For the want of money
Updated: Oct 3
The world was a very different place in the year 2006.
We had just emerged two years out of SARS (Severe Acute Respiratory Syndrome) when I finished my final exam papers. My engineering thesis—or Final Year Paper as they called it back then—had been a weather app installed on the Nokia 6600 running on a 2G network[1]. This was even before 3G cellular became mainstream.
Shortly after, and to much surprise, I got in touch with a fledging IT consulting firm that was run by two French dudes through LinkedIn. The company then had been engaged by Philips TV to develop a software prototype that would work across their global institutional TV division, catering to the hospitality and healthcare sectors. The job advertised was for a software engineer role that needed to be filled urgently[2].
After a couple of offline conversations with the founding team and some deliberation on my part, I took up the offer and showed up for work while the rest of my peers were still in the middle of their graduation trips around the world.
At that point of time, this was how my work desk looked like:
I had been a fast learner and picked up stuff quickly by working closely with the Chief Engineer. Two weeks into the job, I had gotten really proficient at writing code—good enough for a prototype demonstration to the Philips CEO when he visited Singapore.
But I ended up leaving less than six months into my role. I needed to get out. My motivation was driven by:
The fear of being stuck in an engineering job, working from 9am to 5pm everyday for the rest of my life, and perhaps more importantly:
The want of earning more money by getting into a banking job.
That was primarily how banking and the world of corporate finance appealed to me then. I had been told that fresh graduates were taking home S$8,000 a month.
No other career offered that kind of money, definitely not in my field. But I hadn't been lucky. My grades were less than mediocre and my credentials were clearly in the 'wrong' field of study—I was trained as an engineer and not an accountant. I didn't know what a Bloomberg terminal was, didn't know how to calculate a series of discounted cash flows or the definition of enterprise value. I certainly wasn't cut out for investment banking.
Needless to day, I failed to get any interviews for my S$8k per month dream job but with some luck and the help of a school senior, I eventually managed to leave my job in IT for a junior role within the valuations team of a large accounting firm.
I was over the moon when I got my offer letter. It was also going to be a tall order coming from a totally unrelated background.
But being thrown into the deep end of the pool doesn't describe enough how I felt when it eventually got down to doing the job.
Trial by fire.
I will probably never forget my first day of work.
KPMG's office then was situated in Hong Leong Building just next to Lau Pa Sat in Raffles Place. One of the partners' secretaries met me at the lift lobby at the ground floor to bring me up. As I walked out from the lifts on the 23rd floor, she swiped her security card and showed me through the glass doors where I saw my new colleagues.
There were probably over twenty well-dressed people, most of them wore white shirts, some had a suit on, others with ties but they all looked smart. All of them had their own cubicles and seated according to hierarchy, that is: Those seated closer to the front were noticeably younger, while the more senior ones sat behind them, almost as if overlooking the shoulders of the junior analysts. Some were fixated on their desktop screens, others were discussing stuff. The mood was mildly tense with an air of unspoken urgency enveloping the entire room, almost like a trading floor without the running tickers on display at the top.
I wasn't given a desk of my own. Apparently the firm had over-hired due to the overwhelming number of assignments and the only space they could put me up was a elongated desk along a narrow walking space next to the printer where two other new colleagues sat. I later learned that one of them held a Masters graduate from the prestigious Yale University while the other guy was an audit senior of five years who had been seconded to the corporate finance team.
All eyes were on me as I turned left and walked to my space. Here I was shoulder-to-shoulder with these folks, a finance newbie and under-qualified colleague with essentially nothing to offer except my enthusiasm and time.
Despite being a fresh graduate like most of everyone else, I had finished my studies a year later than all my engineering peers, thanks to an additional year that I spent overseas in Shanghai. This made me two years older than the guys who had graduated from accountancy and four years older than their female peers. In short, I was the "uncle" of all the analysts in the team.
And for the longest time, no one could understand why I had chosen to take a 33% pay cut from my job in Philips to venture into the unknown from a zone of comfort and familiarity.
Many times, I even had to clarify where I worked at previously:
"Not Phillip Capital the securities house - Philips, the electronics company..."
It was also much later into my role that one of my colleagues revealed to me that they were all wondering why I had left engineering to "steal" their jobs.
Turns out that it was with the combination of a bit of dumb luck, a vacant junior position created by the timely departures of a few analysts, and sheer persistence that landed me into a corporate finance role.
Truth be told, I was incredibly scared during my probationary six months.
I had come from a working culture that involved going to an office in a techno-park to write code five days a week, to a place that required retrieving stock prices on Bloomberg while discussing which companies were raising capital, or running a sale process to a consortium of private equity investors.
The closest I would ever get to writing code was visual basic in Microsoft Excel. Other than that, I was a fish out of water.
I was so afraid that my line managers would deem me unsuitable for the job and ask me to leave. However, what they did do was make a bet that I would voluntarily leave within those six months.
This incident was later unwittingly and awkwardly revealed by a stranger who had crashed one of our team drinks. I don't remember his name anymore but I still remember him as he excitedly told my line manager:
"Hey! You lost your bet. He's still here!!"
It was just one of those things people in banking like to do. It can come off as condescending and insensitive, but on hindsight, I realised that you pretty much got to have thick skin in order to survive in this role.
I later also learned that the world of investment banking wasn't simply about getting through the gruelling late nights and number crunching. A huge part of the job was also about the harsh and toxic environment that one has to be prepared to put up with for many years to come.
Eighteen months passed, I closed a few landmark projects for the team, got promoted twice, and eventually got accepted by my peers at work.
The rest is history.
No shortcuts, no straight paths.
"I don't have any accounting or finance background, how do I get in?"
