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What are the long-term prospects for people pursuing careers in finance and what is the culture of the industry? I feel that students entering into the financial services industry don't have much of a plan (perhaps you don't really need one) except to exit into private equity or attend business school. What happens afterwards when you are 30 or 40? Are you on a sustainable career or do you milk it for all its worth until you get canned?

My views:
1) Financial services has recently been highly volatile with low job stability. (I don't know if this is generally the case)The skills you gain as an analyst tend to be more technical but success in the industry requires cultivating contacts and being highly personable. Essentially, once you're a VP or MD and you're fired or have your reputation tarnished, it's difficult to maintain your lifestyle with the skills that you actually have.

2) Undergraduate students have no idea what to do after they go to business school and/or enter into private equity. This is of course after they've exploited the numerous "exit ops" after being a 1st or 2nd year analyst. It seems that students are short-term greedy and don't have concrete plans after 5 years.

3) The more I meet MD's, the less I want to become one. I may be unlucky, but I tended to meet staid and boring individuals. I don't want to be a workaholic who puts off fun until 50. I feel that people who enter into the industry tend to just put up with a lot of crap for the money, and there is a lack of job satisfaction.

So, just some uncertainties I have regarding the industry and the people who enter. How pervasive is the attitude, "I'm going to make so much money that I can retire when I'm 40?" Thanks for any input, especially from older professionals who have a much better perspective.

Comments (47)

  • Marcus_Halberstram's picture

    #1- the industry has been and always will be highly volatile with low job stability; this isn't something new. I was reading an article in the throes of the credit crisis about lay offs on wall street and how this marks a major paradigm shift in Wall Street excess and culture and will shake the way banks do business to the core. The more I read the more I kept getting a dejavu feeling. Finally I went to the date on the article and it was published in 2001, I had the same article almost 10 years prior.

    #2- Undergraduate students have no idea what they want to do after b-school? So what? There's nothing wrong with that. You've never worked a day in your life, much less worked in such a demanding environment making such huge sacrifices. You have no idea how you'll deal with it for a protracted period of time, if you'll be a rock star or mediocre or below average, how much you'll enjoy it once the novelty of it wears off etc... there's nothing wrong with leaving undergrad at 21, 22 years old with the intent of getting on the 2+2+2 track and figuring out what you you're going to do long-term somewhere along the way. In fact the kids who are the know-it-alls and swear they know exactly what they'll be doing 5 years down the line are immature and naive.

    #3- I think its a mixed bag. I know a lot of MDs that are actually pretty cool. Its usually the ones that are laid back and not completely full of themselves that are normal. How many MDs have you met exactly? And of those, how many actually gave enough of a shit about you to have a real (non-recruiting) conversation with you?

    As for your actual question about long-term prospects in the industry... different strokes for different folks. Maybe you'll be a career banker. Maybe you'll move to the buyside, get your MBA and go back to the buyside on a partner track. Maybe you'll switch completely out of finance all together. Maybe you'll leave banking for a more moderate lifestyle in another finance capacity... a lot of women do this because of the challenges in such a demanding career and having a family (many move to IR on the buyside, HR in banks, etc...). Many people move to a CorpFin/Biz Dev type roles.

    It all depends on the person. I know people who fit every single one of those scenarios I listed above. As you move through the 2+2+2 you learn to stop following the track and do whats right for you, because it doesn't matter where you work if you're miserable doing it.

  • D M's picture

    1) After working 90 hours/week for two years you have an insane work ethic. This is probably the most valuable thing you learn. It's just like any job, become a plumber, after 15 years your job options are limited unless you learn a new trade. Also, VPs/MDs (if youre not a moron) have been networking the whole time they've been in the business. Exit ops could include going to work for some other company in the same type of business or moving out to a company youve done work with in the industry you're an expert on. Or starting your own company.

    2) What's your point? I think a lot of people have an idea of what they want to do, at least coming out of B-school. Lots of people seem interested in entrepeneurial pursuits, continuing in PE/IB/whatever, corpfin if they want lifestyle or a number of other options. It's up to you to decide what YOU want to do after you go to B-school (if you even do go).

    3) You work your ass off in IB, that's just how it is. If you want a work/life balance, give some thought to PWM or corpfin or something that requires less of a ridiculous schedule. If you want to make so much money that you can retire when youre 40, look into PE/HF, but you're going to have to live a somewhat muted lifestyle.

