Do BB bankers really make that much money when you adjust for the cost of living?

xgozax's picture
Rank: Senior Gorilla | banana points 823

Most of the big banks are in New York and Glassdoor has their salary between $100-$150k first year. $150k is like $60-$70K In Texas dollars.

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Comments (78)

Jan 8, 2017

You can always work for the BBs in their energy groups in Houston and make the same amount of money in Texas... people don't do these jobs for the salary out of the gate, they take them because of the long term growth and career opportunities.

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Jan 10, 2017

True, but energy sucks.

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

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Jan 10, 2017

To each their own. Energy banking is one of the most lucrative fields out there (no pun intended) - and for those who enjoy it, kudos to them.

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Jan 11, 2017

Depends on what you are doing in energy.... its a big place.

Jan 15, 2017

Energy is quite interesting on the contrary

What concert costs 45 cents? 50 Cent feat. Nickelback.

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Jan 10, 2017

Also, some people actually like NYC. Personally, Texas is great, but I'd rather live in NYC than Texas.

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Jan 10, 2017

Agreed with that, but OP clearly thinks NYC is too expensive for him.

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Jan 11, 2017

OP is a peasant

Edit:- Clearly OP is back to throwing MS, just as the peasants liked to do during the middle ages

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

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Jan 16, 2017

actually didn't throw any because I don't have time to reply to sub comments, but cheers, you can have some now!

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

    • 1
Jan 11, 2017

.

Jan 8, 2017

It's worse at the analyst level, most need to have a roommate or two in order to survive off their salary. But that's partly because when they do get out of the office, many go all out with vacations, dinners, bottles at clubs etc. If someone is frugal they can save a good chunk of cash even as an analyst. $150k is basically what a first/second year analyst makes all in, and to anyone outside finance that's a very good comp.

Once you get to associate comp and later, you should be fine in New York. You wont be able to ball out in a two bedroom apartment all by yourself, but on the flipside a $300 dinner every once in a while wont kill you.

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Jan 10, 2017

I've frugal as hell. What do you think?

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

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Jan 11, 2017

You've grammar as hell too.

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Jan 11, 2017
xgozax:

I've frugal as hell. What do you think?

Consumption creeps up on you. IP in 2017 spends money differently than he did in 2010. The rusty honda (whose bottom is literally falling apart due to rust) is getting replaced with a used Lincoln or Buick. However, it will still have a trailer hitch installed.

You will start off by splitting a four bedroom flat with a kooky roommate in Jersey City and eventually graduate to a fifth floor walkup studio on 11th ave.

But yes, in Manhattan I lived in a fifth floor studio walkup. In Chicago I own a 46th floor 900 square foot condo with a partially obstructed view of Lake Michigan, an indoor pool, and an elevator. The condo costs less than the fifth floor Manhattan walkup.

But in the meantime, save as much as you can, and never forget what a dollar gets you in the Midwest.

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Jan 8, 2017

Also look at Wells Fargo in Charlotte or SunTrust in Atlanta. At both firms you'll make pay similar to NYC with a fraction of the COL/Taxes.

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Jan 8, 2017

Chicago, Dallas, Houston. you could

SF, NYC, Denver (MM banks) London not a chance on your base. bonus is taxed at like 45-48%

    • 1
Jan 10, 2017

Bonus is taxed at the marginal rate; there is no separate tax rate for a bonus.

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Jan 12, 2017

If you disagree with this link to the bonus tax rate. Note I said tax rate and not withholding rate, but if you are single in ny your withholding rate is already very high.

Jan 10, 2017

I think the better question is what shakes out when you adjust for the hours?

Jan 10, 2017

Oh god its like $35k/year. Might as well work 3 jobs. To me, IB comp doesn't make much sense. My dad works 2 jobs that require an associates degree for around 70-80 hours week and makes 100k/yr.

Have even taken high taxes into consideration.

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

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Jan 10, 2017

Nobody works IB for the analyst comp - they do it for more lucrative opportunities or to climb the ladder. If you're such a chimp that you can't understand the difference between your dad earning 100k near or at the peak of his career, vs. an analyst that STARTS at 150K and can make $1MM or more as an MD in 12-15 years, then I don't know how else to explain this to you. Now of course, that's not guaranteed, but that's why IB is a hard industry to be in. And yes, while most people I know who went to IB left after their analyst years - ALL of them are in comfortable 9-5 jobs that pay 200K+ now (before 30), or are in PE making quite a bit more.

