PE Associates - How Much Cash Do You Save?
What % of your total income are you saving or putting into the market (post-tax, post rent, etc).
Any data points for comp, rent expense, vacations, weekends, would be helpful.
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I spend 6.5-7.5k a month 5 years out of school in HCOL city. Made right under $400k last year pre tax - I think one thing about PE vs ib is you have mandatory co invest so you live pretty “cash poor” relative to where your peers in ib are but hopefully deals do well and in 10+ years you built enough wealth that you have more discretionary income
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As long as your bonus allows you to set aside the monthly equivalent of ab 10k/mo, you will be fine
Make $300k in NYC and save about ~$100k cash. I pretty much break even on base and bank my bonus.
Rent is $4500 (1 bed), I go out every weekend, eat fairly nice, and take about 3 weekend vacations a year with an expensive 10-day one every summer. I’m doing this job to live and enjoy my money, not throw it in my 401k.
Mind breaking down the rough math on getting to the post tax $100k number. NYC taxes on bonuses are brutal so assume you’re saving a good chunk from your salary too?
its easy $300k all in assuming $150k/$150k breakdown, thats net ~$8000 a month, and with rent being $4500 its safe to say OP spends all his base pay a month. Then $150k bonus after tax is roughly $100k...
Bonuses are taxed no different than salary.
You should think of yourself as an elite athlete. Spend as much as you need to be the best at your job. I grew up middle class and was so focused on saving money, but in retrospect, I wish I had spent more and made my life easier...so that I could be laser-focused on work. I wish I had gotten my own apt, somewhere close to the office, gotten a trainer so I could work out every morning and keep my mind sharp, limit my drinking, and think of my self as a mental athlete. If you really want to make it to VP etc.
A nice apartment is crucial for your mental health, and in a nice location. I’m gladly spending $4500.
This is super thoughtful and I think important to bear in mind when it comes to savings vs consuming —
One could argue that it’s important to take the occasional lavish vacation and endulge in something nice for yourself here or there to really demonstrate the fruits of your labor and show yourself the “power” of wealth accumulation.
I’m not saying that it’s responsible or prudent to spend 3 weeks at the Ritz and buy a new Beamer a year, but there’s no reason a PE associate should have 5 roommates and eat Raman (assuming there isn’t special circumstances like massive debt, family expenses, etc)
Do you mind expanding more on this?
This is either the most hilarious or the saddest comment I’ve ever seen on this website
2 years of IB + 4 years of PE resulted in about $800k-$1M split 40% 401K/IRA and rest cash / stocks. I never lived too frugally but I don’t think I have crazy spending habits. My PE firm was on the higher end of pay whereas IB was one of the lower paying. I also didn’t do a great job managing personal investments. Given SPY has compounded at mid-teens through my career, I probably could have ended up $1.2M+ if I was fully invested but such is life.
This is incredible , congrats mate
Did you live in SF - NYC? Seems really high.
Lived in NYC for about 50% of that.
I am in co-invest/secondaries. TC about $240k. Firm lets us hit the 70k limit on 401k through employer contributions so I save that plus another 7k in Roth IRA and then maybe another $10k in after tax savings for a total of ~$87k.
Rent is $2500 and credit card averages maybe $2500 but I also spend a lot on healthcare expenses and vacations so it can be highly variable.
I honestly don’t do a great job of tracking this but I did about 2.5 years as an analyst and am now 6 months into associate gig with net worth of about $240k (no student loans) so I think I’m doing okay
Can you explain the 401k sitch at your work? Of the $70k how much can be your contribution vs employer contribution? Is this one of the mega backdoors vs the normal ~$23k?
Basically they let us choose how much of our bonus we want to call “employer contribution” and after the 23k employee contribution plus the “match” (it’s actually structured as 5% of base+bonus so not actually a match) I end up choosing to put like 30-40k of my bonus into the 401k
Don't you make too much for a roth ira?
Backdoor Roth is very easy to setup
$275k comp, $90k savings (401k, cash, portfolio). Rent is $3800 for a 1 bed and I do activities every single weekend. Only way to battle the horrible job that is PE.
