more than $3 Millions. Well, I will not tell you my worth, but I will say that just my houses worldwide are worth about $ 11,349,987. I have equity on those for over a million. If I were to add all my accounts, assets, stocks, and investments I will pass by far your $10,000,000 benchmark for retirement though I am only 25. I've been to 33 countries worldwide and in all US territories. My phone has 1750 contacts. Sadly, I am still not married and my life goes from 4 A.M. work till 7P.M. then Working out; by 8 it's spiritual time. At 9.30 It's food again then chit chat with some folks and at 10 it's sleep. My weekends are jammed with travels or preaching, or family. Only Saturday from 7 P.M. to 11 P.M. is for friends and only some saturdays. I am extremely organized and take a month combined vacation time each year usually in my vacation home near NeuChatel, Switzerland. 

             

            This extensive report of my life was copied and pasted here because all the times my friends or younger people ask me how to become like me at such a young age. Well, I always like to share these details if they can help so people see what it takes and see for themselves if they got it inside of them. Though I have worked at JPMorgan Investment Division from 2006 until 2010, plenty people there can not compare themselves financially with me. By the way, I met some of the brightest people there who spent decades there yet I have nothing to envy from them. Though, I started my own business very early, that in itself is not what made me rich. Though I got a BA in Finance and an MBA in BA, education was only a mean to an end and unlike what many people think, it was not the way to wealth. It's a combination of factors that brought me wealth. I will sum it up as follow:

            A-establish the right priorities (see my priorities above)

            B-extreme dedication (Only after university did I get to sleep at anytime during the year more than 4 hours at a time)

            C-extreme organization (I cut off my mom plenty of times after our 15mns alloted time had been reached)

            D-extreme focus (Keep in mind I saved almost 95% of my earnings, never had an Iphone, I have been to 3 movie theaters since I was 12, and today I only own 1 car and 1 SUV)

            F-right support system (God, Family, Networking with essential people)

             

            I hope this helps...Let me know

            • Re: Investment Banking vs starting a company.
              Navigator

              Hi jtommy! You have received two very good responses here and I would like to add my "pearls of wisdom". I have to agree that although it certainly makes life a lot nicer, money isn't everything. I would love to be independently wealthy and have an opportunity to easily experience the finer things in life such as the ability to hop on a private jet and travel to where ever my heart desires on a whim ... Milan for a fashion show and some Moscato, Australia for a ride through the outback or back to England to show my husband the sites I experience when I was fortunate enough to visit there in 2003. However, as much as I would like to be able to do these things, I can't say as they would make me completely happy nor can I say I would have the time to do them if I were in a field that required me to work 60+ hour weeks in order to build that wealth.

               

               

              About 14 years ago, I had a job that I spent roughly 50-60 hours a week working. It was a fulfilling career working with physically and mentally challenged individuals to aid them in living independently but it didn't make me rich and it took me away from my children. I did this for roughly 4 years before realizing that my kids were raising themselves and I was missing out on so much of their lives. As a single Mom at the time, I certainly couldn't afford not to work but I knew I couldn't continue on this path either so I re-prioritized my life and didn't look back. Granted, I sometimes wish I had found that magic answer to make millions and be financially successful but at what cost would it have come? My children are now grown and one has a family of her own. I am not even remotely close to rich but I am also not in any major debt. I have a car loan and 2 credit cards. The economy is insane and there is much worry in the world because of the country's seemingly unknown future but I don't think that I have ever been happier than I am now with my life and choices.

               

               

              I understand that everyone's ideals differ and true happiness is subjective but remember that the pursuit of happiness encompasses more than just obtaining financial independence. Do not miss out on the truly fulfilling things in life to obtain a goal that could ultimately leave you empty inside. After all, the pinnacle of life isn't in reaching your destination ... it lies in the journey that got you there.

               

               

              Best of luck with all of your future endeavours!

               

              ~Moni