Can someone help me with budgeting? 170k as a 22 year old is absurd to me.

Luckily just signed my FT offer. I have a base pay that is above street, with a nice ass signing, aswell with a hefty performance bonus. All In comp will range from 170-200k as a first year analyst. I understand taxes will rob me. 


Can anyone help with what they did with their money as a first year analyst? Things to keep in mind is I will fortunately and luckily have no student loans/debt at all. I also will be located in Manhattan, NYC


How much did you invest? How much did you save? How much did you spend on rent per month in Manhattan? How much did you allocate towards groceries? Utilities? How much did you allocate to dumb shit (buying cool things to celebrate) How much on drinks/restaurants/going out?


Thank you. 

 
Funniest

Analyst comp is practically below the poverty line in NYC, you will not need to worry about saving vs. investing I guarantee. Question is whether you go into credit card debt to fund your lifestyle before the first bonus hits. I feel like most of my analysts spend $2k/month on rent or so

Edit: damn, a lot of bottom bucket snowflakes taking this literally. Keep the monkey shit coming fellas IDGAF

 

Manhattan median household income is like $65k… yes, the city’s expensive and those people have it rough, but being 22 making 3x the median with work paying most of your food and transportation costs is extraordinarily comfortable. You’re not gonna put kids through private school, but you’ll take home more after taxes and rent than any of your college buddies around the country other than those in a few comparable fields

 
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Most Helpful

Here's the TRUTH:

You're a guy who works an above average corporate job. Few years in and you have 6-figures saved across your 401k, index funds, etc. You do your calculations....7-figures in 40 years!! If you're lucky, you'll get that sweet 10% return this year. You pat yourself on the back for being so smart with your money!

In all seriousness I'm going to tell you starry eyed young guy the truth they WON'T tell you. First off, it's not that much in Manhattan imo but everyone knows that already. You should max out the Roth IRA and traditional 401k easily. BUT, within Roth do 3x TQQQ or UPRO (QLD and SSO for lower volatility 2x components if you really want), then open up taxable brokerage and put as much as possible into the same levered ETFs. Do not fucking buy normal SPY and wait your whole fucking life for this bullshit I promise you. AT LEAST crypto if you don't want the levered assets. Also, you already have exposure to the vanilla boring ETFs through your 401k anyway.

Don't listen to the fools on this forum who want you slaving away the rest of your life. Being a millionaire at 60 with hip problems and knee problems because you sat in a chair for 12 hours a day and forever lost youth is the future they dangle in front of you like a golden carrot. Even worse, the never-ending next gig, promotion, "investor role with interesting operating experience" they'll have you chase. All lies. 

You are excited now, but won't be for long I promise you that. You need financial freedom to be a healthy and happy individual. Humans were not designed to spend long hours indoors in front of computer screens and worst of all in the sitting position. There will be people in here who will come and tell you they are healthy and happy working 60+ hours a week...they are NOT. If you are getting less than 7 hours of sleep a night YOU ARE UNHEALTHY period. There is no exception to this rule. I don't care how great your body is or how many gallons of coffee you chug down your system.  

You're going to be old one day and look back on your life. You will regret the risks and shots you DIDN'T take. The crazy experiences you had. Not that you played it safe and became a comfortable millionaire with gray hair. Go forth and block the noise on this forum. There are few people here who legitimately understand the modern world now and how it operates. The one's who realize that thousands of kids are making an MDs whole year's salary they slaved away for in one month flipping NFTs. They'll tell themselves "oh, that's just a small group of lucky people, like winning the lottery!" Don't fall down that rabbit hole. Seize life by the balls and take it.   

 

I'm in this exact position. Started work a few months ago and making same as OP. I'm likely leaving my job. It's not worth it.

I look at the people years ahead of me and realized I would never want to become them. They have sold their lives and souls for a portion of incremental income that is taxed at a high marginal rate anyway. They are divorced from Nature and will pay the price.

