Post MBA Banking Pay

Because I enjoy seeing how different WSO pay expectations are from every survey of actual employees I find, I figured this would be worth sharing (link inside the post).

So median all-in pay 6-8 years after business school at MS/GS/DB/CS/Barclays ranges from $300k-$400k essentially. I find that interesting since the conventional wisdom on WSO seems to be that a 2nd year Associate will be making that much money at those firms.

http://www.bloomberg.com/news/articles/2015-10-26/the-companies-that-pa…

 

What baffles me is NYC/NY State combined to have higher income and sales tax with property taxes inline with Boston. NY also has higher wages, property values etc..

My question is what does all this extra money get them? Is it just extremely expensive to run a city that densely populated? Just curious because it seems like Boston does a pretty good job and even has reduced property taxes especially for the lower income households.

 
Aphex2123:

What baffles me is NYC/NY State combined to have higher income and sales tax with property taxes inline with Boston. NY also has higher wages, property values etc..

My question is what does all this extra money get them? Is it just extremely expensive to run a city that densely populated? Just curious because it seems like Boston does a pretty good job and even has reduced property taxes especially for the lower income households.

The extra taxes go towards funding lazy entitled government employees and labor unions. MTA workers and janitors make low six-figure incomes and get extremely generous pension plans. And of course, the taxes don't translate into a cleaner efficient city. MTA is a disaster, with delays getting worse. The city is still smelly and filthy, and the homeless problem continues to get worse. Meanwhile, crime is up this year due to DeBlasio's demonization of the brave men and women of NYPD. In terms of rent, it continues to stay astronomically high due to idiotic liberal regulations such as 80/20, NIMBY, and rent control.

Most professionals in NYC don't like it, but we are forced to live here since it's where the job is. Eventually, the end game is to make the money here and then move elsewhere, so we can actually enjoy a high QOL.

 
Best Response

This is probably a discussion for people who specialize in urban policy and planning, but I personally believe there are way more efficient arrangements. You often hear that it's b/c of NYC's public services and police force, etc., but it also subsidizes housing in very inefficient ways, and plenty of other (in my opinion unnecessary or ultimately unhelpful) social and administrative policies.

NYC's annual budget as of June 2013 was something close to $70 billion. This is more than almost every state in the Union except for a couple. The City also carries about that much in total debt.

You can see a pie chart of where it goes (according to the City, which I imagine organizes the data in accordance with its own particular spin) here: http://www.ibo.nyc.ny.us/iboreports/understandingthebudget.pdf . See page 7 and page 10. You can see about 20% is for pensions and 10% is for service on the city's debt alone. 10% is paid to the gov't to run itself. Another 20% is used for the nebulous term "Social Services". Only 12% goes to the NYC police state system and transportation and public housing.

And let's not even get into the discussion of ridiculous levels of foreign wealth into the real estate in places like NYC that drive shit up way more than what I believe the local market would otherwise bear.

What this results from in my opinion is a mix of some of the worst elements of socialism and capitalism alike being enshrined in public policy and creating an absurdly inflationary environment for the people just trying to make a living there. And the market won't correct for it b/c people love living in NYC for a whole host of reasons (some legit, some bs, few "economically rational" in the traditional sense), so another example of the "irrationality" of the real market but i digress.

 

"$300k-$400k essentially. I find that interesting since the conventional wisdom on WSO seems to be that a 2nd year Associate will be making that much money at those firms."

The median pay is where automatic pay increases top out based on seniority, so that is not a big surprise.

JPM didn't even make the top 10 in terms of compensation? I thought they were suppose to be one of the best IBs.

 
DaBBzMan:

People complain about bankers making too much money and being greedy. The public sector is 100x worse. At least our 300k is spread across 80 hour weeks and having a blackberry glued to your hip. Look at City Managers in California, public employees getting paid like PE VPs.

Serious questions - do banks still issue/use Blackberries?

