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.

Comments (109)

Most Helpful
  • Analyst 2 in ER
Apr 9, 2022 - 10:19am

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

  • 27
Apr 9, 2022 - 11:49am
IncomingIBDreject, what's your opinion? Comment below:

Even Jersey is $2500 min and nearing $3k. Soon everyone will be commuting from Newark.


  • 3
Apr 22, 2022 - 11:13am
chimp shrimp, what's your opinion? Comment below:

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.

  • Prospect in IB - Gen
Apr 9, 2022 - 5:36pm

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. 

Apr 11, 2022 - 10:48am
jarstar1, what's your opinion? Comment below:

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. 

Tell me you were 4 years old in 2007 without telling me you were 4 years old in 2007.

Apr 11, 2022 - 11:35am
Ferris Bueller, what's your opinion? Comment below:

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

Apr 9, 2022 - 12:48pm
high hopes, what's your opinion? Comment below:

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 

Apr 9, 2022 - 1:18pm
Jeff Skilling, what's your opinion? Comment below:

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)

Apr 9, 2022 - 1:39pm
reformed, what's your opinion? Comment below:

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...

Apr 9, 2022 - 2:05pm
IncomingIBDreject, what's your opinion? Comment below:

25k base increase is actually like $625/month rent increase from a landlords perspective (using 40X)


Apr 18, 2022 - 6:52am
HercaHercules, what's your opinion? Comment below:

I mean that implies your rent was already at 40x, which is ridiculous. A $175k salary can get a $4k apartment

  • Analyst 1 in IB - Cov
Apr 9, 2022 - 2:21pm

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?

Apr 9, 2022 - 2:31pm
high hopes, what's your opinion? Comment below:

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. 

Apr 9, 2022 - 6:37pm
IncomingIBDreject, what's your opinion? Comment below:

When did you sign? Prices keep going up every month. 


  • Analyst 1 in IB - Cov
Apr 10, 2022 - 8:33pm

most people in the world live like this, it's just that the ivy league, instagram obsessed people don't understand that lol

Apr 11, 2022 - 8:21am
IncomingIBDreject, what's your opinion? Comment below:

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. 


  • 1
Apr 22, 2022 - 11:20am
chimp shrimp, what's your opinion? Comment below:

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...

  • Principal in RE - Comm
Apr 10, 2022 - 4:03pm

There's an overall shortage of housing stock (homes and multifamily) versus total households, which is causing both rents and home prices to go up. Theoretically if institutions come in and buy more, home prices should go up while rents go down (since rental stock has increased) in an equilibrium. Both rising = overall shortage

I don't know if institutions shouldn't be able to own residential RE. I actually think people wrongfully believe that ownership is the best financial option, when it really isn't for a lot of people (unless you're staying there 20+ years). I do think there's an issue with institutions owning a huge concentration in a market and using that to their advantage re: pricing. I also think the leverage institutions are able to use relative to an individual probably isn't right (although mortgage options for individuals actually are pretty attractive)

Apr 11, 2022 - 10:54am
jarstar1, what's your opinion? Comment below:

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. 

Apr 9, 2022 - 11:14pm
Kevin25, what's your opinion? Comment below:

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.

  • 3
  • 1
Apr 10, 2022 - 9:12am
Laser44, what's your opinion? Comment below:

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. 

  • PM in HF - Other
Apr 10, 2022 - 9:41am

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.

  • VP in IB - Cov
Apr 10, 2022 - 10:21am

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 

  • Analyst 1 in IB-M&A
Apr 10, 2022 - 11:44am

when the PM's and VP's have entered the chat

Apr 10, 2022 - 3:22pm
Username_TBU, what's your opinion? Comment below:

I agree with this. Was in an apartment in Tribeca for a while. They agreed to drop my rent ~30% mid-COVID. The recent ask was a 40% increase on rent which... brought it about 3% within the pre-COVID rent. Other parts of the country are seeing rents waaaaay in excess of prior peak whereas I think NY is now around / slightly above

What I do notice is the luxuries that were priced for us to use so often that we started accepting them as necessary conveniences raised their prices during COVID so they could start profiting - Uber and food delivery fees. 

