What to do with all this money?
First, let me preface by saying I understand how ostentatious this sounds. This is however a genuine question I am struggling with and need opinions. For context, I have just received a full-time offer from my investment banking summer internship starting upon graduation.
After-tax salary is looking at $95,000 + bonus. I do not need to pay rent, as I live in an extremely expensive city (NYC/SF) and my parents are right next to the financial district. It is also a much nicer place than what I would otherwise rent. They also told me I do not need to pay for groceries, but I will likely contribute anyways. What else am I supposed to spend money on? I do not have time for holidays, do not have a girlfriend (yet), and have no college loans. The only expense I can think of is shopping and eating out, with the latter (maximum) costing $6,000 a year for lunch. What else is there?
For context, growing up I have had a fairly privileged lifestyle. I have decided to pursue finance as I want to create a similar lifestyle for myself and future family. But what I am starting to realise is that my current comp (and anything below $400k) will simply maintain the lifestyle I am already accustomed to. I cannot genuinely think of anything to spend this money on (obviously other than investing) that would make my life better than what I am already used to. I only see this affecting long-term, when my net worth compounds and I can begin purchasing homes. $100k a year in free cash flows (+ bonus) will simply maintain my lifestyle of clothes and eating out, providing no real extra value relative to what I have now. I will obviously invest 80-90% of this, but I'm starting to realise how insignificant salary is. Will I think this way if I am worth $100m? Please do elaborate this is not a troll I am genuinely confused and looking for answers. I am only 21 so this feels like a lot to ponder and digest.
Let's just say I know many people who are in similar situations yet are on the West Coast given our Real Estate nightmare. I also totally understand your situation given how expensive the Coasts are as a younger person starting their life. These are all people who saved by living at home whilst in University/College, single, debt-free, have a good Degree, and have done everything right in terms of personal finance, etc... It's an issue of what do you do next?
From knowing these people's life stories, what went wrong or right, and anonymously relating them to you, I'd suggest three options, again, in terms of personal finance.
1) Save in case you become disabled. Or if your parents die. Or just rainy days in general. You don't know what will happen in the future that hurts your income.
2) Save/Invest/Track your spending to start your own business or for future school. And to get ahead in Retirement. Or to buy a home for yourself.
3) Is related to the advice of #1 yet I would say do not let the money spoil you or go to your head, which you are doing well in, just asking this question in the post.
One or two of the people I know who failed at any one of these three options ended up losing it all due to recklessness. However, of those disciplined to save, some of them are now really successfully self-employed and are even business owners now.
Where of all of these reasons to save #2 of to start your own business is the biggest reason if that interests you.
Best of luck.
Man up and pay your own bills.
Life teaches you a lot more valuable lessons than private school.
VOO or high yield savings account depending on your risk tolerance
Congrats on saving up a massive amount of cash by living with your folks. The housing issue at any tier 1 finance city is a nightmare.
Obviously as a 22 year old it feels like a lot, but in today’s world you need at least $50M to live a decent life and retire with no concerns, vacation wherever, private school, etc. Just never ever be satisfied. The winner in the game of life is who ends up with the most money.
Jesus what a depressing & limited view. The happiest people I know have a tiny fraction of that. It's great to have and make a lot of money but if you aren't happy making 200-400k a year, you wouldn't be happy with 10m+ in the bank either
Would highly recommend moving into your own place and supporting yourself. You're going to be socially stunted and fall behind your peers. It's worth the marginal hit in net savings for now. These are extremely formative years.
No sense in throwing money away if your parents live in the same town (and you get along with them). Help out with utilities, groceries, etc. of course. But people living at home until they marry is the historical norm, not a sign of social maladjustment.
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