💰 Finance Careers

Chad, money makes the human world spin — and a whole industry exists just to manage it.

The Big Picture

Finance careers involve managing, investing, analyzing, or advising on money. They tend to pay extremely well, demand long hours, and attract some of the most competitive humans on Earth. If you see someone in a sharp suit looking tired, they may work in finance.

Investment Banking (IB)

What they do: Investment bankers help companies raise money and execute big transactions — mergers, acquisitions, IPOs (Initial Public Offerings), and bond issuances.

A day in the life:

Build complex financial models in Excel for 10–14 hours
Prepare “pitch books” — presentations convincing clients to hire their bank
Execute deals worth hundreds of millions or billions of dollars
Answer emails at 2am because a client is in a different time zone

Key terms:

Term	Meaning
Merger	Two companies combining into one
Acquisition	One company buying another
IPO	A private company selling shares to the public for the first time
Pitch Book	A presentation used to win client business
Analyst	Entry-level IB role, usually recent college graduates

The hierarchy: Analyst → Associate → Vice President → Director → Managing Director

Pay: Analysts start at ~$110,000–$150,000 (salary + bonus). MDs can earn millions.

The trade-off: The money is exceptional. The hours are brutal. 80–100 hour work weeks are common, especially in the early years. Many humans burn out and leave after 2–3 years.

“Investment banking is not a career — it’s a temporary condition.” — Common Wall Street joke

Private Equity (PE)

What they do: PE firms raise large pools of money from investors, then use that money to buy companies outright, improve them, and sell them later for a profit.

How it works:

Raise a “fund” from pension funds, endowments, wealthy individuals
Identify undervalued or underperforming companies
Buy them (often using a lot of debt — called “leverage”)
Improve operations over 3–7 years
Sell at a profit

Key terms:

Term	Meaning
LBO	Leveraged Buyout — buying a company using mostly borrowed money
Portfolio Company	A company owned by the PE firm
Carry	A share of profits paid to PE professionals (the real prize)
EBITDA	Earnings Before Interest, Taxes, Depreciation & Amortization — a measure of profitability
Exit	Selling a portfolio company (via IPO or sale to another company)

Pay: Associates earn $150,000–$300,000+. Senior partners can earn tens of millions per year.

Culture: More analytical than IB, slightly better hours, but still demanding. Most PE professionals previously worked in investment banking.

Venture Capital (VC)

What they do: VC firms invest in early-stage startups — young companies with high potential and high risk — in exchange for ownership stakes.

How it works:

Raise a fund from limited partners (universities, wealthy individuals, institutions)
Source deals — find promising early-stage startups
Invest $500K–$50M+ in exchange for equity (ownership)
Help the startup grow (board seats, introductions, advice)
Profit when the startup goes public or gets acquired

Key terms:

Term	Meaning
Seed Round	Very early investment, sometimes just an idea
Series A/B/C	Successive funding rounds as a company grows
Valuation	What the company is estimated to be worth
Unicorn	A private startup valued over $1 billion
Portfolio	All the startups a VC firm has invested in
Cap Table	Ownership breakdown of a company

The math: Most startups fail. VCs expect ~90% of investments to lose money. They need one “home run” (e.g., investing early in Google, Uber, or Airbnb) to make the whole fund profitable.

Pay: Lower base salary than IB/PE, but “carry” on successful funds can be enormous.

Culture: More casual than banking — jeans, coffee shop meetings, Silicon Valley vibes. Relationship-driven.

Hedge Funds

What they do: Hedge funds manage large pools of money for wealthy investors and institutions, using sophisticated strategies to generate returns regardless of market conditions.

Strategies include:

Long/Short: Buy stocks expected to rise, short-sell stocks expected to fall
Macro: Bet on global economic trends (currencies, interest rates, commodities)
Quant: Use algorithms and mathematical models to trade at high speed
Arbitrage: Exploit tiny price differences between markets

Key terms:

Term	Meaning
AUM	Assets Under Management — how much money the fund manages
Alpha	Returns above the market average
Short Selling	Borrowing and selling a stock, hoping to buy it back cheaper later
2 and 20	Common fee structure: 2% annual management fee + 20% of profits
Drawdown	How much the fund has lost from its peak

Pay: Analysts earn $150,000–$400,000+. Successful portfolio managers can earn hundreds of millions.

Other Finance Careers

Commercial Banking: Managing deposits, loans, and everyday banking for individuals and businesses
Financial Planning (CFP): Advising regular people on budgets, retirement, and investments
Corporate Finance: Working inside a company managing its finances, not as an outside advisor
Asset Management: Managing investment portfolios for institutions or individuals
Insurance: Calculating risk and creating products that protect against financial loss

How to Get Into Finance

Degrees: Finance, Economics, Mathematics, Computer Science
Key schools: “Target schools” like Harvard, Wharton, Columbia have outsized recruiting pipelines
Internships: Critical — most full-time offers come from internship programs
Certifications: CFA (Chartered Financial Analyst) is highly respected
Networking: This industry runs on relationships