I heard that you can save close to $1000 a month by living in NJ and commuting to the city everyday. Is that a practical solution for bankers(given those crazy banker hours)? Or you're gonna get screwed spending a long time on the train every morning?
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I'm pretty curious about this myself. I've heard great things about Hoboken, but people tend to say that it's expensive there too. To add to the OP's question, if I'm a resident of NJ is there any difference in taxes if I have an apt in NJ and work in NY vs. someone from out of state liviing in NJ???
No, not for bankers. But it works for traders and research guys working less than 80 hours a week.
NJ has two tax benefits:
1.) No NYC income tax for wages. NYC income tax works out to 3.5%, but if you are not a city resident, you don't have to pay it. 2.) Dividends, interest, Roth conversions, and capital gains, which are sourced in the state you are a resident of, are taxed at a lower rate than New York State. This is a smaller benefit at first, but it saved me $600 last year. I'm going to do a huge Roth conversion before I move to NYC this fall to help me further avoid NY State Income tax.
Grove Street/Exchange Place/Newport also has a much lower cost of living. My friends and I did dinner at a Thai restaurant a week ago- $10/entree. I was originally pushing for this sit-down restaurant with amazing tacos (Taqueria) for $6/plate, but they were full. Beer is typically $3-5/pour, not $7. Rent is about 40-50% lower for an equivalent apartment.
The catch is that you have to ride the ~15 minute PATH train into work every morning. But this is a faster commute than from many parts of Manhattan. For giving up the privilege of saying you live in NYC- you just work there- you save about $15K/year after tax pretty easily. This is money that you can sock away into a retirement account, use to build up an emergency fund, pay down student debt with, or spend on hang gliding.
Just because you can (afford Manhattan) doesn't mean you should. $15K saved today works out to $900/year, permanently and inflation adjusted if you stick it into MLPs yielding 6%. Why would you pass on that? That's 10 floors higher or half of a balcony when you do move to Manhattan.
Obviously if you are working in IBD, you don't have a choice. You need to be able to walk home at night without waiting for a darned train. But if you don't have crazy hours, there's no reason not to save a little extra money your first year.
Illy you make saving money sound amazing.
Obviously the outer boroughs (Queens, Brooklyn) don't have the same tax benefits, but are there any advantages to living there if you are a trader/researcher?
Rent is slightly lower in Queens/Brooklyn than Hoboken/Jersey City due to the tax disadvantages, but if you plan to earn high six figures or even high five figures, the tax savings easily pays the rent differences.
Marcus and a number of bankers will show up here shortly and start trashing anything outside Manhattan. They are bankers who work crazy hours and the prestige of Manhattan for them seems to go hand in hand with the prestige of hiring someone from an elite northeastern university. For them, Manhattan is both very pragmatic and prestigious. I am a crassly anti-prestige and anti-spending along with a few other folks on the trading floor, so NJ makes more sense for me.
It is really a preference. If you like fine wines and Amex dining experiences, Hoboken/Jersey City may not be the place for you. If, on the other hand, your role model is a guy who made enough to drive a BMW but drove a rusty Oldsmobile instead and even made you search the back of it for a dime once, you will really like spending a couple years in Jersey City. (If your work schedule can afford the commute).
Just stay east of the Turnpike and the Bergen cliffs.
And is the commute any different? Any longer/shorter? Or are you taking a train into work either way?
Haha you make Hoboken and JC waterfront sound really bad/trashy/poor with those comments. If you live close enough to the PATH you can be at 33rd st in less then 15 minutes. I have friends on the UES and I swear it takes them forever to get to midtown. Night life in jersey city is pretty much nonexistent but Hoboken is a pretty good time.
I'll get shit on for this, but I think Hoboken night life can be better than NYC. Bars are more condensed and the girls are less snobbish...SLIGHTLY
Brooklyn and Queens offer a few more opportunities to commute in without having to switch trains, but that's the equivalent of maybe three minutes during rush hour.