You're comparing apples to oranges when you're comparing somebody in his 40s or 50s to somebody who's 22.

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Jan 16, 2017

What I'm trying to say is there are better career opportunities. VC and PE hire out of undergrad. Elite Boutiques have much higher compensation. Tech. Corporative Development. The list goes on.

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

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Best Response
Jan 10, 2017

Dawg, I made an active choice to leave IB and pursue consulting.

BTW - how many opportunities are there in VC/PE out of undergrad? You'll be doing bitch work, same as IB analyst. The best opportunities generally only hire after IB analyst years.

Same thing holds for EBs. And not everyone wants to pursue tech.

Also, arguing with some random college student from some shit state university on the internet that spells 'corporate' as 'corporative' is a waste of my time. See ya later.

Edit: WAIT, EVEN BETTER. I looked up your old threads and you're the moron from community college with a 2.8 GPA. Great story, still a moron.

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Jan 11, 2017

Well Done.

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Jan 11, 2017
aspiringchimp:

Dawg, I made an active choice to leave IB and pursue consulting.

BTW - how many opportunities are there in VC/PE out of undergrad? You'll be doing bitch work, same as IB analyst. The best opportunities generally only hire after IB analyst years.

Same thing holds for EBs. And not everyone wants to pursue tech.

Also, arguing with some random college student from some shit state university on the internet that spells 'corporate' as 'corporative' is a waste of my time. See ya later.

Edit: WAIT, EVEN BETTER. I looked up your old threads and you're the moron from community college with a 2.8 GPA. Great story, still a moron.

What a kooky ad-hominem. Not everyone who makes it goes to a target school.

Please just do everybody a favor and keep the inside-the-box thinking to your consulting job.

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Jan 11, 2017

Funny thing, I didn't go to a target. But there's a huge difference between a strong non-target and this bozo from a community college

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Jan 11, 2017
aspiringchimp:

Funny thing, I didn't go to a target. But there's a huge difference between a strong non-target and this bozo from a community college

If you read one of the followup threads he graduated with a 4.0 after transferring to another school.

Jan 11, 2017

It doesn't change the fact that he's still a chump ripping on others for being 'just a consultant' and posting controversial threads on jobs he couldn't break into if he tried.

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Jan 11, 2017
aspiringchimp:

It doesn't change the fact that he's still a chump ripping on others for being 'just a consultant' and posting controversial threads on jobs he couldn't break into if he tried.

Ouch. I missed OP's ad-hominem.

It's hard to retract a comment that might have an element of truth-- that consultants might think a little too inside the box, but I categorically reject OP's assertion that consulting isn't as great of a career as banking.

Congrats, you get the Best Post award, so everyone now reads your comment completely out of context!

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Jan 11, 2017
IlliniProgrammer:

aspiringchimp:It doesn't change the fact that he's still a chump ripping on others for being 'just a consultant' and posting controversial threads on jobs he couldn't break into if he tried.

Ouch. I missed OP's ad-hominem.

It's hard to retract a comment that might have an element of truth-- that consultants might think a little too inside the box, but I categorically reject OP's assertion that consulting isn't as great of a career as banking.

Congrats, you get the Best Post award, so everyone now reads your comment completely out of context!

It's a fair criticism... many of us are the risk-averse "insecure overachievers" that we're categorized as.

Cheers

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Jan 11, 2017
IlliniProgrammer:

aspiringchimp:Funny thing, I didn't go to a target. But there's a huge difference between a strong non-target and this bozo from a community college

If you read one of the followup threads he graduated with a 4.0 after transferring to another school.

Is he Robert Duval from that other thread? Colgate University to USC-Marshall....

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

Jan 14, 2017

Consulting is not hard to break into

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

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Jan 14, 2017
xgozax:

Consulting is not hard to break into

You're... just an idiot. Break into it then buddy

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Jan 10, 2017

I think the OP's main questions is if you look at people at equal points in their career, let's say 2 people are VPs at GS and one lives in NY while the other lives in (insert random smaller city here) etc, is living in NY worth it (Do you get paid more in NY than in small city)?

