Chance to Break 7 Figures?
on average, what's the chance that an investment banking analyst at a BB will eventually make 7 figures at one point in his/her life?
pretty much, what percent "make it", what percent don't and are stuck making ~150k or less the rest of their lives
also, what does it really take to "make it"? can you make it in the finance world if you're just after money, or do you need a genuine passion for the field?
awful post on so many levels
Most people here place some value on having money but you just made 150K sound like its nothing...
Personally, my # that I'd be happy with a yr after taxes is $250K. Just so I can say I make a 1/4M/yr but regardless 150K is a healthy sum.
You sound pretty disillusioned dude. Allow me to share some information with you:
To answer your question: few.
The only way you can make 7 figures is to start your own company, head a major company, or bring in a lot of deals for an existing company. Theres no way you can dick around in excel for your career and expect to make that much money. Another way to say this is the standard 2 years in BB IBD -> pre-MBA PE -> top MBA -> PE/greatness track won't land you 7 figures, you typically have to do something above and beyond what everyone else is doing.
http://www.pinnaclegroup.com/compensationstudy.aspx
if IB analysts at BB start at 100k+ including bonus, why is 100k such a big deal? I'm always reading shit about how bankers are pulling 7-8 figures. I guess this is only the super-elite who really really love finance? Someone just aware me, i don't understand how this is the wrong field for making money. I can't play in the NBA.
Because being a banking analyst sucks hard. If you told me that I had to spend 100+ hours per week working as an analyst, indefinitely, I think I would kill myself.
$150k at 40-50 hours per week is nice, especially outside of NYC. For me personnally, 500k pre-tax (outside of NYC) is where I want to be. Beyond that, I wouldn't know what to do with my money.
Seriously, 7 figures? What are you even going to do with that? Buy a Bugatti Veyron? Money's nice, but family, friends, and experiences matter. Liking your life matters.
Your MDs did not get where they are by luck. They busted their asses to get there, and continue to do so to keep their jobs. A few people get 7 figures per year while maintaining normal lives; these people are likely extremely talented and lucky. Don't count on being one of them. For most of us, a million+ will require years of unwavering dedication to the job. And then you have ask, "is that extra zero worth a decade or more of my life?"
great post man, thanks. also, is living in NYC really worth the cost? or is the cost of living only because so many (rich) people inhabit the area. would you say making 700k in NYC is the equivalent of making 500k in california (specifically the los angeles area)? pre-tax
This thread should be killed. OP clearly has no idea what reality is like
i really don't, at least in the finance world. that's why i'm asking you guys to aware me.
"stuck making 150k"
Are you f-ing kidding me? Someone needs to close this thread. This kid probably believes that every I-banker drives a Ferrari, has a countryclub membership, and a penthouse in NYC. OP, let me drop some knowledge on you. Most I-bankers don't live that "bottles and models" dream you fantasize about.
Chances are if you're in IB, you'll be the guy in the Benz, but unless you make it to the top you won't be in the Ferrari. To break 7 figures you have to be a big-time MD or at the C-level (CFO, CIO, etc...)
how do you "make it to the top"? what are the attributes of these people? or is there no strict formula
no strict formula bro, just work hard and know how office politics work and you'll gradually work your way up the corporate ladder.
Check out trading. Young people can make 7 figures doing that.
Good luck, though. You'll need it.
Hey OP...you suck
I think some of the people replying to this thread are seriously of whack with what it costs to live in the real world. Try getting ahead on $150 in a high cost of living area like NYC or most parts of California. You pay a lot in taxes, 1,500 - 2,000 a month for a starter apartment, etc., etc. Clearly, no one is starving to death on that level of compensation, but you are hardly killing it either. The whole point of working in finance is to make good money and get ahead. You are not going to have a nice house and afford private school for your kids on 150, it's mathematically impossible.
