Rich?
Guys,
another question pops up in my mind after reading alot on this forum..
It seems half of NY are IBankers,and since all of them make so much money and since it's such an expensive city..how does that make u rich if everyone makes as much?
who is rich? the person who is happy with what he has.
said differently, to paraphrase the great Charlie Munger...if you're getting rich at a comfortable pace, you shouldn't care if someone else is getting there faster
Hmm...well said...
but philosophy aside...ppl get into banking for 2 reasons only : 1. The challenging work 2. The money
nah for 1 reason...the 2nd one...
being rich is not a relative game unless you make it one.
but the whole concept of rich or not is relative...?
on some level, sure. ie if you have 100k and you live in ethiopia you are rich. not so in nyc....
maybe flesh out your question a bit. you can live fine, but certainly not great on 60k a year in nyc. you can live well on 100k. you can live very well on 200k. it depends on your personality. i have certain fixed costs in my life...and with the exception of travelling better and a bit more, i live very similarly to the way i did as a first year analyst. i just save a helluva lot more.
Hmm...makes sense... Since ur already in banking i got a few more qns for u Jim... 1. How interesting/challenging is the work? 2. Is my CPA n audit experience gonna help? 3. Do u really get really rich in the profession 4. how much of the ranting is true tht these are sweatshops with no human element Thanks man
i don't work in banking. well not in corp fin at least.
Because they can walk down the street to a dealership and buy a Ferrari on a whim. Based on your naivete, I'm guessing you're from a shit-town. So to put it into perspective for you: if one of these guys moved into your neighborhood, it would be considered a big step down.
It's a discussion forum Zala, u don't have to get nasty. If this is the way you speak it certainly does reflect on your upbringing and education.
The fucking idiotic reasoning inherent in your original question, your poor grammar, and your inability to put basic ideas into words reflect on yours, too.
We're discussing 'relative' here and not 'absolute'. And, i'm from one of the ten biggest cities and went to one of the best colleges in the country. Have a nice day.
it's a message board. don;t take things personally...this is tame next to the stuff i hear all day at work.
relative... ibankers are not rich if you want to compare rich as in top 400 richest americans list there are barely any bankers... most are technology or real estate or energy and oil
Hehe...ok, thanks again jim... guess i did get a bit wound up..cool now
good point spect..you can get into the 97-98th percentile in this biz, but generally not into the 99th.
but seriously define rich. you can easily make in the mid six figures in this biz. that should be enough for anyone.
Correct me if I'm wrong, but 99th percentile for net worth is somewhere between $3.0 and 3.5 mil, and for income it is somewhere around $350k/yr. That is pretty easily attainable.
zala you may well be right. i mean you can't really hit the stratosphere in this biz. that's reserved for pro athletes and entrepreneurs.
Yeah, if you define 'stratosphere' at $500m or something, then you're right.
But look at it this way: as of a year or two ago, according to the NYT to be in the top 1/1000th (which is the 99.9 percentile) in terms of net worth, you only need $10m. I'm not going to say that is easy, but for a senior trader/banker/etc that kind of nest egg is very possible.
You might know plenty of people with assets in/above that range (I do), but I try to take a realistic stance about it: the top 00.1% is pretty much the stratosphere of American society, and I wouldn't complain if I were sitting on that kind of money.
The best bankers make way more than the best athletes, and the average banker makes at least 5x as much over his/her lifetime than the average pro athlete.
While I don't disagree with you about earning more, show us where you get the 5x number.
I loathe people that just make up statistics.
look i'm not interested in getting into a pissing match here. trying to make a general point.
"The best bankers make way more than the best athletes" really? how many bankers make more than a-rod or kevin garnett?
i know a guy who's about to sell his biz for $40mm. he's in his mid 20s. that's more than most bankers will ever make.
Even run down cats like Joey Porter and Jeff Garcia land multi-million dollar contracts in the NFL, I doubt Bankers pull in that kinda dough.
Well, like a top athlete in NFL will get 10 mil per year. Their career usually last aroubd 10 years, with the top of your game being around 5-6 years. So a successful athlete probably looks at 100 mil for his career including endorsements. And not all of them land cushy announcer jobs.
Some top bankers make 20+ mil in bonuses and their careers last a lot longer. So a career banker will make a ot more money than a top pro-athlete in a lifetime.
Jimbo - Kevin Garnett signed a five year, $100m deal a couple of years ago. Of course that's a lot, but then compare that to some of the top partners at GS who cashed out when it went public and raked in hundreds of millions just off of that. Or the fact that Blankfein has pulled that much in just two years. Or to take it to an even greater extreme, Herb Allen of Allen & Co, who is a billionaire a couple of times over. Moreover, while these athletes can make an astounding amount for a max of ten years, the top bankers starting rolling in real money at around 30, and then don't stop for the next thirty years or so. So those are just some of the bankers that make more than KG.
