How do you afford to live in London?
I saw a post on Reddit last night about comp being significantly lower in London and Paris compared to the US which led me to check out WSO comp lists for London. Turns out you guys are pulling just over $100k USD all in first/second years.For those of you not in IB, you probably are a bit lower around $80k USD (just assuming 20% less based on what I make compared to IB in the US)My question is how the hell do you guys afford London? COL is 16% cheaper than NYC as of May 2022 but that still doesn't off set how much less you make.
Update: based on these responses it looks like it’s my assumption was correct. You are all thinking of ways to save money (roommates, bars outside the city, living outside the city). Are companies not as profitable there? Does the money go to management and above?
There are some affordable areas in London, some have flatmates, others live outside of the M25 and commute in or WFH more often. It is not as bad as it looks.
CoL isn't just rent anyway, would be relevant to do a more holistic approach in comparing NYC and London inclusive of transportation, socializing, dates, leisure/hobbies, rent, food, etc
numbeo is a good website that provides a base line.
I have worked and lived in both NYC and London and I am currently based in both locations. My spreadsheet is telling me that both locations have very similar costs for me, but the nuances are different. Gas is less in the US, but mileage driven is normally higher. While rent is slightly higher in NYC, you can save in other areas compared to London. It depends on what exactly a professional is looking for.
I currently live in London and my base salary only converts to $60k which is what I base my living on. To me London is a lot cheaper because the outskirts drops the price of living exponentially.I don’t own a car so I take public transport everywhere which is roughly $200 a month (much cheaper than a car). London caps your daily commute cost at £8 for zone 1/2 travel (central to just outside). I live with friends in a house in SW and commute 3 days a week to work for 45 minutes, that’s about $800 for my room. I cook most of my meals which saves money. Don’t get me wrong, London is expensive but if you’re not living in central, it becomes incredibly affordable. To me, New York is super expensive because the price doesn’t get exponentially lower the further away from central you go - or not to the same degree as London.
To put it in the most British way possible, a pint in central will cost £6.50 but 45 minutes in any direction drops it to £5.50, sometimes even lower than £5. I don’t see that kind of drop when I visit NY but this is bias to my experience.
I've lived in NYC and London and no one takes me seriously when I say this but the cost of living being comparable in NYC and London is a huge myth and London is drastically cheaper not just marginally so like most people say.
I think "economically" it might look comparable but if you've been boots on the grounds for a long period of time in both places you'll see what I mean.
I know people on 24k GBP (29kUSD) per year living with one roommate and zero parental support in trendy areas of London like shoreditch and other parts of east london. And they are living really well, enough to go on holiday semi regularly and be out in nightclubs weekly.
No one is doing that in Manhattan, Brooklyn or Queens unless you're deep in them and have to spend 1hr+ to get to anywhere with actual business activity. People earning that in NYC don't live in "nice" conditions like my friends in London and I doubt they live anywhere trendy with an actual nightlife and businesses
Second this 100% having also lived in both. With the pay rises that have finally made their way to London, think comp to COL is vastly better than NYC at the moment. Consider as well that there are no jobs with remotely comparable comp to IB in London. Relative to peers and the average person, you are far further ahead working in IB in London than in the US where there’s plenty of high paying jobs in tech, sales, etc.
Plenty of coping in the thread already from Europoors (dont at me I am one), but yes life sucks in London and Europe vs the US. It is not scraping by but you make it work still and you live a good life, still much better deal in the US. The only positive is the holidays and less intense culture but that does not negate the huge discount you eat (which only increases past your analyst years).
Also this is neither here nor there but investment schemes (pension systems etc.) and brokers are so much fucking dogshit it is actually kind of impressive, making it even harder to grow the smaller savings you make. US is still by and large the only country in the world where you can build wealth the most easily and escape the caste you were born into.
I agree with the point about US being better to build wealth. But being europoor is your fault. Find yourself a better paying job. There are places paying +£70k base +100% bonus, which translates ro ~$175k all in for a first/second year
Which is still much worse than for a comparable position in the US... do not get the point of your comment
Lmao at “Europoor”. Idk what no-name boutique you are at but continental europe provides the best salary/CoL ratio between London/NYC/Europe.
A1 at the big 4 finance cities in continental Europe (Paris/Frankfurt/Madrid/Milan) are on par, if not slightly higher than London (depending on the Pound Sterling’s strength vs the Euro). Even the local EB’s such as ParkView in Germany, AZ in Spain or Equita in Italy pay these salaries. All this while rent and general expenses (minus gas) are much cheaper than in london.
