<p>In your opinion, is it better to go to a LAC and get a degree in economics, or attend an University and get a business degree?</p>
<p>This is for someone who would like to be an investment banker.</p>
<p>Doesn't matter - just go where you can rub elbows with lots of rich people, and learn how to earn their trust (unless you expect to be investing your own bankables.)</p>
<p>Hm. Mini, exactly what did you mean by "trust"? Trust fund?</p>
<p>As I understand investment banking, it is a career than allows you to play with other people's money (and, win or lose, rake in some of it for yourself.) So the requirement is that you place yourself in a position where you understand people who have the dough to play with, and figure out how you can get them to allow you to play with their playdough, too.</p>
<p>(I knew someone who got to play with millions this way - she was an art history major, but her real skill was she really good at crocheting, and found an heiress who.... well, you get the picture.)</p>
<p>Good networking skills--meeting lots of people, staying in touch, being on good terms with them--are an asset for any job. </p>
<p>I've never been a fan of undergrad business degrees for a number of reasons, including the fact that your interests may change, and switching from econ tends to be much easier than switching from business. Besides that, there is something to be said for a well-rounded, liberal arts education. Anyway, I'd suggest econ. You can major in econ at LACs or at larger universities, by the way.</p>
<p>It depends what you mean by wanting to be an investment banker. "Investment banking" involves a whole bunch of different activities which don't overlap much. A business degree, per se, is not terribly necessary for any of them, though. And given where most of them come from -- i.e., elite LACs and universities, most of which do not offer undergraduate business programs -- I would say don't bother.</p>
<p>The most marketable skill in the investment banking world is probably math. Many trading strategies are math-based, and that seems like the golden road to success in the past few years, especially for people who will succeed on talent, not connections and salesmanship. If you have connections and salesmanship, majoring in classics would be fine.</p>
<p>My son majored in Economics with a minor in Computer Science and is working in an investment banking-related field. He is now working at his second job since graduation. He got the first permanent job offer by interning at the company during the summer after his junior year. He got offer for the summer internship by interviewing at his school's career center. He got his current job through being contacted by a headhunter while at his first job. </p>
<p>In agreement with JHS's post, he had no connections of any type to get any of his job offers, but he is very good at math. (As far as lack of connections go, neither my husband nor I even knew what investment banking entailed until our son became interested in it.) I have observed that many of his classmates who went into investment banking, as well as his same age and grade colleagues at his first job (called an "analyst class") were either immigrants or children of recent immigrants, and I have no doubt that they got their job offers through their brains rather than than through any connections. </p>
<p>As far as majors, many of the students who got investment banking offers from his school majored in Economics, Engineering, Computer Science, or Applied Math (called a different name at his school). One of the Engineering majors at his school is similar to Financial Engineering (with a different name).</p>
<p>At my son's first jobs, most of the other students in his "class" were undergraduate business majors. My son said that they had more experience from their coursework in some of the skills needed for investment banking, in particular working very quickly in Excel. Also, Accounting was not required for my son's major, but is offered as an elective at his school, and some knowledge of accounting is needed for investment banking jobs. New hires receive training in both the Excel skills and the Accounting, among other things, but there is more to learn if one has not had it in school. </p>
<p>I feel that Economics give a broader perspective and education, and that an intelligent person can learn on the job the skills they need which someone who majored in business might already have. I think that one can be hired with either major.</p>
<p>Mini, unless you think that the CFO's and Treasurer's of public companies and State government make billion dollars worth of financing decisions based on people who crochet your understanding of the banking industry is woefully inadequate.</p>
<p>To the OP--there are people in private banking... which is what I surmise Mini is referring to, who are client service people for rich folks and help them with portfolio management, i.e. how to invest their money. The top tier firms are places like US Trust but every bank has a private banking or "wealth management" business. </p>