That answer is most likely a case by case analysis. Consisting of how much the individuals make, how far the dollar goes in their respective city, and as I mentioned in my post below - what are the extras that people are spending those dollars on. (I used 5 star hotels as an example).

I would say that yes, all else being equal and assuming that the VPs above have the exact same salary perfectly adjusted for CoL. The NY VP makes more overall than the small city VP because the NY VP can buy more "extras"

...

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Jan 10, 2017

Yeah, I would agree with that, if I hadn't earlier suggested that there are groups in low CoL areas like energy in Houston, which OP promptly shut down. And the salaries in high CoL places such as NYC aren't adjusted for CoL, so a banker in a prominent group such as energy in Houston would be better off. Of course, the appeal of living in NYC counts for a lot.

OP if you think IB at a BB is a waste of time, just don't pursue it? There are probably many more intelligent, less abrasive candidates than yourself.

    • 13
Jan 11, 2017

Just saw previous comments - OP, trolling away.

...

Jan 11, 2017

.

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Jan 10, 2017

Why is nobody here talking about the kid from Colgate University who's gonna work at the M&A department of Goldman Sachs? Isn't he going to make 7 or even 8 figures after 10 years at GS?

    • 2
Jan 11, 2017

Lol. Have you noticed it's always GS that those kind of videos are about?

Jan 11, 2017

That's because they've never done their research and have no clue that other banks exist besides GS. God forbid they pull in 8 figures at JPM in 10 years. Orrrrrrr they just love to troll.

...

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Jan 11, 2017

No! Actually they wanna go to KKR after 2 years at GS TMT. They are just not telling anyone because they are bad asses!

Jan 11, 2017
deMaestro:

No! Actually they wanna go to KKR after 2 years at GS TMT. They are just not telling anyone because they are bad asses!

Because GS TMT -> KKR for PE or Sequoia for VC are the ONLY ways to make a living in finance lol

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Jan 12, 2017

Hahaha you'd be surprised at the dumb shit kids say about GS when they are in one of their offices. I remember having lunch with some target kids and they were talking about how they HAD to be in the TMT group because their goal is HBS.

Jan 11, 2017
deMaestro:

Why is nobody here talking about the kid from Colgate University who's gonna work at the M&A department of Goldman Sachs? Isn't he going to make 7 or even 8 figures after 10 years at GS?

What I was thinking...

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."

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Jan 26, 2017

Do you have a link to the video? It seems the original was deleted, and I've never seen it yet.

Jan 10, 2017

As someone who does not live in a high CoL area, but makes good money and doesn't have to work intense hours very frequently, it is hard for me to ever want to go into banking. My salary adjusted to NYC, places me at a very comfortable level in NYC - BUT when you look down the line, the difference becomes the style of living that one is capable of. If I went on vacation could I stay at a 5 star hotel? If I want it to be a hefty % of my total yearly income sure, but no doubt that a well performing analyst could. These types of "purchases" become your standard as your career in IB progresses, for myself they will be more special occasion luxuries.

Everything becomes about pricing and what % of income an item is. While rent and food may be far more expensive in NYC than it is where I am, the bankers will get more "nice" things.

...

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Jan 26, 2017

This is a fairly salient question, particularly if one is moving from say a tier 2 or 3 city to New York or London. I'm personally okay with a 15-20% pay bump in this scenario at a minimum, but this is assuming greater promotion prospects and most critically, the optionality (depending on industry of course) that a city like NY or London offers versus in this example say Minneapolis or Houston. You just have to accept you are paying for that. With all that said, it would have to be a better fit role-wise.

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Jan 26, 2017

Within the US, there are only two costs that I would adjust for cost-of-living, and I would adjust them incrementally from salary using absolute figures, not %s. The two costs are:

  1. Housing, specifically rent
  2. State & local taxes
    Everything else we consume basically costs the same everywhere (thanks to Costco, Amazon, etc).

For example, soon I will be relocating from Chicago to the Bay Area. Let's say I currently make $130k pre-tax in Chicago.

  1. Two bedroom high-rise apartment in downtown Chicago costs $3,000/month. Similar apartment in Silicon Valley is $4,000/month. I know I can find much more expensive housing in SF but this is just an illustration. $12,000/year difference post-tax is equivalent to $18,000 pre-tax.
  2. Illinois state income tax is 3.75%. California state income tax is 7% (this is the net rate for $130k/year). So I'm paying an extra $4k in state taxes by moving to California.

