S&T VP here. Know there have been many posts about this in the past but I need some sanity checks here as I’m having a hard time wrapping my head around renting a new apt.
Base:215k Comp this year was 415k, next year If all goes well, looking for 475-500k.
Parting ways with the roommate and getting my first place myself. Looking at 1BRs for 4000~. Have a car that costs 400 a month to park/insurance (no pmt/paid for car in cash) so all in expenses are looking at like 4700 with rent/car/utilities. Apt is not NYC but right outside. No other debts except credit card from normal spending which can be steep some months. Post 401k, each paycheck around 5k.
Girlfriend will move in with me next year so the single renting burden will be about a year/we’ll go 50/50 when she moves in taking my monthly back to about 2500. However if we break up (doubtful but who knows with women) it’ll all be on me for the foreseeable future so I’m thinking ahead. Household likely around 600-700k between me and her when she moves in.
Is this absurd? Can’t stomach the fact that I’ll be saving near 0 with 215k base comp until bonus season. Saving up for wedding/house in the next 5 years.
TL/DR- NYC area blows
I made a similar post recently. Was looking at something that’s $3500 but I’m on associate pay still.
I got comfortable with it because I’ve saved every bonus I’ve ever made - sitting around $500k NW with the recent run up in stocks.
If you’re a VP, I’m assuming your net worth is even higher than mine. Spending the entirety of your base is not crazy when bonus is over half of your comp and you have several hundred k saved. I probably spent a little more than my base this past year.
Thanks for chiming in. Yeah I feel like my non finance /high earner friends making like 100-150k spend like 3k on an apt so that help me justifies paying more.
Guess this stems from the notion that folks in finance are pretty risk adverse
My all in comp last year was $120-$130k and I pay ~$3200/month for housing. But this is the cost of 1) ownership in 2) SoCal.
let’s just say I cut it close some months
Yeah I was going to say - I thought SoCal was bad but it isn't almost $5k for a one bedroom bad
Gotta add in the car expense in SoCal. OP seems like one of the only young guys in NYC with a car, but generally you're saving yourself $500 - $2,000 a month on auto expenses (depending on your car)
But this is only half your income... I don't understand this reasoning. You say that your "comp" is going to be nearly $500,000, but when it comes time to calculate your rent and savings you suddenly don't count 60% of it? You make $700k as a household and you're griping about paying 60k/yr in rent? I think the issue here is your expectations, not the reality of the rental market.
There is absolutely no chance that you can't find a luxury rental apartment just outside NYC for less than $4,000. Five seconds of internet searching and I found luxury rental apartments for ~3,000.
Fair points. It’s hard to count bonus as a source of cash cuz if macro goes awol like it has. 250k+ of bonus could be 0.
Appreciate the reality check. I come from a very middle class family so the idea of making the is much (as well as spending) is hard to grasp I guess in my eyes.
I think it’s smart to live within the means of your base, but recognize that if you spend a large portion of that base on living expenses you’ll still be able to bank some or all of the bonus. You could also think rear-facing and only live on last year’s money that you already received. Takes some planning and a mental shift. The dollars are fungible regardless. With your household total comp this seems achievable.
I spend roughly 1/4 of my gross base salary on rent and would only go a little higher in rent, but my firm weighs heavily on carry with generally smaller bonuses. Even once we start getting distributions from this fund I’d be hesitant to rely on it instead of topping up investment accounts.
You can say NYC blows, but it's unlikely you'd make that kind of comp anywhere else (I'd imagine even Chicago takes a small hit?). You'd still be paying $2k - $3k for a solid place in most cheaper cities if you're living in an urban area, so figure you're paying an extra $2k a month to be in New York = $24k a year = you need to make about $40 - $50k more in New York to make up the difference. I think for sure you're making $50k more a year than if you lived anywhere else in the country. And by the way - also super rare in other cities in the country to find a gf/potential wife that's making $200k at a young age too.
Back to the point though, I think $4k rent on $400k+ income isn't bad at all, plus it becomes way better if your gf is paying half. You mention if you break up - well if you break up, you don't need to save for that wedding/house anymore either!
Hahaha I laughed that the last sentence. Very true.
Yeah hard to junk that this income potential is mildly isolated to big/high COL cities. Forgot that was a thing so you’re right.
Thanks to all for a text version of a bitch slap. Needed it!
Who said she's young? She might be a granny and he's worried she might not be around, you know - health-wise.
$4k rent on $500k comp is not a big deal…
Yeah
You can afford it on that total comp number for sure. Wife and I's base salaries (1/3 total comp) after taxes and 401k barely cover our housing costs and car payments. Everything else is paid for from bonus/commission checks throughout the year.
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