    Im not an older professional, but these are all questions that you can easily come up with the answers on your own. Dont want to work 70 hours a week until youre 50? Dont do IB. Think about what you may want to do after B-school, your ideas will probably change as you work as an analyst or whatever you do. It happens, it's normal. Make a bunch of different plans if youre concerned about what you are going to do after so you have a general idea of different post-analyst career paths. Seems like you need to do some introspection, not have other people tell you what to do.

    "You stop being an asshole when it sucks to be you." -IlliniProgrammer
    "Your grammar made me wish I'd been aborted." -happypantsmcgee

  • Marcus_Halberstram's picture

    As an aside, the douchey senior bankers are the ones where work is still their #1 priority, its still the most important thing in their life and their #1 priority... which at 40-50 years old, is just fucking sad. In addition, they tie most of their self-worth up in their careers so they feel the need to make themselves feel important by being douchey and posturing how successful they are.

    Its a pretty pathetic and pitiful existence if you ask me, and I've started to come to the conclusion that all of these people are the ones who somewhere along their junior banker days didn't see the light and realize that they need to find something that they find personally fulfilling.. 10-20 years down the line, its too late and they're stuck with what they've got and they refuse to let go of this delusion that they did in fact get all they wanted out of life.

  • Dr Barnaby Fulton's picture

    I disagree with your MD being boring assholes. About a month ago, I met an MD on campus who was the fucking man. He was interesting to talk to, was not a one dimensional know-it-all, and bought everyone a bunch of drinks at the bar after the alumni event.

    On the other hand, I've met another MD who is an egotistical douche bag. I had an interview with him (as a sophomore) and he started asking me questions in Spanish because I told him I studied abroad for a few weeks in a Spanish speaking country. At the end of the interview, he told me IBanking is on the same level of NFL, MLB, NBA, etc,. and I couldn't cut it.

    The funny thing about this....the asshole was an MD at some no name boutique in Cleveland and the cool guy was named a partner at Goldman the week after he was on campus. MD assholes are like any other asshole ....they have an inferiority complex.

  • brewster-keegan's picture

    Thanks for the posts. I definitely agree that I need to some more introspection, but I also need more information to make a decision. I want to try to avoid a path that leads off a cliff (in general whether it be an engineer or plumber, not saying investment banking leads off a cliff at all).

    Feel free to judge and bash this dilemma that I'm facing, but I've thought about pursuing a career in medicine. Also, feel free to make the connection between medicine and banking (hint: it sure as hell ain't altruism). I'm an engineer and more technical, and I know that medicine is perhaps even more of a structured path than banking. Once you're 27-29, you're almost completely SOL if you decide you want to become a specialist or surgeon. I realize that this is a 180 degree turn, probably shows that I'm not man enough to fulfill my greed, but I just want to see what the culture and attitudes of investment bankers are. I'm also in the process of researching the lifestyles and culture of doctors.

    What happens to people who put life ahead of work and realize that they want more balance in their life? Do they go to business development or work in the corporate finance departments of companies and in general earn less income? Since money is a lubricant for many unpalatable experiences, I just feel that it'd be a shame to come out of banking in a job that anyone with a finance degree could do, especially after enduring so much. Sure you come out with a work ethic, but I'm sure that special forces soldiers and MIT engineers can put up with a lot as well. I guess I came into university without an idea of what the financial services industry does or what the culture and ideology of bankers are. I don't want to follow the herd mentality and I want to be more aware of opportunities, career satisfaction, and lifestyle after the IB, MBA, and PE.

  • Kenny_Powers_CFA's picture

    You want boring try working with accounting firm partners.

    There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

  • wolverine19x89's picture

    .

    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

  • watersign's picture

    all office jobs are boring..except trading ;)

    alpha currency trader wanna-be

  • Suede Loafers's picture

    I would love to know what the OP ended up doing!

  • In reply to Marcus_Halberstram
    iggs99988's picture

    Marcus_Halberstram wrote:

    As an aside, the douchey senior bankers are the ones where work is still their #1 priority, its still the most important thing in their life and their #1 priority... which at 40-50 years old, is just fucking sad. In addition, they tie most of their self-worth up in their careers so they feel the need to make themselves feel important by being douchey and posturing how successful they are.