BrokenIncome - Average salary in the NFL is well below $1m/yr. Average athlete will make this for ~10 yrs. A serious career banker at a BB will definitely make at least $50m over his lifetime.
We can get into the numbers but honestly, I'm too lazy. The numbers both of you are dropping are what the cream of the crop bankers make, that's like comparing Peyton Manning/Vick/Brady or Lebron/Kobe/Wallace numbers to the average banker's numbers.
What GS Partners made after the IPO or what Herb Allen is worth doesn't really correspond with the salary of an MD at a BB.
I am not doing that. I am comparing top performers in both areas. I said the top athletes make around 10 mil per year for 5-6 years and if you throw in endorsements, they make 100 mil for their whole careers. Top performers in banking make more than that.
Oh come...you guys are finance professionals! An apples to apples comparison requires a comparison of the present value of their earnings, you know that! ;P
.
Ken Moelis makes 25+ million a year and was Ozzie Osbourne's 'richer than God' neighbour as Osbourne's children put it.
He has been making over 10mm for a very long time now. So I'd tend to agree with Prescott and Salam. Guys like Perella, Wasserstein, Blankenfein, Mack etc made even more. If you count guys that did banking as a stepping stone (Kravis, Schwarzman etc.) then we are talking about those that do crack the upper echelon of wealth.
although I think this topic is supposed to be primarily about pure banking.
Seanc, I am confused, why would we compare the absolute highest echelon of athletes with average bankers? If you look at what I wrote, I said that the best bankers make more than the best athletes (e.g. Blankfein > ARod, Mack > KG, Goldman Partners > NFL Pro Bowlers). If you want to compare average bankers at BBs to someone, you should compare them to the average athletes in the top professional sports leagues. This really isn't that difficult a concept, guys.
Professional athletes endorsements can be more than their salaries and almost all top athletes have multiple endorsements.
banking is also highly cyclical whereas pay for athletes continues to escalate...might want to take that into account
Compare the pay of the second tier of Athletes i.e. NOT the Mannings, Bryants, A-Rods of the World, to an MD at a BB and tell me how they compare. That's a better comparison than comparing A-Rod to Herb Allen, after all we all know every MD isn't going to make a billion and every athlete isn't going to be A-Rod.
Also don't assume that if you make, say $70MM in your 10 year career, you're not gonna figure out a way to grow your net worth at least a little bit for the rest of your life. Obviously not at the same rate that an MD's salary grows at but a sizeable figure nonetheless.
average athletes make MUCH more than average bankers.
If you compare some average athlete (not A-Rod, Shaq, Kobe, Jeter, Manning etc...) to an average banking MD (not Blankfein, Mac, etc...) the average pro athlete makes more.
Exactly the point I was trying to make.
This is really not that difficult to figure out.
In baseball you have mediocre players getting paid easily $4-6 million per year.
Mediocre MDs surely don't get paid $4-6 million per year. The mediocre MDs are lucky to clear $2 million per year.
Assuming the average pro athlete career lasts 5-7 years, and the average athlete does not have endorsements, I don't see how the argument that an average pro athlete makes more than an average banker over the course of their career makes any sense.
Does your average banker make $5 million per year or even $2.8 million per year?
Not a chance.
The arguement that your average NBA player or MLB player makes more than your average banker over their career is clearly evident based on the statistics you have provided.
Keep in mind, the banker has been making a good amount of money since they were an associate (300k+), whereas a mediocre player wasn't making any money before he got his contract. Also, there are only 2 sports (NBA and Baseball) where the average player was clearing 2 million. Since this is a thread about professional athletes in general, the average across sports is actually much lower than 2 million.
The boutique I worked at last summer (a really crappy no-name one) had the MDs clearing a million, so it is definitely not strange to think an average MD can clear 1.5mm. These guys also work into their 60s, so the 15 year thing might be a bit on the low end.
No kidding. Way more difficult explaining this than it should be.
"How are you not getting this? Let's take baseball. 2.8mm/yr * 6 years = 16.8 million total. Now a banker: 1.5mm/yr * 15 years = 18 million total."
The numbers are biased. Is the average life of a banker's career 15 years? Also, is the average career life of a baseball player only 6 years? Unless they get hurt...you have players that play into their 40's. Anyone remember Phil Nekro the knuckleball pitcher? That guy had white hair.
well you have to take into account the number of years that one is a professional athlete versus the amount of time that one is a MD.
Obviously, the MD has a longer timespan
Source Article
What do you consider an average banker? The average banker does not become an MD.
the average athlete does not make it to the majors/ highest level in their game. are we going to count NBDL and minor league baseball players too?
Jeez if you can make $70mln in 10 years spend about $20mln and put the rest in a giant 5% CD.....that's 2.5mln/yr in just interest. And don't tell me you can't live fancy on $2.5mln a year and save a little too.
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