A question that always seems to come up at the dinner table is, “What should I be investing in right now?”
Investing is extremely attractive because it offers an opportunity to grow your cash with limited effort. The assets that you invest in are determined by your investing strategy and risk appetite. Active versus passive investing? Crypto versus Stocks? Gold vs. Other Commodities? The options are limitless…but what if I told you that none of the aforementioned investing vehicles actually yield the highest returns?
Below I have highlighted three different investment mediums: S&P500, Apple (Ticker: AAPL) Stock, and the US 1 Year Treasury. I left out Bitcoin and other volatile asset classes because they produce outsized returns/losses at an inconsistent rate compared to its peers. I chose $5,000 as the initial investment amount because the most popular coaching package at OfficeHours costs that much:
As you can see above, investing $5,000 across an index fund, a high growth tech stock, and a passive treasury note yields modest returns over a one-year period. However, many people do not understand that investing in themselves has the highest return on investment (ROI) than any other asset class.
Many potential mentees at OfficeHours are worried that the initial upfront cost of our program will not be a worthwhile investment. However, if you look below, I have highlighted the returns that a potential mentee would experience if they invested $5,000 (cost of our most popular coaching package) and successfully secured a top investment banking summer analyst or full-time offer:
Summer analyst internships are typically ten weeks in length, so twenty and twenty-one year old college students can effectively make ~$20,000 (varies bank-to-bank) in those ten weeks. This is not even counting the signing or relocation bonus that are commonplace (typically ~$5,000).
Full-time first year investment banking analysts typically earn around $100,000 to $110,000 in base salary right after graduation (i.e. also applies to lateral hires and Masters students). I have not only omitted the signing/relocation bonus (which is typically $10,000 to $15,000 depending on the bank) like I did for the summer analyst calculation, but also the end-of-year bonus which is highly dependent on the firm and individual’s performance. The all-in compensation (base salary + bonus) for a first-year analyst becomes closer to ~$150,000-$200,000+ (varies bank to bank)!
The point of illustrating these numbers is to give you a sense that a $5,000 investment in yourself and your career goals has a much higher ROI than any other asset class. The biggest mental barrier that students and professionals put on themselves is seeing coaching as a cost rather than an investment.
Why does Lebron James invest millions of dollars on his own health? To continue playing basketball at a high level at the age of 37.
Why do high school students invest in SAT/ACT tutors? To attain a higher edge and test score to put themselves in a better position to being admitted to a top-tier university.
OfficeHours has a +95% success rate when placing individuals into investment banking, private equity, growth equity, venture capital, and other high-finance careers. Knowing that, the question becomes: “Am I willing to invest $5,000 into a program that has +95% success rate for a starting salary that will 4.0x-20.0x my initial investment?” This does not even include the intangible benefits that an investment banking career entails such as exit opportunities into other careers, learning opportunities, developing a transferrable skillset, and working on some of the most prolific M&A, IPO, or debt financings in the world. So… what are you waiting for?