    Its a pretty pathetic and pitiful existence if you ask me, and I've started to come to the conclusion that all of these people are the ones who somewhere along their junior banker days didn't see the light and realize that they need to find something that they find personally fulfilling.. 10-20 years down the line, its too late and they're stuck with what they've got and they refuse to let go of this delusion that they did in fact get all they wanted out of life.

    I'm so perplexed by this post. If a person makes a career commitment as demanding as IB, and maintains that dedication long enough to become an MD, why wouldn't work still be a #1 priority at 40 or 50? Isn't it an individual's choice how he prioritizes his life? So it is ok to prioritize career advancement in your 20s and 30s, but not beyond that?

    Most people go into this line of work long-term because they hold financial success as their top priority, so it's not so far fetched that he who sticks it out, also measure's his personal fulfillment by status and bank account. Not everyone is after some great leisure, higher purpose in life, or feel they aren't getting "all they wanted out of life".

    The fact that making 7 figures a year as a seasoned finance professional necessarily must equate to some level of dissatisfaction or regret of life choices is an all-too-common sentiment on these boards that reeks of self-loathing for one's ultra-success. There is nothing wrong with being a career banker, making a shitload of money, and deciding how old you want to be when it's time to retire. 40 or 50 is simply not that old. How old are you, Marcus? If you're 30, you're only 10 years away from being 40...and trust me, 10 years can fly by.

  • In reply to iggs99988
    Marcus_Halberstram's picture

    Let's start off with clarifying what I was saying. It was quite clear and doesn't really warrant clarification, but I'll humor you anyway.

    I was speaking to the poster characterizing all/most senior bankers as douchey and full of themselves. My point was that's not entirely accurate, senior bankers are generally pretty normal. The douche bags among the bunch, generally behave in this manner because they're unhappy in life and think that making themselves feel important at work will make up for it. In the instances I've seen, they're unhappy because they misappropriated their time along the last 20 years and didn't realize when they had gotten their career going and needed to develop their life outside of work. Those are the guys who generally behave like self-important douche bags. Work is all they've got, and they'll be damned if they don't swing their stimulate their ego.

    Secondly, you sound incredibly green. Making MD in banking is not exactly the crown jewel of lifetime achievements. And being a successful banker isn't all that impressive, although it may seem as such to a 20 year old vying for a banking job. To devote every waking hour of your life in order to become a MD at JPMorgan is, and I use this word seriously, pathetic. It's the definition of not knowing how to appropriately spend your time and not understanding the law of diminishing return.

  • In reply to John-Johnson
    iggs99988's picture

    John-Johnson wrote:

    "Ultra success"? Lets be real: IB MDs are far from rich. Most successful BB NYC MDs make around 1-2 million/year: that’s hardly rich by NYC standards. After taxes and living expenses, it will take you 10-15 years minimum to amass an 8 figure net worth. Hell, I know many MDs who barely break mid- six figures. Please don’t act as if MD at a Bank is the best path to riches. Most of my real wealthy acquaintances (those who created wealth; didn’t receive part of a 1% commission of corporate restructuring) think of bankers as losers. I’m not trying to hate on banking, but don’t think people who question the Banker career path are just pathetic, jealous losers. I know someone worth 9 figures who cracks jokes about how long and hard Bankers try to attain a lower upper class income (by NYC standards), just to avoid risk. There are much more efficient ways to become wealthy (if you can even call Bankers that). Again, I am not trying to hate on Bankers.

    This post can't possibly be legitimate; you are definitely a troll. If you think an annual 7 figure income is not "rich", then you are an unemployed college kid. Furthermore, if you had a guaranteed (understand, nothing is guaranteed) 15 year path to amass an 8 figure net worth, you are certainly an imbecile if you forego this path for another, more "efficient" one.

