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Burning Out in Finance

We did an AMA a few months ago on Instagram with @WallStreetConfessions and one of the questions that resonated with me the most was the following:

“What advice would you give to someone who is burnt out after 1 year of PE?”

Well first, congratulations on breaking onto the buyside!

As someone who was extremely intense about finance during university and who subsequently burned out while in investment banking, trust me when I say that I understand what it’s like.

I know what it feels like to work repeated late nights in an environment where none of the people you are working with care about your well-being or about creating a comfortable work environment.

The average workweek in private equity is tough and the extremes are brutal. When you’ve been working consecutive 90+ hour work weeks and there’s no end in sight, the most reasonable option can seem like tapping out and just quitting.

Working such a high volume of hours is definitely not for everyone and it can take a huge toll on your psychological well-being. It’s been well documented that there is a correlation between hours worked and the risk of burnout.

Long working hours are correlated with burnout when working over 40 hours per week and is even stronger when working over 60 hours per week. Limiting working hours to 40 weekly may be beneficial for the prevention of burnout. Physical activity helps reduce the risk of burnout.” The Associations Between Long Working Hours, Physical Activity, and Burnout

That being said, I think you should consider the following factors before you decide to pull the trigger and actually quit your job in finance. It can seem liberating to walk into your boss’ office and tell them that you’re done, but make sure you balance your fatigue with rationality before making a potentially irreversible decision.

Can You Get By If You Do a Worse Job?

If you’re in investment banking or private equity or anything in finance, you’re probably extremely driven and moderately insane. You’re probably used to dominating every challenge given to you and can’t tolerate the idea of not excelling.

Well, I think it can be psychologically helpful to try and re-frame how you think about work.

Are you burned out because you’ve been giving your job 100% of your energy and attention for the last several years? Have you always been the star analyst or associate, eager to jump at the next project?

See if you can get by if you only give it 70% or 80% of your energy.

A lot of runners find that they can run for a significantly longer time if they go at a slightly lower speed.

See if you can get by if you submit slightly lower-quality work.

Honestly, even if you start getting reprimanded, you can weigh whether the psychological cost of being abused by your senior is worth the extra few hours of sleep. It might sound ridiculous, but I can definitely think of times when I chose to have a fun night out, knowing that I would get chewed out later for low-quality work.

Here are some ways that you can do a worse or selfish job at work in order to get more of your time back:

  • Dump even more work on your junior associate or junior analyst. If you’re working with someone who is still worried about being evaluated and doing a good job, they’re going to care a lot more than you. If you have your PE or MBA offer and they’re still in the recruiting game, they’ll be willing to pick up a lot of slack. I realized the beauty of this when I was a first-year associate and a checked-out associate kept dumping stuff on me – it was brilliant!

  • Lazily check your models. Checking your work is one of the most time-consuming and soul-sucking tasks in finance. If you’re working underneath someone who cares about their job, they’ll probably check your work anyway. If you don’t mind being reprimanded every now and then, this is one of the biggest sources of time you can save on.

  • Do work for other projects while on calls you don’t have to speak. I think everyone already does this, but if you don’t have to speak on a call, you can start taking that as permission to do something else.

  • Exaggerate how busy you are to the staffer. Another classic tactic, but if you have some kind of staffing sheet or staffing process, it can be helpful to exaggerate how much work you have. I mean, your deal could blow up any second!

How Much Leverage Do You Have Over Your Boss?

Another really important factor to consider is how much leverage you have in the firm. If you’re the only associate in a small firm, you’ll be the only one that knows how a lot of models work.

If the investment banking group you’re in has had a horrible attrition problem and reputation, they might be more likely to give in to your demands so they don’t get punished by HR. Hiring new people is costly, annoying and time-consuming for people.

Firing people is also not always an option because if you’re an analyst or associate, you might be on a 2-year contract in which case it doesn’t make sense to sever someone. Some firms have a policy not to fire analysts.

It might also be extremely helpful to just have a candid conversation with your boss. If you feel like you’re working too much or if you need a vacation, express that before throwing the hail Mary of quitting altogether. Even just a single weekend of good sleep and no e-mails can restore a burnout into a reasonably productive employee, so maybe that’s all you need to negotiate or push for.

There’s a chance that your boss doesn’t actually know how much you hate your job and expressing that in a straightforward manner can give you a lot of leeway.

There’s only so much that your boss can do to make your life better, but by communicating that you’re not having a good time or are on the verge of quitting, they might end up staffing the other associate / analyst a lot more.

What Is Your Ability to Lateral?

There’s a quote that says that people never quit a job, they quit their boss. I think that quote might have been intended for people in tech, not finance, but I think there’s some merit to it.

If you haven’t worked under very many bosses, there’s a chance that your burnout stems from the specific place you’re working. If you feel a deep resentment for a single person at your firm, there’s a chance you might be better off if you lateral to a different firm.

If you think it might be a bad boss and not actually a case of burnout, I’d urge you to try and find a lateral opening before full-out quitting. It’s much harder to recruit for finance jobs if you’re not currently at one.

Another great thing about lateraling is that you might get some actual time off in between jobs. That might also be enough to help you shake off the burnout.

How Far is Your Next Bonus?

Let’s say you’re already doing a crappy job and you’ve complained to your boss numerous times that your office is a terrible place to work. Lateraling again doesn’t seem like it will solve your problem because you’ve already tried a few firms and have felt consistently burnt out.

You see no opportunity for change.

I think it’s then time to start thinking about things from an economic standpoint. If your bonus is only 2 or 3 months away, it might make sense to just soldier up and stomach the pain. Especially if you’re only a few months out of school, a full-time finance bonus can be monumental.

Finance bonuses can be more than 50% of your entire compensation and walking away from it if it’s just around the corner can be a bad decision in the long run. Even if your goal is to escape and leave finance altogether, it can be extremely helpful to have more money as insurance and protection.

Strongly Consider Finishing 4 Years in Finance

The last thing I would comment on is that it can be extremely helpful to do at least 4 years in finance. I think working for that long can help you a lot if you ever want to move back into finance or a related role.

Even if you know you’ll never want to do investment banking again, will you potentially want to work for a family office or a pension plan? It can be hard to land one of those jobs with only a few years of banking or no investing experience.

4 years is by no means a definitive number, but it’s what a few of my mentors had repeatedly told me when I wanted to quit finance during banking.

4 years generally means you’ll have completed 2+2, which is the point when a lot of people try new things anyway. After 4 years, you’ll have probably accumulated enough recommendations and been on enough live deals to effectively recruit for future positions.