I'm wondering if I should continue to live in a shithole and continue to save money or if I can finally enjoy and go up to $2,500 a month for a 2BR with a balcony. Over the last three years in consulting I've saved about $200k but I am looking forward to when the market crashes and that all dries up (just a joke). Looking for benchmarks from current Associates. Thanks.
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I live in downtown Chicago and pay around $2,500 for a one bedroom place. It's got an awesome view, solid amenities and is a close walk to the office, the gym, restaurants / bars, etc. I lived in shitholes for a while and saved a bunch of money but I love living in a nice place (been here for about 2 years now).
Overall, it's nicer to come home to and girls appreciate you having a nice place more than you think.
Thanks for the response. Sounds like a great place.
Lol, this is literally my exact situation down to what I pay for rent. Lived in a mediocre studio on the lake in Lakeview for a while, gave me an extra grand in the bank every month, but quality of life and mental relief of having a bigger more comfortable place is well worth the extra cost.
Advice on where an analyst should live in Chicago(Office in the loop)? Likely going to be in a studio/convertible since my roommates offer got pushed
Depends on your budget. Lincoln Park and Old Town are always a good bet if you don't want to be downtown, lots to do and a little cheaper. Living downtown lends to the ability to walk to work and potentially go home for lunch which is a huge plus. I'm a 5 minute walk to my office, wouldn't trade it for anything.
River north if you can swing it, expensive, near nightlife, not the best (not exactly Gold Coast) but pretty good
I agree with one the first two responses said, it depends on what your budget is. Lincoln Park, Old Town and Wicker Park are solid value (lower cost, great areas and not a bad commute down to the loop). Personally, I really like West Loop but it's gotten pretty pricey at this point for a nice place unless you have some roommates. I have some buddies that live in Streeterville, which is less happening but a close walk to the loop and lower cost than River North.
i second the girls point - i have a very nice one-bed flat and the girls i've brought home really liked it. makes for a comfortable place to just hang out in.
tbf, i haven't lived by myself before this, so it's hard to say whether this is purely the quality of the place or the fact that we don't have to worry about disturbing any flatmates.
How much do you spend in rent in London if I can ask and where? And what is your base salary?
Spend the min possible. Don't worry about what other people are doing. Unless you have kids, just keep rent as low as possible (within reason) and deploy that cash elsewhere.
Legendary advice as always +1 SB
Agreed a nice pad helps a lot with pulling chicks.
OP I gotta say though, 200k in 3 years is pretty low vs m&a / IB
I am keenly aware but it's also apples to oranges (3 years consulting pre-PE vs 2 years IB pre-PE as for typical durations), at least that's what I tell myself. But with paltry bonuses and an average base of just over $100k for three years (averaging each year's salary) I think I have done decently for saving in NYC. That is partly why I am looking for this benchmarking to understand what my new peer set does (not to say I will follow 100% but it would be good to upgrade somewhat to keep a happy s/o).
Saving $200k within your first three years shows incredible discipline. Nice work.
Thanks, appreciate it. Bringing lunch to work and taking the train adds up... as well as flexing an already small place in Harlem / LIC / etc...
I actually think 200K after 3 years in consulting is really good. Does that include 401k and IRA contributions?
I'm just nearing the end of my 4th year and I'm getting close to 300K all-in, but a majority of my savings came from the past 2 years vs. the initial years as an Analyst. I also spent some time at a BB that low-balls people come bonus time. Mind you this is all in NY
Includes IRA, but not 401k. Not sure what my 401k is (generally don't really tinker with that).
Can I ask how much you're paying for rent?
~2.5k, but it was lower in my initial years
Yes...$2500 is fine.
know tons of analysts paying 2k/mo in nyc...you're making double and will be absolutely fine spending 2.5k/mo on a flat
The general rule of thumb for rent is 25-30% of pre-tax income on rent, but that's somewhat outdated.
That means you could be theoretically spending like 6-7k a month on rent and could be fine. Obviously you'd be silly to spend that much on rent as a ~25 year old even if you could, but I'm also against the "save every penny" mentality that some have.
Assuming no kids and no family, ~2-3k is a perfectly acceptable amount to pay for rent in my opinion. If you're in a major city, you might have to get roommates (or a smaller studio) if you're in a Chicago or the equivalent, that could get you a nice 1 bed or a decent 2 bed if you want the space.
