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?
Go to PE or PC over IB. IB millionaire pathway is shittier than other methods and less intellectually stimulating.
what about megafund REPE? (KKR, TPG, Bain)
If you have an offer from megafund REPE or corporate PE MM, what would you take?
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.
Yes, top guys at top funds have $12mm homes.
Are you going to be one of them?
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.
This x100
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
It was a joke, just not a very good one.
Also if you’re not even aiming for it, it’s impossible to get there.
If you were in a top regl ib group (bofa/ms etc.) would you target mf repe or mm corp pe?
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.
Unless you live in a very HCOL place, it doesn't matter. You should not pick a career path based on this.
If you love real estate, there are a lot of ways to make FU $ just like IB.
But you'll burn out before you get there if you don't truly love what you do!
Way easier to make $1m in PE but also way easier to make stupid $ in RE. But you have to take risk and get lucky.
PE, but real estate is more fun.
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
All else equals - IB. IB at its core is a sales job in which the “commission” is based on multi-billion dollar transactions
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.
Could not agree more
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.
IB
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)
I disagree w the other comments top re is wayyy better than mm pe 🤷🏻♂️
Obviously real estate, just pull out $16,666,666.66666667 and buy a property at a 6% cap rate, no problem.
6 cap not juicy enough what’s the untrended YOC and basis relative to comps look like thx
Both paths are hard but real estate might give you more ways to make $1 million a year like rentals flips, syndications, and so on. IB is more organized, and to get to that level, you usually have to become an MD, which takes years. RE is riskier, but if you know what you're doing, the upside can come faster.
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