Net worth/savings of analysts and associates?

With the high cost of living in nyc and annoying taxes, it seems that most analysts after a 2 year stint end up with about 10k - 30k in savings. I'd imagine that associates and up would save much more assuming they don't spend beyond their means.
I thought it would be interesting to get some data points from current 2nd year analysts/associates et al. on how much you are actually able to save from your ibanking years.

P.S. for analysts who end up going to business school, would schools like HBS, Wharton offer financial aid since 15k in the bank is definitely not enough to cover 100k in tuition?

 

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

 
IB13:
By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

This prick is a FRESHMAN (1st year uni). He's been going around giving advice to people with actual jobs, and now he's posting about how much money he'll save as a banker ROFL..

He changed his username from Tradex after he got called out on the previous thread...what a loser.

 
Shimness:
IB13:
By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

This prick is a FRESHMAN (1st year uni). He's been going around giving advice to people with actual jobs, and now he's posting about how much money he'll save as a banker ROFL..

He changed his username from Tradex after he got called out on the previous thread...what a loser.

Lol..you seriously have no brains. Knowledge is not measured by status. Your claim automatically carries with it a subordinate claim, that claim holds that every one who is in high school, in their first year of university, and working in physically demanding jobs are all stupid and cannot use RESEARCH skills to surf the web, interview professionals in multiple areas, and learn beyond the constraints of their curriculum.

You represent the word dumb royally. You come off as immature, and frankly irrelevant. I've been living on my own for 3 years now and know just how much things cost thank you.

P.S, I only pass advice to others when I have researched the subject and know what I'm talking about. You're an angry little man, sexually frustrated I'm going to assume from you're demeanor. Just because you were an absolute idiot as a Freshman don't assume that's the norm boy, I have a 3.8 GPA.

 

IB13, here is what you initially wrote:

IB13:
By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

You are clearly counting the chickens before they hatch pal. Being a damn freshman with a finance internship during the summer is light years behind having a full-time offer in hand. Focus on shit that is actually reachable at this point in your life, nailing 18 year old chicks, Christmas vacations with your family and having more than one semester with a 3.8.

 
BobbyLight:
IB13, here is what you initially wrote:
IB13:
By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

You are clearly counting the chickens before they hatch pal.

I already know my tax credits for the year, from the past two post secondary years and my financial adviser gave me estimates for the 3 remaining years. I already live on 2300 a month and I live comfortably, so what egg has yet to hatch? The compensation is a median.

I don't really see the crime behind collecting data and making assumptions based on that data, do bankers not do that? create various scenarios based on various assumption? like the impact of giant oil rig fire on the price of oil when acquiring an oil company perhaps?

And I already do all the freshman crap. I don't need to choose between being informed and partying. I can do both as long as they dont' come in conflict.

Hypocrisy and elitism seem to be a running gag in this thread.

 
jjc1122:
The top tax rate for NYC residents will go up to 60% by 2013, once Obama's plans get passed. It will be tough to save.

get your facts right man, the top bracket goes up to 110%, the more you work the deeper a hole you'll be digging for yourself. I'm planning on escaping to Mexico, I hear the richest man in the world is from there. If he can make it big, surely others can too.

 
madgames:
Current Third Year Analyst - I've saved $100k (which includes 401k matching) still paying off the minimum payments on my student loans. Excludes my third year bonus which I've yet to receive.

Nice. Did you live on a certain fixed budget? What happens when you leave? can you cash your 401k? I'm assuming you'd be able to but would be taxed your current tax level.

 

Similar story here - slightly over 100k.

Threw my second year bonus into anything that was long risk and ended up making some good dough. Was long cash prior to Lehman - that 5% WaMu CD that I bought the day after Chase bought their deposits was a fantastic deal.

Rent has gone down. Vacations are cheap. Been taking a vacation a month and just living the life.

The Obama tax grab is horrendous.. real estate is looking more and more attractive as a place to stash cash.

 
eric809e:
Similar story here - slightly over 100k.

Threw my second year bonus into anything that was long risk and ended up making some good dough. Was long cash prior to Lehman - that 5% WaMu CD that I bought the day after Chase bought their deposits was a fantastic deal.

Rent has gone down. Vacations are cheap. Been taking a vacation a month and just living the life.

Your story sounds pretty similar to mine.

I graduated without any debt and I had managed to save a lot of money from salary my first 12 months and I was only 1/3 invested from my first bonus in September '08. Went with the 5% Wamu CD; bought lots of boring regulated pipeline MLPs in January, February, and March when they were yielding 12-14%; now they are yielding 7%.

Now that everything seems like a bad investment, including cash, I'm doing adventure sports. Since nobody can afford to do hang gliding and motorcycle racing right now, top-notch instruction and vehicles/supplies are CHEAP. We've actually got a whole contingent from work heading up to Ellenville to go hang gliding in a few weeks. If we get a double-dip and go into a depression, I would prefer to starve to death while doing something fun than starve to death while being bored.

 

mine for 6% up to 100k. So basically 6k each year although that will drop this year.

I don't throw money around, but like to eat and live well. Have taken 6 weeks of vacation (you get 3 weeks between your 2nd and 3rd year). Eat out at a nice restaurant once a week maybe more depending on how much I'm working, etc.

It's important to enjoy the money you make if you have the time or you're going to have a really miserable 2 - 3 years.

 
Mandata:
P.S. for analysts who end up going to business school, would schools like HBS, Wharton offer financial aid since 15k in the bank is definitely not enough to cover 100k in tuition?

All-inclusive cost of business school (tuition + living expenses) is about $160k.