<p>Investment Banking is the branch of deal makers- people at Morgan Stanley, Goldman Sachs, et al who arrange financing for building bridges, constructing new dormitories at universities, etc. for the public sector, or to build new manufacturing plants, finance acquisitions and the like for the private sector. They get the money for these activities by selling off parts of the venture to the public.....in the form of stocks (you become an equity holder of the company) or bonds (you become a debt holder to the company or own the debt of the State of Michigan or wherever the project is being financed.) There are more exotic instruments as well which involve pooling a lot of risk and dividing it up so that if the entity fails the downside is minimized.</p>
<p>Once you're hired into an investment banking program you will have a series of rotations to teach you about a lot of different areas of the bank-- derivatives, for example, are those exotic instruments I mentioned; foreign exchange is the part of the business that helps companies hedge the risk involved in having operations all over the world, plus banks often trade with their own money to make a profit selling for or against the yen or whatever.</p>
<p>Companies look for exceptional quantitative skills, very good grades in a rigorous academic program, and evidence of leadership. The ability to hob nob with rich people is not all that highly prized at the top tier firms although I imagine at regional firms there is some old school ties that are relevant ; the ability to use SAS, SPSS, Matlab, perform DCF calculations, etc. are all highly prized.</p>
<p>The top tier firms don't care if you don't know anything about "business"-- they have training programs and will teach you what you need to know. A degree in Econ is about as valuable as Applied Math, physics, electrical engineering, or any other quant discipline, and strong verbal skills (the ability to speak and write persuasively) are highly prized as well. Major in a subject which you love and will do well in; the rest will come.</p>
<p>You can look up a bunch of companies on their websites... they all have a special recruiting site which usually shows the calendar of which campuses they go to and when they interview. The colleges which host both "information sessions" as well as interview days will be the campuses which that institution considers one of their main feeder schools.... on colleges where they don't expect more than a handful of hires, you may just see an email address of where to send a resume.</p>
<p>Doesn't mean you can't get hired from a school which isn't a main feeder school, but companies tend to go back year after year to the colleges which provide a big, high quality pool of candidates, where they've had good luck retaining people, and where the track record of those grads is strong once they're employed.</p>
<p>If you want to major in Classics, per JHS's comment, my advice would be to do so, take both macro and micro economics and an advanced statistics course, and make sure you've got some leadership stuff on campus as well. I don't think the connections will get you very far -- banks don't like to risk millions or billions of dollars by hiring someone's idiot nephew.</p>
<p>Mini- if you've ever owned a house or put an airline ticket on a credit card, you're benefiting from a functioning capital markets system. The subprime mortgage crises notwithstanding, since most people can't afford to pay cash for a home, with no system in place to finance your mortgage you'd be living in a hut. And since I know you've got a keen interest in India and the developing world, you should be less cynical about banking in general. Folks smarter than I believe that the lack of transparency in financial markets, low standards for reporting, cultural biases against capitalism, etc. is what often prevents people from getting access to credit to finance small businesses, buy chickens or cattle to start a farm, finance seeds and farm equipment to expand their subsistence agriculture, etc. </p>
<p>No, I don't work for a bank, but there are women in India who can't get a loan for $25 to buy a loom which would greatly enhance their ability to feed their families, so stop being so snarky about rich people and elbow rubbing.</p>
<p>Blossom has added much informative information about investment banking. The one thing which she mentioned which is not consistent with the experience of my son and his friends who work at other firms is the rotations. I have observed that graduates are hired into a particular office and section of an investment bank (e.g. Company X's technology division in New York, etc.) for a two year stint as an analyst. I am not aware of these newly graduated employees rotating through different sections of their company. Maybe this is the case at some firms, but not the ones where my sons and his friends were hired.</p>
<p>I understand capital markets system perfectly well, thank you. And I actually DO microfinancing in India, and have been for almost 30 years, thanks again. You want to help? (I currently need $17,000 for a flyash compactor, to turn waste products of a coal-fired electrical generation plant into cinderblock.)</p>
<p>I'll stand by everything I wrote. I know who sits on the boards of directors of the major investment houses. I understand their hiring practices, and the limited set of schools they recruit from, and I know how they go about choosing those schools. (a good beginning guide to choosing a school where investment banks recruit iheavily s to make a list of private schools where 50% or less of the student body receives no need-based aid.) I am also aware that, because they are under greater public scrutiny (which I think is great!), they feel under greater obligation to recruit minorities (which I also think is great!)</p>