Well, my point is that Hoboken and Jersey City have a refreshingly different culture than Manhattan. There is more open space, there are a few families, and people smile and say hello (at least sometimes). It's a place where some proprietary trader from GS will strike up a conversation about how nursing school is going with the grocery store clerk. When you walk home at night, you can smell freshly cut grass and be reminded of what it was like to live in the suburbs. The city is walkable but cars are not as expensive as Manhattan. For a simple Midwesterner like me- in the front office almost by accident- who did not understand the mystique of LIVING in NYC in addition to working there, Jersey City was the obvious choice. For the average sophisticated BB FO employee, though, Manhattan might be more appealing. Regardless, it is a necessity if you work in IBD.
I wouldn't say it is a necessity
Living in Manhattan if you work in IBD? If you are coming home at 2 AM every night, waiting those 20 minutes for the PATH train when you could walk home and already be asleep is worth the $60-70/day that you save on rent and taxes.
I'd much rather live in a crappier apartment in Manhattan than live in NJ.
Bottom line, living in NJ is going to suck suck suck and it will be a huge bummer every single day of your life until you move; ESPECIALLY for a younger guy.
Most people who look in NJ do so in order to find LARGER / NICER places, not CHEAPER places. Yes it is a fine distinction, but most people have a fixed budget for rent (and you should too) and they simply find the best option for their money.
Let's say $1500 gets you a tiny rathole of a two bed in Midtown West with a roommate; while the same $1500 in NJ would get you a 1 bedroom. In order to actually save $$, you would need to forget the idea of a 1bedroom and look at tiny rathole of an apartment in NJ. And most people aren't willing to skimp on both location and apartment, thus the move to NJ is not as cost effective as it seems. The tax implications are decent, but IMO the move will materially, negatively affect your social life and sleep situation. Aspiring bankers tend to live close to work for a reason; they have all done the math in their heads and for 99% of us, the move to NJ would be too burdensome on the commute / sleep situation.
Look, establish your rent budget and then find a place to live in that budget. Manhattan will get you far less bang for your buck, but living in a shoebox is a true NYC experience and the benefit to your social life and sleep far outweighs the cost IMO.
^^^ Again, great advice for a banker working 90 hours/week. You do not want to be spending 5% of your non-work hours on the PATH train. But if you have weekend days free, Hoboken and Jersey City are pretty happening places. We've got lots of free concerts, a farmer's market, crazy St. Patrick's Day and Cinco De Mayo parties, and you see the same people over and over again. And we're a lot closer to hiking, rock climbing, camping, and waterskiing in upstate NY and Pennsylvania. It is a genuine community here and you get to see lawns, grass, and trees every day.
Manhattan has its perks, but if you like open space and communities a lot more, you can do worse than Hoboken or Jersey City. The tax and rent savings are a neat little perk, but should not be your primary motivation after your first year or two.
If I make the jump to IBD, I'm moving in next door to where I work - if they let me pitch a tent in the lobby, hell, I'll do that. Otherwise I'm staying in the suburbs and commuting - I actually LIKE my neighbors, friends, family, local bartenders and to be honest....Jersey girls really are the best. I feel sorry for anyone that lives in NYC for more than a few years: it looks exciting, but I need more than fancy restaurants and art galleries to be happy.
....and by 'Jersey girl' I mean the REAL THING, and not the Staten Island trash you see on TV
Agree with Illi.
Hoboken / JC are great places to be living if you are younger / single. There is so much happening and so many people in the exact same situation. If you really crave the NY nightlife, it's just a bus / PATH ride away, but you get to go home to sleep in peace and quiet compared to the city. That and you can live in a waterfront property for half of what you would pay in NYC, in a doorman building with a parking space included.
The problem is Manhattan really is not a nice play to live. It has good restaurants, shopping, bars, etc but the actual quality of life is pretty shit in all honesty. Most neighborhoods are packaged and sold as these glamorous upscale places, but in reality you are no more than a 3 min walk from a street resembling a highway. The complete lack of green spaces does not help either.
^^^ People will say, "Just live by central park or the hudson", but the fact is that this adds an extra 40% to your rent to even get a slender five degree view of it from your apartment. This on top of all the cash you are already shelling out for Manhattan. In reality, the cost of open space and a decent view in Manhattan is $1500/month more than that in JC/Hoboken.