 

I think 100K is reasonable after 3 years when you factor in 401(k) matching. Figure less if you are aggressive in paying off your student loans. Honestly, considering analysts and associates working in NYC are going to be at or near the top tax bracket I would take every opportunity to sock away money in 401(k), IRA, whatever.

I will never, ever understand why anyone would support increasing taxes. I don't want rich or poor to pay more, Jesus, we pay enough already. Govt should try doing more with less like just about every American family has learned to do.

 

Well we need to level out the discussion here. "saving" 100k in the 401k is not the same as saving 100k. You have to pay taxes on that when it comes out. About 60k of that prob was tax deductible going in, so aprx 30% of that will disappear. That about 80k. Still pretty impressive.

I'm sure some people ball out and spend it all. Anyone have any good tax suggestions?

 

Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

 
AnthonyD1982:
Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Been living on my own 3 years now, got a college diploma in financial services along with a couple of licenses before moving to University. I'm not a child, thank you.

 
IB13:
AnthonyD1982:
Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Been living on my own 3 years now, got a college diploma in financial services along with a couple of licenses before moving to University. I'm not a child, thank you.

You are in college yet you've projected bonus savings for your "first and second year," do you understand how stupid that sounds at this point? Focus on getting internships and then a FT offer, it's not as easy as you'd like to think it is.

 

Don't complain. Law school is $210k including living expenses. And the majority of law students didn't have cushy jobs pre-law school. And lawyers make less than post-MBA associates. That's okay though, lawyers have more job security than ibankers. Much rather be a bankruptcy lawyer right now.

Thank god I'm taking a withdrawal from the Bank of Mom and Dad and won't have any student debt.

That said, $100k seems possible based on wall street salaries. Then again, you never know with obama's tax increases.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 

would the people with the 100k savings mind listing some more detailed figures or a breakdown? i'm interested in any advice on how to cut expenses/save on taxes as an analyst p.s. any tax saving tips?

 

Living with roomates saves a lot. My first two years I lived with 4 other people. Mind you this was a HUGE apartment, but rent was reasonable and we split all expenses 5 ways.

Also you can use your "dinner" money for groceries which helps.

Also having a girlfriend and taking girls out can be killer, so you need to manage dates accordingly. E.g. never take a first or second date out to dinner, only do drinks etc etc

 

I don't know, when you figure in 401(k) with match it isn't such an outlandish figure. If with match your 401(k) contributions are around 10% your talking about ~21K with no growth. 3 years of bonuses with some reasonable savings could bring you fairly close.

 

Peter_27 - don't forget: you can have scholarships and grants/loans. Many also work multiple part-time jobs as well. Some of my previous part-time jobs were pretty lucrative - valet (drive cool cars, make cool tips), sat tutor (many rich parents will pay top $ for higher test scores - $100+/hour is a drop in the bucket for them and a ton of money for a college student).

For those thinking about business school, a 529 account is a great way to save tax free and gets you a NY State tax credit.

With pay going up and rent staying low, it shouldn't be too hard for incoming analysts to save. However, part of it also depends on what "bucket" you are in. There is a ton of talk about top bucket numbers, but that's only for the top 10-20%.

 

B-schools do NOT like to give financial aid to bankers. I had 0 savings and it was a pain getting a loans but no scholarship (despite stelar academics and emerging market experience) - I asked why other people were getting scholarships even though they clearly had no financial difficulties (i.e hink people with instantly recognisable last names that sound like big big existing companies, doctors, lawyers, familly business types). Answer: I put in my essay i wanted to go back to finance and therefore told that i would make back the money very quickly anyway.

So if you are smart you can do like my friends who i) hide all their savings in their parents bank accounts 2) understate all their assets iii) overstate all expenses iv) understate salary as much as they can v) mention that they want to set up hospitals in Africa after graduation and vi) go on to work for Goldman / Mckinsey anyway.

 

" can you cash your 401k? I'm assuming you'd be able to but would be taxed your current tax level."

if you withdraw early (ie pre retirement age, except for a few unique scenarios) you pay all taxes at current levels and a penalty rate. it's not a good idea.

for 401k matching it ranges. some places do 5% on the first 100k...some do more than that on total comp. I know shops where b/w pension and 401k matching you can be getting close to 10% of your salary, for free.

 

"6% of my comp up to 100k for me (at a BB)"

ok take advantage of that. there are places who will match much more.

on the flip side, i know of no big law firm that does any sort of 401k matching...

 

2nd year analyst - have saved almost nothing. Most of my salary goes to living expenses while my bonus went to paying off debt, wardrobe, and a well-needed vacation. As an above poster said, girls are a total drain on funds. I think I modelled out that including dinners, drinks, and assorted entertainment, I've spent over $1,500 year to date on girls (figure includes spending on myself [e.g. my portion of the dinner] that I would have forgone had I not been with said girl).

 

I work in MO and my net worth is $110K. 2 Years ago it was negative $7k ($10K savings, $17K student loans). Of course, this includes retirement money (401K and IRA - $66K ROTH money), which B-Schools can't touch.

This was mainly due to two factors: 1. Investing in highly leveraged mutual funds at the beginning of last year 2. I still live with the parents so that obviously plays a factor (although I am moving out in July)

My lifestyle sucks. I am cheap and hardly ever drink.

 
dairyman_crick:
not having to pay rent is awesome...that's almost $20k saving per year > $35+k over 2 years right there.

It may seem that way, but all of this constant bickering and fighting with my parents is really annoying. Hence, why I plan to move out in July when a few of my friends graduate and come to NYC. Not to mention I share a room with my sister, which sucks less since she's away for college until May.

