Feeling Like a Poor Rich Person?

Even though we make a lot of money in absolute terms, do you feel relatively poor?

Have friends and acquaintances from high school (don't even get me started on college), that make $200,000 - $600,000+. Lawyer, dentist, software sales and entrepreneur to list a few. I'm talking about individual income, but of course some married folks are just killin' it!

My own compensation is in that range, so I don't feel like I've "made it" if so many [regular] people have the same income level. 

I remember dreaming about the mythical $100,000 or "six figure" income milestone, but looks like inflation has made that figure immaterial. BUT, even if you inflation-adjust $100,000 to 1980, that's ~$360,000 in 2022 dollars, which honestly, doesn't seem like such a big feat. 

Am I just an out-of-touch, greedy bastard or is it the same for you?

Comments (72)

Controversial
  • Associate 2 in IB-M&A
Aug 16, 2022 - 8:26pm

To be perfectly and brutally honest, I don't think anyone on this entire planet except your parents care about your compensation malaise that emerges out of the swirling mess of entitlement, achievement and anxiety that seems to be defining your daily emotions. Go pound sand.

Most Helpful
  • Associate 2 in IB-M&A
Aug 17, 2022 - 1:45am

I just don't have sympathy for people earning in the top 1-5% of the country who feel emotionally empty about their salary, especially those in finance. I say this as someone who is in finance and in that bucket, and who recognizes how lucky I am relative to the world.

Honest answer, you should probably find more meaning in your life to fill that emptiness, and you sure won't find it hopping on WSO asking it to a bunch of 20 year olds who think about "prestige" all day long.

So to answer your question, you're woefully out-of-touch, and it's not the same for me because I define my life very differently than you. 

  • Analyst 1 in IB-M&A
Aug 16, 2022 - 9:16pm

Looks like the virgin associate got hit by a nightly "pls fix"

Funniest
  • Analyst 3+ in IB - Cov
Aug 16, 2022 - 10:25pm

How is he a virgin if he just got screwed?

  • Analyst 2 in IB-M&A
Aug 16, 2022 - 9:21pm

Nah I agree with you. I had this idea in my head before I started, naively, that banking was going to get me fuck you level rich and that just not the case. Bankers are some of the "poorest" people there are. Not in the literal sense, but they have no time and often live above their means despite making decent money so they will never have any freedom. Golden handcuffs baby.

Aug 20, 2022 - 1:27pm
Quaneaser, what's your opinion? Comment below:

Have a look at the recent thread on realizing carry: https://www.wallstreetoasis.com/forum/private-equity/actually-realizing-carry

It's a mega grind in those industries too (for a long time). What OP is realizing is that at the mid-levels you are extremely well off but not necessarily rich enough to stop working and do whatever you want. Even in PE it takes 10-20 years to realize sufficient carry be in the $10mm+ NW camp. In IB/law, etc. you really need to be an MD/Partner to make serious millions

  • Analyst 1 in IB - Cov
Aug 16, 2022 - 9:46pm

You might have just grown up rich, I'm leagues ahead of most of my middle school / high school friends, but I grew up climbing social classes and was lower middle class in middle school. College friends I'm poorer than but not because they're successful, more because their parents are; I don't think there's many people I know competing with my compensation level without including their parents' money or something, but the reality is that no one really cares lol. I don't even care how much I make at this point because I'm just stuck in the day to day of the job and trying to take it a little easier for my own sake. It's also a lot better to be the poorest guy in a room than the richest.

  • Analyst 1 in HF - Other
Aug 16, 2022 - 10:43pm

You couldn't pay me triple my current salary for me to work at analyst 1 at Goldman or Moelis. Maybe I'll be less rich financially but more rich in the part that counts, such has having chill coworkers, great wlb, and an intellectually stimulating job.

  • Prospect in IB-M&A
Aug 17, 2022 - 5:59pm

cool! who asked 

  • 2
  • 8
  • Intern in IB - Gen
Aug 17, 2022 - 7:26pm

Are you first year out of college?