  • jargon223's picture

    I think the main takeaway here is that all these kids dickride someone who's an MD at a bank. Getting that far up the ladder and making 1+ MM (but not all MDs across all divisions make that) is definitely nothing to down someone on. HOWEVER, I do agree with the fact that, like I was saying at the beginning, kids dickride those people. Is it really the greatest thing you could have done or even the thing that could have made the most money? (because let's be honest, most people are in it for the money - cut finance compensation in half and see how many stick around). As the young people who were so mesmerized by being higher-up in banking get older, they, like a lot of people as they mature, will probably notice something odd happening; those people they knew who went into fields that didn't seem to carry as much money, promise, or career prospects ending up being very successful. Some guy you knew who went on to work at some random corporate job got way up on the totem pole; some guy in real estate you knew ended up having a big brokerage; some other friend ended up having a chain of businesses, some guy who became a salesman ended up being very successful etc, etc.... And to what another poster said earlier on this thread, when you become anything in a corporation, what are you really? You're still property of the company - you don't own any real assets while working there. Whereas with careers where you can create and own a business - law, medicine, small businesses like retail businesses, real estate etc - you are the boss. You have something that you truly own and could even possibly pass down to children. As another plus, it's preferable to do a Schedule D or Profit and Loss statement than having a W-2 as you would if you work for a corporation; all those write-offs save quite a bit (you pay less in taxes), plus if you have a separate entity like an S-Corp, that entity files taxes on its own and isn't included on your personal income tax.

    The list goes on and on, and I'm not trying to bash peoples' dreams here, I'm just laying out the facts. I think finance is absolutely fascinating, and I truly hope people go into it and enjoy it. I just don't like it when I read immature posters saying immature things about how finance is the end-all-be-all of all careers if you want to make money. This is basically what the other poster was saying.

  • In reply to John-Johnson
    NESCAC's picture

    John-Johnson wrote:

    Low 7 figures in NYC is far from rich. Ive spoken to MDs about it, they tell me that they feel upper middle class. After taxes and living expenses at least. Are you suggesting you are more knowledgable than MDs themselves? I never said it was 15 years total; I said 15 years of attaining 2 million income (MD level) may yield 8 figures if one is very frugal. More like a 30 year career path, assuming one is incredibly lucky and gets promoted continously. There is a miniscule chance of an entry level analyst making MD (although far greater than on the buy side). 15 years+extreme luck+extreme sacrifice= 1 mil at best in NYC (300k anywhere else). Doesn't seem worth it to most people.

    I am from NYC and I will say that you are on crack if you honestly think 7 figures (pre or post-tax is irrelevant) is far from rich. Most people do not see that kind of money in their lifetimes.

    Shameless plug for my blog: liboratory.wordpress.com

  • In reply to iggs99988
    Marcus_Halberstram's picture

    There's no trolling here, you're the only one that sounds like a college kid. He's right on the money. 7-figures in NYC is not rich, its upper middle class. $1.5m is high-six digits after taxes.

    If you're married with 3 kids, you're living comfortably but you're still budgeting and being smart where you can. Keep in mind no MD is living the lifestyle of a public school teacher. It costs money to live that lifestyle. And sure... maybe you live in a $3m apartment/house and that means you're rich based on middle American conventional wisdom, but you don't feel rich, you still think about money. Especially given the volatility in this professional where you need to bank a big chunk of what you make to smooth out the earnings volatility and support your lifestyle... which gets exponentially more expensive once there's a wife and kids involved.

    People throw all these numbers around and it sounds like so much money, until you're actually making it. Then your tastes get slightly more expensive, your lifestyle gets a bit more expensive, you get a bit older and you're living comfortably but aren't exactly flying private, driving ferrari's and chartering 100 foot yachts for the summer.

  • In reply to Marcus_Halberstram
    NESCAC's picture

    Marcus_Halberstram wrote:
    People throw all these numbers around and it sounds like so much money, until you're actually making it. Then you're tastes get slightly more expensive, your lifestyle gets a bit more expensive, you get a bit older and you're living comfortably but aren't exactly flying private, driving ferrari's and chartering 100 foot yachts for the summer.

    Chris Rock once put this beautifully: "Wealth is passed down from generation to generation. You can't get rid of wealth. Rich is some shit you can lose with a crazy summer and a drug habit"

    Shameless plug for my blog: liboratory.wordpress.com

  • In reply to Marcus_Halberstram
    Red3's picture

    I know this is immature but I thought MD's Did take their ferrari's and yachts out over the summer. I hear kids bragging on being invited to MD's this and MD's that all the time.

    Hugh Myron: "Are there any guides on here for getting a top girlfriend? Think banker/lawyer/doctor. I really don't want to go mid-tier"

  • In reply to Red3
    Marcus_Halberstram's picture

    It's mostly bullshit. While in banking, I once picked up someone else's iphone thinking it was my own and unintentionally read a text or two, it was pretty sad/hilarious the lens of distortion applied to people's actual experiences and what is communicated to friends. Not to judge too hard, I've unconsciously found myself doing the same.