There's like zero space in the house so it's really really hard for me to find quiet time to study for the CFA and GMAT (when the time comes). Usually I have to study on the subway or schlep an hour each way to the Main Library in Midtown.

 
broadandwall:
I am a third year analyst in i-banking and my net worth is $130k. I have only have 2 full bonus cycles. I live in NY. I graduated with 15k in net worth. It is possible, friends.

come on dude, why don't you be a doll and explain HOW it is possible with telling us HOW you managed to save that amount of money. And, how much of that savings is bonus and salary?

 
BobbyLight:
broadandwall:
I am a third year analyst in i-banking and my net worth is $130k. I have only have 2 full bonus cycles. I live in NY. I graduated with 15k in net worth. It is possible, friends.

come on dude, why don't you be a doll and explain HOW it is possible with telling us HOW you managed to save that amount of money. And, how much of that savings is bonus and salary?

I work in capital markets and I'd like to think it's possible for a thrifty analyst in IBD. You can save $5-$10K out of salary your first year if your rent is less than $900-$1000/month and you're a moderate spender (eating out 1-2x/week, no ridiculous spending your first year). Second year, you get a $10K salary bump, so you can save more like $10-$15K your second year out of salary, plus the money you save from bonus. Third year, maybe $15-20K. So we're talking about $35K in savings from salary and then maybe another $33K/year from year-end comp. Also, we don't know how much of this money is pre-tax or post-tax.

You won't be able to wear Armani suits, go to Tahiti for vacation, or live in a penthouse with a balcony facing Central Park, and you might have to do some of your own cooking on the weekends, but you can have a comfortable life with plenty of room in the budget for occasional fun stuff (heading out to Jones Beach, going skiing in VT, doing ice dives on Lake Ontario, etc.)

 

I know this is irrelevant, but my brothers net worth is 1.1 million.

He was one of the first 100 employees to be hired by YouTube (Steve Chen) and when they were acquired by Google for 1.65 bill, he cashed out his stocks and fucking became a millionaire. In fact all his coworkers became millionaires or multi-millionaires off of that. How's that for 5 years out of college

 
Theteller:
I know this is irrelevant, but my brothers net worth is 1.1 million.

He was one of the first 100 employees to be hired by YouTube (Steve Chen) and when they were acquired by Google for 1.65 bill, he cashed out his stocks and fucking became a millionaire. In fact all his coworkers became millionaires or multi-millionaires off of that. How's that for 5 years out of college

You raise a good point- you don't have to do banking or finance to become a millionaire or a "baller". I think it's healthy for folks thinking about finance to realize this- both for their sake and the sake of the long-term economy. (The US will need a lot of start-ups- and brilliant people with good ideas- to go back to being a producer economy)

If anything, I think the aggregate income of a lot of folks hired into finance in the past 5-10 years would be higher if the folks who really enjoy doing something else got into those industries.

 
BTbanker:
It's very possible to end up with over 200k. That's if you have self control.

Hahahah what????? That is the most ludicrous statement I've heard in a long time. Self-control like living with your parents and evading taxes maybe. And the best part is you even said "very possible".

Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."
 
BTbanker:
It's very possible to end up with over 200k. That's if you have self control.

Man I want some of whatever you're smoking. I'd be impressed if most people's take home reached 200K.

My goal for my first year is $25 - 30K - won't be in NYC so bonuses are smaller.

MM IB -> Corporate Development -> Strategic Finance
 
wadtk:
200k must be assuming you get a 70k+ bonus....or score some big return on some investment

200k is completely impossible unless you are top bucket both years, live at home or pay next to nothing in rent, never spend money on going out / entertainment, eat seamless and save leftovers for lunch the next day, never party, don't have a gym membership and have no student loans. On top of all the above, you would also have to live in a state like Texas with no state taxes, and you would need to have a substantial return on investments...

What actually happens:

You might be top bucket, but top bucket is 50 or 55k instead of 70k. You don't live at home, but live near the office because you need to maximize sleep, there goes $1500/mo (reasonable estimate in Manhattan), you pay for lunch every day and drink a coffee every now and then. You also go out 1 night a week to blow off some steam and prevent yourself from ending your life. You pay state and local taxes to New York and Manhattan. You buy new suits because you wear through your old ones. You take a vacation because you haven't done anything fun or relaxing in longer than you can remember.

Long story short... NOBODY saves 200k in two years as an analyst post '07 unless they live at home and invest like Soros around their 90-100 hour weeks. I would argue that it would be pretty difficult for an MBA to come close to that level of savings.

Saying that it's reasonable to save 200k if you are diligent as an analyst is almost entirely laughable.

 

The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.

 
SanityCheck:
The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.
And so it goes
 
SanityCheck:
The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.

Truth

 
Disjoint:
They got banking jobs in the midwest? At Charles Schwab?

There is this place called Chicago in case you haven't heard. There, you can live off $1200-1500 a month if you live frugal lifestyle.

I'm not in IB so I have time to go out and spend a lot more, and I still spend on average less than 2000 a month. 100k is ambitious but reasonable after two years.

 

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years - 104k if top bucket - 80k if middle bucket - 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers: - Maxing out all pre-tax deductibles - Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride - I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

 
gdxx:
NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years - 104k if top bucket - 80k if middle bucket - 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers: - Maxing out all pre-tax deductibles - Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride - I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

worst case scenario = you on the street bruh

 
gdxx:
NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years - 104k if top bucket - 80k if middle bucket - 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers: - Maxing out all pre-tax deductibles - Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride - I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

On what planet are you making 180k pretax as first year analyst in banking at a bulge bracket?

 
mrb87:
I would say top bucket 1st yr is about 60k and bottom can be as low as 20k depending on the bank.