Which means I would need to make $152k in the Bay Area to equal $130k in Chicago. But note, this also means that if I made $200k in Chicago, I would only need to make $225k in the Bay Area. In my experience, Bay Area jobs pay significantly more than Chicago jobs, even after accounting for this cost-of-living difference.

The point is, if you're negotiating salary on a job in a "low-cost-of-living" city, make sure to do the specific math instead of swallowing the standard "our city is X% cheaper" line from HR.

Note: Buying a house would make this calculation significantly different, but I'd argue that buying real estate is a consumption choice, not a true cost-of-living.

    • 1
Jan 10, 2017

Not sure how you're coming up with your estimates, but you can actually save a decent amount in NY. Things that are more expensive in other cities (like travel in sf/LA) are cheaper in ny.

My brother worked in NY as an ib analyst. All in comp was $150k, $180k, $210k over the three years.

For tax, don't look at the tax bracket rate, that doesn't make sense. You need to look at effective tax rate, which is ~35% on all-in comp. that brings you to $98k, $117k, $137k.

Less $25k for rent and $10k for living expenses. that brings you to $63k, $82k, $102k.

spend another $10k per year on god knows what and you'll still average $70k per year in savings.

    • 1
Jan 10, 2017

Just because you couldn't break in because of the 2.8 from a community college, doesn't mean you need to look down on those who could. It is a great career path and opens a ton of doors for those who are there.

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Jan 10, 2017

What is the community college cutoff for investment banking? How about University of Phoenix Online?

Jan 11, 2017

Well Texas sucks, so theres that

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Jan 11, 2017

why would you reference two jobs that pay $30k instead of one job that pays $60k? Surely someone who has the competency and background to consider BB IB can land a $60k job, no? Whose dream isn't to be an FP&A god?

Jan 11, 2017

Buyside/Prop FTW. CT, NJ, IL and even CA if you're lucky are a bit less "shitty".

Jan 11, 2017

Having any sort of job is a true fortune, but how are you going to talk down to those who break into BB banking!? Regardless of the COL, some people enjoy the NYC life and that compensation is more than enough to live a comfortable lifestyle there. SMH OP

Jan 11, 2017

I don't understand the people talking about the NY "lifestyle". If you're working 80-100 hours a week how much time could you possibly have to enjoy it?

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Jan 11, 2017
BobTheBaker:

I don't understand the people talking about the NY "lifestyle". If you're working 80-100 hours a week how much time could you possibly have to enjoy it?

68-88 hours per week

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Jan 11, 2017

No we dont, not near enough.

Jan 11, 2017

Can OP break into the cashier group of McDonalds from a non-target with a sub 3.0 GPA????

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Jan 11, 2017

When you adjust your salary for income taxes, state taxes, city taxes and cost of living you're probably make the same per hour as a McDonald's employee. The only difference is you work more hours

Jan 11, 2017

Totally man, that's why you see so many Target and McDonalds employees driving their Audi's around the Hamptons.

    • 1
Jan 11, 2017

How many entry level investment bankers do you see driving their Audi's around the Hamptons? Most have roommates and no car lol

Jan 12, 2017

I wouldn't know, I prefer to summer in Nantucket.

Jan 11, 2017

Granted expenses vary due to spending habits and where you choose to live... but this is interesting: http://money.cnn.com/calculator/pf/cost-of-living/

Jan 11, 2017

apparently, according to that chart, I make just under first year IB money being in my area and I work 50 hours a week. lol.

Jan 11, 2017
xgozax:

New York is an expensive liberal shithole

Sounds like paradise to me.

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Jan 11, 2017

I don't have time to read all the comments right now, but the short answer is no.

When you adjust for the following the income drops pretty quickly:

  • High Taxes in NYC
  • High COL in NYC
  • Twice the average hours a person works - This one is killer, divide 120K by 4000 and the hourly rate drops quickly to that of a Chik Fil A manager. Of course this is only true at the very entry levels, moving up brings significant pay bumps.

When you break it down they still make more money, but they work more too. As previously mentioned, a bigger reason people go into the field is for the exit opportunities it presents.