    Second, the banker demographic is has an upper-middle class bias, so there is a fair amount of wealth already there without the job. There have been MDs that have hosted their group for a summer outing at their $10m Nantuket/Newport house, but that's either family money or they had a windfall doing something else like investing in real estate or a business venture or something.

  • iggs99988's picture

    Which one of you guys makes $1mm a year? I'm sorry but you're all delusional. I'm 28 y/o with a lot of work experience and I've lived in NYC for 15 years. $1 million a year+ in annual income is rich by any city's cost of living or living standards.

    Once again I pose this question to all those that are scoffing at 1mm: 1) How old are you 2) Are you clearing 7 figures annually? If not, stfu.

  • In reply to Marcus_Halberstram
    iggs99988's picture

    Marcus_Halberstram wrote:

    There's no trolling here, you're the only one that sounds like a college kid. He's right on the money. 7-figures in NYC is not rich, its upper middle class. $1.5m is high-six digits after taxes.

    If you're married with 3 kids, you're living comfortably but you're still budgeting and being smart where you can. Keep in mind no MD is living the lifestyle of a public school teacher. It costs money to live that lifestyle. And sure... maybe you live in a $3m apartment/house and that means you're rich based on middle American conventional wisdom, but you don't feel rich, you still think about money. Especially given the volatility in this professional where you need to bank a big chunk of what you make to smooth out the earnings volatility and support your lifestyle... which gets exponentially more expensive once there's a wife and kids involved.

    People throw all these numbers around and it sounds like so much money, until you're actually making it. Then your tastes get slightly more expensive, your lifestyle gets a bit more expensive, you get a bit older and you're living comfortably but aren't exactly flying private, driving ferrari's and chartering 100 foot yachts for the summer.

    Marcus dude, how old are you? You sound so out of touch. If you can afford to live in a 3 million dollar apartment you're rich. Nobody is salivating for driving ferraris or chartering 100 foot yachts in the summer. Only new-money utter imbeciles do that kind of shit. Immature. Unless you're worth billions (with a B) or have a strong desire to burn your cash, you're not going to be doing that stuff. Rich means being able to afford a 3mm apartment, go on vacations, drive a nice car, dress in nice designer clothes, and eat whatever / where ever you want. All of this can be accomplished on a 7 figure annual salary in NYC. WITH a family.

  • In reply to iggs99988
    Marcus_Halberstram's picture

    I'm close to 30. How old are you? You sound like you haven't lived a day outside a world where making $14 bucks an hour lifeguarding is a windfall.

    Your disbelief and incredulity tells it all.

    I have a handful or so of MD-or-close-to-it friends who make high-6 to low-7 digit incomes. The one's who don't have family money live comfortable but modest lifestyles and worry about money just like the rest of the world. I'm talking early to mid-30's married with a kid or two. They have a nice but not ridiculous apartment in Brooklyn/Battery Park, they have a mid-level Lexus SUV, they go on slightly above average vacations, etc. I'd equate their lifestyle to that of a doctor or dentist living in the suburbs.

    But to each his own. If becoming a banking MD is your raison d'etre, more power to you. Just know that when you're all of 19, things look much bigger and shinier than when you actually have those things. So perhaps when you're drinking Georgi vodka, feasting on raman noodles and pinching pennies on your meal plan, making 7 digits sounds incredible, in reality its a comfortable living and nothing more. Old money Warren Buffet-types like you, notwithstanding.

  • iConsult's picture

    To everyone saying that a person making a million dollars a year isn't rich, have fun being very poor the rest of your life; statistically speaking, you won't come close to that number at any point in your life.

  • In reply to John-Johnson
    youayou's picture

    John-Johnson wrote:

    Once again, I've spoken to many NYC BB MDs and all of them (not born into wealth) have stated they do not feel rich by any means. Lets say an MD is lucky enough to earn 1 million/year (if you look on company database, its not as common as it seems).
    (-600k)
    400k after taxes alone (Nassau county etc.)
    (-120k)
    280k after mortgage for 2 million property (10k a month)
    (-150-200k)
    80-130k after other living expenses (Yes, MDs tell me they spend around this much)

    This is assuming that MDs live frugal lifestyles without luxuries/vacations. Do you really think 80-130k in disposal income is "ultra wealthy"? You will only be able to buy a very low-end super car at best at the end of year, with serious saving.. I know plenty of MDs who make mid six figures and virtually have no savings. Also, you are wrong about how "rich" is defined as having vacations etc. Most guys in IB only do the shitty hours because they dream of an opulent lifestyle with yachts etc. as an MD. If they actually knew the reality of it, , most would quit. I know I sound clueless when I say that 80-130k disposable isn't a ton ; but it isn't. These numbers all come from MDs I know.

    you need to explain how you get 60% average tax rate.