This is accurate. It varies between banks AND groups within the bank (e.g. TMT vs FIG vs LevFin). I got second bucket and got 40k as 1st year bonus (BB industry coverage). Bottom bucket at my bank got laid off.

I was able to save 55k cash (not counting 401k and benefits) in my first year. Regional office. I live pretty modestly. I was also getting killed, so I wasn't able to spend as much time/money at the bars as I would have liked. But when I did go out, I would spend more money or buy more rounds for my friends because I was flowing with cash. I went out on average 1 night per week, but I usually didn't go as big as I would have liked because I was always too tired or had to work the whole next day/night.

If you're consistently working 90 hours a week, you'll save a lot more money than the analysts working 70 hrs/wk because that extra 20+ hours is what kills any life outside the office (and therefore significantly lowers expenditures). Also, you'll eat more Seamless and hopefully get a bigger bonus than the 70/wk pack.

Epilogue: I retired after my first year as an analyst with $75k in my PA (had $20k life savings before I started). Now, I'm enjoying the good life. What will I do? Not sure, but it feels good to have $75k in the bank.

 
Best Response

Being frugal and living within your means are all well good but I feel these threads turn into an orgy of "I'm the cheapest son of a bitch on the Street" and then IlliniProgramer comes in lays down his ultimate tales of thrift to be +1'd.

Things like vacations, girls, nice gifts for family members, etc are all expensive. That doesn't mean they are always a negative. There are two kinds of people who live in shithole apartments the size of a closet, eat the same food every day, work 100 hours a week, and are miserable: Foxconn employees and junior bankers trying to squeeze every nickel out of their salary.

When I sit down at the end of the year I'm not going to say to myself "Could have bought 15 extra shares of GOOG with the money I spent on vacations and golf" or "Gee shucks I'd have an extra 100 shares of GIS if I didn't take my girlfriend out to nice restaurants"

Go out and try to enjoy life a bit - I knew a very talented equity analyst with a sick job at a HF that got diagnosed with cancer at 27 and was dead within a year.

 

I earned 40k in 2011 and 80k in 2012 (including bonus) as a first-year analyst. My effective tax rate for this 120k was ~25% I think, which means that I earned ~90k after tax. I was able to save 55k of this. So, I was able to save ~60% of my after tax income. This seems reasonable to me. My after-tax paychecks were ~$2k. I paid $1250 in rent and I usually kept my monthly credit card bill under $750. Jan-March were horrible months as far as hours and my cc bills were like $300! Didn't have cable (no time). I was able to save like 2-2.5k per month after tax plus my 40k bonus (~30k after tax). So my savings were somewhere between $45-55k (I made some money in the markets from this too). Note: my credit card bills were much higher in college when I was going out 5 nights per week + trips all the time. Since I quit, I spend more money on leisure (bars, sports equipment/gear, weekend trips), but I moved back home to save on rent and food. I'm retired for the rest of this year--at least.

 

I just plotted my credit card expenses for the last 3 years. The average bill was $900 before I was analyst. While I was analyst, average bill was $400! December 2011 was $60 and March was $160!!! Those were by far the worst months of my life. Since I quit, my cc bills have returned to $900 (on 2 months so far). Interesting.

 

Is $2.25mm of savings after 7 years realistic in IBD? Just made a post about it but this girl (The Money Habit Blog) said she was able to save $2.25mm after 7 years (earnings plus index fund investing). Probably from like 2009-2016. Know the markets were up but this still seems high given NYC taxes and she was still spending ~24k a year. Of course I have never worked in IBD or maybe she was a trader. Believe she was working for JPM.

 

Just did some back of the envelop math on this because I'm bored waiting to go out for New Year's, and the risk of someone checking my math / nitpicking on numbers/assumptions, I find it very hard to get to 2.25mm after 7 years (I call it 7.5 years because she wouldn't have quit before her bonus in year 7...also apologies for the formatting here)

Level Year Pre-Tax Income Post Tax Income Rent/Expenses 401k match Investable $ ROI Total Savings AN1 0.5 $98 $59 ($21) $6 $43 25.5% $43 AN1/AN2 1.5 145 87 (42) 9 54 108 AN2/AS0 2.5 198 119 (42) 12 88 224 AS1 3.5 250 150 (54) 15 111 392 AS2 4.5 325 195 (54) 18 159 651 AS3 5.5 400 240 (54) 18 204 1,021 VP1 6.5 500 300 (66) 18 252 1,534 VP2 7.5 600 360 (66) 18 312 2,237

Some key assumptions--

Assumes $25k signing bonus for analyst in year 0.5 and a stub bonus (I know some banks give full bonuses in June for analysts but that is not how I did this).

In year 2.5, she gets a stub analyst bonus and a stub AS bonus as she transitions into the associate role (note she's promoted after 2 years of being an analyst).

Spends $1,500 per month on rent as an analyst, $2,500 per month as an AS1-AS3 and $3,500 a month as a VP. Associates are less likely to have roommates and VPs likely aren't living in studios.

Assumes $2k per month in other expenses--this likely is on the low end.

For effective tax rate I assume an all in effective rate of 40%.

401K match I kept it simple and have this at 6% of total income (maximum of $18k contribution limit). Realistically signing bonsues and (I believe) normal bonuses wouldn't be subject to this match.

Assumes that all money is invested at period end for simplicity.

I took rough guesses at all in pay--VP is pretty variable so it's likely she had bang out years here--my figures here are more for mid-bucket.

