I still remember the exact moment I decided I would never work in the investment banking industry under any circumstances. It was my senior year of college and I had just started an internship with an investment firm. At that point I had no clue what I wanted to do with my life but I knew I wanted to work in finance in some capacity.
Investment banking sounded like a decent option because it paid well and apparently you learned enough on the job that would make it easier to get into business school or find another role.
Then my boss told me about his experience with investment banking. He came out of an Ivy League school and at that time (early-2000s) everyone from those schools went into finance. He said his first three years out of college were spent as an investment banker. In his first year on the job, he had a grand total of three days off. Three!
He regaled me with tales of pulling all-nighters, working weekends, getting hazed by the partners through meaningless 300-page PowerPoint presentation assignments, working until 2 am and being back at his desk by 7 am after only a few hours of sleep, and basically a life that was completely devoted to work.
He wore these tales like a badge of honor. We didn’t exactly see eye-to-eye on this one. I couldn’t imagine busting my ass doing busy work just for the sake of doing it because that’s what everyone else was doing to get ahead. That’s not how I wanted to live my life.
There was a story in The Guardian this week discussing the adverse health effects that come from working too much. They also documented studies that show most employees aren’t productive past a certain amount of work:
Research from the Australian National University recently found that working anything over 39 hours a week is a risk to wellbeing.
Is there a healthy and acceptable level of work? According to US researcher Alex Soojung-Kim Pang, most modern employees are productive for about four hours a day: the rest is padding and huge amounts of worry. Pang argues that the workday could easily be scaled back without undermining standards of living or prosperity.
Other studies back up this observation. The Swedish government, for example, funded an experiment where retirement home nurses worked six-hour days and still received an eight-hour salary. The result? Less sick leave, less stress, and a jump in productivity.
With Internet and email availability it’s become much harder for people to adhere to a 40-hour work week anymore since we’re all tethered to our smartphones at all times.
Even though it sounds like it’s almost gone, the 40-hour work week is still a relatively new phenomenon. According to Robert Gordon in The Rise and Fall of American Growth, the typical 40-hour week didn’t really become commonplace until the 1940s.
In 1870, more than 80% of the labor force worked in physically demanding jobs that were equal parts hazardous to their health, tedious, and unpleasant. Workers averaged 11-12 hour days until the laws changed in 1874 to mandate no more than 10 hours a day. In 1900, the standard work week was 10 hours a day for 6 days a week. By 1920 it was down to 8 hours a day, 6 days a week until that finally settled at the standard 5 day 40-hour work week by the 1940s.
Supposedly it was Henry Ford who shaped the 40-hour week because he thought his workers would be more productive working fewer hours. It’s been relatively stable ever since but it’s difficult to gauge the actual hours worked today as people spend more time on the web for both personal and professional purposes.
The majority of the labor force has shifted out of the unpleasant physically demanding working conditions of the late-1800s and early-1900s into more knowledge-based roles. The idea of work hasn’t kept up with this change.
Beyond the simple work-life balance side of the equation, the biggest reason I could never see myself working in something like investment banking1 that requires so much time and effort doing tedious tasks is that in some ways it’s basically a return to the past way of doing things.
If you’re constantly working you never have time to think and reflect. In a knowledge-based economy we need that time to collect our thoughts and work through the decision-making process.
It can be difficult to separate work from play because the lines are becoming blurred. I do know that I function better when I take some time each week to:
- Read books. My job involves plenty of reading, from financial media to academic journals to market research and much more. But much of this is short-form and not nearly as useful to my decision-making process as reading books from a wide range of disciplines. Most organizations would probably have a more productive workforce if they made an effort to get their employees to read more books.
- Write. Most people assume writing begins by staring at a blank page on Microsoft Word until the inspiration hits. To me writing is more about reflection, gathering my thoughts, researching, forming conclusions and figuring out how to organize what it is I really think. Writing is good for the brain.
- Clear my head. I’ve never meditated before but working out feels like my form of meditation. If I go more than a couple days without physical activity I start to get edgy. Working out is a great way to clear your head. This is when I get the majority of my best ideas.
- Check out. I have 3 children. On the weekends I have zero time to even think about work or reading or writing or the markets….and it’s wonderful. Thinking about your work too much isn’t healthy. You need a break every once and a while to leave work behind and be present with friends and family. The added benefit of this is it forces you to make more efficient use of your time when you are at work.
- Waste time. I don’t have as much time for this as I once did but binge-watching TV series or movies or even going down an Internet rabbit hole can be useful in small doses because it gives your brain a break.
Even someone as busy and important as Bill Gates takes some time just to think. Gates has said he would go into seclusion for 1-2 weeks each year for the sole purpose of thinking and reading away from the office and his day-to-day responsibilities.
Giving yourself some time each to think, reflect, and even check out for a while can be time well spent if it makes you more productive and efficient when you’re on the job.
Being In Control of Your Own Time
Now here’s what I’ve been reading this week:
- Meet the man behind the Bitcoin genius ads all over the Internet (Yahoo! Finance)
- Price vs. value (Humble Dollar)
- Dopamine hits and the power of defaults (Abnormal Returns)
- Is this as good as it gets for a 60/40 portfolio? (Irrelevant Investor)
- A letter to my younger self by Quentin Richardson (Players’ Tribune)
- A best case look at future returns for U.S. stocks (Philosophical Economics)
1I’m sure not all investment banking is like this for everyone but this was the experience relayed to me by a number of people.