Pretty simple. You're a first-year banking analyst. Fast forward 20 years, you're still in "high finance". What percentage of your cohort still in "high finance" has $10 milllion+ cash between all of their financial / investment accounts?
Discuss.
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Aside from like personal investments/saving wouldn’t it come down to where you’ve exited to, bonus etc? I have a family friend who pulls in over ten million annually at an HF.
Congrats to your "family friend".
How many family friends are out there on a percentage basis from the day 1 finance cohort, 20 years later. The point of the topic.
Well just the one. He’s very successful
you'll quickly learn what lifestyle creep means. It takes a special kind of person to get their ass kicked at work for that many years and stay disciplined enough to have it stay in cash / investments.
Even those that are disciplined will then find it hard once you start a family
Congrats for not answering the question directly. Presumably, your answer is "not many"?
Presumably if you weren’t as stupid as a rock you would’ve picked that up immediately. I’m not a Quora answer curator. I come on WSO when I’m on the shitter, not to be your analyst running marketing sizing analysis lol
I know a guy who trades Eurodollar options and made about $20 million in 2019, but he's the only one that I can say for sure is at 10 million net worth. And he's only 32.
Any clue what his strategy is? XD
Lol I actually don't, but what's interesting is that he only has a team of like 6 or 7 people.
It's very likely if you're disciplined you can be worth well over $10mln.
That said, golden handcuffs are a real issue, most financial centres have high costs of living, and there are all kind of leeches in life (ik a lot of WSOers have to pay a shit ton to their ex's), and so on.
Thanks, but would appreciate takes from non-prospective monkeys. Working professionals.
If you are a working professional who never changed monikers, disregard this comment.
As a 27 year old, I really don't know enough to answer this question but will give my best guess. I think $10MM after 20 years (so early 40's) would be extreme outlier (in other words highly unlikely). I fully expect to receive comments of "my pal made $5mm a year in his late 30's or I know a guy who got a $10mm bonus" but those are just that - outliers. I'd put that in the top 5-10%. I'd say $5-10mm net worth in 40's is a good goal to have as a solid performer in finance, with $10mm + being the top 5-10%.
Again - what do I know, I'm 27. Just my initial thoughts.
According to OP you should go die in a hole because you didn't answer his question directly
hahaha didn't even notice his snide comments to everyone on this thread
Are you including equity in RE?
I think this dude is trying to set a record for worst SB/MS ratio on a single post with these comments
I cannot help but also want to MS when I see that MS
Not in IB ... but Pretty unlikely given the path you lay out for all of the above reasons and more.
It’d take having 300k at 25y/o and then maintaining a steady 300k annually for 15 years @ 8% to hit 10m by ~41
I’m not sure how doable 300k annually is for most VPs....
At 30 with 1m in assets, you’d need to save 480k for 10 years @9% to hit 10m by ~41
This is just napkin math without taking much of anything real into account....
At typical salaries, saving 300-500k a year gets difficult even with personal/private pensions, real estate appreciation and better than average returns.
10m by 50 seems highly likely for a steady performer. They reap that sweet compounding that is only getting started at 40.
This doesn't make that much sense..
Presumably most of the increase in net worth will be backloaded to your director / md level years. Your junior to mid years are there to get you to ~$1-1.5m or so. Then a combination of capital appreciation on that and additional contributions from your senior years will do the rest.
I agree with the other poster that $5-10m is more reasonable "on average" after 20 years in high finance. $10m+ if you had some solid years at a senior level or made some smart choices in higher-risk investment plays
Like I said it’s napkin math that assumes you’re making 1m+ by 30 and never have a bad year.
But I assure you after nyc taxes, private schools, mortgage, charity events, toys to keep your sanity, weeks in Aspen and the Hamptons that you kinda have to do to keep the pipeline flowing and wife happy, it’s very hard to save 500k+ on a gross of 1-1.5m...
Im speaking from experience.
'steady performer.' Your math is fine, but you aren't factoring the most important factor(s): burnout, and work-life-balance. the overwhelming majority will reach a breaking point. Look at Apollo associates if you don't believe me. Some of the most competent, type-A people. With those higher salaries usually means higher likelihood of burning out from immense pressure.
What bug crawled up OPs ass?
OP is an absolute loser
OP must have meant to ask how many people get hit with 10 million MS on a single post. At this rate, he'll get there by the weekend!
$5-$10M in NYC by 50 is fair assuming no family money, wife doesn’t work and the person isn’t terrible with their money like a lot of bankers are. I would say $10M is pretty aggressive for an average BB MD by 50.
When does the average MD retire?
50 isn’t a little late?
You'd have to fuck up big time to end up with $5m at 50 after a full career in high finance.
The capital appreciation alone (assuming invested in an index fund) on that first ~$1m you accumulate en-route to MD would get you to $3-4m by 50. You would have to literally blow all of the money you make in your MD years to end up with $5m lol.
Might need to run the math again bud.
Eh, I'm a little older than you and think you're in for a rude awakening.
Alright, Analyst 1 in IB-M&A
I’m a Director - need to update this.
50% effective tax rate, exceptionally high COL, private schools, mortgage, other misc expenses. $1-$1.5M of mostly deferred comp doesn’t go that far in NYC. I’m experiencing this now.
I feel like I make the same comment every time a thread like this comes up. It all depends on your lifestyle. I’m not saying you have an extravagant lifestyle, but where you live (city), 1 kid vs 3, private school (and which one) vs public, how nice an apartment, types of trips, any help you pay for (cleaning all the way to live in full time help at the apt), cars (even just owning one in nyc), etc and of course not to mention how you decide to invest the rest all impact the final number.
That’s why the “how much money saved up” on average is difficult to answer (has the complexity of both the income side and expenses - also what do people consider average? That is also what makes it an interesting conversation) and gets more confusing when people add in personal stories as that is rarely representative of the average. Although all are useful for people to get a sense of what types of expenses may exist that they may not be considering early in their career.
I find it easier to just say average earnings over a career path look like “X” (yes I know averages there also have the outlier issue, but easier to get a sense of standard pay packages) and then let people pick and choose their expenses and then do the yr by yr stuff themselves. But does make for a less interesting conversation (although as you note helpful for people to understand how much is deferred, what the burnout rate is, etc).
Ballpark, if you had no kids, any large expenses that you’ve worked around, would there be a difference in how much you have saved right now?
.
This man woke up today and chose monkey shit.
Guys I think we bullied OP off his own post
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