Is it easier to make $1m/yr in IB or RE

Title basically tells all. I’m curious if it’s easier to make 1m/yr in IB or RE. Given that the only people in IB making that amount are probably MDs, which is by no means easy, do you think it’s easier to make that amount in RE?

 

Dude not even close, IB by far. I’m in real estate and there’s a lot of people who don’t actually know anything about PE/IB misrepresent it. If you do your 2 years out of undergrad at a reputable shop you’ll be making over 1M if you stay in IB or if you go to PE/GE by early 30s. Getting into a top RE shop that puts your cash comp on par with middle market PE is wayyy harder to get than those middle market PE roles because there’s way less. The top PE roles are EXTREMELY lucrative. Look at those firms and everyone in them, the senior people all live in 12M homes and get to charter their companies jet for family vacations and spends 100k on a small LP party. Making 1M a year in RE consistently is hard and usually requires decent amount of risk imo, also fewer positions and opportunities for it. It’s basically guaranteed in PE and IB if you stick it out. I’m saying this as I’m in real estate but my family is in PE and friends in IB. Even the non-technical roles such as IR (fundraising) pay over 1M cash comp in the senior roles for a superrrr cushy wlb. Expect 400k+ at 30 for never pushing more than 60 hours on a hard week. If you’re in undergrad you can either think I’m lying or do your own diligence. Money is basically determined industry at the high levels it’s easy to make a lot relative to real estate

 

1000000% MM Corp PE and I wouldn’t think twice. Real estate is extremely niche (someone’s gonna comment saying everything is niche) but real estate silos you so much more and there’s gonna be far more opportunities to gain massive equity pieces later on in your career with the ability to take a step down in hours for slightly less comp. If you want to leave MF REPE expect a large step down in comp

 

If you like RE then MF REPE will set you up to have a great career in the industry. That being said, don’t expect to make partner because there’s no space for you or anyone else at this point.

If you don’t want to get siloed, then MM corporate PE but that becomes a mixed bag comp and performance wise. RE also has that problem where you have some firms paying $120k all-in and other firms paying $350k all-in at the first year associate level. I have friends from HS, college and my IB stint who did everything perfectly and landed MF corporate PE but were pushed out to smaller shops and now make less than I do. It all comes down to hard work and a lot of luck.

 

Lol, top guy at top PE fund, that ain't happening

That's like first being a top-ranked state prospect > D1 college Bball > NBA and then becoming Steph Curry / Lebron James and not a guy that has the average career length of 4 years

It's just as plausible as being a f50 CEO or billionaire unicorn founder

MM PE could be an option if your fund performs, you can reach much higher potential if it works out than a bigger fund. Although huge *if* it works out and you get your carry paid out. Higher risk for higher reward, but personally would not bet on getting carry paid out and you just end up with lower cash comp

 

Making money in RE isn't about getting into a "top shop". Go get some equity. You will never get a crumb of equity working for a place that already has 40 partners.

That's not what the 18-20 year olds on this forum want to hear but trust, you will not care about having a sexy name on your resume by the time you're in your late 20s. You'll care about whether you like the people you work with and whether you mean something to your company.

 

Real estate is extremely niche and pays like dog shit at the lower levels at a lot of firms in the industry. Go with IB for more optionality and higher comp at the junior levels. 

If you end up getting placed in RE coverage like I did, you’re kinda SOL but you’ll still be fine monetarily if you can land a spot at a top player. The thing I tell myself to get myself through life is there are more RE billionaires and hundred millionaires than corporate PE billionaires and hundred millionaires and IB isn’t anywhere near that discussion.

 

Real estate is extremely niche and pays like dog shit at the lower levels at a lot of firms in the industry. Go with IB for more optionality and higher comp at the junior levels. 

If you end up getting placed in RE coverage like I did, you’re kinda SOL but you’ll still be fine monetarily if you can land a spot at a top player. The thing I tell myself to get myself through life is there are more RE billionaires and hundred millionaires than corporate PE billionaires and hundred millionaires and IB isn’t anywhere near that discussion.

If the only thing getting you through life is the thought of being a billionaire/millionaire (and the chance of you doing so is slim) then I feel sorry for you 

 

Are you willing to take risk?  If yes, RE is 100x more likely.

If no, then IB is more likely.  

Questions like this are fucking stupid. 

 

Define "easier". It's a much more guaranteed and quick path without having to do anything special besides make it past VP level in IB but you work your nuts off in terms of hours and work/life balance to get there. It takes a lot longer to make $1mm a year being an employee in RE and many never make it there. 

 
Most Helpful

What do you consider your starting point?

If you're already an analyst in IB, then the easy answer is banking.  You don't need any particular degree of intelligence or creativity, just a slavish devotion to your job, and you'll end up in that ~1mm compensation range.  But breaking into banking is hard!  If you're 20 and thinking about career options... that may not be as easy.

Real estate isn't an industry in which you'll get paid $1mm.  You'll make it by taking risk, by being an entrepreneur, by owning deals.  Very few people make cash compensation in the seven figures.  Lots of people get carry and make seven figures (relatively speaking).

