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…
Post-MBA also includes IT, risk, etc. it's not purely IB. Also I think WSO expectations are often a little high.
Yeah that was my initial impression as well. My guess is MBAs from lower ranked schools will work in non-banking/trading/research roles at bulge brackets, thus bringing down the average.
I know this may shock you but not 100% of the grads from whatever school you're hard over are going to front office and are going to stay there or move "up"...
Taxes take half of it. Then with all the daily/monthly expenses, you're probably left with $50k a year in savings while you work +100h weeks.
Weight wat??
How ya been honey dip?
Democratic Republic of NYC...income taxes there are absolutely insane, but I guess that's the price for playing.
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.
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.
JPM also is a universal bank and has a lot of folks going post-MBA into non-IB functions.
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?
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).
The real issue is that now you pay almost as much in taxes in NYC as you do in most socialist European countries and get a lot less for your money.
My argument in a nutshell.
>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.
this thread is FUBAR.
wow this thread turned bad, quickly
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.
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.
300-400k is a lot of money in NYC, or anywhere else for that matter
https://smartasset.com/ tells me that the tax burden on a single person in NYC making 350k is 42% while a single person in Charlotte's tax burden is 37%, Atlanta's is 37% and Nashville's would be 31%.
All are depressing... $135k to the government annually.
Jargon has literally no idea what it is like to live in NYC vs other areas of the country. Which is weird because he claims to live here.
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.
I will say, the upward mobility and breadth of opportunities in NYC>Places like Chicago, which is why I'm still here and plan to be here post business school. But once you start to realize what your ceiling is that's when you have to think about whether or not the low buying power is actually worth it.
@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.
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).
3 reasons why housing in Chicago is so much cheaper.
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.
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.
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.
Wtf are you talking about?
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.
A lot of people here don't have, or have never had, a girlfriend
Even better. They tend to be the biggest expense ... ;-)
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.
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