Base Raises Are Basically Meaningless Now
What the title says. This applies more so to NYC, but with runaway inflation I feel like we are right back to where we started with how much your comp can actually buy you. Rent prices are out of fucking control in Manhattan, food prices up, clothes prices up - it’s all way up. Sort of a depressing thought considering when these base raises happened, I considered it to be a decent amount of extra money, and now I am going to have to move out of my current apartment in Manhattan because I legit cannot afford it after they raised rent - even with the salary bump. Shit sucks boys.
In a similar situation to you. Gonna have to move to Brooklyn/Jersey if I want any shot of finding a reasonably priced studio/1br.
It really makes you think though - if finance kids are having a tough time finding apartments and make far more than the average person, who tf is moving into these places???
Shit is just so out of whack right now in NYC
Even Jersey is $2500 min and nearing $3k. Soon everyone will be commuting from Newark.
I asked myself the same question since last year.... who are renting those so called lux apts? who pays for the rents? They say the increase rent is because of demand-supply relationship but I honestly think it's more than that.
Real estate bois are ruining everything lol. Such weasely little scumbags that couldn’t get a real finance job. Sure, keep on jacking up prices and checking Redfin and Zillow or whatever tf you guys do
I went to a concert last night and was randomly talking to the guy behind me in the coat check line. Guy was telling me he buys up properties and then rents them out on AirBNB. I asked him how he learned how to do this and he straight up told me, "I just took a course online, they give you the spreadsheets and you just plug in the numbers to see if it's a good deal". Kept a straight face and just nodded.
Real estate is the newest sidehustle meme after shitcoins and amazon dropshipping. Seems like everyone and their uncle is involved in it in some way or another. A lot of dumb money "entrepreneurs". The rugpull will be interesting.
Are you really making money if your income from real estate is rising as fast as inflation?
Tell me you were 4 years old in 2007 without telling me you were 4 years old in 2007.
This isnt really new, pretty common post crisis. But, the major issue is that people are looking at these "influencer" videos who make all of this seem insanely easy, when its quite far from it. Bridge/construction dutch or non-dutch loans to zero experience borrowers with high renovation budgets/high IRs are pretty easy to get these days. In the mortgage world, this is the only sect that is still like a wild-west non dodd-frank oversight business. Been looking at these for years. All they need is to not bake in the correct expense buffer and they are screwed. That guy in particular, municipality changes Airbnb rules (some have), he could be screwed. Investor mortgages should be the first to go belly up with any housing issue
You mean your boy blackrock buying up all real estate and jacking it up.
….Blackstone
based
Shit like this makes me so glad I’m doing IB in a LCOL city
RTRTRT
How can you not find an apartment with a $175k base salary or higher?
you take home $8k/month after NYC taxes assuming AS1.
sounds like restructuring associate boi is headed towards his own bankruptcy
Honestly, the OP feels like a really ham-fisted reddit post about impending worldwide economic fallout from somebody who's gleaned all their finance/macro/markets knowledge from YouTube and TikTok.
You hit the nail on the head: $175k base after taxes is waaaaaay more than enough to survive and not have to move to the outer boroughs. Honestly this post feels kind of made up and bullshitty, but I'm lost for a motive here (other than to circlejerk about monetary policy)
Sounds like people want to save? Maybe thinking that just because you make 8k month after tax you should be spending 4k in rent is exactly how you go bankrupt…
its always going to depend on how they want to live... youre looking for a doorman and security high rise with a rooftop and good amenities? Yeah those covid deals are gone. But the smaller apartments in pre war buildings are still there. Sometimes its just lowering expectations
How expensive is your place?
$25k bump is like $1,300/month after-tax. You're saying your rent was raised like 40%? Somehow I doubt that...
25k base increase is actually like $625/month rent increase from a landlords perspective (using 40X)
I mean that implies your rent was already at 40x, which is ridiculous. A $175k salary can get a $4k apartment
2021 - $,2,300 FiDi studio
2022 -renewal same studio $3,400
So yes.
exactly the situation that I am in
No idea how anyone on this website has such shitty financial planning skills lol, I pay $2,600 for my studio UWS and I think I have more than enough money for rent? Do you guys just waste money on going out too much or something?
Depending on 401k contribution and all that other stuff I can see how things can get tight.
oh lol i don't contribute to 401k, think it is a waste in opportunity costs.
When did you sign? Prices keep going up every month.
My UWS 1BR is $4500 and not that lavish, most units in my building now going for $5000+. Not sure if you're just in a less nice area or not great building but it's not realistic in many neighborhoods to expect below $4k now.
Median annual income in Manhattan is like $55k and you're crying on $175k base? LOL sounds like you're just fucking retarded, bro.
this^
You actually believe that number?
How is anyone affording to live in Manhattan on 55k
most people in the world live like this, it's just that the ivy league, instagram obsessed people don't understand that lol
There's a closet rental business where people will literally rent out the closet of their room for ~900/month. It has just enough space for a small cot and maybe some clothes. Then get a gym membership close by for bathroom/shower.
If the median of $55k is correct, shouldn't we be thinking more about who can afford living in Manhattan instead of beating on the ppl who ask this question? Logic matters...
What are your thoughts on restricting PE and AM firms from owning residential real estate?
So only individuals and banks can hold them?
..
It won't do anything. Real Estate is such a huge industry and easily the most fragmented, institutional ownership of real estate is not what's driving prices, it's sever under-building over the last decade. If you narrow into very small submarkets you can find other effects, but on the whole we're just missing so much housing.