Based on the math above, she'd need a 25% return per year to hit $2.25mm--this isn't happening. If I add 20% to pre tax income above (would be top bucket or close to it), you'd still need a 16.5% ROI--again this isn't likely over a long period on index funds. The S&P had a 13.4% CAGR from 1/1/09 to 12/30/16. which is still well short. She likey had at least some comp in her bank's stock, which likely has appreciated since the financial crisis, so perhaps this makes up a bit of the gap.

She certainly had no student debt in these figures and very likely had some decent savings before beginning her job. I'd venture to guess she also was top bucket or close to it. So based off these rough calcs, yes it's possible but not really a realistic goal. If I plugged in more realistic assumptions I'd say savings of around $1.5mm after 7 years a bit more realistic (assuming no kids, divorce, good health and other caveats).

 

Another huge caveat to this is it ignores the fact that if she was at a BB firm, a larger chunk of her pay was likely deferred/not vested--if you retire sometimes firms will accelerate this,l but they do that more for old MDs--if I told my firm I was retiring at 28 and asked that my deferred comp not be forfeited, they'd laugh in my face.

 

At $60K annual salary you'll automatically have 35% in federal income tax withheld. Then you lose another 7% or so in state income tax. Then there's also FICA and other withholdings... all in all you'll only take home around 50% of that, so we're looking at $30K, maybe slightly more.

An apartment in Manhattan will be around $1000-1500 on the VERY low end and maybe even that's too low (haven't lived there in a few years). Any lower and you might put your life/health in danger.

So let's just assume midpoint and say $15K a year on the apartment... so that is $15K you have left to save. But obviously there are other expenses like transportation, utilities, misc. personal stuff etc... so that drops your disposable income to $10K.

My advice: don't worry too much about saving all this money in your first year. Your bonus is what counts. If you never do anything fun in an attempt to save all this money, you will go insane. Have some fun, and focus on saving/investing your bonus.

 

you do not get 35% federal withheld making 60K, not even close. your marginal tax rate is 25% up to $77,000, and your average tax rate is lower than that. Once you add in FICA and state and city tax, it adds up to about 35-40% total withheld.

 

Tax rates are based on marginal dollars earned. Your first 77k will be taxed in their respective buckets (google tax rates to find exactly what they are). Once you hit the 77k threshold, every dollar over that is taxed at the new rate. Therefore, your 60k from salary will not be getting taxed at the maximum rate.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

To sum it up in a nice accounting fashion:

Income: 60,000 Less FICA, FUTA, SUTA: 6000 Federal tax: 15000 State tax: 4800 Gross Income: 34,200 Less Housing Expenses: 18000 Transport Expenses: 1800 Food expenses: 7500 Partying & drinking expenses: 2500 Laundry, Electricity & water: 2000 (you save a lot on electricity cause you never get a chance to be at home) Total Expenses: 31800 Savings: 2400 Savings + Bonus(Lets assume its 100% of base after tax): 2400 + 40000 = 42400(try and invest or save that for B-school, but in my opinion, I'd put it in a mutual fund and chill out)

 

Guys, you can definitely afford to max out your 401k over the year, decreasing your taxable earnings. Plus, your first "stub year" where you work from june to december you won't be anywhere near the higher tax brackets and should get a refund.

--There are stupid questions, so think first.
 

Guys, for additional investing, what investments do you choose. Are you fans of low-cost mutual funds (indexes) or something else? I am looking to start saving and keeping it in the fund for 30 years or so.

 

i save the maximum amount that my firm will match ~4% and have about $250 a week of disposable income... meaning shopping drinking eating out etc. This is after all other necessary expenses like dry cleaning, utilities, breakfast/lunch money. Some weeks im working all day and night so i have more cash to spend the next week. Outside my 401k i dont save. Saving will come when its bonus-time.

If you want to save more than that, you will just have to cut back on going out, which i do not recommend, because you will almost definitely go crazy.

 

If you follow your budget, you'll do fine. Also good to not include bonus figures in your calculations.

I followed a budget quite strictly my first 6 months, then ramped up my rent, then started to eat a little better, then paid more for rent again, then decided to spare no expenses to ensure that I live well.

Basically, if you cut corners in some parts of your life to save up a bit extra, it'll catch up to you.

So I save a bit less every month now than when I first started, even though I earn a good percentage more.

Analysts should be able to, all-in, save at least $20k a year. Obviously, the further away from fees you move and the closer you get to adding value to assets, the potential is greater.

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
 

yeah i agree

If I were extremely frugal, i'd probably pay 800 for rent, buy cheap groceries and bring my lunch,

But I'm not, I live comfortably but I don't go splurging on 2000 dollar suits, 1000 dollar watches, 100 dollar steak dinners, and bottles for random girls at the club...every night like Bateman.

Anyways, yeah 20K per year is defin doable...hope to exceed that by a significant margin though!

 

If my fuzzy math is correct, assuming $70k, taxation of 35% federal/state/local (if any), single, $50k bonus, no car and NOT NYC, you could probably save $50k easily. You could probably take care of day to day expenses for about $30k a year, assuming your firm doesn't cheap out and decide to stop reimbursing you for late night food.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 

HomerS, your bonus is what will really impact your savings/net worth. Lots of kids end up in complete debt before they even get their bonus. I have excluded bonus from the $20k assessment; if you don't splurge throughout the year, it should be pretty do-able. I spend nearly half my salary on my apartment, but that's because it's an apartment will impress just about anyone in their early-mid 20's, unless you're an NBA athlete or Megan Fox. Otherwise, I find my biggest expense to be plane tickets (I work in what you could call an emerging market) and taking friends out when they come and visit me - if you're working in your own country, I can guarantee your expenses in these areas will be significantly less than time. Consumption: if as an analyst you consume like a vice presisdent, you will most certainly end up abusing the plastic, and your bonus will mainly be there to service your debt - if it even does.