  • Analyst 2 in IB-M&A
Aug 17, 2022 - 11:59am

I certainly agree with you. I don't make that much yet, but I came from a lower middle class family and when in high school I always thought "imagine making 120k a year, that would be insane income and I wouldn't even know what to do". Now I make more than that and it feels like it's not that crazy. I can imagine it's the same feeling until you really make a ton of money where you have uptime financial freedom

  • VP in RE - Comm
Aug 17, 2022 - 4:30pm

Pick up a hobby. Might be hard for bankers to have time to do stuff cause you're working 60-80 hour week. But for me next life goal is to be scratch in golf, and that is literally life for me. My job pays for my hobby/hobby goals. I legit don't give a fuck if someone I know make $50K/100K whatever the amount more than I do since I'm just in tune with my own life / hobby. I'm lucky to be in the 1% of income, despite being may be 90 percentile in academics back in school and probably intelligence, what else is there to complain about.

Once you make doctor salary ($250K+), I'd say you have a comfortable enough income to do whatever the fuck you want (most things in life - not talking about the big fancy 200ft yatch - but a moderately luxurious life). You may just lack a real hobby to focus your attention on.

Aug 18, 2022 - 11:46am
ConfusedGuru, what's your opinion? Comment below:

At the same time, with inflation at like 10%, and assuming its around this same value every year which is possible, that 250k mark is gonna increase more and more in order to maintain the same type of comfortable lifestyle. Earning 250k in a place like NYC is definitely not gonna allow you to do that much.

  • Associate 1 in CorpDev
Aug 17, 2022 - 4:48pm

Christ. There seems to be a post like this or some iteration about external comparison every week. There's always going to be someone with more money and power than you. Focus on yourself and stop counting other people's pockets. What are your goals? What do you want in life? What's the plan in achieving those things? Are you meeting your own expectations that you set for yourself? 
 

Name any rich financier and there will be 100 more financially successful people above them. You'll be forever miserable comparing yourself externally. That's not to say you can't have any external benchmark but it should be last on your list after you establish even in a general sense what you want, financial and non-financial out of life, and creating a working plan to achieve your goals.

Aug 17, 2022 - 6:30pm
sick_willy, what's your opinion? Comment below:

People tend to generally make more upward comparisons vs downward comparisons. Pros and cons to both. Try doing more downward comparisons and see how that feels. In terms of upward comparisons and in your situation, I can see that, and I agree. Feeling for me went away post hitting a certain number (annual income and net worth). 

Aug 17, 2022 - 6:42pm
Peter-Griffinn, what's your opinion? Comment below:

I guess it's like a 6'2 person not feeling tall because he sees people taller than him regularly...

Anyways, be thankful you earn that much, there are people who work at Walmart for $12/hour, or even worse, people who grow up in slums or subsaharan Africa.

Aug 17, 2022 - 9:42pm
anglosaxonchad, what's your opinion? Comment below:

Any income under 135MM RMB/annum is insufficient for personal comforts. Any income under 80 bil RMB/annum is insufficient for personal ambitions.

Aug 18, 2022 - 10:03am
Masterz57, what's your opinion? Comment below:

Am I just an out-of-touch, greedy bastard or is it the same for you?

A little bit of this, but also you're spending way, way too much time comparing yourself to others.  Unlike most of my college/bschool/other friends, I went the corporate route instead of finance/consulting/medicine/law/tech, and I am without question among the very "poorest" of them.  I spend just about 0 time thinking about this, for 3 reasons: 

1.  I chose to prioritize my interests and work-life balance over money.  The vast majority of my friends went into fields where they work much longer hours under much higher stress.  I wouldn't trade my current situation for theirs even with the added $$

2.  Gratitude.  While I am "poor" compared to most of my friends, I still make more than ~95% of the US population and 99.999% of the world population.  I am extraordinarily lucky compared to either your average US citizen or your average human 

3.  Priorities.   My priorities in life are my friends, girlfriend, hobbies, travel and other things, not work and definitely not money.  Money is a means to an end, and there is not much that I really want to do that I can't do right now on my income (this year I will make ~$230-250k or so).  I can go to nice restaurants, travel wherever I want and stay at nice places, buy random shit on Amazon if I feel like it, etc, etc.  The only thing that more money gets me is "nicer" versions of some of those things (i.e. fly first class instead of economy on long flights, stay at 5 star vs. 4 star hotels, etc), and frankly I don't really care that much about those things.  