To answer the question, there is no data, but it's certainly possible to make seven figures if you work hard, have some skill, and are either a partner at a good shop or run your book, either for yourself or someone else. Most of the analysts at the firm I work for either went into business for themselves if they could raise capital, or went to work for others making 500,000 - 1,000,000 a year roughly in comp. Virtually all of them were multi-millionaires and retired in their mid-30s. Obviously, the outcome depends a lot on what trajectory you are on and where you start.
bump for more input
Easily my new favorite thread on WSO, for a variety of reasons.
Quick thoughts: 1) 150k gross isn't what it used to be guys, especially in New York 2) People make 7 figures. As the discussion has gone in dozens of other threads, these people aren't common in banking (MD level or higher basically, and obviously not many people make MD considering the kind of sacrifices you have to make and ridiculously hard work you have to put in) but like some people mentioned, trading or working somewhere that your comp is tied to P&L, people make this money, but again those people are just as hard working and risk-taking as MDs if not more. 3) Ferraris are fucking gay 4) In NYC, once you get up to about 300k gross then I'd say you're comfortable and can start coasting 5) Nobody getting paid the kind of money you're looking for is in it solely for the money
I think you don't have a lot of familiarity with what things cost. An anecdotal example: my dad did the whole Harvard-->Lehman Brothers-->Wharton-->Lehman Brothers thing, and then we moved to the mid west and he's an MD at an MM here. He makes around 400k, and I have never felt less than "rich as a king." This might be because my parents are incredibly good at budgeting, incredibly good at prioritizing, or just always put us kids first, but I couldn't imagine having a better standard of life. Objectively speaking, all of us kids go to private schools, buy expensive preppy clothes (just being honest), and spend a lot of money just going out and stuff. TBH, I've always thought my family is a pretty solid example of the American Dream (my parents are sort of immigrants too).
OP has got to be a college freshman or is still in high school. If you're doing banking just for the money, you're never going to last, and certainly won't be in it long enough to make a million a year. As a kid, it's nice to think that you'll just end up making millions a year one way or the other, but that's just not how it works. To make a million a year, I'd imagine you have to be very hardworking, very smart, and most importantly, very lucky. If you're just after the money, you've got your priorities messed up, and will likely not end up making the kind of money you're after. People In every profession can make great money, find something you're passionate about and work as hard as you can. There's no fast track to success, so stop looking for the easy way out.
Why revive this? Leave the poor kid alone already.
Making 7 figures in any field requires a lot of luck, determination, and eventually skill/wisdom. It often takes years even to touch the mark. There's no formula to it.
I don't understand the self-righteous people commenting here. Kid just wants the answer to a question, albeit one that is vague. If you think you can live comfortably with a family, kids going to a private school, and driving in a Benz with 150k a year in a major city you're delusional.
Easiest Way to Seven Figures (Originally Posted: 12/31/2013)
What is the easiest, most risk averse way to have $1mm in cash?
You can say things like go into IB, but that is not exactly easy (who wants to work all those hours...) You can get another high paying job in finance but that is not easy to get Entrepreneurship seems to work for a lot of people, but that is not risk averse
I have my own opinion that I'll post later, but just curious as to what other people here think.
Create/source a product that makes a $1 profit and sell 2million times.
inventing something & getting a patent costs about $8,000. If you come up with a few good ideas thats a pretty good way to make a huge profit. Have a few friends trying to pull this route. obviously not easy though
Usually ends up being quite a bit more than that, unless it's something extremely simple.
If there were an easy, risk adverse way of becoming a millionaire, don't you think everyone would be doing it? This reminds me of a quote from Roadtrip...
"It's supposed to be a challenge, that's why they call it a shortcut. If it was easy it would just be the way."
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffett lecturing to a group of students at Columbia University He was 21 years old.
I'm not sure that he still holds this view, but when it is executed effectively it can be very enriching.
http://www.businessinsider.com/how-to-sell-body-parts-for-profit-2012-3…
I reckon if you stretch it you can probably make about 50K just selling some of your body parts. Prostitution is a good way as well, you are quite young I would imagine and if physically fit let's say you'd pull in 100K in a year.
