Personal Finance in IB?
Accepted full time offer in IB for next year and am really into personal finance. Currently maxing out my Roth IRA during my college years to contribute after tax hours while I'm only earning part time work/summer internship money. Grew up kinda poor with parents that were not good with saving for the future which made being financially secure really important to me. Just wondering what advice you guys have in terms of saving money, investing, etc for someone just starting their career with an IB job. Would saving 20-30k/yr(including retirement) be reasonable for the first two years?
Just tossing this here for other readers
Honestly, putting money into your roth IRA in college just isn't that smart of an idea, but is one that is constantly pushed for by psuedo-intellectuals on social media like tiktok and instagram. It's great if your college years are bankrolled by your family, but you will not know if that money would be more useful or needed somewhere else in the near future, before you would be making enough money to both max out roth IRA and have emergency savings (car, apartment down payment, tuition hikes).
I get what you mean, but I can pull out the contributions without penalty if I need the money liquid and it’s only in funds so it won’t fluctuate a crazy amount if I do need to pull it out at some point. I have some money in a checking account rn too and plan on the signing/relocation to cover the moving and housing upfront costs. Idk how it’s pseudo intellectual or anything in terms of learning about compounding early on but thought it was useful to mention in terms of what I’m doing so far.
I max it out too. Currently in my states lowest income bracket and the the minute I start full time I’ll be in the highest tax bracket. To put 30k in and get 270k tax free savings is a steal. And I can take the money out whenever for almost anything.
I’ll tell you what I told my friend/what I’m doing. I’m not going to NY (LA/Chi/Houston/Boston) so my COL is slightly lower but your analysts years can really set the foundation for the rest of your career so I wouldn’t be cheap and get a place 30+ min away from the office to save money. Depending on the type of firm you work for (EB/BB for example) you can save over $75k each year (on the high end). Most banks have a 3 year vesting period for their 401(k) match. I’m really big into personal finance/investing so I just set aside money each month (almost $4k a month rn since I don’t have rent expense).
Wait, so when most people leave after two years, their 401k contribution match isn't vested and goes back? I've only heard of vesting periods in terms of company stock esp in tech companies, didn't know that was a thing for 401k matching. Thats awesome with savings without rent. And I'll definitely focus on location for a place and be willing to splurge there to be closer to the office.
Depends on the bank & their plan but generally yea. It’s kinda BS but nothing you can do about it and it should affect what job you take.
$20-30k is certainly reasonable, but will of course depend what your income and expenses are.
I think trying to save ~$7K of my salary, including my 401k contributions but not including the matched amounts, and then 90% of my bonus was a reasonable goal my first year in nyc which would probably put you above the ~$20-30k range (although who tf knows what bonuses will be next year). I also was fortunate enough to have about $10k in savings, $10k in ETFs, and no student debt to pay off after graduating.
I found that this allowed me to enjoy my weekends within reason, but without concern. By this I mean getting bottle service on a regular basis will probably throw you off track, but you can take your date to a nice speakeasy or treat your buddies to a round of tequila shots without sweating it. My friends with student debt probably saved a little less and spent a little less than me to pay it off.
My logic is that as your income increases, you will be able to save more money without it cutting into life experiences as much. Even though lets say $35k a year won't get me where I need to go in the long run , that figure will (hopefully lol) increase. At the same time, the stress of living paycheck to paycheck just to ball out is a little too risky for my taste.
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