    • 1
Jan 11, 2017

Thanks, that breakdown was super informative. And yeah living in NYC is crazy--just read King of Capital and see where some of those guys started off their first years in the industry in terms of living arrangements.

Jan 11, 2017

I would not let location, or costs affect your choice of career. I would figure out your end goal and work backwards from there. This is something I tell a lot of people. Sort of like a binomial model tree, there are many paths to achieve your goals in life. If your goal is purely to make as much money as possible then get into sales and kill it. If your goal is to have a great career but focus mostly on your side hustle/enjoying life, then find something MO and still make a ton of money but just a little slower.

Keep moving towards your goals and stay motivated and educated.

    • 1
Jan 11, 2017

how can you expect to work in banking op and not understand basic micro eco

Jan 11, 2017

Wow - so much IB defensiveness and bashing here.

I grew up in the suburbs in a Southern state. The mortgage on the house I grew up in (middle/upper middle close) was approximately half of what I now pay to rent a small one bedroom in Manhattan. I used to be of the "this is way too expensive stupid cold why does anyone live here" variety but I've come to appreciate it.

Five (or 3) years ago me would kick me in the balls for saying it, but I can understand why people that can afford it pay up to be in NYC. NYC is a city on a scale different from any in the U.S. (I say this having lived in SF and Chicago, though not LA/Miami). World class everything (food, transportation, entertainment, culture, arts, social opps, diversity, job opportunities). In exchange you have one good that is stupidly expensive: housing (ok, alcohol too). If you are over the threshold where your salary can absorb a few GS a month of rent/housing (say guaranteed $150K/yr) it is, dare I say, worth it.

Obviously, the calculus changes as you age/ go through different phases of life. Once you have kids (or even a serious relationship), the value of a lot of NYC amenities (esp. entertainment and social opps) plunge b/c you no longer take as much advantage. Your costs also tend to rise and become less flexible (kids). At that point I can see why you'd want to go elsewhere (elsewhere being Chicago/SF/ parts of Virginia, think it would be hard to go back to a Southern suburb).

Jan 11, 2017
dazedmonk:

Wow - so much IB defensiveness and bashing here.

I grew up in the suburbs in a Southern state. The mortgage on the house I grew up in (middle/upper middle close) was approximately half of what I now pay to rent a small one bedroom in Manhattan. I used to be of the "this is way too expensive stupid cold why does anyone live here" variety but I've come to appreciate it.

Five (or 3) years ago me would kick me in the balls for saying it, but I can understand why people that can afford it pay up to be in NYC. NYC is a city on a scale different from any in the U.S. (I say this having lived in SF and Chicago, though not LA/Miami). World class everything (food, transportation, entertainment, culture, arts, social opps, diversity, job opportunities). In exchange you have one good that is stupidly expensive: housing (ok, alcohol too). If you are over the threshold where your salary can absorb a few GS a month of rent/housing (say guaranteed $150K/yr) it is, dare I say, worth it.

Obviously, the calculus changes as you age/ go through different phases of life. Once you have kids (or even a serious relationship), the value of a lot of NYC amenities (esp. entertainment and social opps) plunge b/c you no longer take as much advantage. Your costs also tend to rise and become less flexible (kids). At that point I can see why you'd want to go elsewhere (elsewhere being Chicago/SF/ parts of Virginia, think it would be hard to go back to a Southern suburb).

+SB, I agree with this 100%. Obviously people have varying opinions but Dazedmonk says it perfectly. If you want to live in NYC and have an opportunity there then take it. I personally chose a second tier city with a high salary. My decision was driven on giving me the ability to focus on things outside of work (sports/traveling) while still making good money.

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Jan 16, 2017

Yeah I think this is really what attacked the core of the problem and answer all the relevant questions. Glad to know that this has become such a popular thread.

Would like to say I did make this discussion more heated and less rationale by inserting "liberal" and "shithole" into it, but perhaps we may have not arrived at these conclusions without it.

Great job man, if I was an MD, I would hire you. You executed were all other monkeys failed.

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

    • 2
Jan 11, 2017
Jan 13, 2017
Jan 11, 2017
Jan 16, 2017

Let me hear you say, this shit is bananas, B-A-N-A-N-A-S!

    • 1
    • 3