It's all pretty risk free if you get a good pimp. The first bit has some risk attached to it, but worth it as you are not doing any work yourself. It's really just the surgeon who is working on extracting some of your body parts.
That's 150K right there, for the other 850K I just don't have any other ideas. Maybe take the whole 150K and invest it in the lottery...
You joke but I remember reading about a "high class" prostitute making more than 200 grand a year, working 15ish hours a week. She charged like $500 an hour though.
What is the time frame? I would say get a well paying job with a nice 401(k) match and just live very frugally. Pretty easy to amass that kind of money if you avoid the common life destroying pitfalls such as marriage and children.
Marriage?
I didn't really have a timeframe in mind, though of course sooner the better. Maxing out 401k seems like a good idea to invest tax free.
What I had in mind was buying real estate in good areas and getting rental income.Seems like over the long run you don't have too much of a downside risk.
you're dumb
Stop shitting yourself, there is no easy way unless you win the lottery, inherit it, or find a suitcase full of $100's in the train station.
Marry it, steal it, or earn it. Most risk averse way to earn a lot of money is the way Buffet did: buy stable, cash positive companies and leverage the income stream against more aquisitions. Personally, my long term goal is to trade my own account for a living and I have to be honest: I love bubbles. It's like people just want to give me their money. Computers, bitcoins, gold, housing, the financial industry itself 1999-2007...easy money if you accept the fact that it's going to crash because people are gambling instead of investing. Ride it up, ride it down, it's just like surfing: the second you get lazy and stop paying attention you fall onto the jetty and get killed.
Markets aren't efficient, they're usually fucking retarded and are a reflection of fucking retarded decisions that the average fucking retarded person makes. Markets efficiently punish fucking retarded people for being fucking retarded with their money.
So why aren't you rich yet?
.....working on it lol
Whoever threw the shit, I want you to do the following: 1. open this link http://www.google.com/finance?q=INDEXSP%3A.INX&sq=S%26P&sp=1&ei=WY28UoD…
zoom out to 15 years
observe the multiple, massive swings
realize that if markets "knew" everything, they never would have over reacted to the bubbles that never should have existed. Instead, people got overconfident while bidding things up, and then panicked while bidding them down. That aggregate movement of lots of people making these decisions are what we call "the markets". If you still think they're rational after observing this, you're probably the type of person who thinks the Pope can never get it wrong since he declared himself infallible....there's no hope for you and I really really want you to be in the market so I can take your money.
Give me your life's savings so that I could start a fund. Guaranteed to have 7 figures in 5 years
(not srs)
penny stocks
The most unpopular way is to 'work hard' or 'work smart' Fool a rich person into marriage Stock market
Start with $2 Million and buy CDOs.
Bubbles are basically impossible to trade. If you recognize one, I recommend simply not placing any bets. If you do, I recommend placing those bets using call or put options with money you plan on completely losing so you don't lose your shirt.
There's some interesting behavioral theory on why arbitrageurs are wise to avoid stepping in to correct bubbles, even if they know things are massively overpriced. The gist of the problem is that "the market can stay irrational longer than you can stay liquid." This is especially true with short positions.
I don't ride bubbles up and I don't ride them down. I try to stay the hell away. I like to fly hang gliders by riding thermals, but when the thermal happens to literally be a tornado, it's probably wise to just avoid it.
There are a few ways to perhaps predict crashes in bubbles, but a conservative investor either avoids trying or makes very small bets. Either way, if Warren Buffett got his timing wrong on calling a bubble in tech (back in 98), and would have gotten thumped if he had taken out a short position, I don't think anyone is much wiser than he is on timing. Just because you might be able to predict where the tornado is going to head doesn't mean you go out there and bet on it.
Inherit it.