Which area are you getting a one bed for 3800? Or are you not based in NY?
Austin. New York is probably higher for a 1bed.
Mind sharing if that is 1st year PE associate comp? Recruiting in Texas and want to know what to expect
I save about $120k off a $350k income (MFPE). I lived with 3 roomates in a shit apartment before and I was miserably depressed. Now I spend $5000 for a 1bed and I’m significantly happier. It’s not even close.
I’m at $70k savings with a total compensation of roughly about $260k.
Base is $130k, bonus is ~100% give or take.
The only way I can stand this industry is blowing my income on a big summer and winter vacation. Seemingly it’s crucial for my mental health, as I’m sure others above have echoed. I also spend $4200 on my one-bed apartment in FiDi, although this area isn’t the best imo.
Was contemplating FiDi, what’s the rationale against it?
Why was FiDi underwhelming? Contemplating moving there
I save around $5k or so a month in base. Very LCOL city and in LMM PE. Total comp is around $200k (lower compared to my prior jobs). Did well with savings before this and have around $775k between IRA and brokerage.
Total savings with base and bonus?
How many years of experience between IB and PE
Just out of base. Then I save basically whole bonus.
5 YOE total plus MBA
How are you saving 5k mo if I’m assuming your base is 125?
$125k base, $125k bonus. MMPE in NYC.
Rent: $4450 (1 bed)
Vacations: $8000 each, 2x
Weekends: $250 (go out often)
Not saving that much but fuck it, I need this.
How in the world are you getting approved for $4400 rent with that base…
Then you get and married and have kids and the math stops math'ing :(
$160k base $100k bonus - LA PE
Rent is $3400 each, roommate
Save like $100k full year, mostly from bonus.
Last year - $150k base $150k bonus in SF.
Rent: $2k (1 bedroom with fiance), total spending (incl. vacations) averaged out to around $4.5k / month. Put away $140k.
This is amazing. 2k rent in SF WTF.
Sorry, meant that the $2k is my portion of rent if it wasn’t clear (total $4k for a 1br).
$300k all in ($140k base, $160k bonus)
Rent in NYC is $4400 for a one bedroom in a fairly nice building. Between food, going out, and a nice gym, I’m at $3500 spending a month on top of rent. Few vacations a year - stay in nice hotels and fly far abroad.
$90k cash saved last year. No 401k, fuck that.
Why no 401k, considering the tax advantages / employee match
dude you gotta wait till 59.5 to pull that money out. Also, its still technically taxed but at a lower rate. Meanwhile you can put post-tax money to work at a higher rate of return over the next ~20 years. 401k was a thing for the boomers imo
PE with roomates is hell on earth. You need your own space to focus and relax.
My roommates are my homies so I love it
Made $315k all-in last year, put like $60k into 401k (including match / incremental "profit share" portion of salary). Then like 100k into brokerage. So I guess like $160k total. Live in Texas so rent / utilities is only like $1,700 with a roommate in a fat townhouse (for reference we live on different floors and the master bedroom/bath is prob close to the size of an NYC apt, so not like I'm slumming it out here). Idek what a $3k+ rent budget most people here seem to spend would get me here. Nice Gym / dinners are covered by work then rest of expenses are just golf and going out / and your standard decent dinners every other week or so. Don't really budget or anything, just don't have high fixed costs. Still vacationed abroad + took a bunch of 3-day weekend trips last year so pretty satisfied outside of work (which is hell 80% of the year). Insane how cheap TX hearing most of posters above, part of me always wanted to go to NYC but I guess there's always trade offs in some form. 5 years post-grad have about $725k banked.
That seems really nice, are you a 3rd year associate? What fund size range if you don't mind sharing?
I'm heading to a NY UMM this year but interested in TX PE in the longer term.
yeah 3rd year, bumped up to senior associate effective in July. latest fund ~750mm, with about double that in current AUM.
What’s the Texas PE Scene like? Are the big PE firms like KKR and black rock there? I’m from Texas and an undergrad in college so I’m curious.