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  • Associate 1 in PE - LBOs
Aug 19, 2022 - 3:13pm

Can you share what you do and for what size company you do it? Also, how many years of work experience do you have? Trying to land in a LCOL market making what you make while working way less than I do now but unclear what roles that provide that I have open to me after 5 years of IB/PE experience.

  • Principal in RE - Comm
Aug 18, 2022 - 10:19am

OP, I get it. After a ton of early career progression, it's slowed considerably. The path to doubling my income seems much harder than the first few doublings. Meanwhile, there are others who have jumped to the right shops that took off. 

You're not out of touch. You obviously get it. We make great incomes, we've hit our goals from our early days, etc. At the same time, there was a time where our goals were changing that felt like if we hit the right decisions, we'd be in an even better place. It is what it is

Aug 18, 2022 - 6:09pm
ConfusedGuru, what's your opinion? Comment below:

If you live with your parents and get to save every penny of your income, and don't care about saving or racking up credit card debt, it's pretty easy to go out multiple times a week for drinks, go to nightclubs, bars, miniature golf, bowling, the movies, road trips, etc.

Aug 21, 2022 - 9:55pm
IncomingIBDreject, what's your opinion? Comment below:

$36k isn't impossible to live decently on, depending on the city. NYC? Not a chance. Wichita, KS? Definitely possible. 
 

The fact is Manhattan has so many high earning , smart, driven professionals that you'll always feel "average". You may want to consider trying a gig at a "less prestigious" city and you'll soon find yourself much higher from a ranking perspective. This comes down to whether you want to be a big fish in a little pond or a little fish in big pond.

Array

  • Associate 1 in IB - Cov
Aug 18, 2022 - 3:43pm

So a lot of other posters have made some very valid points about comparison being the thief of envy, practicing gratitude for what you have, but I think your feelings are completely valid with respect to one's definition of "wealth". Growing up, you may have observed "wealthy" people enjoying a significant degree of personal freedom, financial freedom, a luxurious lifestyle, etc., and there's a very good chance they earned the same income you are earning now (inflation adjusted). Do you feel like are you able to enjoy the same level of personal freedom and lifestyle at your current income? Probably not. There are two very good reasons for that.

One, you are most likely earning that "top percentile" income in an extremely high cost of living city like New York, where you are literally competing for physical living space with 8 million other "top earners" on a small crowded island. Your residence (regardless of whether you rent or own) is probably several multiples more expensive than the median American residence, and yet probably 1/10th of the "value" of comparably expensive homes across the country. Just go look at what your current rent will get you anywhere else (either as rent or an equivalent mortgage monthly payment). While you may have the same top-line income as that doctor or lawyer family you grew up down the street from, I assure you their money goes much further wherever they may live.

Another factor here beyond variation in living costs is personal freedom. That doctor or lawyer family living down the street from you probably clocked out at 5:01pm Monday - Friday and turned the work phone off all weekend (if they even had one), while enjoying several weeks of completely unplugged paid-time-off every year. They were not getting hit with "pls fix" emails on Saturday afternoons, and certainly have never frantically panicked to find wifi or connect to a hotspot to turn comments from a moving vehicle. Due to the constantly reinforced culture of unrealistic client expectations, you will never enjoy this level of personal freedom in most sell-side roles. Additionally, since the bulk of your compensation will always be deferred until year-end, and is completely at your boss's discretion, you do not really enjoy any level of financial freedom either. I know we like to feed ourselves this lie that the "bonus" is just-that (a premium or incentive), but the sad truth is that very few competent professionals are willing to make the personal sacrifices demanded by our jobs for the base salary alone, and the true value market value of our labor is captured by the base+bonus total compensation package. Thus, if +/- half your salary is perpetually held hostage to your boss's discretion (your perceived performance, the market, everything we're fed to believe so that we always sacrifice more etc.) you will never feel any modicum of the personal / financial freedom you may have observed in other high-income / high-net worth individuals you've encountered, outside finance.