Commercial Real Estate Developer
 
CRE:
DaBBzMan:
People complain about bankers making too much money and being greedy. The public sector is 100x worse. At least our 300k is spread across 80 hour weeks and having a blackberry glued to your hip. Look at City Managers in California, public employees getting paid like PE VPs.

Serious questions - do banks still issue/use Blackberries?

Yes - mine is trying to get rid of it but I'm desperately holding on. Way better than checking email on my Android by opening up a separate app.
 

NYC certainly has its issues, but these issues are a problem in other US cities as well, and are actually less severe in NYC. If you think public unions are a problem for NYC, you may get physically sick when you read about what they are doing to the city of Chicago. Yes, housing is expensive for the middle class, but it's nothing compared to what is happening in San Francisco. A few other cities around the world may have more impressive subway systems (although I believe NYC has the most stations out of anywhere), but at least its an option in NYC-- try commuting around LA for a while and see how you like it.

 

Right on all counts for each of those individual problems and the city you used as comparison with a worse problem.

However, tax burden in NYC is way higher than all of the cities you mentioned.

And the numbers show it isn't paying for the MTA.

I think it's because NYC has all of those problems combined in enough of a degree to which they feed into each other, creating ridiculous budget and concomitant need for revenues,

NYC's budget is $70 Billion alone.

That's almost as large as the state budget for Texas (3x the population, with thousands of miles of roads, infrastructure, etc.). You could run LA, San Francisco, and Chicago COMBINED TWICE OVER for that much (and still have about $10 billion to kill).

 
JulianRobertson:

>OP's question on post MBA pay

>discussion turns into how taxes in NYC suck

meh, I live in Dallas now so taxes aren't a big issue, but do wish for some things that a truly big city like NYC offer, like better food scene, nightlife, actual walkability, etc.

If you can't find good food and nightlife in Dallas, you're doing it wrong.

 

The expectations on salaries are way off base, on another thread a kid is thinking $300k by age 30 in tech is easy. More like the exception than the rule.

Or my personal favorite, "just network", instead of pointing out that they should look for a different line of work.

 
SHORTmyCDO:

The reality is that 4 years into a BB banking role, and once you hit VP, you will base at $250 so i think $3-400 is fair. The reality is that most people that start in BB banking as A0s will never make it to VPs, most will burn out by then.

And even 3-400K isn't that much money in NYC. That's the sad part.

 
jargon223:

Yeah I have no idea yet I've lived here for several years now and grew up in the South. Good point.

Fail

From looking at your previous threads, you're still in undergrad. Meanwhile those of us who actually live in Manhattan as working finance professionals are telling you that your cost of living estimate is off base. Listen to your elders, kid.

What's up with college kids on WSO talking like they know everything?

 

This argument is going nowhere. Everyone has a different opinion of what's nice, what's a good quality of living, and what amount of money is "comfortable." Arguing about it is pointless.

Commercial Real Estate Developer
 

@MBAGrad2015" and @opsdude1" , I guess it all depends on what you feel is a good QoL. I'm single, I don't care about space in my apartment and I never really have issues with going out. I grew up in NYC so I'm used to apartment living and don't care about a yard or space in my apartment. As long as I have a bed, a couch, a TV and light I don't much care about the rest. It's far more important to me to be in a location where I can walk to lots of bars and restaurants and can get to work quickly (which I am). I also routinely underspend on the rest of my budget so I effectively have ~$250 to spend per week on going out. I don't go out every Friday and Saturday like I used to when I was 23, so $250 is more than enough to cover 1 night out, 1 happy hour/date per week and a nice dinner every other week. I never go to dives, but I also don't drink like a college student anymore.

You are both absolutely right about Chicago though, you get way more for your money there than you do in NYC. As I said in another post (defending Chicago), you get ~85% of NYC for 55% of the cost. However, 80% of my closest friends from high school, college and bschool live in NYC, so that tips the scales for me. I've said before that if I could magically uproot everyone I know and move them to Chicago (with the same jobs) I'd be more than happy to.