Sorry to say this but if you are an “Europoor” in Europe whilst working in IB you should lateral asap.
1. The thread is about London
2. Another muh WLB/Pay balance cope
3. Ah yes Milan, that sweet WLB and pay balance...
I do not know guys, all you need to do is open any salary reports, and use numbeo, tax calculators, and fx rates to see the difference
ParkView is not an EB in Germany 🤡🤡🤡
thoughts on Canada and Australia?
Fully agree, a lot European Big 4 Consultants coping in here
London IB bases are around £70k which is $86k. London is also far better connected, you can find extremely affordable rent for very nice places in London.
Note the GBP is trading very low at the moment, the 16% difference in living costs is assuming far more parity of ER.
In real terms, 1 GBP buys you the same as about $1.50 (in summer the ER was at £1=$1.41, and then it was about 10-15% cheaper in UK still).
So adjusting for COL, £70k ~ $105k. Considering the banks paying $110k pay £70k in London, that's pretty close to partity. Of course, you don't spend 100% of your income so arguably COL is less important in that sense. If you save up $15m over a 15Y career, that $15m is going to be intrinsically better than £10m saved (even if the two "buy the same" as you might want to move to say Italy to retire).
Those who are the real winners are those in LDN who are on $ denominated salaries (some US MF, maybe HF also).
Which funds pay $ denominated? And how does it work? Do they make exactly the same as the US colleagues?
Clearly not answering the question here, but working in AM and a lot of people simply just live outside London. A lot of places have reasonable commutes (1 hour ish or less), if you’re hours aren’t too bad, it’s a lot better and you can actually afford to buy a place.
As a student studying in London, here are my two cents:
Tube takes up a ridiculous amount of money if you use it more than 3-4 times a week. Invest in an Oyster card. If somethings within 25mins walking and you have time, walk it. It's a lot better, healthier and cheaper. For lunch, providing you aren't on some bulking/shredding season, you can get something good for < £5 at fast food places and Tesco meal deals etc. I'm not saying anything groundbreaking but as a budgeting student, these are the easiest ways to save money.
Another useful student hack is if you are in the 16-25 age group, buy a yearly railcard (£30) and link it with your oyster card. That way, you pay a third less per ride on the tube during off peak hours.
Most banks pay £70k first year base ($90k) + similar bonus ($175k). A bit lower than NYC but cost of living (mainly rent) is lower
From what I saw in comps that wasn’t the case. Maybe at EBs?
Most BBs pay 70k first year base as well. Some EBs pay 80
Only IB pays well. Consulting pay sucks and go figure with other less prestigious jobs. This is the real difference between the U.S. where you can work a back office job but still make a pretty good living. London limits you to FS.
How about AM? where yes you may not may 6figures until after 3years but you are earning either more or the same as Consulting/Corp Law and working half the hours they do too
Sorry, I meant to say "high-finance" jobs pay well so that includes AM too but the best are obviously IB/PE/HF. It's just asinine that some of the other jobs haven't caught up in salary yet and most people who want to live a good life need to be in those prestigious jobs. Just as a reference, my friend who has a super non-target business degree just got his first job in data entry - $72k. Show me someone in the UK making 58k GBP straight out of school doing that kind of job. This is MCOL too.
a lot of money
money.
The European economy simply has not kept pace with North America since the GFC. The bulk of innovation in tech/finance/healthcare that has taken place over the last decade has been concentrated in the US in particular.
Chart below from the FT is relevant. It would be interesting to see if this trend continues over the next decade - if so the difference in compensation and living standards between the US and everywhere else will truly become staggering.
What does “journeys” mean in this chart?
no. of mass transit journeys
I’ve been living in London for a year so far. Haven’t started working yet but as it stands, my COL is barely 1k£. (Keep in mind i don’t drink or go clubbing so that could influence COL). If i work in IB for 120 all in, i could literally be saving 100+ pre-tax. I wouldn’t be able to do so in NYC
Drinking and clubbing will add c.£600 per month
That's still reasonable enough when you compare with NYC imo
I've been in London for 3 years earning approx. $70k USD and it isn't pretty. I know lots of people, non-finance, who live in London and have support from rich parents, trust fund kids, etc. Everyone else scrapes by and it's why brits are leaving for Europe, US and further afield. The quality of life has definitely gone down and looks like no signs of slowing
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