<p>You are absolutely right that they don't care if you know anything about business or about economics (unless you are filling a permanent niche as an underling) - that was EXACTLY my point.</p>
<p>(and virtually everyone in public investment in my state came out of the private sector.)</p>
<p>Mini- I don't have time to do the research now but as I'm dashing off my computer I must note that Timothy Cahill, the Treasurer of the Commonwealth of Massachusetts is a BU grad, and that Denise Nappier, Treasurer of the State of CT has a BA from Virginia State and a masters degree from University of Cincinnati. How the big wigs in Massachusetts failed to find a Harvard grad who liked to hobnob, and how CT ended up with an African American woman who didn't go to Yale must be a mystery.... but your continuing conspiracy theories about the Preppy Index and how it runs the banking system is getting tiresome. I'm sure a poster with time can dig deeper into where the rest of the 48 states get their Treasurers from (did Denise Nappier get need based aid at Virginia State? another mystery)</p>
<p>To be in investment banking, I think it has less to do with your major than where you go to school. As others have suggested, it would help if you take courses in accounting, finance, math and statistics. It would be much easier if you attend one of their 'targeted' schools where lots of investment banks go to recruit future employees.
Like Motheroftwo's son, my son who was working in an investment bank majored in economics in a heavily recruited school. He was offered a permanent position from the company where he interned the summer after his junior year. He also received the placement through his school's career office. Now he is in a similar related second job.</p>
<p>If you just want to be an investment banker go to the most prestigious school you can. If you want to be a good investment banker study economics or some other substantive discipline. If you want to you can always get an MBA later.</p>
<p>blossom has it pretty closely identified.</p>
<p>As to your original question, it depends on which LAC and which undergrad business program. If the best NY firms don't recruit there, its not the optimal place to be.</p>
<p>Most investment bankers don't think much of run-of-the-mill rich people, if you're referring to people depleting their inheritance. The ones who've actually made it themselves are of more interest, since they hold controlling interests in companies, and sometimes are able to repeat their successes. In any case, while knowing the right people is often thought to be important, its actually much more useful to be highly competent and have a reputation for it. The world is full of those who know lots of influential people. </p>
<p>Learn to enjoy working extraordinarily long and unpredictable hours, with long periods away from home and unpredictable travel. Do well at whatever school you choose. Hang around people who've worked there before and ask questions. Its a complicated business with lots of facets that are often confused.</p>
<p>Where do the best NY firms recruit?</p>
<p>Ivy and near Ivy schools, especially Dartmouth, UPenn, UVA, Stanford and the like. Not sure which LAC schools.</p>
<p>One factor that hasn't been mentioned: do very well on your SATs, especially t he math portion. You will be asked for it. It is also good to take the math 2c and do very well on it. My kid could not believe that someone asked for SAT scores, but investment banks do ask. </p>
<p>My kid did the junior year internship but decided not to go for a full time job with a IB after graduation. But getting one of those internships is the most common way to get a good IB job. About half the kids in my kid's junior summer program were Wharton students. The others came from a mix of top schools. Only one did not attend a top college. He had been savvy enough to go through all the business directories until he found someone who had graduated from his college who was a top officer at the firm. He sent his resume to that person, not HR, and got a job. Some, including my kid, had more artsy/humanities/social science majors, but had take at least a couple of econ and math classes and earned As, and yes, as silly as this may 'sound,' had high math SAT scores.</p>
<p>Yes, it does sound ridiculous, but my son put his SAT scores and SAT 2 scores (which were all very high) on his resume for both his first job and his second job. I asked him about it and he said this was commonly done and would be expected at the companies where he was interviewing. </p>
<p>Jonri - May I ask what your son decided to do instead of IB after graduating? It is good that students can get a taste of it during the summer internships so that they can make a more informed decision as to whether or not it is what they want to do after graduating.</p>
<p>They also recruit at tech schools like MIT and Carnegie Mellon.</p>
<p>Williams is one of the LACs at which IBanks hold both information sessions and interviews.</p>