What is the pension plan like, and how will you invest your savings? I had cashflow issues (until this year, I had to pay my rent 4 months at a time, which really adds up) so I couldn't put my savings into equities until recently. Is your employer the sort that will pool all analysts/employees together, or do they reward individual performance? If the former, you are essentially dependent on your firm's/division's performance, and you should never discount the possibility of a bad year (which lots of people outside GS and JPM had last year). Associate promotion: if you make it to associate, certain banks give you a "promotion bonus". It's sizeable.

By the way, I am assuming you are working for a bank. If you're a consultant, add 20 per cent to your salary savings, but your bonus will be minuscule.

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
 

I'm not a consultant.

I just have no clue what the bonus will be like.

That is why I'm not counting it in my savings.

Whatever the bonus (since it varies so much), I still plan to save as if I had no bonus. This way the bonus is just icing on the cake for later years.

I do travel quite a bit if I have time, but I still don't imagine i'd spend 10,000 bucks on that per year.

I love to party sure, but I'm a different kind of partier and not into the splurging bottles and models. So I don't really lose any cash over that stuff.

Anyways, I plan on investing in ETFs for the most part. Mix of EM, and NA ones

 

If you're in consulting though you probably could get away with not springing for a nice apartment, since you're on the road 4-5 days a week anyway. Maybe even get rid of your apartment altogether and store stuff with the parents. You're probably best of getting an apartment near the airport but within reasonable distance from your base office although you'll probably only go there maybe once a week. So that's going to mean significant savings over IB where you're home almost every night.

btw, $10k is a lot of money for travel. If you travel off season (who the hell wants to travel during peak season anyway? I sure as hell don't-too crowded) and join a frequent flyer program, it could take you far. It's not like things get any more interesting during peak season.

I'm so glad I'm going into corporate law. Pay is completely lockstep and base is 80-90% of your total comp.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 

Search. This has been broken down 100x by location, and even by line items of things you will be spending money on.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

You can't have an IRA. I-bankers make more than the income limit (something in upper five digits) on IRA contributions.

Donate the full $15,500 or 20% of your salary, whichever limit hits you first, to your 401(k) each year. Beyond that, it's also possible to save from each paycheck. Especially if you live in Jersey or Brooklyn and don't live for the "models and bottles".

(There are no clubs in Jersey and models probably won't date you if you live there either. If these things are of concern to you... pay the piper and live in Manhattan so that you can buy some new friends and date a model who is barely fluent in her native tongue. She'll enjoy spending your money even more than you will.)

 

No problem, slams.

You can invest in a number of things through most plans, so research all the options and pick a few different good funds. If you don't have the time or just want to make it easy, go with a simple index fund for the bulk of your cash. Like the Vanguard 500 Index Fund or something similar. You can always switch to another fund whenever you want down the road.

 
Jimbo:
The income limit for IRA's is 110k. you might not exceed that as 1st yr, especially in the coming years. i certainly didn't

if they're BB, they'll exceed 110k, at least in the next 2 years, unless they are a shit analyst.

 

You actually can have an IRA at any income level you just don't get the tax deductions when you put money in, but still get the benefits of letting your money grow tax defered until retirment.

I belive that the 110k limit is for a Roth IRA.

 

You can always have an IRA, just your contribution will not be tax deductible. For Roth IRA, the limit starts at 150k and you won't qualify at 160k. However, because in 2010, you can convert your traditional IRA into Roth IRA, you can max out your IRA from now till 2010 and convert it to IRA then.

 
sonyyy:
For Roth IRA, the limit starts at 150k and you won't qualify at 160k. However, because in 2010, you can convert your traditional IRA into Roth IRA, you can max out your IRA from now till 2010 and convert it to IRA then.
Sonyyy, it looks like the Roth IRA limit starts at $95k and completely shuts you out at 114k just like traditional IRAs (click here). Maybe you used the numbers for married filing jointly? I doubt too many analysts have that filing status.
 

20% contributions is a great way to start. My company matches 5% after a year, and I'm sure all the banks do that too. Company matching is literally free money. Currently, I still have student loans (private, variable interest rate) I am working to pay off, by at the end of this year I will go to 25-30% (usually the max you can contribute.) Living comfortably on 3/4 of your paycheck is totally possible, and because the $$ going to your 401K never hits your bank account, you never miss it, and it is exciting to watch your savings grow. As far as stocks, okay to invest pretty aggressively now, as you won't be using it for a long time. Diversification is good- a blend of growth, index, doesn't really matter a whole lot right now. May be a good idea to have some international in your portfolio too. Best of luck.

 
guyjer:
Haha my parents decided to open an IRA for me on my birthday (I know that is depressing). I know it was pretty smart but it is 4,000 i won't see till im like 68.

Yeah, it's depressing your parents gave you $4,000. Depressing to me, jackass! Go kill yourself now. :) BTW, if you leave it in until you are 68 it'll be worth around $1 million* by then, not $4,000. Your parents are such assholes, they just made you a millionaire.

*This assumes you are 20ish and that it will grow at 12.5% annually.

 

Jesus.... a four thousand dollar birthday gift? My mother sent me a card a week late (it didn't say Happy Birthday on the front, but it was written inside), and I'm grateful she remembered that much.

Who gives four thousand dollar birthday gifts? Who the hell complains about four thousand dollar birthday gifts? Dude, even if you can't do the TVM calculations, at least you can understand that that's money you don't have to save.

Someday, you will be incredibly grateful. That's a staggering sum of money, and it's now safe from your callow indiscretions. :)

 

Wait... did you just complain about being given a gift with "only" a $700,000 future value? (And that's future value, not present value. You will want to learn this cold before you interview with investment banks.)