$170k in NYC is NOTHING. After tax and rent, you may clear $75k in the bank. But that assumes you never go out or spend a dime. Anyone who says it's a lot is just content with serfdom.

You are not a serf!

 

mitchrapp1

I'm in this exact position. Started work a few months ago and making same as OP. I'm likely leaving my job. It's not worth it.

I look at the people years ahead of me and realized I would never want to become them. They have sold their lives and souls for a portion of incremental income that is taxed at a high marginal rate anyway. They are divorced from Nature and will pay the price.

$170k in NYC is NOTHING. After tax and rent, you may clear $75k in the bank. But that assumes you never go out or spend a dime. Anyone who says it's a lot is just content with serfdom.

You are not a serf!

Finally, we have a winner! I wish more people could open their eyes and work towards getting out of the matrix. One of the best ways to preserve and grow your wealth is understanding the tax codes and making them work to your advantage. That way you do not have a death sentence if having to work for someone else forever.

SafariJoe, wins again!
 

I completely agree with the majority of what you said, but.....is it not statistically true that holding TQQQ over time has an expected return of 0? Holding through all drawdowns and still expecting to come on top?? I understand trading TQQQ short-term and making some good money here and there, but personally I'm not sure if holding a leveraged ETF for the long-term is smart. Again, I agree with taking risks to get rich much earlier in life, but I think these should be informed risks, not essentially gambling your money away. Being a rich 60 year old with graying hair and back problems is still better than being 30 years old and homeless.

 

1. You won’t go homeless from buying TQQQ. You’ll have bigger problems beyond fiat currency if the market goes bust that bad.

2. You can DCA into TQQQ and most importantly have a cash buffer to buy heavy during large downturns. Impossible to lose that way, seriously

3. You can just buy QLD (2x levered QQQ instead of 3x) or SSO for 2x SPY if you’re really conservative and hold long term you are fine. Combine that with buying more during downturns, mathematically can’t lose

4. if you really want to use your time for something, you could just buy and sell based on the 200 MA for SPY if it’s above/below. Would have avoided all major crashes of the last 40 years

 

Please do not put a large percentage of your NW into TQQQ. Yes, you might hit it big, but it is a very risky investment. Taking a small percentage of your investments and putting it into "risky" assets (levered ETFs, crypto, etc.) is fine.

In terms of budget, start by using various templates that are available online, go through major items, decide how much you want to save, invest, splurge, etc. It's all up to you to be aware. If you want to splurge on nonsense, just know you're leaving yourself little wiggle room to (i) leave the job / make less money and (ii) have savings if you get laid off. If you save everything, know that you might be sacrificing early enjoyment.

My advice is generally:

- Don't be frugal just to save. You don't have to sacrifice every part of your life to save every last penny. You can enjoy some.

- Don't spend the money just because you have it. Spend money where you actually get value / happiness

- Read personal finance reddit primers to understand the basics of investing / where to put your cash and capital

- Your margin of error increases based on (i) do you have savings, expect inheritance, have support from family, etc. and (ii) if you plan on being in the industry and always increasing your income (versus many people get into the industry for the experience of 2-5 years and then can join various companies in different roles, have financial security, etc.)

 

It wasn’t a joke. Also what exactly makes this such an exuberant time? I would say more but don’t feel like wasting my time. God knows what my life would be like if I had just listened to people like you and typical investment advice. Glad I was able to tune out this forum and take bets on myself that now put me in a position to do whatever I want.

 

dumbest fucking shit I ever read. Yes, you should be risk on in your 20's. No, levered ETFs and flipping NFTs & crypto are not the way. There are better, more efficient ways to add market risk to your portfolio including using margin, investing in PE (if you work in PE and have coinvest, max that out), shorting, and using effective leverage at the personal level (e.g., refinance your student loans to extend the payment period as long as is responsible).

I'm not even going to address crypto and NFTs. Those are obviously zero sum games and just the latest example of investor mania. 