Spend most of my base and bank the bonus. Max 401k and put 300-400 per paycheck into brokerage. Put around 90% of bonus into brokerage/backdoor roth then the rest in HYSA to save for a large trip or if I feel like splurging.
Rent is 2k, I’m conservative with fixed expenses and want to leave as much room as possible to do things outside and travel. Travel comes out to probably 5-8k per year.
City?
NYC. So expensive here.
All of the 401k from base?
$300k all-in and saved $80k cash last year. I do not contribute to 401k and would rather enjoy my vacation to Australia.
$275k gross, $4750 1bed rent, save $80k
225k LMMPE LCOL. Rent is $2800 for a nice 1-bed. Save like 85k.
$275k NYC PE. $4000 rent each, 2BD apartment. Save about $90k. I spend a ton of my vacations as well lolololol
that 275, assume thats all in - do you mind sharing LMM / UMM / MM etc ? whats aum roughly if u dont mind
I don’t get how the math works to spend “lavishly” and with your rent and still save close to 100k lol … 275 is what , roughly 160k post tax according to some of these calculators? Rent is 48k, and with 90k of savings that leaves you 22k annually for food expenses / everything else other than rent … which is certainly a lot of money but doesn’t seem like that extravagant of spending on “expenses”?
Free dinners in PE and make my breakfast at home for $5. Skip lunch. That $25k is literally going out and vacations.
Anyone else in my boat? Feel weird reading all these responses.
Currently 25 years old, PE associate 2 at a LMM making $270k. Did IB 2 years. Only have $130k saved total. I mean i feel like we are in such a bubble where all of my friends not in PE/IB all said they have $20-$40k to their name lol but man reading some people on here my age with 800k+ burns me in the ass.
No one has 800K at 25. The reason why you get there in your late 20s is because comp scales meaningfully faster than spend (unless you have massive lifestyle inflation) as you move up the chain. Comp scaling + bull market leads to excess savings.
Bro don’t worry. You’re 3 years out of undergrad at a great pay rate rn. I’d venture to guess that you saved a small amount as a first year analyst. Then substantially more, and this year will be even more than that. At $270k, you should be able to save a very nice chunk this year. Imagine you’re able to save $80-100k the next few years. Without accounting for investment gains, you’re be at $500k+. Then imagine you get some market gains and some larger than expected bonus plus raises. You have a clear path toward getting to a very nice level by 30
My guy thank you this reply was awesome and made me feel better. You are the man.
Yep… bit of a non-traditional path but I have $200K saved up, 5 years out of undergrad. Live in NYC and been at ~$250K comp for the last three years between IB and IB adjacent roles. No idea how people saved enough fresh out of school to have $800K, they probably had no lives so whatever.
I think I will have close to $300K by end of year with bonus and all that… have been saving $3K per month to savings / brokerage in addition to maxing out 401K this year and I can feel the momentum. I think 500-600K is very attainable by 30 for both of us, and regardless of what circle you’re in, that’s incredible. Just need to save every month and don’t let the lifestyle / credit card grow…
For those who feel they’re behind, here’s a chart that may make you feel better and add some perspective. Once you get an initial $100k (or whatever amount), saving an additional $100k (including investment return) gets easier and easier. There are a lot of different iterations of this chart but this highlights the point. Just keep saving and investing and you’ll get there.
not enough. I have around £80k locked up in watches lol
underrated - can be brought cross border unlike other forms of capital storage
Anyone spending under 3.8k in NYC rent in PE is a loser straight up.
Moved to a LCOL city for PE after 2 years in IBD in NYC with ~$40k saved up (plus ~$20k in my 401k with BB match). Note I did spend my whole 2nd year bonus before starting PE as revenge therapy for the year I had.
In PE for almost two years now and comp for those at ~280k (⅔ base). Now at ~200k saved up (plus another ~30k in 401k, no match from fund so stopped contributing). My investing hasn’t been good so losses offset and gains and so those savings mainly just come from operating life cash flows. Saved all my bonuses except that last IB one.