Having a cleaned up living space is huge from a mental health perspective and to me, part of becoming an adult. I have some friends that have had crappy places/multiple roommates, but pay 1k less on rent than I do, but I can't say they're much better off. The 12k they've saved over the course of the year hasn't made a material difference in their lives. Unless you can go to an extreme and pay 0 rent by living at home, you're going for some sort of FIRE lifestyle where you want to retire at 30, or the extra 10k could be utilized in some hugely helpful way (student loans, remittance to family), I'd say pay up for a place that will make you happy.
Plus in my opinion 2500/month for rent for a great place vs 1500/month for a place with a lot of compromises just isn't worth it. Time and convenience are going to be huge over the next few years as you work hard to succeed in PE. Adding a mediocre living situation on top of that isn't worth it.
Just my 2cents though.
Agree with all of this. I’m outside of NYC now and spend in that $2-3k range. Really nice spot, great views, amenities, everything. The difference in general quality of life is huge and worth every penny. I can’t possibly imagine going back to NYC and paying in the 1.5-2.0k range that I paid during my analyst years. If I were to go back I’d pay $4k+ to have a livable spot and wouldn’t think twice about it. You could make $300k a year, pay 4K a month in rent and still save $75k+ per year. Incremental savings aren’t worth the trade off at this point.
Why would you be silly spending that much? In fact, given rising lifetime income expectations, the age to be spending more is when you're young as you seek to smooth lifetime consumption. I thin 25-30% is way too much, maybe 25-30 of post-tax.
2500-4000 fine OP
So you're questioning why I think spending 7.5k/month on rent is foolish, but then advocating for spending less than that on rent. I think you misread my post.
If one was a first year Associate making $300k a year but was spending 7k+ a month on rent for a really nice 2bed/2bath I would categorize that as wasteful. Again, to each their own, I'm not going to tell anyone how to live their life, but if someone was asking me for advice on rent and said they found a great place for $7k I would say they could probably find a place thats functionally just as good for half the price, even in a major city.
The 25-30% is a rule of thumb (but an outdated one) but gives a general frame of reference for what makes sense. I'd agree with you that 2.5-4k is a reasonable range.
Just to add a datapoint, I’m a first year associate and pay ~$2,400 for a studio in Brooklyn. Previously had cheap rent in flex’d apartments as a banking analyst but felt like this year was the time to upgrade to having my own place
Thanks for the data point!
Does 2.3k as an IB analyst sound crazy to you guys (nyc)?
It's pretty sad if you think about it, but I've always lived with at least 1 other roommate (in a house, flexed apartment in NYC, etc.) because I like nice places but refuse to pay over $2.5k in rent by principle (felt wasteful even when I was making 350k+). I get the feeling. It's pretty ridiculous how expensive NYC/SF is (and a sudden revelation that even at 350k I was feeling a lot of financial pressure to nickel and dime on my expenses).
As I creep closer to 30 though, I'm seriously thinking of just saying **** it and pay up for a nice 1BR in a nice area that's 3-4k. Will it hurt? Hell yeah. But at some point you have to start thinking about your quality of life.
At a certain point, living alone just to have complete privacy and freedom is probably going to be nice. I was lucky, I never had a roommate when I moved into NYC. Had a beautiful studio with an alcove and separate kitchen UES. Pied a terre. I still miss that place.
I have nothing to add to this thread, but holy shit is Chicago a good deal on rent
Was just over 2K, west coast major city
$2k per month in Texas. Doesn’t go as far as people think unless you’re in the suburbs, but can still get you a very nice 1bd in the cool parts of town
About to be in similar boat. TX (Austin, Dallas and Houston) isn't as cheap as people think it is. Will have <700 sq. fee for $1,900. Good location, but still.
Yup, friend is at ~$3k for a 1,300 sq ft 2BR.
European here, why isn't anyone buying an apartment in New-York ? Can't you afford it in your late 20s/early 30s if you make 250-400k?? Seems crazy to me. My coworkers certainly make less than that at Ass 2-3 level and can still manage to buy something with a 25-year fixed rate morgage (below 2%, thanks EU)
Please explain!
where are you seeing 25 fixed year
France and Germany for example, my colleague got around €250-300k mortgage on 25yrs with something closer to 1.5% than 2%. Average in France is 1.30% 20yrs / 1.60% 25 / 1.90% 30 (source: https://www.empruntis.com/financement/actualites/barometres_regionaux.p…)
Anyways my initial question was why would no one buy something in NYC when earning more than 300k ?