 

Serious comment - can someone please explain the logic behind maxing out Roth IRA / 401k? I just don't understand why you'd want to put so much money starting in your early 20s in what's effectively a prison for your money that you can't access until 40+ years down the line, unless you want to pay back all the savings plus a penalty.

 

Yeah I don't think "put all $19.5k away" advice is the best advice. I think you should make sure you're putting away as much as your employer will match. Usually that's in the 5-10% of salary territory, which is a pretty high retirement contribution for someone in their 20's. I did that for my first four years out of school (have since gone to b school so no employer match) and the ~$25k or so I contributed is already well over $100k, which should snowball to ~$2mm by 2060. While I'll go back to meeting my employer match post business school, I'm now more worried about saving for my first home purchase.

 

100% agree with this! 

Out of curiosity, did you leave for a role with more work life balance? It sounds like that's the long term goal you desire. And if so, what have you filled the additional free time up with? 

 

mans is down ~67% YTD lol. I am a TQQQ proponent, but 100% of portfolio in it I think is rather insane, especially with the levels it was at when he was preaching this. Now is the perfect time to dump as much cash as possible in TQQQ though, especially given the time horizon for all associates and analysts

 

Here's the TRUTH:

You're a guy who works an above average corporate job. Few years in and you have 6-figures saved across your 401k, index funds, etc. You do your calculations....7-figures in 40 years!! If you're lucky, you'll get that sweet 10% return this year. You pat yourself on the back for being so smart with your money!

In all seriousness I'm going to tell you starry eyed young guy the truth they WON'T tell you. First off, it's not that much in Manhattan imo but everyone knows that already. You should max out the Roth IRA and traditional 401k easily. BUT, within Roth do 3x TQQQ or UPRO (QLD and SSO for lower volatility 2x components if you really want), then open up taxable brokerage and put as much as possible into the same levered ETFs. Do not fucking buy normal SPY and wait your whole fucking life for this bullshit I promise you. AT LEAST crypto if you don't want the levered assets. Also, you already have exposure to the vanilla boring ETFs through your 401k anyway.

Don't listen to the fools on this forum who want you slaving away the rest of your life. Being a millionaire at 60 with hip problems and knee problems because you sat in a chair for 12 hours a day and forever lost youth is the future they dangle in front of you like a golden carrot. Even worse, the never-ending next gig, promotion, "investor role with interesting operating experience" they'll have you chase. All lies. 

You are excited now, but won't be for long I promise you that. You need financial freedom to be a healthy and happy individual. Humans were not designed to spend long hours indoors in front of computer screens and worst of all in the sitting position. There will be people in here who will come and tell you they are healthy and happy working 60+ hours a week...they are NOT. If you are getting less than 7 hours of sleep a night YOU ARE UNHEALTHY period. There is no exception to this rule. I don't care how great your body is or how many gallons of coffee you chug down your system.  

You're going to be old one day and look back on your life. You will regret the risks and shots you DIDN'T take. The crazy experiences you had. Not that you played it safe and became a comfortable millionaire with gray hair. Go forth and block the noise on this forum. There are few people here who legitimately understand the modern world now and how it operates. The one's who realize that thousands of kids are making an MDs whole year's salary they slaved away for in one month flipping NFTs. They'll tell themselves "oh, that's just a small group of lucky people, like winning the lottery!" Don't fall down that rabbit hole. Seize life by the balls and take it.   

Wait bro, after reading your post, I read up all about leveraged ETFs and apparently if the market dips by a third in a day you lose every penny (makes sense). Investopedia and Reddit both agree that leveraged ETFs, esp 3x and ESPECIALLY within a single sector, are NEVER EVER meant for long-term and will certainly bankrupt you... are you sure this is worth it? I also heard that the insane expense ratios + volatility decay will kill your returns, and overall TQQQ is down from 24 years ago. They say that the only investment that'll never decline long-term is the SP500 and no active manager except RenTech will ever beat it's annualized returns. Lmk!