 
Masterz57:

@MBAGrad2015 and @opsdude1 , I guess it all depends on what you feel is a good QoL. I'm single, I don't care about space in my apartment and I never really have issues with going out. I grew up in NYC so I'm used to apartment living and don't care about a yard or space in my apartment. As long as I have a bed, a couch, a TV and light I don't much care about the rest. It's far more important to me to be in a location where I can walk to lots of bars and restaurants and can get to work quickly (which I am). I also routinely underspend on the rest of my budget so I effectively have ~$250 to spend per week on going out. I don't go out every Friday and Saturday like I used to when I was 23, so $250 is more than enough to cover 1 night out, 1 happy hour/date per week and a nice dinner every other week. I never go to dives, but I also don't drink like a college student anymore.

You are both absolutely right about Chicago though, you get way more for your money there than you do in NYC. As I said in another post (defending Chicago), you get ~85% of NYC for 55% of the cost. However, 80% of my closest friends from high school, college and bschool live in NYC, so that tips the scales for me. I've said before that if I could magically uproot everyone I know and move them to Chicago (with the same jobs) I'd be more than happy to.

I see where you're coming from, and I'm not going to presume that others do or should share my priorities.

When I was a lot younger, I think I could've dealt with NYC QOL pretty well. After all, when you're straight out of college you're still used to dorms and roommates, so getting a small place while working 90+ hours/week in banking is something you can do, physically and mentally. I'm now well into my 30's, and the older I get the more I care about QOL and COL. Don't get me wrong; I fully appreciate the diversity and breadth of opportunities in NYC and all that the city has to offer. There is no other U.S. city quite like it. For me though, I now don't go out as much and want to come home to a nice place after work, with a decent amount of space, and amenities to enjoy. The amenities in my prior residence in Chicago are certainly not necessities but oh boy, do they really improve your QOL. Not having to pay a gym membership, doing laundry whenever you want without having to leave the building, buy snacks at the 7-11 store without stepping outside, having friends over for drinks and BBQ grilling during Chicago summers (as close to heaven on earth as you can get), and so much more. Stuff like that affects your QOL, although it may seem trivial at first. And having enjoyed the fruits of Chicago and now being stuck in NYC for work, I appreciate Chicago that much more while recognizing NYC's fundamental flaws as a city.

 

Chicago and NYC are my two favorite cities in the US, but everyone needs to ask themselves why Chicago is so much cheaper. It's not another NYC; the two cities are very different once you get beyond the superficial similarities.

 
CF1988:

Chicago and NYC are my two favorite cities in the US, but everyone needs to ask themselves why Chicago is so much cheaper.

Chicago is dramatically cheaper than NYC & SF because of relative low population and job growth. It's not a dying city (yet), but it's certainly not booming like most other major (and minor) cities. Chicago apartment rents for instance comp with cities like Nashville - certainly not NYC & SF.

Commercial Real Estate Developer
 
CRE:
CF1988:
Chicago and NYC are my two favorite cities in the US, but everyone needs to ask themselves why Chicago is so much cheaper.

Chicago is dramatically cheaper than NYC & SF because of relative low population and job growth. It's not a dying city (yet), but it's certainly not booming like most other major (and minor) cities. Chicago apartment rents for instance comp with cities like Nashville - certainly not NYC & SF.

I don't disagree that low growth is a factor, but what Chicago has done really well (bloomberg had a really good article about this recently and I can't find it) is that their housing construction has exactly matched population growth while NYC only built about 1 new unit for each new 5 households and it's 1 for 10 in SF. It is basic supply and demand, if you have rapid population growth and you don't built new housing fast enough (or at all in the case of SF), prices are going to skyrocket. Others have earlier discussed the reasons behind these dysfunctional policies in NYC very well so I won't dwell, but it has to be said that smart housing policies and support for construction is a huge driver of why COL is so low in Chicago (and many southern cities such at ATL, Houston, etc).

