Investment Banking Analyst – Part 2: Stress

Continuing from the previous discussion of the sleep deprivation effects of being an investment banking analyst, the arguably most detrimental aspect of the job is stress. The stress is generated from a lack of sleep, free time, and opportunity to receive care from others, as well as immense pressure in the workplace to produce error-free work and meet tight deadlines. Stress obviously has a long list of health effects; the most important of which are, arguably, the effects on aging.

As mentioned in Part 1 of this series, sleep deprivation can cause an investment banking analyst to feel as though he or she has physically aged four years in two years’ time. While sleep deprivation plays a major role in this feeling, stress also is a major factor in driving that feeling. Stress can also turn that feeling into a reality – stress has been noted to cause grey hair at an earlier age, or even hair loss at an earlier age. Looking and feeling older are not desired traits by young adults around age 25.

Another fallback of the immense amount of stress placed upon investment banking analysts is they grow used to it and learn to expect stress in their lives. That is not to say necessarily that analysts learn healthy ways of dealing with stress, however. Stress becomes such a constant and ongoing part of their lives that even in situations without stress, analysts commonly find or create stress to make that situation revert back to “normal” for them. Although younger Americans are typically more stressed on average, investment banking analysts take this to a whole new level as stress becomes an unhealthily expected part of their daily lives.

As touched upon briefly before, stress can cause a change in physical appearance, but it can also take a toll on the overall health of the body’s organs. The normal physical aging and aging in appearance process an individual’s body might go through is severely accelerated by working in investment banking. In addition to looking and feeling older, the body may actually be older at the end of one’s stint as an analyst. Stress can increase the risk of cardiovascular disease and hypertension in the heart, ulcers and other digestive issues, and even skin problems, which would have either not occurred at all or occurred in later life. This accelerated aging and creation of health risks are downsides of the job directly attributable to stress.

Stress in one’s life should decrease as they age. The issues and uncertainty associated with puberty, maturing, finding a job, and starting a family certainly cause stress to be high beginning in the late teens to mid twenties. However, as people grow older, more decisions are set in stone and settlement takes place, thereby reducing uncertainty and the sense of worry. This would lead to stress decreasing as people age, which holds true for Americans. I would also expect this to hold true for investment banking analysts, but due to the high stress in investment banking and analysts being accustomed to stress as part of their lives, I predict analysts maintain a higher level of stress than the average and take longer to begin becoming less stressed. As far as aging is concerned, a lower level of stress for a shorter period of time would appear to be ideal, but in the case of an analyst, he or she would experience the exact opposite. This could lead to serious aging consequences down the line.

In summary of Parts 1 and 2, sleep deprivation and stress are very real aspects of the lives of an investment banking analyst on Wall Street. Both inevitably accompany the job and create serious impacts on the aging process. College students considering entering investment banking should strongly consider these issues before pursuing a career in the field.

Investment Banking Analyst – Part 1: Sleep Deprivation

This will serve as the first post in a two part series examining the health and aging effects of the lifestyle of an investment banking analyst.

An investment banker has two primary job functions: to advise on major transactions and to raise capital for businesses. These business transactions include mergers and acquisitions activity – essentially buying or selling other firms – and the capital raising activities include raising money through stock and debt offerings. An analyst in investment banking is the most entry-level position, whose job responsibilities include industry research and extensive use of Excel in creating financial models. Investment banks are often as thinly staffed as possible to cut costs and increase returns, so analysts often work an exorbitant amount of hours per week. A typical analyst week might include an all-nighter or two, and not uncommonly totals 120 or more hours of work per week.

This job includes a number of negative health consequences; chief among them is sleep deprivation. When the work load calls for being at the office for two complete days straight without sleep, the effects of sleep deprivation begin to take effect. Of the effects, headaches, irritability, and memory losses will cause a decrease in work quality, productivity, and ability to work in a team. A recent Gallup poll suggested sleep deprivation can cause as much of a detrimental effect on job performance as the consumption of alcohol. Although investment banks surely realize this, I believe banks want to squeeze every ounce of work out of an analyst as possible. Despite the analyst’s productivity decreasing as they go without sleep, they are still producing some work, and the investment bank wants to squeeze every bit of work out of the analyst in the shortest amount of time they possibly can.

As it relates to aging, one would struggle to find an analyst who would disagree in saying that they have physically aged more quickly as an analyst than they would have otherwise aged at a 40-hour-per-week job. Investment banking analysts commonly work in banking for two years before jumping to another career opportunity. The benefit of working so many hours is that analysts get four years of work experience in two years’ time. However, analysts frequently feel as though they have aged four years in two years’ time. A Gallup poll suggests that about 30% of Americans say they do not feel well-rested, but virtually all investment banking analysts feel this way. This appearance and demeanor with which analysts carry themselves could have negative consequences further along in the aging process.

Another downside of working those extreme numbers of hours in a week is the inability to provide caregiving services. Although analysts are frequently in their early twenties and do not have relatively high caregiving demands, 120 hours of work in a week almost completely preclude any opportunity at all. Many religions and cultures ask for young adults to take care of aging parents or grandparents, which is almost impossible to do as an investment banking analyst. With very little sleep and virtually no free time, an analyst cannot even find the time to take care of a pet.

While sleep deprivation is a very serious downside of working in investment banking as an analyst, perhaps the most taxing con is yet to be discussed – stress. Stress will be discussed in part 2, which will be up shortly.