  • In reply to iConsult
    John-Johnson's picture

    1 million/year goes a lot farther in places outside London and NYC. I think I made that really clear. Also, I agree that 99.9%!of WSO will never make close to 1 million/year in their lifetime.

  • In reply to Marcus_Halberstram
    youayou's picture

    Marcus_Halberstram wrote:

    I'm close to 30. How old are you? You sound like you haven't lived a day outside a world where making $14 bucks an hour lifeguarding is a windfall.

    Your disbelief and incredulity tells it all.

    I have a handful or so of MD-or-close-to-it friends who make high-6 to low-7 digit incomes. The one's who don't have family money live comfortable but modest lifestyles and worry about money just like the rest of the world. I'm talking early to mid-30's married with a kid or two. They have a nice but not ridiculous apartment in Brooklyn/Battery Park, they have a mid-level Lexus SUV, they go on slightly above average vacations, etc. I'd equate their lifestyle to that of a doctor or dentist living in the suburbs.

    But to each his own. If becoming a banking MD is your raison d'etre, more power to you. Just know that when you're all of 19, things look much bigger and shinier than when you actually have those things. So perhaps when you're drinking Georgi vodka, feasting on raman noodles and pinching pennies on your meal plan, making 7 digits sounds incredible, in reality its a comfortable living and nothing more. Old money Warren Buffet-types like you, notwithstanding.

    This discussion makes no sense. It is true that average New Yorkers would consider 1M a year rich. It is also true that same number is not considered rich among all high finance/executives/company founders and won't give you lifestyle in wolf of wall st or any other wall st movies/books. The definition of rich is relative.

  • In reply to John-Johnson
    youayou's picture

    John-Johnson wrote:

    Federal+State+Local. NYC suburbs like Nassau are notorious for high local taxes.

    can anyone confirm this? this looks too high to me. IRS estimates average federal tax rate for people earn 1.5MM to 2MM is 25%. Even considering most MD's income is salary based instead of investment/carry, 60% average tax rate is ridiculous.

  • In reply to youayou
    John-Johnson's picture

    25%? What? The top marginal income tax for Federal alone is 39.6%. Most MDs I have spoken with are not trying to evade taxes with loopholes. My friends who live in the city say State+Local is 12.5%. Leaving the grand total to 52.1%. Even if you don't believe the MDs I've talked to, it's reasonable to assume that wealthy NYC suburbs have 8% higher local tax rate.

  • iConsult's picture

    The thing about using 52% vs 60% is that it's $80,000 every year. But I suppose now you'll tell me that $80,000 in discretionary income doesn't get you very far...

  • User11221122's picture

    The idiocy in this thread is overwhelming.

    100k is not 1000k is not 10000k. You are disagreeing over what 'rich,' means, when it is an arbitrary definition.

    With that said, in my OPINION, saying 1 million a year is not rich, is pretty silly.

  • In reply to John-Johnson
    youayou's picture

    John-Johnson wrote:

    25%? What? The top marginal income tax for Federal alone is 39.6%. Most MDs I have spoken with are not trying to evade taxes with loopholes. My friends who live in the city say State+Local is 12.5%. Leaving the grand total to 52.1%. Even if you don't believe the MDs I've talked to, it's reasonable to assume that wealthy NYC suburbs have 8% higher local tax rate.

    Marginal tax rate is not average tax rate. Also, correct me if I'm wrong, only NYC has local tax. Nowhere on long island has another layer of income tax. In addition, MD's year end package should largely consist stock with a vesting schedule instead of hard cash. Tax on unvesting stock is tricky especially in bull market.

  • In reply to youayou
    John-Johnson's picture

    Never said marginal=average. I was implying that tax loopholes go a long way. Also, you're right about local tax. Most of MDs lived in NYC anyway. In regards to stock comp., an MD told me that his restricted stock plans were taxed at the completion of the schedule as ordinary income.

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