 
CF1988:

Chicago and NYC are my two favorite cities in the US, but everyone needs to ask themselves why Chicago is so much cheaper. It's not another NYC; the two cities are very different once you get beyond the superficial similarities.

3 reasons why housing in Chicago is so much cheaper.

  1. not as many super high paying finance jobs
  2. very few rich internationals snapping up properties
  3. not as much onerous regulations such as NIMBY, 80/20, rent control, etc. that limit market-price housing supply

The poster above did a great job of talking about Chicago actually matching population growth with new housing construction. Chicago has done a masterful job in this arena while NYC has utterly failed its people. What's sad and comical is that NYCers point to the astronomically high rent as some symbol of pride. They shout, "The high rent means that our city is so special and rich! Everybody wants to be here!" No; it's because the liberals who control your city are purposefully limiting housing supply, thus driving prices through the roof. Edward Glaesar, an urban economist at Harvard, has done numerous studies on this topic.

 
MBAGrad2015:
3 reasons why housing in Chicago is so much cheaper.

1. not as many super high paying finance jobs
2. very few rich internationals snapping up properties
3. not as much onerous regulations such as NIMBY, 80/20, rent control, etc. that limit market-price housing supply

The poster above did a great job of talking about Chicago actually matching population growth with new housing construction. Chicago has done a masterful job in this arena while NYC has utterly failed its people. What's sad and comical is that NYCers point to the astronomically high rent as some symbol of pride. They shout, "The high rent means that our city is so special and rich! Everybody wants to be here!" No; it's because the liberals who control your city are purposefully limiting housing supply, thus driving prices through the roof. Edward Glaesar, an urban economist at Harvard, has done numerous studies on this topic.

Yeah, perhaps that and the 25% decline in population since 1950-- so "matching population growth" would mean actually destroying housing (which the city actually did sometimes-- see Carbrini Green). I'd like to read some of those studies if you've got the links to them, I love this type of stuff. I have a hard time believing Chicago city leaders are less liberal than their counterparts in NYC; Chicago is really one of the most liberal cities in the country. But I didn't want to get so far in the weeds-- my point was fewer people want to live there compared to NYC, and there are probably good reasons for that that haven't really been brought up yet. I also want to point out that I can't believe I'm actually "talking down" Chicago. I'm usually on the other side of the conversation, since it's typically some east coast snob ripping on Chicago ("Chiraq") or the Midwest in general while I calmly remind them that the city and region in general are wonderful places for most Americans to live.
 

This is a quality of life discussion now. If you need a tennis court, doorman, tennis court, yoga studio, gym, pool, grilling area, blah blah, all at your place - then yeah, you're gonna pay up here. I don't really care about having any of that stuff at my place. The spaces are also smaller here than what you'd get in another city in the US. Also, for anyone reading all this and wondering what apartments really look like/cost, check out www.streeteasy.com That all being said, I would rather be here in a small place than in a mansion in some small city. Even if I had kids, I would probably just buy a place and move out to Brooklyn. For me, life in NY is drastically diff from living in Atlanta or DC, etc. When I go to those places, its nice for a few days, but I get ready to get back to the city pretty soon. I just haven't found anywhere that can match what I feel NY offers me in terms of diversity, new places to go, convenience, and just outright fun. Some people love it, and other people don't - it's not for everyone.

 

In comparison to Chicago and NYC, how would you guys rank Boston?

I'm considering a move there next and the post above about Chicago makes me want to move there instead.

 
rjj1:

In comparison to Chicago and NYC, how would you guys rank Boston?

I'm considering a move there next and the post above about Chicago makes me want to move there instead.

Chicago utterly dominates Boston in every facet imaginable. Even putting Boston in the same sentence as Chicago is comical and absurd.

 
MBAGrad2015:
rjj1:
In comparison to Chicago and NYC, how would you guys rank Boston?I'm considering a move there next and the post above about Chicago makes me want to move there instead.

Chicago utterly dominates Boston in every facet imaginable. Even putting Boston in the same sentence as Chicago is comical and absurd.