Ultimately, most finance roles do not require a rare, unique or specialized skillset. The only reason we are paid "highly" is 1) because we tend to live in expensive areas and 2) these are the minimum required levels of compensation demanded to offset the massive sacrifices to our physical-mental / health, personal lives, relationships necessary to perform low-value monkeywork for 80-90 hours/week.

Aug 18, 2022 - 3:46pm
ConfusedGuru, what's your opinion? Comment below:

Well said. To your last point, I'm noticing a lot of my peers (early/mid 20s) are clocking out career-wise. They value WLB and fun experiences much more than a high TC. Because money these days goes way less as far as it once did, there's very little incentive to grind just for a bit more TC, when it won't change the quality of your life in any meaningful way. I have friends making minimum wage and living with their parents, and they're enjoying life to the fullest.

Aug 21, 2022 - 10:05pm
IncomingIBDreject, what's your opinion? Comment below:

I have friends making minimum wage and living with their parents, and they're enjoying life to the fullest.

 This isn't a good example for the argument that people can be happy with less money. Those friend's parents to say it bluntly are going to be dead one day and then they're going to find themselves broke without anything to their name. Even if they inherit the house, they probably won't be able to financially maintain the house. 
Additionally, since you wrote below that those kids don't contribute to the bills they are taking advantage of their parents who work hard , and instead of offsetting some of the bills and making their parents life easier while they stay at home, they are blowing all the money away on partying. I don't know about you but it doesn't settle with me quite right how these kids are taking advantage of their parents when they have the financial ability to contribute.

Array

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  • Associate 1 in IB - Cov
Aug 18, 2022 - 3:53pm

I think the main takeaway is that everything in life comes at a price (even your friend living for free with his parents is probably lacking some sense of independence), and everyone values things differently. Ultimately, the diminishing returns (both absolute and relative) of a career in investment banking don't make it as obviously worth the tradeoffs today as it may have once been.

  • Intern in Consulting
Aug 18, 2022 - 8:22pm

Bro what. Ngl it sounds like you were the highest achiever in school who went into IB and therefore thought you were better than everyone else. News flash you can be successful in other careers as well. Life isn't IB or you're poor.

Although it sounds like your high school peers are definitely not average. From my experience at an average school, someone becoming a top tier Corp lawyer, successful dentist etc would be like a top 1-3% case.

Edit: just reread your post. How insanely out of touch are you that you think mid 6 figures is "regular income". Are you for real? Its literally top 1% income in the US.

Aug 19, 2022 - 6:21am
HanyuPinyin1980, what's your opinion? Comment below:

Image result for Feeling Like A Poor Rich Person?
If you're two standard deviations higher than the median household income of $69,000 and the median household net worth of $120,000, you're considered rich. At a two standard deviation, you're richer than 97.8% of all Americans.

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Aug 21, 2022 - 10:13pm
IncomingIBDreject, what's your opinion? Comment below:

That's a completely useless metric because it doesn't account for the variation in COL across regions. There are many cities that wouldn't even be ranked on WSO where you can get a quality 1BR for $1k or less. Now for Manhattan, multiply that by 3-4X, include state and city taxes, etc. Hence the COL of someone making $75k in one city could be the same as $200k in Manhattan. 

Array

  • Investment Manager in AM - Equities
Aug 23, 2022 - 7:33pm

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  • VP in IB - Gen
Aug 23, 2022 - 10:31pm

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  • Analyst 2 in HF - RelVal
Aug 24, 2022 - 1:49pm

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