Cost of Living experience: Houston vs. NY?
I am a student that will be applying to SA 2022, studying at a target in texas, so should have good opportunities both in NY as well as Houston.
This question is directed towards those that have lived both in Houston and NY. How has your experience been, and more specifically, I have heard that the COL in Houston is much lower than NY but have you actually experienced that yourself?
For a similar salary (let's say 150k) how much would you be able to save in Houston vs. NY? Assuming you pay for living expenses and taxes and nothing else after that.
I am not considering this only on a cost basis (obviously looking at Energy vs. other industries too), but any insight would be super helpful.
Bump
Few main costs differences. You get a 2 bedroom for 1200-1600 per room in a very nice building, NYC not so much. But, in Houston, you need a car. I remember reading an article that 60k in Houston gets the same lifestyle as 120k in NYC. As you make more I would assume the gap shrinks. It really depends on your goals and lifestyle. I personally like Houston a lot but I am 22 and am able to save a lot of money. If I was making 250k+ I would rather live in NYC.
~$2k/month worth of housing in HOU is comparable to >$6k/month in NYC
Second MorganStanleyYes' comment, that looks about right, maybe a bit less on the NYC side post COVID. My younger sibling just picked up a new lease in NYC and I was pretty surprised at the price/location/quality. Rent has come off at least 25% in NYC.
I started my career out in Houston in Energy coverage and moved up to NYC. Can't beat Houston banking COL, pay and savings potential; but for career prospects, would highly encourage you to focus on NYC opportunities.
Definitely sticker price shock in terms of rent / taxes / going out, etc., but the professional and social experience is vastly better. Don't get me wrong though, I really enjoyed my time in Houston and if you are a Texas native and plan on staying in Texas your whole life, Houston banking opens up a ton of exit opps (O&G specific and generalist) in Texas and would be a really good financial move. I personally don't plan on being in NYC my whole career (maybe move back to Texas at some point), but I am happy I got the experience at the beginning.
Makes sense. I will be joining (Jefferies/TPH/Evercore) next summer in houston. My plan is similar to what you did. Spend a couple of years in Houston and then lateral to IB in NYC once I am an associate. How easy is it to shift to a bank that isn't a downgrade, so like a BB or an EB? Would be interested in knowing your thoughts on that
JEFF/TPH/EVR are all great shops and you'll undoubtedly get good deal reps, so no issue there. I think it will ultimately come down to the timing component - success in lateraling is really all about availability / demand of positions and your relative urgency / timing to make the move.
Overall, I think your plan makes sense, that said, if your goal is to get out of Energy coverage, the longer you stay, the harder it is to get out (primarily optics more than anything). In my experience, much easier to tell the story of the move after your first analyst year vs. after three years in O&G trying to switch coverage groups. If you are considering an internal move to a different office, that's a little different.
Really interested into how you would compare shop culture between Houston vs NYC in general
First year analyst in Houston, contributing 15% of each check to retirement, sock another ~20% into cash savings account trying to build up a solid safety net. Paying ~1100 in rent for a pretty big house w/2 roommates and eat cheap groceries. Most of my spending goes to coors light and nicotine, nightlife not being the same rn affords me a lot more cash on hand. Hopefully with the first bonus which I plan to completely save will lead to ~50% of comp being saved.
We are all truly living the same life lmfao. Cheers man. Coors/Busch/KeyStone are the best cheap beers and you can save so much money per can over purchasing "nicer" beer.
$150K and you are living on 1-2+ acres of land in a 5-6K square foot estate where you drive your golf cart to the mailbox and get to snoot AR-15s in your backyard over cigars with your buddies. Whereas in NYC you are regretting 2 Starbucks runs in a day and still have 1-2 roommates unless you live in a less than optimal 1 bedroom or solely devote a huge portion of your pay to a studio apartment you sleep maybe 90 hours in every week.
$150K and you are living on 1-2+ acres of land in a 5-6K square foot estate where you drive your golf cart to the mailbox and get to snoot AR-15s in your backyard over cigars with your buddies. Whereas in NYC you are regretting 2 Starbucks runs in a day and still have 1-2 roommates unless you live in a less than optimal 1 bedroom or solely devote a huge portion of your pay to a studio apartment you sleep maybe 90 hours in every week.
One thing to consider: you aren't a banker for the pay alone. You are also a banker for the exits, and the NY exits, shop v. shop, are substantially better and more diverse.
From a pure cost/savings potential perspective, Houston blows NYC out of the water. I was able to live in one of the nicest apartments with great amenities, have virtually zero commute time (when going in to the office), did morning and afternoon coffee runs + lunch out every day, generally didn't think about budgeting/being frugal, and still managed to have ~85k saved at the end of my first year (liquid, so not including 401k/roth etc). Some of those savings came from my previous summer, and I am also not the type to spend money on material items like nice clothing/watches. First year total comp was ~140k.
All that being said, I would only aim for Houston if you are really passionate about Energy, or just really don't want to leave Texas. Otherwise NYC will definitely provide better opportunities - a high percentage of the analysts I know in Houston tried/are trying to recruit non-energy PE, and most have had very little if any success. That is definitely the more important consideration when making the decision of Houston vs. NYC.
Makes sense, thank you for the insight! Would you be able to provide what kind of shop you were at? (ex. JEFF/TPH/EVR/Citi). I am not interested in PE and thus don't care about those exits as much, but don't know if I want to be in energy for the long-run so was thus wondering if you had any insight into how lateral recruiting for IB positions in NY is like?
The reason I am asking this is that it's easier for me to get a top position in Houston than it is for NY.
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