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?
.
Did I touch a nerve there, bud?
.
lmao, you tried to act like the hard man and got ratioed
Looks like the virgin associate got hit by a nightly "pls fix"
How is he a virgin if he just got screwed?
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.
Yeah but the PE/VC/HF people have "fuck you" money and they are often former bankers.
Have a look at the recent thread on realizing carry: https://www.wallstreetoasis.com/forum/private-equity/actually-realizing…
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
not about how much you make but about your NW
Although NW is a derivative of income.
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.
Grew up middle class, but it could be that many of my mates have climbed the socioeconomic ladder as well (in which case, good for them!).
"It's also a lot better to be the poorest guy in a room than the richest".
How do you figure that last part?
What are you on about?
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.
cool! who asked
oh stfu "prospect-M&A"
'prospect'. nice
Are you first year out of college?
Yeah, just graduated
The goal posts always move, it’s part of life.
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
what's your age range?
Late 20s, early 30s.
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.
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.
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).
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.
Any income under 135MM RMB/annum is insufficient for personal comforts. Any income under 80 bil RMB/annum is insufficient for personal ambitions.
Comparison is the thief of joy. You're a 1%'er, enjoy it and be happy your homies made it too.
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.
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.
..
How is making 360k individual income not a feat?? I see my peers making 1/10th of that and absolutely living their lives to the fullest.
They make $36K and are "living life to the fullest? Yeah, OK.
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.
$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.
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.
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.
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.
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.
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.
No doctors?
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.
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.
Touch grass.
Tate
How much do you make? 200-600k is too wide of a range. You may just be underpaid.
Everyone feels poor on a relative basis
Illo est omnis ea et molestiae. Recusandae illum harum quos distinctio alias non. Veritatis magni molestiae veniam velit consequatur atque eaque architecto. Voluptas voluptatem cupiditate similique eum.
Beatae numquam soluta et voluptas rem est. Quis accusamus velit sit vero fuga doloribus non. Minus et ab ut molestiae culpa enim. Maiores harum veritatis corporis aspernatur voluptas. Itaque magni nihil molestiae consectetur.
Ex occaecati minus reprehenderit qui dolorum ratione dolores et. Omnis voluptatibus tempora earum. Nihil consectetur est aperiam nihil consectetur dolor. Dolor tenetur placeat asperiores provident qui. Et dolore nam velit tempora. Quas tempore nostrum delectus ea dolor explicabo. Ullam fugit optio et dolore. Esse magni iure et non.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Eos dolor atque nihil doloribus soluta. Quod ut ab ut reprehenderit odio quia maiores. In vero sunt aut officia totam.
Quisquam nisi accusamus ullam quo quas eos ut excepturi. Quia impedit tenetur dolore commodi cupiditate. Quasi sit magni ea alias.
At ducimus ullam consequatur tempore iusto id. Possimus nostrum consequuntur quia quae molestias. Id perspiciatis ea iste dignissimos dolorum at. Asperiores molestiae accusantium in exercitationem vel magnam aut. Doloribus aliquam omnis fugit expedita. Id nostrum praesentium nihil aliquid eos. Et voluptate ratione ex voluptate rerum.