How do you spend your money associates ?

The typical investment banking analyst's salary spending is known to be fairly tight if you live in NYC or SF and practically save nothing, but how do the pre-MBA/post mba associates at IB/PE/HF that make 200k-400k spend their salaries ? Like do you guys actually blow everything too or live the same lifestyle whilst saving more?

 

That is so fucking stupid. You WANT to spend your money on tangible items and not things that you can't see such as rent or the 18 yr old tinder dates u talk about lol

What concert costs 45 cents? 50 Cent feat. Nickelback.
 
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You can easily save money on an analyst's salary especially today when its 85k+ starting vs. 70k back when I graduated. No reason you can't max out your 401k with just the base salary and live off the rest (plus be able to bank your entire bonus).

As an associate, monthly take home after taxes, health insurance, and maxing 401k (assuming equal contributions over the 24 pay cycles to get to ~18K) is about $6,500 in NYC.

Salary: $6,500 Less: Rent (studio @ 3,000) Less; Utilities (100) Less: Internet/media (Netflix, HboGo, no cable): 70 Less: Food (groceries/lunch, excl. dinners/brunch etc.): 400

Remainder: 2,930 which is quite a bit monthly for traveling, dinners, going out, dates, buying stuff or just saving

Firm pays for cell phone, 80%+ dinners are comped by work, no debt, no car payments, walking distance to work. The math up there allows me to bank 100% of the bonus and including the 401k contribution savings are well over 100k annually.

 
Marti Kahn:
85,000/12 = 7,083 Minus taxes (25%) = 5,312 Health care, 401k (Max) = 3,712 Rent (2k) = 1,712

Not to be a dick but not sure you math is adding up. 1,700 on all other expenses and trying to save is not much...

Was more referring to all in comp for analysts. Though the 401K max is real savings (though granted not liquid) and you'll have an additional ~30K after bonus+taxes which is pretty sizable savings for a 1st year analyst

 

Quaneaser You can easily save money on an analyst's salary "

Yup. Always save money. It gives you that place of fuck you that John Goodman's character talked about in the Gambler. That's what you want - to make sure you've got $ in the bank for when the bad times hit, and the banks slash jobs. Again. Like they ALWAYS do in a downturn. Make sure you've got your bases covered. Always have money in the bank.

 

Frank: You get up two and a half million dollars, any asshole in the world knows what to do: you get a house with a 25 year roof, an indestructible Jap-economy shitbox, you put the rest into the system at three to five percent to pay your taxes and that's your base, get me?

That's your fortress of fucking solitude. That puts you, for the rest of your life, at a level of fuck you. Somebody wants you to do something, fuck you. Boss pisses you off, fuck you! Own your house. Have a couple bucks in the bank. Don't drink. That's all I have to say to anybody on any social level. Did your grandfather take risks?

Jim Bennett: Yes.

Frank: I guarantee he did it from a position of fuck you. A wise man's life is based around fuck you. The United States of America is based on fuck you. You're a king? You have an army? Greatest navy in the history of the world? Fuck you! Blow me. We'll fuck it up ourselves.

 

I definitely chuckled at your post but real talk, you get taxed on your base which for $85/yr puts you in the 25% bracket, and if you wanna get really douche-technical only dollars $37,950 through $85,000 are taxed at that rate. after about $92,000 you jump to the 28% bracket and that's all the way through ~$191,000. your bonus is taxed differently but the math above was straight up just doing an $85,000 base.

Source: the day I jumped my base into the 28% bracket I got some real amazing bragging rights over my brother who is an engineer, and by all measures much smarter than me haha.

 

I'm in the camp of spend your salary (less 401(k)) and save ~80% of your after tax bonus.

Thankfully, I live in a relative low cost of living city, so the IB comp goes a long way and allows for some frivolous spending... like a fast car. I also enjoy some expensive hobbies like range / target shooting - couple hundred bucks of ammo and range fees every time I go.

 

Most associate bases are now 125/150/175/200. You generally lose 40% to tax / 401K / benefits. If you can keep rent to 2000 (w/ roommate) to 3200 (self) - you can start ripping some FCF depending on student loans. Tbh ppl spend most extra money on add ons like drinking / eating out, 1 bedroom that costs 5000, buyin fancy stuff, etc. You shouldn’t need the bonus beyond first year - even for some fancy trip. Now if you want to buy a NYC apartment - different story.

 

I didnt read any of the comments and went straight to the comment section here to make a point -

Writing: ‘The typical investment banking analyst's salary spending is known to be fairly tight if you live in NYC or SF and practically save nothing’ - wtf, so whatever a starting total comp is nowadays, $100-150k leaves someone saving nothing?!?! Yeah, only if you spend all your dough on nighclubs, booze, models, and maybe drugs. Wtf people, lets get back to reality. If someone cant save a cent on that kind of salary theyre just wasting their money away on nonsense. I get that people do that but dont start a damn thread saying how you dont save money on starting IB salaries - dont think you’d have many baristas and waiters in NYC if that was the case...

 

From my 3 years in IB as an analyst, I saved a little less than $250k living in Manhattan (a little bit less when you factor in the deferred taxes on 401k). My first year and a half I paid $2,900 a month in rent, which was just too much. Otherwise, I didn't travel at all, buy any fancy watches, bottle service, etc. I stayed on my parent's health insurance and cell phone plan (only child, so it would be my money eventually, right?) Frankly, I wish I had spent more of it and enjoyed life more. I have everything in cash right now since I rolled my 401k, so I need some ideas on how to deploy it. My biggest issue is figuring out what asset classes should go in my IRA vs. my taxable accounts, etc. Any advice would be appreciated.

 

Hey, I've read all of the typical value investing books, MPT, etc. What I also understand is the opportunity cost of the 30%+ I'd lose if and when this market tanks. That being said, I don't disagree with you, but the opportunity cost in today's market is not exceedingly high on a month to month basis. I'm looking to structure my portfolio as efficiently as possible to manage the cycle and what costs I can control such as taxes, fees and all that. My new job gives me some insight into my sector, so when I have some time and experience I would like to build a L/S portfolio to leverage that insight (not MNPI, just the perspective of an informed industrialist). It makes sense to have some beta risk too, though.

 

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