Luxury FiDi studio $2400, now renew offer at $3500. I’m out.
same here. $2,400 to $3,800
this is insane wtf
where are you thinking about moving to?
i skimmed streeteasy and everywhere seems insanely priced
do you think why they raised the base? to account for inflation. it wasn't supposed to make you richer. just a market adjustment due to inflation. everybody knew inflation will be crazy once Fed started stimulating economy in mid 2020.
Banks have a read on inflation earlier than most people. They saw an opportunity to say “we hear the GS 13 and are looking for ways to help out”, but really it was a response to inflation they already saw coming. This way they were able to accomplish two agendas and improve their reputation.
Banks gave you a 15-20% salary raise. Thats before your bonus which also went up. I am sorry there is no way inflation went up beyond that.
Instead of saying “man if its tough for me, imagine how the service staff, doorman, etc are surviving in this city and maybe I should give .5% of my salary to more tips/charity.” Nope lets cry for the dude who with highest raise, future prospects and best salary out of school must be struggling.
Think some of you got too used the post COVID rent drop. Rent is slightly higher than pre COVID but not that much more. Market is basically normalizing. Also during rent drop, bunch of people who had no business living in Manhattan moved in (or got places of their own). They need to cycle out of leases. Then we will be back to normal. $2400 for FIDi studio was obviously abnormal
when the PM's and VP's have entered the chat
More of a senior Director now but tbh idk why an analyst living by himself in some luxury studio. Most of us had roommates as associates for first couple of years.
..
If you can’t survive in nyc making 500k, inflation isn’t the problem.
Landlords want base alone...
Second year analysts can point to last year's bonus but yeah for stub they're going to base your 40x purely from your salary. It's definitely tough for them considering where rent is right now.
Lots of misinformation in this thread. First of all, institutional ownership helps rental prices. Look at occupancy rates of properties that are institutional owned. It's in their best interest to rent them out at highly liquid market rates. If anything, the foreign buyer who buys property and leaves them empty are the ones causing the issue. Even so, both of these ownership %'s are TINY compared to the overall market. As someone already stated, it's mostly due to under-building and city zoning laws which keeps supply relatively low versus demand.
Also, like someone else said, you weren't meant to have a $2,600 studio. Lots of people moved to Manhattan during covid and now that trend is reversing. My friend had a studio back in 2008 and it was $2,900. 2020 is not the benchmark. There are lots of people suffering in NYC and the people on WSO are not the ones to feel sorry for. Get roommates or move to LIC.
Weren’t the salaries higher pre GFC though?
I made $60k base and $50k bonus when I was in banking. Rent was $2800-$3400.
This isn’t meant to be an “I told you so post” but it is reaffirming what I thought when I was recruiting for post-mba IB a few years ago.
Lot of my friends and peers could not wrap their heads around some of us who recruited for non NYC locations. They also could not believe that we get paid the same nominal amount.
I was leaving school aged 29, not young 20s and saw the writing on the wall. Picked a city where I’m paying 2,200 per month for a 1,600 square feet 2 bedroom loft, 10 minute walk from my office. Food, going out, everything cheaper here.
There is zero doubt that I’m missing out on some aspects of IB but there’s also zero doubt that I’m putting away 30-40% more and for however long I last in this gig that makes a massive difference compounded over even a couple of years.
Totally respect the NY scene but if (particularly post mba) you’re actually looking to “get ahead” and build wealth comfortably it’s not the place to do it right now.
..
I am an IB analyst at a top BB and can attest that no one in my IB analyst class lives comfortably. I max out my 401k and live paycheck to paycheck. Rent is increasing by $750 to make things better. For all of you thinking this is dumb ($120k seems like a lot ik) but if you consider having any social life in NYC you won’t be able to save money - one night out is minimum $100 (~4 drinks w/o food) and a nice date is $200+. All my single homies are struggling bad going on dates.
The main implications of this inflation/rent increase is that no one in my class wants to pursue PE unless it’s MF. Most people want to stay in IB to avoid the inevitable pay cut in MMPE.
..
Bro who goes on a date to the Smith? Not saying I don't like places like that, but I genuinely enjoy going to nice(r) places on dates and it adds up fuckin quick 200-300 is definitely the norm with drinks
The fact that you can't afford endless $200 dates and multiple $100+ nights out a week on a $120k income in NYC is a shock? To someone working in finance, and presumably able to do math? lol...
Let me correct myself: for those who actively go out with friends on the weekend, have a girlfriend or go on weekly dates and want to enjoy their 20s no analyst is living comfortably in nyc. For example, my suit is too small so I needed to buy one for a client meeting ($800 suit supply) and now my liquid savings are cut by a third.
If you’re a hardo who only works and has no social or love life then sure you can live comfortably and save. But I would never want to live a life like that. You work hard in college just to get IB and then have no social life after school… no thanks… life’s too short
$200 dates lol Food on a first or second date is a dumb financial move. Cocktails/drinks shouldn't cost you more than $40-60. That should be first date, second date can be something creative and low-key. If a girl only wants to go to a restaurant with you, chances are she's a waste of time and only wants to use you for food.
I would kill to have this problem. Try working at a BB that's still at $85k base for the incoming analyst class.
Is it really a BB then
Go somewhere else. The lateral market is hot. Don't waste ur time working at a shit firm that won't pay its people. Also, out them so other people know
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