There is a lot of douchebaggery in this thread. The OP mentions "get another high-paying job in finance." That's my vote. I don't mean it would be easy as in it would be very likely, but there are lots of guys who make seven figures who didn't have to work 100-hour weeks to get there: - partner at a big 4 - partner at MBB - many other finance roles: trader (in the right product), MD in something like ECM, top performer in buyside or sellside research, big CMBS guys - many C-level guys have never worked a 100-hr week in their lives etc
Seriously, there is no easy way. It might have been easy for you but it was hard for someone at some point in the line. Suck it up and grind it out. Anyone who works hard can do it, you just have to work hard, take smart risks, and see them through.
@IlliniProgrammer - I mostly disagree with you. The best thing to do in a bubble is take advantage of transaction fees. In the gold bubble I set up a small gold brokerage and it didn't matter if people were buying or selling, or what the price was doing. When you're trading a bubble, which I started to do when I realized exactly how completely irrational people were being, the key point is to be extremely disciplined with your stops. If you want to try to hedge your position, that's great, but the cost of hedging in a high volatility situation is usually pretty well baked into the other side's model. Realistically, you want to spot a bubble before everyone else realizes it's a bubble. If someone can't see a bubble for what it is ahead of everyone else.....then they shouldn't be trading it. Never come late to that party. Never stay too late. These are one time opportunities that a risk management model isn't going to be able to explain very well.
How much was it to start up a gold brokerage if you don't mind me asking? Also, what kind of fees were you able to rake in percentage wise?
Create a non-revenue producing app, get enough people to use it, and convince a website like Yahoo! or Facebook to take it off your hands.
Oh, I thought you said 1 billion dollars. You're on your own with the millions
@UFOInsider but then you're really not making money off of stupid people. You're making money off of stupid people and smart people and could probably make the same off of non-bubbles. Just sayin. :-)
Follow the instructions in the E-mail from Nigeria.
easiest way is to sell drugs. not necessarily the most risk averse though. watch "how to make money selling drugs".
Damn, UFO must have rustled some jimmies to get all that MS. Whether or not it's easy, you can't tell me there isn't money to be made off of foolish people. For the record, I can't time markets and would follow IP's advice myself.
Starting up costs a lot: vaults, marketing, scales, testing equipment, bonding, license, bank accounts, legal fees, security (mostly off duty cops) but it evolved from a cash-for-gold into full fledged bullion trading. So, the expenses grew as we became more larger and more sophisticated. Never went electronic trading, so yes, we had Glocks tucked in our belts in case someone tried to dick us on delivery. Sounds crude but take a drive through a bad area with $100K of gold and it changes your perspective. Spreads were pretty small for the actual trade, but in the case where we were reselling to refiners instead of P2P then we were able to tack on transport and other fees. It was more a cash garage business instead of a formal Park Ave type brokerage, so the people we were dealing with were typically not too sophisticated. Had gold prices kept rising for another year or two, then yes we would have gotten to the point where we became a formal B/D and had physical locations.
I was actually just a partner, the guys who started everything didn't even see the gold bubble until later on when I showed them GLD charts and such. What I learned was that if something is booming you have to move very very fast and lock in your gains early....once everyone else figures out what's up you then use your head start to keep your lead and DO NOT OVERBUILD thinking it will last forever. (If it does, hey, bonus). As a boom gets recognition for what it is, all sorts of people jump in and that's the red flag: then you switch into "advisory" role and make money off of the treasure hunters. Personally, I didn't make a huge fortune on this, and the key takeway for me is to have resources available to jump on this sort of thing. My biggest regret is not having larger amounts of my own capital to play with early on.
Create an iphone app.
There is no easy way to make 1 million dollars!
no easy way.. if there were, everyone would do it
Selling cocaine, duh.
Oh wait, risk adverse. Hmm...
Honestly, the lottery is the easiest way to. But also the least likely.
BB ER analysts and IBers: At what age do you expect to see your first 7 figure comp. package and what will you do with it? (Originally Posted: 07/08/2016)
Many of the prospective IB lifers and ER analysts I've come across in college have a mentality where they will shoot for that first 7 figure pay check, trek along for a few more years after that, and then retire by 45 to start their career as the next globe-trekking Johnny Sins.
