Can I become a millionaire in 10 years?
Assumptions:
- Starting as a first year analyst on a £70k/$110k base.
- Investing 1/3 of take home pay every single month.
- Average annual return (6-12%) on some specific ETFs (QQQ/VOO) or a broader basket of ETFs with global exposure.
- Adjusting for conservative salary progression up to VP/ED level and taking no bonus into account (reduce result distribution range).
Can you become a millionaire in liquid assets? Is it possible? Is it probable? Is it plausible?
It's easy to assume that you will survive in banking, have consistent saving, and have a diverse perfect portfolio that is resistant to recessions and goes up and beyond during booms for 10 years.
People's lives aren't so cookie cutter. You could get fired, burnt out, or go into a mental breakdown, the ETF you invested in may fail, You can certainly plan things in a shorter term 5 years max. It is as ridiculous as just like taking advice from a tiktok finance guru who assumes putting $10,000 in the S&P gives you x average return and will make you a millionaire in 8 years without working and just doing side hustles. It's possible, but not likely.
So is it possible? yes, of course, but your assumptions are flawed and farfetched. Having a solid credible plan with backups to fall through to get there imo will turn that possibility into a credible likelihood.
yeah
Yeah math works out for sure, barring any unforeseen wipeout events like a Russian nuke
I don't think it's probable with your savings rate, assumption of $0 bonuses, and the uncertainty other posters have listed around career progression, personal life, markets, etc. It's possible, but, if you raise your savings rate (in aggregate, not necessary analyst-level), having $1M of liquid assets after 10 years of IB is more likely than not in my view (and anecdotal experience).
Also, your note on not taking bonuses into account is normally fine, but IB bonuses are much much more consistent than incentive comp in other industries. Given that bonus goes from 1/3 of total comp to 2/3 between analyst and VP, you're missing the biggest part of the pie by excluding bonuses.
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