Today, I get a lot of questions on how to break into a corporate finance career whenever I teach at the Singapore Management University.
Ironic as it seems, I think young people today have relatively much better credentials, working knowledge and access to investment banking than I had during my time. That said, today's environment is also significantly more competitive than it was back then. There are just no guaranteed pathways to any job.
My attempt to learn about how the financial markets work was primarily done through punting in stocks. I rode through the bull market, which peaked shortly in 2007, and then it all went downhill towards the end of 2008 and early 2009.
I dabbled into the markets not to make money, but more so to experience first-hand how it was like to invest, trade or punt. Any profits I made were offset by the losses, all of which I treated as "school fees" for learning the trade. And it wasn't much anyway given that I had just graduated.
Younger people today are presumably more investment savvy and have even more access to investment and trading platforms--so I guess no excuses for not learning?
Ultimately, I don't have a straight answer for how to get into an investment banking role. The willingness to work hard beyond the stipulated 8 or 9 hours a day was definitely a plus, but beyond that, it had been challenging to also prove how you could get the job done eventually or the value you brought to the team.
For most of my peers coming from the finance and accountancy sector, it was mostly due to the fact that they were familiar with navigating the culture, and having done similar internships before.
In my case, it was largely attributed to my posturing as the go-to-coffee-boy, doing the work that no one wanted to do. If I were to narrow it down to a single factor, most of this was probably being at the right place, right time and meeting with the right people.
That said, everyone has a different trajectory.
2006 had been a somewhat a unique year characterised by an employees' market in which banks had been actively poaching from the accounting firms, who in turn perennially hired fresh graduates from the universities.
In a bull market where there is high demand for staffing people on deals, this naturally created a vortex of talent, in which I had been lucky to get dragged into that whole process.
Revisiting "the want of money"
Bankers during those hey days were also raking in deals, notably from the many S-chip listings that were highly popular during that time. Some of these people were even taking home multi-year bonuses.
I remember reading about executives from one of the local banks taking home thirty six months of bonuses. Even if you disregarded how mediocre his monthly base pay could be, the absolute quantum was still a lot, and getting three years of your salary in one lump sum payment still sounds crazy on all levels.
It was also common for performing bankers who got less than a year pay in bonuses to jump ship just because they felt they weren't compensated enough.
What a crazy world.
Just imagine: What people in investment banking typically earn in one year was the equivalent of what everyone else makes in 3 to 4 years.
This also implies that after working for anywhere between 7 to 10 years in investment banking, you could possibly retire for the rest of your life if you don't lead an extravagant lifestyle. It makes everyone else's job look like a joke. What kind of crazy world is that?
Fast forward nearly two decades, the frenzy of hiring and huge bonus payouts have significantly subsided. But the brutality of the work environment probably hasn't changed.
Many fresh graduates today continue to worship the altar of corporate finance, chasing the money and prestige of being accepted into the bulge brackets. It is important to realise that there are many careers out there which pay decently well (but may not pay as "fast and furious"), if you stick it out consistently.
It is obscene that bankers are paid so much for the work they do compared to most other careers.
Therefore easy for me to say "do whatever makes you happy" or "be open to other well deserving jobs" when I have personally gone through and benefited from the system.
No guarantees
At the end of the day, everyone has to make peace with whatever career you have landed into.
Many of my engineering-schooled friends are doing very well today, even having not gone into banking roles. Some are in sales, business development, entrepreneurs, etc. After all, not everyone who lands an investment banking career is guaranteed to make lots of money and the promise of working on exciting deals.
Most of the day-to-day work in investment banking tends to be iterative (and sometimes even borderline mundane). These include stuff such as research, spreading numbers and window-dressing a company's profile.
As a junior or mid-level banker, you'd be lucky to get involved in and be a spectator in deal negotiations. Be realistic, you won't get to be portrayed a hero or a rockstar deal-maker. This is not the movies. However, you will be paid well and most likely be a target of envy for most of your peers who are probably earning only a fraction of your salary.
By the time you reach director or managing director level, chances are that you will feel the mighty burden of revenue targets and also deal with the complex politics that come as part of the job. Hopefully during this time, you stay grounded and haven't gotten too used to a lavish lifestyle that will put you in golden handcuffs for the rest of your life.
More important than the prestige that comes with investment banking, you really have to love what you do. The dots really do connect backwards. It is not so much about simply earning the big bucks, but whether you also appreciate the dynamics of the job and find a way to sustain yourself in that line of work for an extended period of time.
As I look back on my cover letter dated in 2006, I recall of how starry-eyed I was when I applied for a role in investment banking.
I had been lucky, yet, at the same time, it also reminds me of how far along I had come. I had applied for the money, saved some, spent some, invested some and lost most of it. I'd gained knowledge of the subject matter, technical skills and the experience, including the network of people, intangible resources built over the years, and spat out by the system.
But. No regrets.
[1] A somewhat chronological lineup of all the Nokia phones ever made: https://www.telegraph.co.uk/technology/nokia/8465809/Nokias-classic-mobile-phones-in-pictures.html
[2] An interesting side story: I only found out later that I was a replacement hire for a young Irish guy who had taken up the job in a part-time capacity. He had blonde shoulder length hair and showed up to work every day in surf shorts and slippers--much like a hippie. The job role opened up only because he had to go back home to the UK. I also found out how underpaid I was a few months later when I eventually left. The firm tried retaining me with better staff benefits and a huge pay increment to 3k but I still left either way. My replacement turned out to be a more senior hire with five years experience under his belt and that they were paying him 5k! Nevertheless, both of them were very capable and professional. Perhaps, one of the most important lesson that I had learned was: You can have great credentials but ultimately people care only about whether you could can deliver on the job.