Wow, I've never lived in Chicago, but it sounds like the place to be. How is the dating scene in Chicago? NYC is probably tops in that area.

 
undefined:
rjj1:
In comparison to Chicago and NYC, how would you guys rank Boston?I'm considering a move there next and the post above about Chicago makes me want to move there instead.

Chicago utterly dominates Boston in every facet imaginable. Even putting Boston in the same sentence as Chicago is comical and absurd.

Wtf are you talking about?

 
rjj1:

In comparison to Chicago and NYC, how would you guys rank Boston?

I'm considering a move there next and the post above about Chicago makes me want to move there instead.

I lived in Boston for a while and I love the town but it's very small for a major city, which can be good or bad depending on your preferences, and it's really expensive. Probably only a slight degree less than NYC. On the good side, it's clean and safe, well laid out, walkable and manageable (partially due to its size), you're not far from the ocean so if you stay long term and move to the burbs it can be oceanfront, and there's a lot going on in the arts, culture, music and food scenes among other things. To say that Boston doesn't even belong in the same sentence as Chicago is idiotic. And I like Chicago.

 
undefined:
rjj1:
In comparison to Chicago and NYC, how would you guys rank Boston?I'm considering a move there next and the post above about Chicago makes me want to move there instead.

I lived in Boston for a while and I love the town but it's very small for a major city, which can be good or bad depending on your preferences, and it's really expensive. Probably only a slight degree less than NYC. On the good side, it's clean and safe, well laid out, walkable and manageable (partially due to its size), you're not far from the ocean so if you stay long term and move to the burbs it can be oceanfront, and there's a lot going on in the arts, culture, music and food scenes among other things. To say that Boston doesn't even belong in the same sentence as Chicago is idiotic. And I like Chicago.

Boston is a small provincial town where you can exhaust the nightlife and restaurants within a few months. The city shuts down super early. It's great for students, but that's about it. Chicago is a global cosmopolitan city with so much stuff going on that it will make your head spin. So yes, Boston doesn't belong in the same sentence as Chicago. Boston's closest counterparts are cities such as Philly and DC, not Chicago.

 

A lot of you crack me up, seriously. I lived on an income slightly north of $100k for a year in NYC, net income would be a bit lower than $5,000 a month. My girlfriend and I lived in a great one bedroom for $4,000 which we would split equally. I had around $3,000 at my disposal every month, of which I spent around $300-350 a week on going out, food et cetera and saved the remaining $1,500 each month.

Admittedly, I wished I could have saved a bit more, but saying you cannot live comfortably on a salary 3-4x as high as mine is absolutely BS.

 
undefined:

A lot of you crack me up, seriously. I lived on an income slightly north of $100k for a year in NYC, net income would be a bit lower than $5,000 a month. My girlfriend and I lived in a great one bedroom for $4,000 which we would split equally. I had around $3,000 at my disposal every month, of which I spent around $300-350 a week on going out, food et cetera and saved the remaining $1,500 each month.

Admittedly, I wished I could have saved a bit more, but saying you cannot live comfortably on a salary 3-4x as high as mine is absolutely BS.

A lot of people here don't have, or have never had, a girlfriend

Commercial Real Estate Developer
 
undefined:
undefined:
A lot of you crack me up, seriously. I lived on an income slightly north of $100k for a year in NYC, net income would be a bit lower than $5,000 a month. My girlfriend and I lived in a great one bedroom for $4,000 which we would split equally. I had around $3,000 at my disposal every month, of which I spent around $300-350 a week on going out, food et cetera and saved the remaining $1,500 each month.Admittedly, I wished I could have saved a bit more, but saying you cannot live comfortably on a salary 3-4x as high as mine is absolutely BS.

