Is my IB analyst personal budget realistic?

Yes

Where the fck do you live that your rent is 20k a year? Enjoy a little

Double rent

If this is NY, 1700 a month for rent sounds low. I´m guessing you have roomates now, so you might want to increase rent expense if you want to live alone eventually.

The footnotes lol

Looks good to me

Very nice spreadsheet think I will re create for myself in free time. Need to make sure to get to $5mm in balances by age 40 for retirement

Pretty awesome spreadsheet. Index fund returns seem very bearish but also good to be conservative. Is your IRA post-tax (aka Roth) or pre-tax (aka traditional). Assuming you're single, I think your income level is too high to contribute to a Roth IRA - can't contribute if you make more than $153k in 2023. So is that pre-tax IRA?

Awesome spreadsheet dude - thanks for sharing.

Assumptions look good to me, maybe a touch bearish on your investments growth?

I'd at least build in a downside case here. At least half of the analysts I've seen burn TF out of this job and end up in something more lifestyle-friendly like corporate roles or LMM PE. Your base case assumes pretty great pay all the way through - its rarely that easy.

Your rent also looks incredibly low. Are you going to be 30 years old and living with 3 roommates in an absolutely gross apartment? Same with your misc. expenses, your going out (incl. dinners) is going to increase a lot more than $600/yr over 6 years as your lifestyle grows. You won't be living like a 22 year old poor analyst forever. No travel at all?

Those things aside this is a great spreadsheet setup

Drivers on separate tab, pls fix

Pls bake in your asso promotion base, run the number, and get back to us. Thx

Love it. Yes very good. Stick to it

Any major city double rent and random expenses.

aren't associate bases 175, 200, and 225 respectively? And bonuses would be 70-100% (assuming market gets better in coming years)?

What's with kids these days underestimating rent in NY? Have you set foot in the city? Do you mean a median studio is $3,500 and you'll get so tired of that shit after a year that you'll want to upgrade to a 1 Br at least? 

Nice model dude. I am a bit confused on why you did a cohort analysis on your index fund investments. Couldn't you just add last years ending balance to new investment balance then multiply by (1+ r)?

Going out is way too low. 100/week? More like 100/night out at least

Really like this, any chance I can PM you for the file? Been looking for something like this and would love to play around with it.

Yeah please could I get it aswell? Thanks!

Can I PM you lmao I need this

Extremely detailed analysis projecting out a shit ton of uncertainties for half a decade into the future that will inevitably not come to fruition…yep you were made for banking.

Jk this is actually interesting and something that I ballpark frequently in my head as I stay up til 3am pulling together analyses that are not needed as I know we will ultimately pass on the deal anyway…

First off, congrats on being responsible. This isn’t nerdy, this is how you achieve financial stability. People often mistake a high income or savings as financially stable, financial stability is actually controlled spending relative to your income. You are doing great by doing this.
 

Anyway, summarizing what others have said, but adding my insight based on doing this and evaluating what actually happened now that I’m close to 30. Going to be blunt and critical, but comes from a place of love and admiration because you did exactly what I did and I’m in a position to tell you where I was off:

• You are underestimating the frequency of “one-off” things and how they contribute to your budget. I can’t remember the stat, but the gist of it is when people provide budgets they are in general 25% low. In my experience, I thought I consistently spent like 4.5k-5.5k as an analyst then had one month a year where it was much higher. The result is my spending was really closer to 6.5k. An example of the sort of one-off things that add up when you retroactively evaluate: moving (move in fees, movers, renting a uhaul, eating rent), weddings & bach parties, vacations, furniture (buying a bed, a sofa, new pans &pots), clothes like buying a tux or a suit or new dress shirts. There’s just a lack of awareness here on how frequently these things occur.
• Your rent is entirely unrealistic. Even in a low cost of living city, these numbers are delusional. It makes sense that you could get away with it in the early years, but at 27 you aren’t going to be paying basically the same rent you are now. Especially if you are making the numbers you are planning in salary. At a certain point, you will trade luxury and/or convenience for money because it’s positive for your happiness and you have a controlled understanding of your expenses. Just as an example, as an early analyst, I didn’t care about natural light or my kitchen or proximity to a gym. Now, I realize having the time for workouts is really important for my happiness and health and difficult for my schedule, so it’s worth paying an extra few hundred to be close to a gym. I can afford to make that trade and I’d argue it’s actually responsible to do that from the perspective of doing well at my job, living long, and being happy. Natural light also is something I didn’t care about then I got one cheap place that had it, it made me happy, and now there is no going back. Lifestyle creep is real, but on top of that, you get to a point where your time is valuable and you make trades to support your well-being as you should. There’s a middle ground between having bad lifestyle creep and just being realistic that you can probably afford and get a lot of worthwhile enjoyment from moving to a neighborhood more optimal or having your own bathroom or something.
• You can’t contribute to the Ira due to your income, the whole back door roth thing you could explore, but it’s not worth the trouble unless you want the learning experience. If you are that fixated on post tax growth, contribute to a 529 plan for your kids or your own grad school education. Many states also offer a tax deduction which can bank you a pretty penny on deducted state taxes.
• Add-on acquisitions and related diligence jack this whole thing up. Dating and having an sig other will 100% change your spending. Me and all my stingy friends all of sudden started getting new sheets and coffee tables and rugs when we got girlfriends. Some people do it to impress girls, but honestly, my spending went up just because I liked making my girlfriend happy and wanted her to enjoy my place and not feel like she was coming to a shithole—this was even more true when we began discussing living together. I had worked hard for years and earned the ability to buy things like a nice coffee machine or a new couch rather than a used one. I don’t know anyone that lives the same at 27 as they did when they were 22 that has their life together. Another one too, my girlfriend can’t afford plane tickets to see her family on the other side of the country. As a result, she went years with touch and go contact. Now, she pays what she can and I cover the rest and she sees her parents every year because I can afford to do that. Things like this will come up—maybe it’s helping a parent or sibling or maybe it’s girlfriend related.
• As others mentioned, your salary could change a lot a lot. A great deal of my friends either left the field or pursued an alternate opportunity that had more delayed comp.
• I think mentioned one-off things, but you are going to travel or you should. 
   