Nonetheless, $4000 is a huge sum of money. You could add up every birthday and Christmas gift I've ever received from anyone and it wouldn't total $4000. Don't take it so lightly, man.

 
Mis Ind:
Nonetheless, $4000 is a huge sum of money. You could add up every birthday and Christmas gift I've ever received from anyone and it wouldn't total $4000. Don't take it so lightly, man.

Same here. Add in graduation gifts, still not there. I'm going to start slapping him.

 

Dumbass - you can take the $4000 principle out w/ no penalty if it's a Roth. I'm surprised you bankers are so concerned with saving for retirement as a first year analyst on a shoestring. Yeah, save early, diversify, blah blah bullshit. If you all plan on attaining BSD status by your 30s pulling in $5m/year, who the fuck cares about $4000 grand now - spend it on a trip you won't be able to take when you are 30 and married.

Personally, I'm going to dump into my 401K ONLY to the match (it is free money), but do some more exciting things with when I start making some real coin (and I might take a loan from my 401K to do so!). It's all about angel/early-stage venture investing. Pump your $50k after-tax bonus into 2 ventures via a local Angel Group, and use next year's bonus for another 2, or as dry-powder so your common doesn't get diluted in the next round. 5 years later you're 10% owner in 6-8 ventures, and if one hits big with an up-round recap or liquidity event and instant 20x return on your common (very common these days, especially with glut of PE money, even though you naysayers are right that the IPO market is crap for VC backed exits) - all of a sudden your $200k total investment is worth $2M off of one big hit (plan to completely write-off 7 out of 8) and you have some ammo for bigger targets - Buffet didn't get rich chasing 8% returns in index funds.

That being said, my first investment with a couple partners - a 5.6% ownership stake in a medical services company - is still EBITDA negative and burning cash like crazy. Some asshole VC will come in an demand liquidation preferences (and get them) and probably wash the common out completely - And THAT'S if I'm lucky, because a HUGE exit might still put a few bucks in my pocket or at least make me whole, alternative is to shut the lights off and pay no one. Oh well, it's a learning process right - Michael Jordan didn't dunk the ball the first time he picked it up.

 
PoolSideBanker:
Dumbass - you can take the $4000 principle out w/ no penalty if it's a Roth.

Is it true that you can pull all the principle out of a Roth IRA with no penalty? I heard this somewhere else, but all the research I've done suggests that you can only pull principle out penalty-free if you pull it out before the end of the year in which it was contributed.

I'm sure I'm just missing something. Can anybody provide a link?

Thanks in advance.

 
PoolSideBanker:
My first investment with a couple partners - a 5.6% ownership stake in a medical services company - is still EBITDA negative and burning cash like crazy.

Hey, I have some spare cash. Is it too late to get a piece of this gem?

Your real estate (mobile home) idea actually does sound like you might not lose your shirt, but just make sure you start getting a return on your investment from the beginning instead of hoping that the metro growth overruns it in 10 years. With high energy prices, the civic tendency moving forward might be for cities to build denser with public transportation instead of building out with just highways and cars.

You can see this trend already post-RE-boom with real estate prices diving 30% in 2006 for the exurbs of Northern Virginia (like Ashburn and Sterling) while falling only 5% closer in (like in Arlington and Alexandria).

 

PoolSide what year are you? Thats a pretty interesting approach there.. how certain are you that one will hit big? this something you seen someone else do? I don't know about how that works there :) 2m sounds nice lol.

  • Slams
...
 

Slams - I graduate undergrad May and start as an analyst in July. I had no idea what an Angel Investor / Venture Capitalist was until I came to college, and luckily I got hooked up with the right group of people and a couple great mentors. One of said mentors just scored a nice one - 3 months ago a big PE group gobbled up a financial services company he was in, and his seed $100,000 investment as well as his $250,000 participation in the Series A venture round from 2001 netted him just over $6 million. Thing is, he has 30 years experience in this stuff, knows how to protect his investment, knows how to leverage or replace executives if need be, demands a board seat and knows how to drive a company towards liquidity - all invaluable skills learned from the school of hard knocks. Just as valuable, he has the capital base to suffer some of these losses and take the risk, whereas I don't.

How certain am I that one will hit big? I wouldn't bet my left nut on it, but I'm not a risk-averse investor by any means - so what if I go broke, I'll just work a few more years until I build back my capital base. The guy I mentioned above had some epic disasters before his first successes, and now he's a millionaire many times over. I AM confident, however, that given 20 years of financial experience, network-building, and a little real-world pain/gain investing in startups that I will be have an edge over 99% of early-stage investors and bring the next generation of great companies to the market.

In the mean-time, other private investments can diversify the risk of this big hit. Believe it or not, the next investment we might make is in a mobile-home retirement community. Great current income and cash flow, low maintenance costs (simply give the managers a free space), we're long-term bullish on the underlying raw land (right on outskirts - metropolitan area will engulf it in 10 years), and can you think of a better BABY-BOOM play? Supply and demand wins the day - rents will skyrocket. Above all, this shit excites me - 401k investments don't. What if you die before 59 and you can't cash that shit out?

 
PoolSideBanker:
Above all, this shit excites me - 401k investments don't. What if you die before 59 and you can't cash that shit out?

What if you do? I plan for things as if I will be alive to see them, it's the only logical way to look at things. 59½ isn't anywhere near "death-age" unless you live a risk-filled lifestyle where you use really cheap parachutes to skydive. And I will probably look just like I do today at the age of 59 with the way medical science progresses. We'll all live to 110, and 59 will be our mid-life crisis when we cash in the 401k's and buy a small country thanks to all that tax-free appreciation shielded from the IRS for all those years.