I pay 3k in rent and don’t have any big other necessary day to day expenses. But I do spend ridiculously on vacations/travel and have expensive hobbies, think I spent north of $50k on those last year and this year shouldn’t be any different. Probably irresponsible on my side but I’m too nihilistic and hedonistic to care.
Easy when u end work at 7pm with no weekends like you do, but lie to your friends and say you’re slammed?
What?
$5150 1-bd in NYC. $325k comp.
How is everyone getting such cheap rent?
Roommate or live in a studio? 5K is nuts
Reading this thread makes me realise how we getting screwed big time in Europe with our comps.
We are called Europoors for a reason
The net worth we made were the memes along the way my friends
Kind of interesting that 75% of these comments are 'unless I spend a ton of the money this job isn't worth it' and then the other 25% are LCOL arbitrage people.
I'm just a consulting peasant who works 40h / week and was not expecting to see that I'm saving as much as PE associates lmao
Consultants are cheap af. Live a little. Unless you’re worried about that 10% bonus of yours.
I would say i've been doing some living, not the expensive kind though. Does it still count as living if its free?
Bro you’re not saving close to six figs a year … though congrats on ZS
Why you mad
I bank my entire bonus (100% of salary) and max out the 401k and HSA. I should start to save more from my salary though...
Max out the 401k from bonus or all base?
I do it such that about half is from my base and the remainder from my bonus to maximize employer match and have some personal FCF on a regular basis
300k total comp
Rent 4.5k
Other loans (car, school) almost 2k
On top of that I spend a lot on vacations, going out, and things like that. I have no plans on leaving the industry anytime soon and value experiences and spending money while still young, higher utility
All-in, saving 50-100k a year after tax and all expenses
Feel like you are lying and spend like 3.3k on rent lolololololol
As an associate I made 300k in NYC shared a 2bd apartment for $4200 each in rent
ASO1: $250k Comp $4400 rent
ASO2: $300k Comp $4400 rent
ASO3: $325k Comp $5200 rent
I'll bite since I want to promote transparency on this site and before people critique me about my lifestyle choices, I'll just come out and say I'm more on the cheap side of the spectrum however I do splurge on things but just am disciplined when I do (e.g., one really nice Rolex instead of 3). I also didn't start out with any student debt which I'm very greatful for
Current Comp is $380k (split 50/50 between base and bonus). After tax paycheck works out to be ~$9k a month.
Rent is $3k (live in the same studio I had when I first moved into the city 4 years ago as an AN1 and have been lucky to not have needed extra space nor been subject to excessive rent hikes)
Discretionary spend on my cards are ~$2k-$2.5k/month. I work a ton during the week so the meal stipend really helps me out but the dinners I go to on Fri-Sun with the GF usually average about ~$120 for the two of us per meal. We do go out to the Torrisi type places but it's not an every weekend type thing. Firm also has a gym stipend which is huge. I've mastered using credit card points so that really helps knock down the cost off all the vacations I've had every year.
In terms of savings I think I've done pretty well for being 4 years out of school and living in NYC. I've banked all of the bonuses (3 total) I've received and only really spent the part of a signing bonus I received. Maxxed out the 401k, ROTH IRA, HSA, etc. and invested the entirety of bonuses into the brokerage. I'm sitting on ~$600k across everything.
I think it's totally possible to put away a ton of money here in NYC and still live a great life. It's really all about balance - do I still get bottle service with my boys or ball out on fancy dinners with my girlfriend, absolutely! But I just make a conscious decision to do it maybe once a month vs. every weekend so I can be well equipped financially for the next stage of my life.
When did you graduate college? What job are you in rn?
2020 grad. MF PE.
Any advice re credit card points ?
bump
Wow
This thread is so depressing. Should have exited PE rather than corporate.
Are you guys maxing out 401k off base or through bonus?
Base for me
base, i look at it as a built-in way to reduce lifestyle inflation creep.
half from base half from bonus to max employer match
As an ASO1 I made 275, spent 3800 on rent, and saved about 80k cash.
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