I make my living as a trading coach on Wall Street. Before you let your bias take over and clump me in with thinking that I am part of the problem and not the solution, I want to share with you a perspective from behind the golden laced curtain we have come to think of as Wall Street Greed. What I am going to layout is not intended to defend Wall Street (that is not my job) but rather to give you a new perspective and better understanding of what really goes on in the heads of the Wall Street Elite (and not so elite) when it comes to their bonuses.

Prepare yourself for what I am about to say because it is not going to make sense at first, but it is very true.

You really want to know what is behind the psychology of Wall Street bonuses. Why people on Wall Street feel a sense of entitlement to earning huge sums of money each year even if the bank loses money. Over the years, hearing the conversations and coaching Wall Street talent to even higher levels of performance has taught me that it is not about earning a good or even great living. It is about payback for the sacrifices they have made along the way. 

By sacrifices, I mean the continual stress, long days, political games and volatility of the world markets. Not just some of the time. I am talking 24/7, 365 days a year. If you want to survive and thrive on Wall Street, you have to be willing to put in the hours – sometimes up to 100 or more per week. If you don’t like it, then quit. And even when you are not in the office, you have to be available and ‘on call’ at all times (blackberry’s and email have only added to the demands made on Wall Street talent). After all, the world economy does not stop just because you took vacation with your family to Disney World. Many, many times, I have watched hard working, good people on Wall Street get their vacation time ruined or eliminated because of unexpected events in the markets which required their attention. On Wall Street, disconnecting from the world is not an option – ever - at least not an option if you want to move up the ladder and have a successful career on Wall Street.

I have seen good, smart, well adjusted men and women burn themselves out in a few short years. I have seen some fall prey to substance abuse in their efforts to ‘unwind’ each night from the daily grind on Wall Street. I have seen loving marriages disintegrate over the years because the demands of the Wall Street job overwhelmed the lines of communication and impeded severely on personal time. I have heard clients tell me how they don’t have time for a social life. How they are unable to maintain a social life because of their work schedule. I have listened to clients tell me how they only had dinner with their family one day this week. How they missed their daughters school play because they had to be at a client event out of state. And that five days a week, since the day their kids were born, they have left their home before the kids wake up and most of the time, get home when they are already asleep.

Is this level of sacrifice worth it? In hindsight, most people on Wall Street will answer, “It depends on how well I was bonused at the end of the year.”

So when it comes to getting paid. When it comes to earning a bonus. They feel they have earned it. Not just by their work, effort and intellect but by the personal sacrifices they have made during the course of the year. They realize they cannot turn back the clock. That their kid’s school play is long gone. That their spouse finally had enough after 15 years of being married to Wall Street and the divorce is final. That long planned family vacation is already ruined. In their mind, Wall Street has and continues to torment their life and the very least it can do is pay me and pay me very, very well. Is there a paycheck big enough to make up for that? No. Will it make up for what they have lost? No. But if the bonus is big enough, if there are enough zeros on the check, then it will soften the blow to some extent and at the very least, keep them coming back next year to do it again.

Please don’t judge whether they are right or wrong or whether they are crazy to make this level of personal sacrifice. It is a choice they freely make and at the very least, people should respect the choices other people make. I am not asking or even suggesting that you feel sorry for them or agree with the path they have chosen. They (like the rest of us) get to deal with natural consequences (both good and bad) for the choices they make. I am just hoping to help you understand them a little more before you write them all off as greedy, evil people. Some of them are (just as there are some in every occupation) but most of them are good people just like you. They have simply chosen to make different choices with their life. As an American, that is their right, just as it is yours. Is it worth it? Well, I guess it depends.

Dr Doug