In summary, I used to do a budget like this and I found it was kinda false precision and being retrospective gave me more informative info. So here’s what I do now and what I moved to after I got a few years of experience budgeting:

• Max out my tax advantaged accounts (401k, the tax deduction for 529 plan for my grad school, my soon to be wife’s, and eventually kids)
• Search for good housing deals constantly and at about 25, I found a place that I thought I valued more than the market because it had unique attributes that I overvalued relative to others and I’ve just kept re-renting this spot even with the rent increases because it has positive attributes and moving often ends up being expensive from a time and stress perspective . As an example, my building has no amenities, but is next door to a grocery store and gym and transportation. It is an ugly building, but has floor to ceiling windows. It was gross and I redid much of the unit with little things like painting etc. and the result is even including all the improvements, my monthly living expenses are way lower than anyone else I know and my place is nice. Housing is your biggest expense, so it’s worth looking for good deals here.
• Track my spending using mint each month and evaluate where things are trending and why. In my mind there are 3 types of expenses: 1) necessary (can’t avoid them like rent) 2) hard to avoid (going to a wedding, dinner for a friends birthday that 20 people went to) 3) fully discretionary (subscriptions, buying stuff on Amazon, going out). In my opinion, given the salary you make in finance, you should not be the guy bailing on life experiences or refusing to go to a wedding to save money or people will think you are an ass and you will have no friends. Similarly, in theory you could eat rice and beans and live in a shithole, but that’s not the point. If 3 starts to get a little whack, in a month I make adjustments.

In general, I’d say this is a great exercise to understand how you spend and what opportunities are, but I’d recommend being retrospective and not ignoring the impact of one-off expenses.

My MF would love to hire you, send me DM ;)

Why is the HSA exceeding $3,850 at any point given there’s a hard cap limit on contributions per year?

This is sick

Can you send this to me? Looks great

One maybe helpful point is that you can calculate taxes relatively easily, so you don't need to hardcode your tax assumptions

I’ll take a copy as well if you’re open to sharing it

If you're open to sharing, I'd love a copy of the file. Thank you

^ yes if you are open to sharing I’d love this excel too super helpful. Feel free to pm me if so!

Really good that you're doing this and thinking about your budget, but agreed w/ everyone else that your expectations are unrealistic, and notably that rent is too low. Your priorities will really likely change by 30. Hell, you probably won't want to live that lifestyle at 28. Even if you are fine living in a cheap place, I wouldn't expect your rent to only go up by 3% / yr.

Others have called this out but your going out and random purchases $ are too low - not just from your day to day spending, but think about your "fun" things like bachelor parties, weddings, vacations / trips in general, dates, etc. By the time you're 30 wedding season will be in full swing and just a single bachelor party alone can easily run you in the thousands. I just went to a destination wedding and had to pay over $2k just for the plane tickets (in economy), forget everything else associated w/ that trip.

Then there are the "unfun" things to plan for - funerals to attend (unfortunately), medical emergencies (and you put down HSA so you'll be on a high deductible plan), your car breaks down, moving expenses (cross country moves will be in multiple thousands easy, intracity moves also aren't cheap), just simply buying new furniture, etc. 

On the flip side doesn't look like you're accounting for any 401k % matching from work.

Going out is gonna be much higher. I’d say around $10k

Nice format btw

Looks good thx

Would love a copy if possible, thanks!

following

Dude, you can’t fit life into a spreadsheet. Half of your assumptions and outcomes will not even be close.. you won’t have any visibility into your earnings 5 years down the road in IB or any other field. Are you going to jump ship the minute you calculate a $1 higher NPV elsewhere? Spreadsheets are useful tool, but you have to know when to use a tool. 

Nice model! Thanks for creating it.

I am in my 5th year and I would say generally this is quite accurate, from a high level perspective.

As others have suggested, might make sense to add downside scenarios to consider 1) cost of changing jobs to a lower paying jobs 2) rocketing expenses due to dates / going to Dorsia / changes in lifestyle.

And a separate question: the model you built seems to say you will have ~590k balance by age of 30. How does that feel? Do you think it is a lot already?

I actually did some similar calculations before myself and it's a bit depressing to know that after putting in so much efforts, you "only" get [600k] by 30, while many dudes from rich families got that when they were born. I mean yes be grateful you are better than most already - but as my friends always say, even working in IB, it is hard to help someone truly move up the social ladder money wise, unless you can stick with IB for 10-20 years.

Appreciate any thoughts