That being said, it's a foolish question.  Do what you're interested in.  Both fields pay extremely well, it's not like you're deciding between investment banking or working at a coffee shop

 

If you don't like the work in IB you're not going to last beyond a couple years. Happens all the time

Similarly in RE, you won't do the things or take the necessary risks required

Forget about the compensation and do what you want to do, because you're going to be doing it for a long ass time 

 

It depends on your personality. I know guys who work in development that are incredibly talented and entrepreneurial, who are already doing there own deals. I think some of these guys are certainly going to make it rain in their future. I also think they wouldn't have lasted a week in soul-crushing IB. On the flipside, there are IB drones without a creative/entrepreneurial/independent thinking bone in their body who work at completely average banks, climb the ranks, perform the scope of their job faithfully for the employer and eventually cross the $1M mark. 

I die on the hill that the odds of success in anyone's potential career paths are significantly dependent on their actual interests and temperament. 

 
RE Dawg

I die on the hill that the odds of success in anyone's potential career paths are significantly dependent on their actual interests and temperament. 

Could not agree more 

Commercial Real Estate Developer
 
RE Dawg

I die on the hill that the odds of success in anyone's potential career paths are significantly dependent on their actual interests and temperament. 

Which is why colleges and universities are chock full of people who just love being in the Finance Club!

 

If you're willing to subject yourself to no life and pure suffering, then IB will be "easier." 

 

Neither. In IB, your route to a millionaire depends if you can climb the corporate ladder. Positions become smaller and smaller as you rise up and if you’re not a contributor, you’re out! IB has an up and out culture. You have to be the best of the best to make Managing Director.

In real estate, you’re not gonna make 1 million a year unless you’re a partner, or you have realized carry happening every single year (not gonna happen). You can make 1M a year if you are a CEO of a public REIT and you have stock options. But it’s unlikely.

The key here is that making this kind of money rarely happens when you’re working for someone else. I know it sounds cliché, but you have to go through the entrepreneurial Road. It’s even harder than our parents generation to make this kind of money.

 

Have to disagree with this. Look at compensation reports (from PERE, Rhodes Associates) and you’ll see that cash comp excluding carry/promote in the 1M range at MD level is very possible and happens in CRE. Depends on firm and market but you can hit the 1M mark without going out on your own/becoming partner.

 

I'm curious about the retention rate in IB, specifically the percentage of analysts who stay within the industry for 2 years, 5 years, etc. There's no shortage of posts in the IB threads from folks who hate the work. Granted, the exit ops can be strong and very attractive but I'm not sure how many analysts turn into lifers. Lifer IB'ers have told me how the skillsets change quick a bit as you start to climb, and not everyone is cut out for that (as is the case for many industries)

 

Magnam aut qui saepe aut minima eius. Eius qui eum eveniet earum voluptas explicabo maiores. Doloremque debitis est ipsam.

Aut quis earum tenetur sit qui temporibus. Pariatur delectus autem repellendus. Veniam quisquam vitae iste et excepturi. Aliquam voluptas dicta aut nostrum qui iste a est.

Dolorem ducimus eos adipisci. Omnis nostrum quos ea molestias quidem.

 

Nihil sint ea doloribus modi molestiae et. Cupiditate et voluptatem quidem. Dolorem omnis assumenda quis quo est repellat.

Occaecati et ab dolores odio dolorum officia molestiae aut. Ut aliquam ea temporibus soluta excepturi suscipit et. Expedita omnis eius architecto occaecati.

Quas magni quo ut quod. Assumenda fuga est saepe iste. Necessitatibus quos dolor quo.

Et possimus vitae fuga optio optio voluptas. Incidunt beatae est ut voluptatem ipsam voluptatem. Assumenda cumque ipsa sunt. Quas et doloribus voluptas et quos et numquam. Quibusdam rem sit sequi dolores architecto.

Career Advancement Opportunities

June 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Perella Weinberg Partners New 98.9%
  • Lazard Freres 01 98.3%
  • Harris Williams & Co. 24 97.7%
  • Goldman Sachs 16 97.1%

Overall Employee Satisfaction

June 2024 Investment Banking

  • Harris Williams & Co. 19 99.4%
  • Lazard Freres 06 98.9%
  • JPMorgan Chase 09 98.3%
  • William Blair 03 97.7%
  • Morgan Stanley 04 97.1%

Professional Growth Opportunities

June 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.9%
  • Perella Weinberg Partners 18 98.3%
  • Goldman Sachs 16 97.7%
  • Moelis & Company 05 97.1%

Total Avg Compensation

June 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (22) $375
  • Associates (94) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (69) $168
  • 1st Year Analyst (207) $159
  • Intern/Summer Analyst (151) $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
Betsy Massar's picture
Betsy Massar
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Secyh62's picture
Secyh62
99.0
5
dosk17's picture
dosk17
98.9
6
CompBanker's picture
CompBanker
98.9
7
GameTheory's picture
GameTheory
98.9
8
kanon's picture
kanon
98.9
9
numi's picture
numi
98.8
10
Jamoldo's picture
Jamoldo
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...”