A lot of people here don't have, or have never had, a girlfriend

Even better. They tend to be the biggest expense ... ;-)

 
undefined:

A lot of you crack me up, seriously. I lived on an income slightly north of $100k for a year in NYC, net income would be a bit lower than $5,000 a month. My girlfriend and I lived in a great one bedroom for $4,000 which we would split equally. I had around $3,000 at my disposal every month, of which I spent around $300-350 a week on going out, food et cetera and saved the remaining $1,500 each month.

Admittedly, I wished I could have saved a bit more, but saying you cannot live comfortably on a salary 3-4x as high as mine is absolutely BS.

First, if you're living with somebody who has an income and is helping pay your bills then you aren't living on a $100k salary, you're living on your combined salary.

So you spent $2k on rent, $1.5k on going out/etc and saved $1.5k. So you don't buy groceries, pay utilities, have a cell phone, have tv/internet, have a gym membership, take a taxi, buy a metro card? I agree you don't need $500k to live comfortably in the city but your numbers are a huge stretch.

 
undefined:
undefined:
A lot of you crack me up, seriously. I lived on an income slightly north of $100k for a year in NYC, net income would be a bit lower than $5,000 a month. My girlfriend and I lived in a great one bedroom for $4,000 which we would split equally. I had around $3,000 at my disposal every month, of which I spent around $300-350 a week on going out, food et cetera and saved the remaining $1,500 each month.Admittedly, I wished I could have saved a bit more, but saying you cannot live comfortably on a salary 3-4x as high as mine is absolutely BS.


First, if you're living with somebody who has an income and is helping pay your bills then you aren't living on a $100k salary, you're living on your combined salary.

So you spent $2k on rent, $1.5k on going out/etc and saved $1.5k. So you don't buy groceries, pay utilities, have a cell phone, have tv/internet, have a gym membership, take a taxi, buy a metro card? I agree you don't need $500k to live comfortably in the city but your numbers are a huge stretch.

I believe this is exactly the problem with a lot of people in NYC. There is a constant stimulation to spend money. The $4,000 in rent is including utilities and internet, and my apartment has a gym. I don't need a $250 a month Equinox membership or a $150 a month iPhone subscription to get the newest the second it gets on the market. Not sure if you work in finance/consulting/law, but I hardly spend any money on groceries and expense most of the taxi drives. If I am with a girl, I obviously take a taxi to get from A to B, but otherwise I mostly take the subway, which is often faster than a taxi.

Agree that some people argue this may not be an extremely comfortable lifestyle, but a lot of things in NYC give you an incremental better lifestyle for a disproportionate amount of money. Note that I was not saying $100k gives you an incredible lifestyle in NYC - I merely stated that it is idiotic to treat a salary of $300 - $400k as if it on the borderline of the poverty level.

Also to address your original query: you do not make $400k as a second year IBD associate, no matter what your (college) friends tell you.

 

Quam adipisci optio voluptatibus quam. Aut velit dicta quia est dolor vero. Asperiores dolorem a reiciendis sed. Veniam qui quo aspernatur eveniet est accusantium nostrum. Doloribus rerum dolor esse nulla.

Quis vitae autem provident unde est sed. Consequatur sit expedita quibusdam ut illo. Excepturi quis atque et voluptas harum iusto. Sit et eaque rerum esse itaque sint.

Cum et quos doloribus. Placeat tenetur doloremque reiciendis labore ducimus eos. Quaerat necessitatibus aut earum aut consequatur doloribus facilis. Rerum molestias sint fugiat fugit.

 

Tenetur sit quia quos sed corporis. Et laborum tempora nesciunt animi sed hic. Accusamus quo quia ducimus laboriosam pariatur sunt. Reprehenderit delectus quasi doloremque repudiandae. In voluptas molestiae voluptates natus. Minus perspiciatis aut quisquam incidunt impedit esse eum. Et molestiae magni et quia recusandae et voluptas.

Illum rerum odit vero dignissimos dolor quae. Necessitatibus consectetur qui dolorem iste quia vero. Repellat quia ut ducimus quasi molestiae nisi. Nostrum suscipit est laboriosam id rerum voluptate modi.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”