 
PoolSideBanker:
Slams - if you have time on your hands pick up The Venture Capital Cycle by Gompers. Very academic but a nicely packaged overview. Browse www.pehub.com to stay apprised of the market, although nothing beats picking the brain of a seasoned VC over lunch.

Thanks Poolside. What bank will you be working at?

...
 

I take the far opposite approach to PoolSideBanker. For one thing, no one especially not anyone in PoolSide's position, can be certain he will reach MD or whatever at some point. He's assuming quite a lot about his future career and running with it as if it came with a guarantee.

Two different philosophies, but I'm as conservative as it gets when it comes to investing and I'd say most MDs still just own a portfolio full of boring-ass mutual funds to this day. They don't have the time to become angel investors until they retire from i-banking and try to find something interesting to do in between sailboats.

 

Mr. NYSE - I didn't necessarily say I will become a MD, only a BSD in whatever I do. 2 years I-banking, couple years top PE, top MBA, you are on your way to BSD status in whatever you do. By the time I'm 59 my body will be ruined from 16 years of competitive athletics, 4 years of college binge-drinking, 5 years of 18 hour work days, and heart issues that tend to kill most of the men in my family in their early 50s. I've got to live my life while I have the chance.

On a side note - you're boring. Have fun in your Jersey apartment with your index mutual funds. Do us all a favor and pick up a Hunter S. Thompson book - that man will teach you how to live.

Slams - prefer not to disclose my future employer for reasons of anonymity, probably a good policy for everyone on this board.

 
PoolSideBanker:
Mr. NYSE - I didn't necessarily say I will become a MD, only a BSD in whatever I do.

Assuming a lot since you're still a college kid. But if you're really going to die when you're 50, by all means don't save back a dime. You'll be wormfood well before the people you're giving advice to.

PoolSideBanker:
On a side note - you're boring. Have fun in your Jersey apartment with your index mutual funds. Do us all a favor and pick up a Hunter S. Thompson book - that man will teach you how to live.

I've actually read some Hunter S. Thompson books, back in "the day" and I lived that lifestyle at one point in high school. Your idol killed himself because his life was so useless. Hopefully you're not well on your way to the same fate! I know you think you know it all because you're a big man on campus, but this is the real world and you need to grow up.

By the way, I've never once invested in an index fund. I recommended it to someone who didn't know what else to invest in. Even in my 401k you'll find ETFs that employ fairly complex hedging strategies.

And the best hedge funds aren't risk-loving like you are. The best investors, like Warren Buffett who you mentioned but seem to know little about, are very much risk-averse.

Hell, Microsoft in the 1980s and 1990s was far too risky for Buffett to touch. So if you want to be like him, you might want to leave your angel investor hopes and dreams behind and become a conservative Ben Graham value investor. After all, that's what your financial hero is, a boring-ass conservative investor.

Warren Buffett eats BLTs for lunch, so maybe a Baller4Life such as yourself should use another example next time.

 

Ouch - quite a sharp tongue you have. Enjoy your life of mediocrity. Personally, I refuse to ever grow up and become jaded by the ills of the world, as you appear to have become, but that's just me.

And Hunter S. Thompson didn't kill himself because he thought he lead a useless life. Quite the contrary, he simply felt he had done everything he needed to do in the world and felt it was time to go. No he's not my idol, and yes he was crazy, but I think we all need a little bit of Hunter S. Thomson in our lives, just like we need a little bit of Buffet.

No need for the sarcastic "college kid," "big man on campus," or "Baller4Life" appellations. We're all a little more mature than that, aren't we? It's amazing the courage some people can muster when hiding behind the anonymity of a keyboard.

 

I'm never mediocre in anything I do, but there's nothing more mediocre than losing your shirt trying to be a baller like you and so many others. If you think conservative investing is mediocre, you're not reading what I said. (Buffett?)

Yes we do all need a little bit of Hunter and a little bit of Warren. My abrasiveness I actually get from my Hunter side. Can't you tell? And as far as courage, what would I be hiding from again? Do you think I'd want to beat you up if I met you in person? I just gave you some good advice, so it's not like I'd want to kill you or something.

Seriously: best of luck! I wish you well.

 

"Do you think I'd want to beat you up if I met you in person?" - No, but usually calling someone you don't know sarcastic names face-to-face is grounds for an ass-kicking in my neck of the woods.

Best of luck to you too.

 

Hey, you called me boring. I called you a Baller4Life. Are you still whining about this?

PoolSideBanker:
Usually calling someone you don't know sarcastic names face-to-face is grounds for an ass-kicking in my neck of the woods.
And where is that, the rough and tumble streets of Princeton?
 

Some risks are worth taking, and some are not- I can't imagine why anyone would chose to NOT save money based on the aspiration that they will become rich. Maxing out yout 401K and saving money early in your career is probably the soundest investment you can make. Compound interest is huge. PoolSideBanker is right that life is too short not to enjoy it and why work so hard if you can't make your money work for you, but I would disagree with him/her and encourage you to put at least 15% in your 401K every paycheck. Live within your means and budget in order to save money, and use that to travel etc, but don't borrow against your 401K. Not only do you pay 10% penalty to take it out, but you are also taxed at ordinary income tax rate. Interest compounding for the next 40 years aside, you're much better off to take it out at retirement and be taxed then. By all means, go out, work hard and become filthy rich- just don't neglect to save your money now because you plan on making a ton of it later.

 

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- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 

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CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/

Career Advancement Opportunities

March 2024 Investment Banking

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