How do you guys budget
In my third year at HF and so far haven’t had a great time comp wise - $75k, $75k - likely zero this year given team perf. How do you guys budget? Life in NY/SF is pretty expensive and I frankly find it pretty hard to save substantially on my base alone. The corporate world is looking more and more interesting every day with this comp….
I'm sorry, you're making $75k all in during your 3rd year at an NYC hedge fund?
For your own sake I hope you're trolling.
Follow up to this. 75K both years all in or 75K bonus both years? If the latter, what’s your base?
Bonus
150-175 over the years
Not saying I’m totally starving here more so just how to budget given inherent variability in TC from year to year
3rd year on $75k in NYC? That's like Big 4 money. Should probably fix your job performance/sh*tty employer before trying to budget...
Source of never ending annoyance. My salary ($150k) is not quite enough to live on (as a 31 year old with GF, mortgage on condo, travel obligations, country club membership, etc.) so I'm always drawing on the prior year bonus. Once you hit $1mm liquid (so 2 good bonuses), the stress goes away a little as your passive income plus your salary should be enough to cover a reasonable, pre family lifestyle and you have a couple years of breathing room but I'm still constantly moving money between the market, money market, and my bank accounts. Right now with short term rates in the 4's, I don't mind keeping a full year worth of living expenses in the money market but as rates come down, I'll probably move more into the equity market and basically schedule draws periodically throughout the year.
I'd start by cutting the country club membership unless it's absolutely critical for your career.
I don't have any financial problems. I've got millions of dollars in my early 30's and make 2x on an after tax basis what I spend in any given year and have for 3+ years now. it's just a pain in the ass having to constantly shuffle money around.
Don't know much about HF world but currently am in IB. A salary of 150k seems pretty low no?
150 base, or there about, is standard for top funds. Base doesn't really change at a HF until you become a PM
Salaries are all over the place at hedge funds. I've been offered $125-200k for essentially the same seniority positions. $150 is whatever / slightly on the low end of average. Salary really doesn't matter that much in the grand scheme of things. Would I rather my comp be more salary rather than bonus? Yes but I wouldn't trade $25k more salary for $10k less total comp.
I’m first year at a T1 LO and I barely cant save money at the end of the month because I have to take care of my GF as well.
Is it alarming or can this be sustainable as my salary will probably grow?
live off the salary, try and save as many bonuses as possible (which obv varies year to year quite a bit). for big expenses like a house, i've saved for a while and am putting in a good down payment such that mortgage is okay off salary. not ideal, but it is what it is. jealous of my banker and doctor friends that get paid consistently high and have great visibility. lack of visibility means having to live below means until you put down big chunks into whatever you're purchasing, at least that's how i do it.
that said, i know people who just spend big parts of their bonus every year. makes no sense to me, but whatever floats their boat.
I honestly don't get it. What are you all saving for? There are only like 5-6 big lifetime events that should require a meaningful degree of saving: engagement ring, down payment, daughter's wedding (obviously you may end up having multiple), kids' college (again, same comment), retirement. If you're in your early to mid 30's with $2mm+ net worth (which I've achieved after a decade on wall street even with 2 goose eggs and a cumulative year of unemployment), you realistically have put away enough to pay for each of those meaning for the rest of your career you just have to cover your lifestyle and that of your dependents, in aggregate. For instance, to fund a $400k private college education in 20 years (assuming your first kid isn't born yet) you only need to earmark about $60k. A $350k wedding (i.e. a bougie ass wedding for 400 people) in 30 years is only $20k today. Having $2-3mm at retirement (which would be a lot assuming your house is paid for) in 35 years is only $100k today. I agree with folks that want to put more than 20% down for a down payment given the risk of a hedge fund career but then I also don't understand why some people feel they need a $5mm house when there are beautiful $2-3mm houses all around the tri state. If you end up having a career flame out and making say $200-300k in your mid career sure your life style is going to suffer and the Mrs may need to pick up a newspaper route (the absolute horror...) but you can realistically still afford $60k of mortgage payments (i.e. a $1mm mortgage) on that based on the ~30% of after tax rule of thumb. Therefore, you can probably get away with 50% down on a $2mm house. Yes you can get hit by a bus or struck down with cancer but there's really no way to mitigate those risks.
I feel like half of wall street have become these ultra tight fisted, Dave Ramsey disciples. The issue is y'all are fucking boring. My country club, the annual ski trip I take, the squash & tennis club I belong to, fine dining once or twice a month, etc. are where I get 50% of my network and 90% of what makes me interesting to talk to. One of those things actually led to a meaningful check being written into my fund which absolutely contributed to my bonus. Carrying a single digit handicap can be huge for one's career advancement as well. You want to be the guy who the PMs want to put in front of clients, not the dork with grocery store coupons peeking out of his pocket.
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