I'm not knocking folks who choose to live in Manhattan- just pointing out that for some folks- especially people used to the suburbs and open spaces and communities, Jersey City and Hoboken look pretty darned hospitable if you are willing/able to put up with the PATH train (or the ferry if you can keep a schedule). Hoboken is not exactly Cedar Rapids, Iowa, but it does seem like crossing the Hudson River at least brings you 1/3 of the way to Pennsylvania.
The funny thing is I grew up in the NJ suburbs and have been going to NYC my whole life. Initially I bought into the whole package NYC tries to sell to people, but then you actually go visit other world class cities and you realize it is a farce. I live and work in London now and the neighborhoods, green spaces, transportation, etc are infinitely nicer. You can live in Central London in a neighborhood that is green and feels suburban, and then walk 10 mins and be at some of the sickest bars and clubs in the world, its great.
I too recommend living in NJ if you want a nicer and more chill environment to live in (and its cheap). Also Hoboken > Jersey City.
Just my 2 cents........If you are a fresh 22 year old college grad entering IBD in NYC and you have not grown up in the tri-state area, then of course living in Manhattan is the way to go, especially when working 90+ hours a week. Now, if you are not enticed by the prestige of living in Manhattan due to any number of reasons, could be that you grew up in northern Jersey and are very familiar with Manhattan or you come from a non-traditional background going into IBD (you are not a fresh 22yr old college grad and you have a spouse) then living in Manhattan is not a necessity. If you have a good reason for not living in Manhattan, then the extra commute (which is not all that much depending where you are) can be worth it, and let me tell you........Manhattan looks a whole lot nicer from the outside than it does from the inside.
IlliniProgrammer:
I've been meaning to ask where you're getting your tax information from?
My wife is an accountant at a small accounting firm and does a ton of taxes for investment bankers who live in Connecticut and work in NYC. She told me that they do not escape NYC income tax by living in a different state. She's cited multiple examples of this, but I was just curious where you were getting this tax info from?
NY State taxes are still payable for work done in New York City. However, there was actually a court ruling about ten years ago invalidating a commuter tax:
http://articles.nydailynews.com/1999-06-26/news/18096491_1_commuter-tax…
http://www.nyc.gov/html/dof/html/services/business_tax_nys_income.shtml
NYC employees who live outside the city must also pay the tax. However, nobody else is liable for it if they live outside the city limits. City vs. state income taxes can get confusing when you have two jurisdictions with the same name, but I suspect that unless your wife's clients work for the city, they are only liable for New York State taxes. This would still be a hassle for CT residents because Connecticut's income taxes are much lower than New York's.
Employers must pay NYC taxes on wages they pay. That's also what she may be thinking about.
Yes please let us know. Because if so I'm going to list my address as my parents in nj while I'm living in the city. Can I pull this off?
My recommendation is just to pay the NYC income tax or live with your family 183 days of the year. It's a lot easier to sleep at night, not worrying about how much of your savings could wind up belonging to the city if you get caught.
Guys you have this all wrong. All the savings you are referring to for living in Jersey are not real, when certain expenses and opportunity cost are factored in. 1. Living in Jersey requires that you have a car 2. Car Payment, Car Insurance, Maintenance, Accidents, Tickets, possible DUI all add up to more than 15k in costs per year and this is an underestimation. 3. Daily Tolls to pay Jersey, sometimes several 4.. Living in NYC does not require you to buy a car or bear that expense. The taxes paid to live and work in the city is still less than the costs incurred driving a car in Jersey. 5. I am going to go even further, Path and trains are more expensive than NYC subways, in which case if you are living in Jersey, You will drive your car to Path train and park (fee), Path/Train commute (fee), To get around in Manhattan take the NYC subway, (one more fee). 6. The taxes charged to live in the city by my estimates are less than the expenses incurred living in Jersey. Think about it.
How is it then does it really save to live in jersey over any of the boroughs outside of Manhattan. Granted, living in Manhattan will cost you more on apt, but the other boroughs are way cheaper.
Have you ever even been to Hoboken? This is just wrong. Not an opinion I disagree with, just straight up wrong.
Why would you be required to have a car in Hoboken? The whole city is very walkable, at less than 1.5 square miles, so accessibility is not an issue. If you're taking the PATH train, what tolls are you paying? Speaking of the PATH, a monthly pass is $89, which, by my count, is still less than the $112 it costs in NYC.
