does compensation matter after a certain point?

Life on Long Island City?

It is all about keeping score and benchmarking yourself against your comp to keep you motivated and driven. A very close friend of the family makes that amount and wants to be able to create an empire for his children so he obsesses over comp and is just as hungry as he was a decade ago. 

Yes. The diminishing returns of money is well-supported by the field of psychology

I've been in investment banking since I graduated college, and there definitely are diminishing returns.

I can't think of the last time that I had to give serious thought to a purchase. I'm single and in my early 30s. With the exception of say an apartment, most purchases have been well within my reach for quite some time -- so my annual pay increases really just go to savings / investments.

There is a certain peace of mind that comes with the financial situation, but it doesn't make me "happier" on a day-to-day basis.

after a certain point, you become less concerned with the absolute comp and more concerned about keeping it coming in. Also life changes as you age into high 6 fig/7 fig positions and that can change things for some. 

I would add to the sentiment that "once you have enough it really doesn't matter" that not only does it not matter it won't be the catalyst or motivation to do more or better X. Real growth occurs when you like what you do and want to expand that significantly.

I'd also like to add the obvious point that it's different for everyone. So far, my dream is just to hit 40-80k/yr passive income then I plan to travel around and spend more time on the business and technology ideas I've been slowly working on. Up until that point, I definitely notice change in compensation and market returns. Since I haven't hit my target, I can only assume it'll be way less satisfying to get more income in my salary job. Returns from my own business decisions will probably feel a lot better for a long time

Yeah I think so - went from a boutique to a MM to a MF and my comp increased a ton relative to what I've ever seen in my life. So I did (and have recently) done what people who suddenly get a bunch of money do - spend it. I'm a big fashion guy so my vice is generally clothing etc and it's embarrassing to say how much I dedicate to this "retail hobby" of mine. 

I'm not condoning any of the above but just to give perspective, I have gone against the grain of most sage financial advice and increased my lifestyle as my comp increased. This is okay to some degree but I reckon I took it a smidge too far and have cut back recently to the extent I can (locked into the unnecessarily ritzy apartment and associated furniture, companionship etc). So if I were to continue spending this way then I would say that comp does matter from a totally selfish standpoint. However, I would also add I have an SO who is making almost as much as I do and we are pushing ourselves to make sure we aren't tied down to our salaries going forward. 

I would like to say that comp doesn't matter after a certain point but I will say that there are limitations such as children and actual homeownership / real adult responsibilities I'm not yet accounting for which will distract me from the relatively high level of materialism I tend to revel in. This post was a slight tangent but I would hope that I, along with other people reading this, will head in a direction where I can confidently say I wouldn't need to worry about comp.

One quick other angle too to look at this from is that once you get a taste of what a lot of money can do for you, you can tend to get an addiction to getting more and as you do, what you have will never be enough. 

Think it also matters how big a family you want and how well you want to provide for them. I make today the rough total comp of a BB IB analyst working maybe 70% of the hrs (and I don't want the avg hours per week to ever go above 50-55).

If I wanted to be single for me entire life, even if my comp never increased I'd retire well.

If I had a wife but didn't want to have kids, then we'd want to have a HH income of ~200-250k roughly to do the same for two.

If you want kids, this is where it gets tricky. Personally I think you should never have more kids than you can provide for with the best opportunities. This means paying for schooling, summer camps, sports, great vacations, youth programs, after-school tutoring / SAT tutoring, etc. To me this also means private high-school (Andover, Deerfield, etc.) as well as paying for their full private college (an Ivy-tier school) so they have 0 debt. Per kid, just for the private HS and private college that is 8yrs of paying ~50k. You want 3 kids, that's ~150k out the door just for schooling. Then add on top of it all the other associated expenses and your own lifestyle, that's an easy 300-350k post-tax expenses. Given tax rates will almost certainly be higher in 20yrs vs today, basically you'd need to make some ~700-750k at that time to just break even, and if you really want to save well then you'd need to make at least 1ml (~1.5ml+ ideally).

Part of the saving for retirement is also in how well you want to retire. I want to have the best insurance, be able to see the best PTs when someone gets messed up, maybe have a cleaning maid come in twice a month, etc. and then leave something sizable for the kids. Would love to have 3 kids but given expenses above it may not be realistic. But then again, if you don't want to pay for your kid's college or don't want to put all of those other investments in them it doesn't matter. But I could never stand doing that, as I was raised in such a way that my parents gave me every conceivable advantage and it really shows given where I've ended up & what the potential career trajectory looks like from here (fingers crossed though as it's still near the beginning). 

Biggest takeaway from what I said about is the investment in / amount (if any) of kids you want. If you want more than 1 kid and want to be the best parent possible, then you need to be making more than 500k. 

Comp always matters, even at high levels, or we would pay all mds/partners the same.

We are competitive driven folks or we would be doing something else.

Higher comp this year may not be the best reason to jump ship - need to look at mid and longer term for most people.  Really thinking about total comp over the next few years. 

To quote Drake: "N*ggas with no money act like money isn't everything".

It matters, until it didn't.

What i'm saying is, getting more and more money matters to a lot of people. Until they found out that money doesn't buy you time, actual healthy relationship that doesn't driven by material things, or a simple happiness.

I made good money for the first 2 years of my career, but i started to feel like everyone around me is here because they think i am "up there" and not because i'm here.

I didn't get into Real Estate for money. I want to have a lasting impact.

I want to be able to walk by a building and tell my son (eventually) that his dad was involved in its development in a major way. Now hundreds of people and families call it home and it is their haven from the world. 

to me, THAT, is way more important than money. Don't get me wrong though.... money is nice & enables me to live the life I want, but after a certain point it's meh

bump