How much did you save in 2021?

I review my financials at the end of the year and track what percentage I'm saving and what I'm spending money on, etc. I'd like to think I'm pretty disciplined about saving and figured I'd share high level statistics to see how I compare to WSO

Background: I live in a pretty average COL area (think Dallas/Miami but with state income taxes), 2.5 years in PE, am single, still rent an apartment with my roommate from college, no credit card debt, small car note with 4 yrs left, and I lever my co-investments. 

  • Saving percentage: 58% of net income (post-tax), ~40% of gross (pre-tax)
  • Income besides job: pretty low at ~$10k a year which is not enough to cover rent... Two holdings: private sub. debt (yielding 12%) and a really small dividend portfolio that I assembled during COVID (pays 10% of cost; yield is closer to 6% now IIRC)
  • Top-3 expenses: top category was rent (12% of net income), going out for drinks / food (11%; thinking of this is as "pent-up demand" from COVID as it's usually HSD), and travel (3 domestic vacations in 2021; 6%)
  • Wealth: my net worth is equal to ~10x my annual spending. 
  • Leverage: my (real) assets are stocks (75% ETFs; 25 individual stocks), co-invest stakes, and a very small crypto portfolio. My liabilities are a car note (2.8% APR), debt from levering co-invest (~5.5% PIK), and a $10K interest-free loan from undergrad. Ratio @ market value (excl. crypto) is 5 to 1. The ratio improved materially during COVID as asset prices swelled. 
  • Plans for this year: been given the nod for a promotion in six months. Once that's official, I'll probably move into a single unit at year-end. Will likely undertake 1-2 new co-invest positions. Besides that, I don't plan on any other lifestyle changes, but know my expenses will still increase due to inflation. When I redo my budget, the goal is for my saving percentage to increase even though expenses are increasing nominally. 
 

You need to simplify this post. Your assets are 10x your annual spend? Kind of a useless stat unless you mean your net worth is 10x your annual spend?
 

Percentages and ratios don’t mean much. If you make $125k you’re doing an excellent job saving. If you make $350k, you’re just doing ok in terms of savings rate.

Keep it simple

1) Net worth

2) Pre-tax income from Job

3) Annual savings after taxes

Array
 

I ain’t saving shit - inflation will piss all of it away. Instead I’m debt financing the shit out of everything. It reminds me of a story I heard a long time ago from a guy who owned a liquor store: he and a few buddies had a prostitute over their house and took turns having sex with her. When she came out between guys to put the money in her purse one guy would take the money from her purse and use it to pay her for sex next. This is a parable for spending money in the Weimarian period we are in. 

 

- What do you use to track your budgeting?
- Why do you bucket your dividend paying stocks separate from your PA? How do you weight/diversify your stock portfolio? Are you investing any new money into stocks or crypto? Do you max out retirement accounts? Do you DCA monthly? 
- What percent of your net worth would you say is in co-invest? Are you worried about the risk associated with your job? Do you think about this at all? 
- Will you rent or buy in your city? Do you have any private real estate or REITS in your book? 

 

Brio

- What do you use to track your budgeting?

Personal Capital. Only track things annually as I've never had a problem with overspending. 

- Why do you bucket your dividend paying stocks separate from your PA?

When I was younger, I read about Warren Buffett's thoughts on passive investments. The ides of making money in my sleep was appealing then, but, after working in finance for a few years, it sounds even better now. I monitor the cash flow from dividend stocks + private debt separately from dividends that come from VTI or individual stocks. For me, it's intrinsically motivating to see that number climb and start covering more expenses so I like to have it separate on my summaries / dashboard. 

- How do you weight/diversify your stock portfolio? 

~80% of my portfolio is Vanguard total market (VTI). Looking into adding international equities, but not sure if I want to be country specific or invest in VXUS. 10-15% is in sector ETFs. There's 25 individual stocks that make up the remaining 10-15%. Most of those I came across a while ago or were in my coverage universe in banking (e.g., Dexcom).

- Are you investing any new money into stocks or crypto?

Crypto allocation is too high rn due to gains. I DCA into my stock portfolio out of my paycheck, but, for my bonus + co-invest proceeds, I'm choosing between private debt or new co-invest opps.  

- Do you max out retirement accounts?

Yes.

- Do you DCA monthly? 

Daily. 

- What percent of your net worth would you say is in co-invest? Are you worried about the risk associated with your job? Do you think about this at all? 

Just had an exit before the holidays so it's only 10%. I assume the risk you're referring to is the fact that I'm investing in a fund managed by a firm that I work for. My income and the performance of co-invest stakes are dependent on the firm's success/survival, but the firm I work was founded ~25 years ago and hasn't shown signs of slowing down so I'm not concerned about my income disappearing over night. There's quite a few factors in my favor when co-investing also... Specifically, my familiarity with the investments, favorable terms I receive (e.g., no mgmt. fees), and the cheap leverage are real positives.

- Will you rent or buy in your city? Do you have any private real estate or REITS in your book? 

I'll probably keep renting because I like living in the heart of the city and don't want to be tied down geographically yet. 

Array
 

2021 has been a wild year for me. I bought a nice watch, moved across the country on a three week roadtrip, moved into a short-term apartment for a few months til I found my long-term one, filled it with furniture, and just recently spent my (almost) last dollars on it framing some art (I still have to buy a new receiver, the one I have is crap and the one I want is out of stock). So because of all that I've spent most of my marginal saving dollars have gone to expenses, but moving forward I have a pretty good budget set up.