Do you veterans actually know of any BB employees who made it near the top of the IB/ER world and just called it quits after they hit 45? Or do most of them keep pushing forward for another 20 years?
Hello kwilly, you seem like a good kid. Anyways me being in an m&a group at a bb, eventually future chairman of the federal reserve, and the next face of the 36 dollar bill, expect to see my first 7 figure cheque real soon. I am going to place an all out bet from savings accumulated from four back to back summer stints on a fight in the upcoming UFC 200 event.
I will use this money to finance a PhD in forestry.
I will also make the cheque my facebook profile pic and tag my mother martha, whom has supported me since i was a wee child.
hahahaha
That's very atypical for IB or ER. Definitely more common in the HF world.
Not sure why anyone who worked their way up in IB would quit after only a few years of being an MD. Think about it.. in your 40's, you're seeing the culmination of your entire career come together. Former classmates and colleagues, mid-level company people you worked with on prior deals, etc. would be entering C-level positions. Your network would be at its peak in value. Same with ER. You spend however many years working under an analyst, then however much longer building your own track record, why would you quit at your peak?
Well I don't know if I would, but many of the aspiring analysts I know in college come from lower middle class backgrounds and see IB/ER as a means to an end--freedom. The MD's, partnered MD's, and respected ER analysts probably still bust their hump in their middle-age years if they hope to make more than 1 mil/yr. I can see how at that point the rat race is not worth it for a family man with a wife and kids.
By age 45 he should have around 20 million saved up if he's smart enough. That's enough to live comfortably off the interest and then have a bit left over to put into side businesses/RE. This can definitely be a better path for an MD who isn't really on a partnered track or an ER analyst who just wants out from his 50-60 hour work weeks.
Bare in mind I'm not advising this route to anyone or saying it's superior to sticking it out as an MD for another 15 or so years. It just seems like something that most non-partnered MDs and senior ER analysts would do after working for so long.
This is probably why people say you have to love doing deals to make it a career. The same enthusiasm that brings one to reach the MD level (probably 10% of analysts make it or something?) will probably keep you going well into your late-career, instead of chasing the MD carrot and retiring 2 years after getting it.
I would expect this is far closer to the truth. If you do the math, you do not need to get anywhere near the MD level/7 figure paycheck in order to be able to retire and live off the interest. People who are looking to go that route make their nut WAY earlier than that.
I'm an IB analyst and I don't expect to ever make seven figures in one year. Is it possible? Yes. Can you strive for that? Sure. but if that's your expectation then your setting yourself up for a major disappointment.
Probably never.
I work at a MM IB. My bosses (early 30's) have had a few good years where they've made $1mm+. The head of our (small/satellite) office definitely pulls $2/3+mm depending on the year (I work in a high beta business).
Haters gonna say fake but its true.
Cue college freshmen mentally masturbating to piles of money.
Aaaaaaand scene.
I work in ER at a MM bank, and yes people definitely can make 7 figures if they are rain makers. Top bankers, and global heads of industry coverage are allocated the greatest share of the bonus pool, so if the bank has a stellar year, then they're well positioned for a massive bonus. Nobody is compensated anywhere near that in terms of salary though. It all comes down to how the bank performs as a whole, how your area of the bank performs (S&T, ER, IB), and how YOU perform within that group by generating fees - which can be done a number of ways.
And furthermore, I can't say I've ever even heard of someone calling it quits after reaching that level of earning potential. Why would you? If your ultimate goal is to retire at 35 and go live in the forest, then you probably won't make it to the top. Guys at that level love their jobs.
In the ER field, if you have a detailed, expert knowledge of all the companies in your coverage universe over the past 10 years, and a tighter relationship with the management teams than those at other banks, you don't need to work very hard to get paid, because your experienced opinion is more valuable than the young analysts. However, that is contingent on you being able to develop those relationships, and having talent at forecasting earnings. And not everyone can do that successfully.
67 days before my 29th birthday. I'm confident about this...
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