 

Congrats on your offer and for taking the time to plan. I echo the comment above that though it may seem like a lot it may not be too much when accounting for HCOL, costs of doing the job (not much time to cook or do your own laundry or too many errands without delivery, etc.), and just social aspects of the company/job may eat into that amount. Granted I do know a good amount of junior people (myself somewhat included) who saved a good amount. There are those who got in debt but I don’t think it’s necessary unless you want to get bottle service or the like almost every weekend/month it seems. Rent I think is supposed to be up to 1/40 on a monthly basis of annual salary, which roughly comes out to like 2k/month. Again some people did more than that and some did below. Then there’s breakfast / lunch / commute expenses during week. Other meals as needed, not too much time for groceries but maybe now with WFH it’s better on that potentially. Dry cleaning, laundry, general household / self-care expenses. Maybe all of this can cost you another $1k a month. Then social and entertainment, going out, fun stuff. Maybe a gym membership. Maybe another $500/month there. So far looking like a reasonable estimate may be like 3.5-4K/month on expenses. Since nyc taxes come out to like 1/2 the paycheck (maybe more now even for analysts idk given new tax regimes coming in) that’s like 8k in gross pay just to cover expenses basically. That’s like $100k in annual salary to almost kinda breakeven in the job in some sense. I could be off on these numbers but this is just one sample rough estimate. Granted if you can save your bonus / the lump sum payment of your wages at the end of your time (sounds like that may be another $100k for you) that amount can be pure “profit” / money for you to save / invest or do whatever you want with. I hope this helps! :) best wishes and good luck! :)

 

I feel like 500 on food is nearly impossible. I spend ~15 a day on lunch at the office alone, which is like 400 a month right there. Stop for breakfast/coffee on the way to work that’s another couple hundred.

Dinner is comped during the week, but if you want to do anything social on weekends other than eat chipotle delivery in your room, you’re going to be spending another couple hundred a month right there.

With no time to cook or buy groceries, food is very expensive. Don’t underbudget here- I try for 1000 a month and often have a hard time staying in that range

 

Moving to a VHCOL city (not NY) with same base pay as you. My estimated budget looks pretty much the same, except I, fortunately, don't have debt. Good to see that it's doable and not as terrible as so many people I've seen on the internet say. 

 

just save your ass off and find out what you like to/are good at investing. The important part to making lots of money is having capital at the right time. 

Plenty of guys make a ton of money before 30 on dumb investments. Stash a large amount away until you see an opportunity whether it be RE, crypto, etc then take your savings and roll the dice. 

Or you can be a boomer and toss everything in SPY. 

 

Let’s assume you make 200k and since you live in nyc let’s assume your taxes are 50%.

So you basically have 100k cash for the year, which sounds like a lot, but not really if you’re living in Manhattan.

Rent should be about 2.5k a month imo, because living in a nice, safe building is worth it. Esp when you bring girls home, don’t try to save on a nice place it’s not worth it. So that costs you 30k.

You’re down to 70k. Since you’re getting free dinner from work your food costs shouldn’t be crazy. Let’s say a few nice meals and few nights a month on dates and clubs. Would run you around 2.5k a month. Another 30k.

So aim to save about 40k a year. Plow that right into vanguard extended market every year and you won’t have any problems come retirement.

 

Each paycheck:
Max out 401k
$500 per paycheck into long term savings (investments / down payment on house / retirement)
$300 into short term savings (vacationing or splurging)

Leaves you plenty to live on, about $13k a year in long term savings (before bonus), and enough for a couple nice vacations

Bonus: put a few thousand into splurge account and the rest goes into long-term account.

After bonus, will leave you about 40k in long-term savings not even including 401k in your first year.
 

Just my take / what I do

 

You'll be saving a lot more, living in a more luxury/comfortable place, and have more space. Oh but I guess your missing out on all the "prestige" and the dope paycut you could get by moving over into the golden promised land of PE