Post-tax, about 55% of my income goes to rent and student loans, 10% to general living expenses, 10% to 401k, 15% to brokerage, 10% remaining to general discretionary. I'm trying to move as much of that 10% discretionary into brokerage, but I also don't want to live like a pauper and if I say fuck it, I'm going to Mammoth for the weekend I'm not gonna bust my own balls over it.

 
Most Helpful

Don’t mind me as I overshare a bit here, just to give a bit of perspective (similar to salaries and bonus when most of what I see are large numbers). I just moved from credit into an IB position, base pay was relatively unchanged at $100k and bonus this year was $20k for the three months I was in the new position.

In a MCOL city, and this year was also a bit of an anomaly (aside from brief shutdowns and not going out as much) but also got engaged, which was a pretty big hit to the savings rate (also got myself an Omega Speedy as a self-congratulations lol).

  • Maxed 401k: $19,500
  • HSA: $3,000
  • Health, Dental, Vision: ~$1,100
  • Rent (1.5Br split with fiancé): $14,750
  • Misc. (ie renters insurance, gym, phone, monthly subs like Prime/Spotify, utilities): ~$4,700
  • Groceries (I was footing the whole bill for a bit): $6,800
  • Eating out: $3,900
  • Other (ie gifts for bdays/Christmas, we took a vacation to Mexico, trip back to SoCal for the holidays, Miami NYE with friends, the aforementioned ring and watch, extra costs for our adopted pup, some random things for the apartment - my PS5, a dope record player setup and a buncha vinyls, artwork): $28,500

So all in all, not my usual year where I try and target 40% savings as I only hit about 30% - inclusive of pretax vehicles such as 401k and HSA. I’m roughly 3 years out of undergrad and was fortunate enough to not have any debt, but also didn’t come out with any savings even though I worked throughout all 5 years. I had the mindset of saving as much as I could, and sacrificed some lifestyle choices for the sake of maintaining a higher figure in my bank account, but recent experiences have cause me to lighten up just a bit. Still will aim for the 40%, and wouldn’t want to drop much lower than 30% (these values will grow as my income does as well), plus COVID pushed my girl and I to value cooking together at home and having going out be more of a special occasion versus the every weekend we were doing when we first met a couple years ago, but want to spend more time exploring the world and getting back to travel. 

Finally, yo Pizz, this one’s for you: NW of $175k - $18k in cash, $149k across investment accounts ($46k in PA and others are retirement), remaining sum in art/watch/etc. No car.

Bonus quote from Electric Body by ASAP Rocky and Schoolboy Q:

All I wanna see are green faces,

All I wanna count is green numbers,

Man that shit is weird, lookin like the Matrix

 

I did a similar review last weekend actually.

After tax combined income: 600k

Roth IRAs: 12k

Roth 401k: 39k

Mega backdoor Roth: 35k

Cash balance plan: 15k

529 plans: 25k

Mortgage and taxes: 120k

Mortgage 2 and taxes 85k

HSA: 6k

Groceries: 25k

Eating out/hosting parties: 40k

Jewelry & gifts: 30k

Other: 30k

Cash left to invest or save: ~138k

 

it sounds like you are doing well, the only comment I'll make is that at 58% of income savings rate, you're on track for early retirement, kudos. however, do not delay all of your experiences until later in life. I see you took 3 vacations last year, I hope that fulfills you enough and you didn't leave anything on the table. I'm not going to tell you how to enjoy yourself, all I'll say is that you could reduce your savings rate a bit and still retire early but potentially enjoy life more (if you're not already!).

source: this was the epiphany I came to last year when reviewing that I only took off 12 days in 2021 after reading Die With Zero. I had some good vacations but definitely left some on the table and likely saved too much money (maybe 50%?). goal for this year is 35% savings rate and more vacations. 

note: I have no plans/desire to retire early, so keep that in mind

 

I am probably biased towards saving just given my history. Saw plenty of people struggle in 2007 - 2009 when I was about to start high school, and it seems to have stuck with me as an adult. Regardless, right now I just take vacations to decompress, but I want to re-ignite the passion for travel I had as a kid.

I'm Italian and speak it fairly well so thinking Naples should be my next stop to see the cousins. 

Since you're looking into vacationing more in 2022, any destinations you're really excited about? Could use some ideas. 

Array
 

You’re missing out thebrofessor, early retirement is great! We should connect one of these days. I’m off to Italy in a couple weeks and want to compare notes on learning Italian.

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

Happy to compare notes, but I just started learning 6mos ago so am definitely still a beginner.

and on early retirement, with the economics of my business it's a possibility, but it's also possible for me to arrange the best of both worlds - work 8 months out of the year and be wherever the other time. Also my wife and I want a beach house so I can finally have the ability to surf every single day, and that's more important than early retirement for me

 

Aut ea vel minus doloribus aspernatur. Ut in occaecati eius sequi nihil qui voluptas. Voluptatibus sit et est iste est molestiae est. Ea est ullam nam molestiae explicabo corrupti.

 

Quidem cum officiis voluptas veniam sed. Corrupti vel quod sit sunt impedit. Fugit expedita soluta repellendus facilis quo.

Quos nihil officiis fugiat. Soluta similique esse odio molestias aut possimus. Vel nam eos neque. Mollitia magnam optio deleniti ad.

Similique ullam non dolore magnam. Qui aut facere aut. Non consequatur doloremque officiis et. Dignissimos vero eligendi quo et omnis. Aut nam ipsam et qui praesentium molestiae. Rerum qui enim debitis est eos similique consequatur sunt.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”