Apr 11, 2022 - 8:24am
IncomingIBDreject, what's your opinion? Comment below:

Landlords want base alone...


Apr 11, 2022 - 9:42am
Lester Diamond, what's your opinion? Comment below:

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.

  • VP in PE - LBOs
Apr 11, 2022 - 12:10pm

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. 

Apr 11, 2022 - 1:17pm
IncomingIBDreject, what's your opinion? Comment below:

Weren't the salaries higher pre GFC though?


Apr 11, 2022 - 1:27pm
DayMan247, what's your opinion? Comment below:

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.

  • 5
  • Principal in RE - Comm
Apr 11, 2022 - 1:39pm

I am curious where OP is living, and I'm surprised by some of the posts. To me, none of this is new. So I'm totally with complaining about it, but it shouldn't be complaining that this is a new trend.

- As an analyst, nobody's living alone in Manhattan, unless they're comfortable paying more than "they should." Most folks I know had roommates, had shared 1 beds with a wall, etc.

- As a first year associate, still difficult. At that point, as a single person, my understanding is (i) you're in a luxury studio or (ii) you're in a nice walk up 1 bedroom.

- It isn't until second / third year associate and up that you feel breathing room on being able to have a nice place in the city (at this point you're late 20s - 30 in IB, maybe even younger). First 5 years of living situation in Manhattan always was kind of crappy

- Someone mentioned the 40x rule in base alone - I've never heard of this issue. Yes, out of college and first year stub was an issue for some and that hasn't changed. I'm not saying this is the answer (it shouldn't be), but again, in the vain of nothing's new, typically 3 people were living together and one person's parents stepped up to provide a guaranty. Very annoying. Or between the three offer letters the landlord was fine (maybe this has changed)

- You shouldn't be comparing year over year rent increases. Rents during COVID were completely depressed. If you didn't live here before / during, it was really really bad. When our lease was up we couldn't believe what we could get for same rent (instead decided to renew at 40% discount because we didn't want to have to move after a year due to the huge back-to-norm increase). Compare to 2019. My guess is rents are around 2019 or within 5-10%

Apr 14, 2022 - 7:20am
Hunter324, what's your opinion? Comment below:

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.


  • 2
  • 1
  • Principal in RE - Comm
Apr 14, 2022 - 3:08pm

I don't disagree with this, but the idea isn't to save a ton when you're a first year analyst. You mentioned maxxing out your 401k, so you're saving 20k per year - that's a lot.

What is living comfortably (or what is living uncomfortably)? Genuinely curious. I'm not disagreeing but I don't think anything is new. The "standard" to me is a shared 1 bed flex in Murray Hill - I imagine this is affordable.

Also $200 should not be a first date for an analyst 1. The Smith you get an entree and a pasta, a starter to share + 2 drinks each you're probably at $100, going to $130 for tax and tap. I also don't remember a lot of dating as an analyst 1, I remember more just going out on weekends.

Again, not saying the money doesn't go quickly, but it was never meant as analyst 1. And was never meant to be luxurious

  • Incoming Analyst in CorpStrat
Apr 14, 2022 - 3:47pm

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...

Apr 14, 2022 - 5:05pm
Hunter324, what's your opinion? Comment below:

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


  • 2
  • 1
Apr 17, 2022 - 10:02pm
Incoming cfa level 1 charterholder, what's your opinion? Comment below:

$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.

  • Incoming Analyst in S&T - Equities
Apr 14, 2022 - 10:42am

I would kill to have this problem. Try working at a BB that's still at $85k base for the incoming analyst class. 

Apr 14, 2022 - 9:51pm
phillyboy, what's your opinion? Comment below:

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

  • Intern in IB - Gen
Apr 17, 2022 - 10:09pm

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Apr 22, 2022 - 11:25am
chimp shrimp, what's your opinion? Comment below:

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  • Analyst 1 in IB - Gen
Apr 17, 2022 - 10:48pm

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Apr 22, 2022 - 11:21am
chimp shrimp, what's your opinion? Comment below:

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