Why the hell do people work in NYC/SF IBD?

I am not sure why you are ranting as such, but I think you need to go get some help...

I'm 24 with 150k saved and will have close to 500k saved by the time I'm 28 if I stay in IBD... So don't know where your 50k is coming from.

"xgozax"It makes absolutely no sense to me. I've heard a lot of people try to defend it, but it's simply indefensible.

It's almost like people have different opinions, priorities, interests, etc...

Let me tell you a story.

In my first job (a failing family biz doing translations for personal documents and those little instruction leaflets for chinese crap), there was this girl who had a salary of BRL 1,200 (around USD400) like the rest of us. She was always telling how she had massive debt problems. How she would get into fights at home to get loans from parents and relatives (not to pay down debt, but to go to shows and buy booze). She was not a totally incompetent worker, however, and even got invited to work at other larger companies where she could, in theory, make more money and improve her quality of life a little bit.

She never bothered, though.

When asked why, she would shrug and say "well, I'm satisfied. I live with my boyfriend, I don't earn enough to pay income tax and I can drink and go to shows. Why would I waste my time with something more demanding?"

Stupid, right? Well, in her opinion it was a good deal. She saw advantages in that life style.

People who decide to go into ÏBD in NY/SF" made that choice too - It's a good deal for them. Maybe some will see along the way that this is not for them. Others will enjoy and go on ( I won't even go into things like compensation, prestige etc). It's what they like to do. Why do people become lawyers in those big-name firms? Why do people become doctors? They also work like dogs and many die, as you classified, as "followers".

I bet they enjoyed what they did, though. This is what matters IMO.

As if life is all about being 28 with half a mill in the bank.

People live and work in NYC because it's fucking amazing. If you like sitting at home and are married at 22, sure, NYC is gonna suck. If you're young, enjoy going out and meeting people, you'll find a lot missing outside of major cities.

even though you're obviously a kid looking through a very narrow lens, you're making the right points.

it's a very hard trade. i went to Goldman Sachs because it was the absolute best job i could get out of school, and it set me up for the rest of my life.

if you think PE is exit opportunities you're missing the point: when you have these skills and experience, you can walk into any job in business, years ahead of where you might starting straight out of school.

i also wanted to start in a job that would best prepare me for any role in business, and I still believe IB is that.

But, if you're looking for some get rich quick. or you think that it inevitably leads you to your yacht and 6 homes you/re just as delusional as this kid who hasn't figured out that life is about relative trades.

you may think ib is a bad trade, so why not go get a "regular" job where you can just work away in boring mundanity for hte next 40 years?

or you could figure out what you truly love and just do it every day, and stop wasting our time whining about what jobs you think suck

I think this point has been hit on a couple times here but it is all about perspective, and perspective is different for everyone.

When I was a junior in college I interned in a BO role for a large insurance company and was given a spiffy "Business Analyst" title. One day my manager asked me to job shadow another analyst (who was actually a 60 year old guy who had essentially been doing the same task for 20 years). I sat down at his desk and essentially he pressed a button on Microsoft Access and a report would compile for about an hour while we just sat there. That was more of less the extent of the job. For him he was close to retirement, left at 4pm every day, and lived in a low cost area. But for me I realized I could never do a job like that and in fact it honestly feels like some of the 15 hour days in IB go by faster than the 7 hour ones during that internship.

Regarding NY, it's not for everyone, it is for me though. It was always my dream to live there after growing up in a rural town of 6K people and finally go the opportunity to do so after undergrad. After a year I moved to Chicago to chase the IB dream and after 3 years elected to move back to NYC. I've mentioned it in another thread but the cost of living would make anyone question the decision (3x rent I paid in Chi, 15K more in taxes alone, etc.). That said there is no other city like NYC. The variety of people, opportunities, etc. is unmatched in an city - you get a little taste of it in Chicago but it's not the same. There's just something about the trash in the streets, the hustle, and the diversity of people that makes it amazing. Again it's not for everyone, I realized it was for me.

Disclaimer: I do work in IB but not in NYC / SF. In a small southern city (1mm metro population, low COL) so i can have some perspective.

You're math is pretty wild. I'll give you the 50% as a proxy for what taxes would be like living in manhattan, but at 30% of 150k that'd be rent of $3,750 per month, which literally no one is paying as a first year analyst. I'd say most people are paying $2,500 and that's prob on the high side.

But even at your assumptions (50% tax / 30% rent / 10% food / 10% savings, you're still netting 15k per year in savings. If you operate under the assumption that you will remain making 150k per year for five years of banking (23-28), you'll be at $75k. As others have mentioned, depending on lifestyle choices, it is pretty realistic for someone in IB to have ~$500k in the bank by 28.

Which brings me to my main point: The reason people do IB has been covered, but a reason they want to do it New York or San Francisco is the availability of exit ops within the city. There is a distinct advantage to be recruiting for positions that are just down the street vs. half way across the country (something i am experiencing firsthand right now). The ability to take the morning off for an interview vs. flying somewhere, or grabbing coffee with someone vs. a phone call is invaluable and something I wish I would have realized when i took my current role.

Aside from the fact that NYC is my favorite city in the US, and somewhere i have always wanted to live, just from a professional standpoint, the long-term benefits of being in a major financial hub far outweigh the additional costs of living there.

1. 100 hours / week (high end likely 70-80 week on average - likely working those hours for 2-3 years)

2. 150k high end (? - you mention a band of 6 years - high end for that band would be 180 - 500+ / yr)

3. 50% income to taxes (just, no); 30-40% to rent ($2-$2.5k/mo is less than 30% rule of thumb even if you're mid buck first year taking home $125); 0-10% savings (you should save your bonus - for a nation where the avg. national HH income is ~$55k, you're killing it)

4. $50k of savings at 28 (not a great situation - either have a spending issue, as you're eluding to, or assuming you graduated with significant student debt you've saved yourself decades of interest, secured yourself a 6-8% return on paying off that debt earlier, and have set yourself up for an explosive 3rd decade)

5. Sold six years of your life and have nothing to show for it (...other than a massively inflated earnings potential, a financial and legal education that allows you to run circles around people years older than you, a flexibility to pivot in just about any direction from a career perspective, an ability to intelligently invest your money so that when you inevitably build up that golden nest egg in the next 10-15 years you can successfully invest it in private/public investments that yield you a return such that you can reliably count on future cash flows to supplement or fund your lifestyle with a higher degree of confidence than your counterparts who sold tech software and did marketing for an F1000, set yourself up for a career where you can reasonably expect to be able to afford supporting a family where you can vacation internationally 1-2 times / year, go on ski vacation and send the kids to private school without having to take out a second mortgage on your house)

Maybe if you majored in computer science and economics, have been a serial entrepreneur since you were 12, have a trust fund to access and fund your current aspirations and a family business to fall back on, then you can argue that its a waste of time and you'd be wildly successful doing something else with your life for 6 years, but the 20-somethings forging ahead in tech or other endeavors aren't working 40 hours a week, taking rogue Mondays off and chilling with 350k in their bank by 28. They're busting their balls just as hard, if not harder, than the kids slugging it through the lower rungs of IBD.

Success rewards skill and there are few better places to curate such a versatile, applicable and sought-after skill set than in IBD.

Good luck though. For some people, money and the things it lets you afford don't matter much.

P.S. forgot to mention the future value of forming relationships with the leagues of incredibly intelligent, ambitions people you'll be meeting along the way

someone didnt get a bid.