london vs ny

With the GBP fall off, its not that much higher anymore. Cost of living is higher in London, too. At least that's my opinion.

Hmm hard to say. GBP is weakening, however tax on analyst salaries in London is around 26% whereas in NYC I've heard it as high as 44%+. Nominal salaries are higher in London. Cost of living is very high in central London (and less central affluent areas), but it is also very high in Manhattan. Cost of living can vary wildly depending on your neighbourhood in both cities. As for the net result, it probably depends on the types of things you spend money on, their proportions, and the area of each city in which you are living.

Overall, neither city is a very attractive place to live in real terms. IMO as long as you're a junior your short-run net disposable income will almost always be higher in 2nd tier cities like Chicago, Toronto, Frankfurt, etc.

Another question:

Given the current markets, would you rather be based in New York or in London?

given the current state, I'd say Asia.

Nauru - Taxes in london are quite high actually when you consider your bonus is taxed at 40% and the VAT is 17.5%, although you are right about the salary at 26%.

In current markets, I'd like to be in a place where I'm not worried about my job, maybe HK.

in hk you do get housing allowances, which is around 25k. so that plus the 60k base will get you a guaranteed annual of 85k. plus 15k for "relocation" (same as sign on bonus) will net you 100k for the 1st year before bonuses.

there is some kind of weird ex-pat tax in hk as well. kind of complicated so banks give US citizens a free tax consultant to work out all your problems, making sure you don't double pay taxes etc.

job mkt is quite stable in hk, esp ibd. s&t is the same situation as nyc or london though.

o yeah, cost of living is pretty low in hk except for housing. but the 25k housing allowance (more than 2k a month) is more than enough to cover it if you're not picky (and whatever is left over you can keep as cash).

meal allowance of 200hkd (~$25) a day is also wayyy more than what you need. you can get a decent chinese meal for $3-4 haha

How high is the tax on bonuses in NY? 46%? Please tell me it's lower than that.

46%, that's rough man.

Are workers ought to speak foreign languages? I mean are there any American who work in Asia, yet they don't speak the country's native language?

I think Indian Banker can fully answer this question.

I have experience with both London and NY, and can easily say you get paid vastly, vastly more in London - even after taking into account the higher accommodation costs, FX, cost of living, tax etc.

In London a 2nd year analyst gets £45k salary and can easily get over £100k bonus in Sales/Trading (perhaps more £80-90k in this bear market), £75-100k in M&A at a top-10 bank. A 1st year associate gets a £60k salary and easily £100-150k bonus. £ vs $ was recently 2:1 and recently down to 1.85:1. Do the maths, you get enormously more.

And now taxes are actually less than NY - income tax on your salary is just 30% for a new graduate, 35% or so for a 1st year associate - the first £5k of your salary is tax-free, the next £35k at 20% before you start paying 40%.

Cost of food, nightlife etc not enormously more than NY, accommodation is a bit more, but small change compared to the huge amount of extra money you get being in London.

Having briefly looked at salary/bonuses vs cost of living, tax rates etc, right now London hugely beats not only NY but Dubai, Singapore, HK. Moscow may be on par.

But of course there's other factors to take into account...

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23yr old Associate

at the bb i was at this summer, everyone there associate and under in IBD knew at least one asian language, whether it's indian, chinese (most common), or korean. surprisingly the white guys in the bank knew how to speak chinese too, haha. most deals coming through are chinese related so frankly if you're only doing english speaking deals, it's very hard to keep someone busy in a slow mkt like right now.

have met other analysts and interns at other bbs tho who only know english. it all depends on the bank i guess

Okay so the first half of the comparison is fine. But what about the numbers for New York?

I'll immediately disagree with you on accommodation being "a bit" more in London. It is considerably more expensive in London (although London is also the nicer city to live in) and housing is generally the single largest expense for any junior person. Nightlife is more expensive in London. Restaurants are more expensive. Clothing is more expensive.

What are these "other factors" you would take into account?

There is cheap London accommodation available if you're not too fussy - a lot of grads pay £100/week, in fact some as low as £70k, for reasonable central accommodation in 'ghetto' areas.

Even when you take into account £20 nightclub entry vs $20 in NY, £20 stakes vs $20 ones, £100 shirts instead of $100 ones etc, I'd confidently say you save more money in London, as the difference in paycheque, particularly the 5-figure difference in bonus, more than supercedes these relatively smaller costs.

By "other factors" I just mean things like weather (give me Dubai over London/NY anyday), where you may have a personal advantage (languages spoken, culture) etc.

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23yr old Associate

For the quality and location you get for 100 pounds a week in london (and the number of people you have to share your flat with) I think most on here will agree you get something better in New York, sharing with fewer or no other people. I'm curious as to what you consider "reasonable central accommodation" in London. Google maps link?

By 'Central' I mean anything within Zone 1. Look at London and you'll see anything within Zone 1 is pretty central - http://grimebeatsonline.com/london-underground-tube-map.gif

My friend pays £69/week to be 15 minutes walk, or a 5 minute Tube, from Canary Wharf - home of BofA, Lehman, Credit Suisse, Morgan Stanley, HSBC. 4 people sharing a 4 bed house

I paid £125/week to live near Liverpool Street, 5 minutes walk from UBS, Deutsche Bank, RBS/ABN. 3 people sharing a 3 bed flat.

You can live on your own with a studio apartment at most 10 minutes tube from your firm (whether in west end, east end or canary wharf) for about £180/week.

Again, sure, New York is considerably cheaper, fine, but the 5-figure difference in paypacket (last year, what our NYC counterparts got in $ pretty much matched what we got in £) completely trounces a couplea thousand (at most) a year more for accommodation.

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23yr old Associate

How is NY housing considerably cheaper, when, at least to my understanding, most analysts residing in Manhattan pay at least $1500/mo for rent?

£180/week is about £800/mo, which, given the current exchange rate, is a bit over $1400/mo.

I didn't think it was, had originally said 'accommodation is a bit more' in London, but just to make my point even if NY were less, you're still saving a helluvalot more cash in London. Property in London seems to be as expensive as similar property in central Chicago from my experience.

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23yr old Associate