There’s some discussion here:
https://www.wallstreetoasis.com/forums/when-did-you-finally-buy-a-place
Realistically, most associates are able to buy a place if they wanted (but maybe not the place that they want), but there’s a lot more that goes into that decision than “I finally have enough money to buy” and in many circumstances renting is actually a better financial decision (as long as you invest the down payment and any monthly savings)
Interesting how people see that in the US. I would actually rather buy a smaller place as analyst/associate (maybe rent it out and live in a rental myself), then buy a second bigger place once I earn more money that I would see myself in the longer term (think 2 bedroom or close suburbanian area house).
Long story short, no, you cannot.
The math generally doesn't make sense due to property taxes + HOA fees. Might as well just rent and not need to worry about upkeep, etc. If you have children the trade-off is you have to go to public school (which is VERY hit or miss in NYC), the suburbs have higher property taxes but the schools are way better. Then there's also job security and not wanting to commit to a 25 year fixed-rate mortgage at age 25. Seems like a burden when you're in your 20s and just want to fuck around.
Yea taxes/living in Manhattan vs. far from work are the real deal breakers here. Morgtage payments would be +/- aligned with rent amount, especially if you make $300K so you would still be able to fuck around until you get kids/wifey
I'm probably in the minority here but if you fit all three of the following characteristics, I'd recommend you spend what it takes to get a nice place- you can define that as you see fit but if it's $4500 for a 1Br in Chelsea, you can afford it (of course you are saving less near term) and it is a massive quality of life boost. Trust me- I went this route and never regretted it.
2500-3k will get you a solid 1 bedroom in UES. I use my base as a proxy rather than my all-in comp, so 2500-3500 isn't unreasonable depending on how nice you want it to be.
Everyone - thank you so much for the feedback here. This has been tremendously helpful. Even if I did not respond to all comments I appreciate the wide ranging but always thoughtful input.
I know one Assc spending 5k for a Park Ave studio. Super nice building in the UES, but I think he does not budget well. When I asked him about it, he said that he does dip into his previous bonuses.
Edit: I did not notice this was the PE thread. I was talking about an IB associate.
Split a $5k 1-bed with my SO, I make more so offered to split it 60/40 and pay $3k on my end. Gets you a spacious 1-bed with a home office in a high rise doorman building in a nice part of town (Union Square area). I feel $3k is on the upper end of what I’m comfortable paying, but being able to get everything we wanted (location and unit) is worth way more than saving an extra $10k a year
Considering a similar situation to yours - did you financially stable paying that sort of rent? Looking at coughing up $3,400 alongside SO. All in comp expectation is $325-350k, have about 1.5 years of banking salary saved up (~$130k). Alternative is to stay in small studio away from downtown for $1,500 a month. Curious to hear your thoughts.
Stable yes, but not flush with cash (prior to bonus). It leaves enough to go out, enjoy myself, etc., without fretting the cost, but building up any meaningful savings only really happens at the end of the year. I had a little more when I starting paying this much (1 associate year down and ~$250k or so to my name), but not much in the grand scheme of things. It’s definitely still a luxury expense, but one that felt worth it and within my means
I think the QoL is so underrated...that $10k in dollars is worth like half of the intangible comfort for me
Have always had the mentality of living off my base and banking the bonus - currently splitting $3,500 on a 1-br with my SO (pay more since I make more). It's an old unit and not super swanky but spacious enough for us to both WFH comfortable.
With HCOL markets like NYC/SF, you need to figure out what you're willing to compromise on unless you're willing to dip into the bonus.
Man reading some of these rent prices is bananas...I'm $2,700 for a one bed in Boston, I think I'm the moron here
Nah man. Long live the anti-simps.
Honestly saving the extra call it 25k while you’re young is not worth it. Go for the place that gets you everything you need. Don’t compromise. Stay on the hamster wheel
how large is is ur cock?
I'm generally of the mindset that saving an incremental ~$10-20k a year won't impact your quality of life the same way spending that money on a nicer place would. If you're reasonably comfortable in your job (that is, you think you'll be around for a couple of bonus cycles), I don't see anything wrong with spending as much as $5-6k / month on a very, very nice place. If you're making $300k+ and you have a fairly reasonable lifestyle outside of that, you should still be saving a healthy amount annually regardless. The calculus changes of course if you're looking to buy a place in the near-term, but given the comp trajectory most young PE professionals are in that shouldn't be too much of a problem.
Genuinely curious. What city are you living in where 2 bedrooms are only $2.5k?
You could find a 2bd in Manhattan for $2500… wouldn’t be the kind of place I’d want to live in, but it can be done
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