I will give you the fact that having to pay for another subway card if you want to traverse the City can be annoying, though.
I am glad to see you have no idea what you're talking about...well done.
As mentioned, you definitely do not need a car if you live across the river (Hoboken, Jersey City, Weehawken etc) but if you can afford one its a nice perk and much easier and cheaper to park. No one drives to the PATH train, Hoboken is small enough where you can walk or if you want take the light rail, bus or even the HOP Shuttle. Plus, many building offer free shuttles to the PATH. If you don't want the PATH you have an option for the bus or ferry as well. These aren't the suburbs we are talking about here
You absolutely dont need a car in Hoboken (and most people in Hoboken dont have cars). Hoboken makes sense, especially if you take the ferry across. If you work in an office near the ferry terminal at world financial or pier 11 the commute can be minimal.
My commute to my office since I moved to Hoboken is less than it was when I was in Chelsea. I live a 5 minute walk from the ferry and my office is five minutes from the NY ferry terminal. With an 8 minute travel time (and it running every 10 minutes during rush hour in the morning) my commute is 20 minutes door to desk.
Also, I'm not sure why IlliniProgrammer says it doesn't make sense for bankers. If you are leaving late everyone takes a car anyways, doesn't matter where you live. And a car to Hoboken is quicker than a car to the UES at night.
Lastly, you save 3.5% in city taxes (which adds up) and you get way more bang for your buck as far as apartments go. Not to mention the lower sales tax. A 3500 a month apartment in Hoboken is as nice as a 5k a month apartment in the city.
All in all, there are absolutely reasons to live in Jersey over NY and it is undoubtedly a money saver.
Income taxes in NY vs NJ (Originally Posted: 03/22/2008)
From an income-tax perspective, does it only matter where you work or does it also matter where you live. Woring in NYC/Manhattan, is NY or NJ a better option to live? I know I could just look up the income taxes, but there is also NYC city tax, which I assume doesn't apply in NJ. Everything else equal, are the taxes lower in NJ or NY?
Thanks
http://wallstreetoasis.com/forums/bonus-dates
I had the same question a few days ago. I believe you need to pay the city tax regardless of where you live, NY or NJ, as long as you work in the city.
Live in NYC or commute from NJ for SA? (Originally Posted: 02/26/2014)
I got a great internship in the city for the summer. I'll be working about 60 hours a week (no weekends), and I would much rather live in the city, but it's really expensive. I think I'll net about 9k after taxes, and living in the NYU dorms would be a little over 3k. The train ride to Penn Station from my house is about 40-45 minutes, and then a 15 minute walk to the building.
Would you live at home or work in the city? I want to be able to attend intern events and go out for drinks with people if that happens so I can build up my network, so I'm afraid that will be more difficult if I'm worried about making a train to go home. It would also just be nice to be able to do stuff in the city on the weekends, though I guess I could just commute there to do that if I wanted.
What would you do? Convenience/fun vs. a lot more money. I'll be working in NYC FT starting summer 2015, so I will get the experience of living in NYC then anyway.
I would live in NYC. That commute may not seem bad to you, but when you have to do it everyday- it gets tedious. Take into consideration that you're working 60hrs in 5 days. Also, keep in mind that some nights you might have to stay later, and the train might not be running that late. Just my .02, though.
Know from personal experience
If you live in NJ, expect to pay $350 per month on a monthly train pass. The commute sucks man, its worth the extra money trust me
I know it'll be annoyed to have to commute on top of working a lot each day, but do you really not think saving twice as much money would be worth sucking it up for 10 weeks? Again it's just for the summer; I would never consider doing this long-term.
NYC, my friend who commuted from NJ hated it.
You will spend significantly more money living in NYC. Besides rent there are a ton of little expenses you'll incur from living in the city that you wouldn't if you lived with your parents. Having said that, commuting from NJ sucks. It's definitely doable but it will not be as fun as living in the city. I think you framed the trade off well so it's your call. Personally, if this is a junior year internship I'd say go and live in the city. Don't piss all your money away at the bars, and between what you save up from your SA stint and your signing bonus you should have plenty of beer money for senior year.
Compromise and live in brooklyn
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