Analysts' 100K
Hey guys, Im a sophomore at Ross and while browsing the forums, I found a lot of analysts talk about how 100K salary in NY really isnt that much. I don't know if I had some crazy pipe dreams, but I had always assumed that 100K salary at 22 years old would be living the dream (even if I was working 100 hours a week). Apparently, though, the cost of living in NY is so high that analysts have enough to live and spend modestly, but not splurge on anything they want (as I had assumed). Is this true?
The short answer is 100k in nyc is really not that much. but i guess it depends on where you are from. One of my analyst buddies is from the boonies and thought 60k base was a great deal.
When you say 'splurge' on anything they want, what exactly are you talking about? analysts usually splurge a little on themselves when they get their bonuses (nice watch, nicer clothing, etc.) but its' not likely they're going out to buy a car (for the most part).
http://bankrate.com/brm/movecalc.asp?a=0&d1=70000&d2=118.640743811361&d…
Use this link to get a feel for what $100,000 in NYC would represent at other cities, which is not much on a cost of living basis. In NYC, city taxes take a significant portion out of each paycheck, rent is killer, and you pay more across the board for daily necessities.
First, as an Analyst you will only make around $60K in base salary your first year until your bonus hits in July... that is maybe $35K after taxes. In NYC you will be spending at least $1500 each month on an apartment... so that is already $18K right there. So you're left with $17K. $17K seems like a lot... but then you have other expenses like transportation, buying new clothes, furniture for your new place, etc. You do save quite a bit on food by never paying for it.
However, if you take all those one-time expenses (yes that is true banker-speak) and then factor in a couple hundred of "going out" expenses each month (reasonable in NYC), you're not left with much.
And my $1500 per month assumption for the apartment is on the cheap side... I think that is what really gets people, paying too much for an apartment.
One banker I know was paying so much he was actually cash-flow negative until he got his bonus (!).
dosk is right about all of that. rent is the WORST in NYC. you pay at least $1500 a month to live in a shoebox
I live by myself, go out for dinner most nights during the week and generally dont deny myself much of anything. I am ableo to live off my base salary which is right around 100k/yr. You can definitely do it.
As a disclaimer, my vacations, charitable contributions etc, pretty much all come from my bonus. as does the vast majority of my savings.
Granted you probably won't be able to save much, you can definitely live off the salary. Dosk17 was right when he said that $1500 is probably low for monthly rent but you will be able to find an apartment for that price. Ulimately, there is no point paying ridiculous money for an apartment because you will rarely be there. A good friend of mine who works at JPmorgan lives a nice three bedroom apartment for $1700. One thing which will hopefully make it a little easier is relocation bonus. Relo bonus should basically take care of furnishing and any other apartment needs.
Your rent will prolly be the biggest monthly expense so if you live in Soho or something your rent will be like 3k for a 1 bedroom but in Park Slope you can probably get a 2 bedroom for 1500. Yet again who wants to live in brooklyn? But would you rather pay 3k or 1.5k =/ especially if you have student loans the answer is simple. I live in midwood the rent is 1200 for a 2 bedroom nice neighborhood, but if you work in manhattan the trip there and back could easily top 2 hours everyday.
I was about to say, where are you getting these numbers from, because 1.5 is way too low for a good spot in manhattan. I mean, unless you want to spend your nights in the Upper West Side, its not going to be cheap. I know of some people splitting 2 bedrooms in prime real estate for a little over 2k each. Its in a great area but its still SMALL, I'd say around 500 to 700 square feet.
According to the bankrate calculator, 100k where I live translates to roughly 200k in Manhattan. Cost of living in NYC is killer -- don't go there if you're looking for a high quality of life.
Take the cost of living calcultors with a grain of salt. Remember, it's weighted towards the essentials, and as such is more relevant to people at the median income level. Its applicability deteriorates as your income rises. For example, if the index is 1.50x, then it's probably right at 40k: 40k in your city might require 60k in NYC.
However, at 400k the correlation is completely different because most of the marginal income is disposable and not used for direct living expenses. At $4 million, it's clearly not accurate.
Having said that, all our analysts feel poor. Part of it is that rent takes a huge bite out of their base salaries. Part of it is that they are clearly the bottom of the comp structure, which also contributes to making them feel poorer than they actually are. It's mostly a case of them not being able to live as large as they would want to, rather than being objectively poor.
By the way, CompBanker - I like you. I think you're going to have legs in this business. You ever decide you want to do the NY thing (although I doubt it), give me a shout.
i pay 1100 for a shoehole in midtown. i got lucky. walkup/no doorman but what the heck.
holy crap, it says the overall change if I relocated to NYC and maintained the same standard of living would be 120% and the housing price difference is nearly 5 times more....
seitys i was tlaking about park slope brooklyn not manhattan.
I pay 2600 for a 500 sq ft 1br in East Village (walkup, no laundry, no doorman). A similar place in UES is probably 2000...100k = 8333/month. After taxes, insurance and transit pass, you're looking at 4900/month. (37% taxes + 350 for insurance). Say you spend 200/week for all food + another couple hundred for dinners out that aren't paid for. That leaves you with 1900/month. Cable = 125, electric = 100, cell phone = 100; leaving you with 1575. Ever travel home or go on vacation...$400 set aside for that...leaves you with 1175. Ever take a taxi after the bar? another 100/month minimum; 1075. You drink beer? That's a measly 2x/week for $50/night = 675 left.
$675 left for clothes, dvds, women, drinks beyond a mere $100/week (which is nothing), furniture, gambling, going on any type of real vacation, etc...
$100k gets you nowhere in NYC.
while 100k is not a lot, for 2 years you will be fine. there are people in nyc who make WAY less than that and still manage to survive
One of the biggest reasons why people pay that much (anything more than 1600+ for an apartment) in the city is because they are usually in a rush between graduation and the start of their job to find a place. No self respecting New Yorker would pay that much money for a shitty place. Most of the time, it's kids from other parts of the country (i.e. not New York) who are completely misinformed and think they have to pay that much for an apartment.
The deals are definitely out there, if you know where to look or know what brokers to use. You need to be patient. You pay a premium for quick and easy. In my opinion, paying any more than 1500 a month in RENT (not including all the other amenities) is just crazy. And you can def. live in the 'chic' or 'cool places' also if you get a roommate.
how do the cost of living in NYC compare with LA? I guess you would need a car and that would be an additional expense...any ib analysts in LA out there
Not by a ton, but you can get more for your money than the equivalent in NY. The car is a big additional expense, especially since insurance premiums are so high if you live in LA. Plus there's the cost of putting up with all the traffic, which may be enough to drive you to insanity.
You can get by for = 1600 if you have roommates. If not; you're probably living in Brooklyn or very, very UES...Friends I know that are paying ~1800 for a 1br and living in decent locations (Union SQ, Hell's Kitchen) are living in 350-400 sq ft studios (shoeboxes).
At the end of the day, what's the point in being here if you're living in Hoboken or Park Slope? The last thing I want to do on a Friday night at 3 or 4 in the morning is take a $40 cab ride home to Jersey.
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