Got an Expensive Manhattan Apartment, Will I Have Enough Left Over to Have Fun?
I'm 21 y/o starting my first job in the city and just signed my lease. If I get no raises, no stock bonus, and the absolute minimum cash bonus, I'll be pocketing $175k my first full-year on the job (2018). Having even one of these three things happen means you're in the bottom fourth of the company (all three means you're probably getting laid off), but oh well, better to be conservative. 2/3rds of that is the base and the rest is 100% guaranteed bonus (90% is public stock, the other 10% is cash). Also, my company caters food on the level of Google/Facebook (so free breakfast, lunch, dinner, snacks, etc whenever you want the entire day).
Anyway, when it comes to priorities for my living situation, having a great social life is number one. Dating is especially important, as I'm newly single. Given this, I figured it'd be worth spending the extra cash to live in Manhattan rather than Jersey City or one of the boroughs. I found an amazing doorman 1 bedroom in Midtown on the 20th floor with million-dollar unobstructed views of Midtown (clear views of the Hudson from my bedroom), a balcony, and over 700 square feet of space. The building is great too, as it has a pool, spa, shuttle service, and is only 5 mins by subway from my office. However, after taxes and rent, my base salary only nets me $3200 a month.
I know $3200 is a lot, but Manhattan is expensive and I've never lived there so I have no idea if it's enough to have a great social/dating life. Rent was already more expensive that I even imagined so I'm worried other 'normal' things will be just as expensive. Am I ok with this spending plan? If it matters, I will be keeping the bonuses, so I'll be saving a minimum of $40k after taxes (that's without using 401k, Roth, etc).
With that kind of money your better off being a homebuyer. At 21 your making what my consolidated loans are worth but that's beside the point. Your young have fun.
Midtown apparently does not have any underground sex dungeons. Waste of money, move to Newark!
You should have calculated that BEFORE you signed the lease.
...pretty much up to you, isn't it?
Look, it's your life, figure out what makes sense to you. I'm a boring, risk-averse married guy, so no way would I spend the proportion of my income on housing that you're proposing. My order of operations is to pay myself first--figure out how much I want to save, then work out from there what I can afford with what's left. But if what really lights your fire is being in the city and spending cash, then it wouldn't make any sense for you to do what I do.
Key takeaway: what you are proposing is relatively aggressive compared to other people who aren't you. Use that information however it makes sense.
I mean a baller pad and only $3200 in your account might get you laughed at rather than admired.
I tried to send you a message but I don't think it went through...
I think it's hard to spend $100 a day... I read your post and I thought I'd share my experience since I've lived here for 7 years (4 in undergrad and 3 working).
I definitely make a lot less and I am 3 years out of school. I also have friends that make more and less than me give or take $50k. I'm at $100k base.
1) Will you even have time for a great social / dating life? It seems like your job is in finance, and as a first-year, it'll be really hard except for sporadically going out.
Aside from that though...
2) I think friends and potential dating partners won't look at the money you have, but the kind of person that you are. There's always going to be someone that makes more than you, and if people only want to hang out with you based on what you spend, that's a bit ridiculous!
School Life: I had to work part-time in school and that barely covered my basic needs. What I did have left over wasn't a lot, but I really enjoyed: - Kayaking on the Hudson (Free) - Mini golf in Tribeca (it's $5 a game!!) - Free running clubs like November Project, LuluLemon, Nike - Art museums / galleries and opening nights (Free) - I didn't travel as much then, but still had 1 international trip a year! - $$ rating on Yelp food, and a lot of secret awesome eats from LES - Free before XX time clubs (lol)
Current Life: I'm still paying off student loans, support my family, my rent etc, and savings. So for "fun" activities, I budget about $700 a month, in addition to the above... - Broadway shows - 2 international and 1 big US trip a year - $$$ restaurants on Yelp! Honestly no food is worth $$$$ (but I'm about taste and quality over "ambiance" and brand) - Going to clubs with a cover... :o - Membership dues for sports leagues - Painting classes - Piano classes - Donating to charity
I'm not sure what kind of social scene you're looking for... but I think you'll still be able to afford table service sometimes ($500+ a night), drugs?? (lol..), shopping sprees...? but I echo with what I said... Manhattan has a lot to offer, more than just "clubs" and anyone you meet / date shouldn't expect you to have to pay for everything...!
Good luck! If you want more recommendations I'll be happy to give them - and always happy to hang out too!
BSP
Thanks for the detailed response. I'm glad to know that the city has a lot to offer even if you're not an MD at Goldman. I'm not looking to do bottle service, Pink Elephant, etc just yet, but I do want to try out all the great food and great wine, check out as many galleries as I can, watch Broadway and local theater, and soak in all the local music and artists. I work in Technology so I actually only work 35-40 hours a week. I even get to work from home 1-2 days a week if I want. I really want to use all that free time to see everything the city has to offer. Looks like I'll be able to do that as long as I don't start spending like it's 2007. Best of luck to you too man.
Well I'm a lady, lol. But thank you :D
If your hours are so great... I definitely think you'll have an awesome time! :) Everything you mentioned aside from the wine, is affordable!
I think just walking on your own two feet, (or getting the CitiBike deal since it's Bike Month in May), will let you see all the crevices and nuances of our beautiful city.
For Broadway, take advantage of the TDF program, local theater and local music/artists play at venues that have super low covers. Smalls Jazz Club is a $10 cover I think. And for a lot of street fairs etc. look into TimeOut NYC - it gives good reviews especially for art! If you want to catch a gallery opening, ArtNet is a good resource.
Dude start saving some money. You're going to live better than 99% of people (billionaires kids will have a better life than you) anyways. Don't make it a game to blow through it, with an age and salary like that you can easily hit a 7 figure networth by the time you're 30.
What job position is that? 175k first year is crazy.
I am sure it's software @ Two Sigma/Jane Street/DE Shaw. Something like 115+60
Good guess, but those firms actually pay even more. Some of my friends working at those firms have a base that's over 80% of my total comp...
You can take me on dates
Why wouldn't you live cheap for a year or so until you have a down payment? Your huge rent payments could be mortgage payments somewhere other than midtown.
Because I don't want to buy a house at this age. I have no idea if I'll be living in NYC in 5 or even 3 years time as plenty of firms I want to work at in my industry are in Chicago.
What were the deciding factors in choosing a big tech company over prop trading firms? Also, curious to know where you see yourself in 5 yrs.
Compensation mostly, but also stability. If I stay, my career path within the company is very well defined. Also the vast majority of my comp is base and stock, meaning I know my comp within +/- 10% at all times.
You'll be fine.
I would say this save and build your wealth now in your 20s. My goal is to have a net worth of 1 million at 30 years. Your 20s is probably the most energetic point in your life instead of squandering it and paying the price later use it to build. Pay off any debt as fast as you can, live below your means this includes a cheaper place...as a life long New Yorker who was born in Brooklyn and lived through it all from having encounters will crack heads to yuppies here is a pro tip..if you want a place where you can live cheap and yet have great time go where the gays are going not after but now....the reason is that the area is not going to be expensive since it will be shitty but give it a few months and you will the area start to clean up, great spots will be popping up everywhere from stores, coffee spots, brunch spots, dinner, etc still at cheap prices.... at that point it will be a snowball effect soon you will see condos and skyscrapers pop out of no where and rent sky rocket.
Now from a business stand point here is what you do if you have cash you go in early and buy up these properties. My grandmother did this I'm talking about she bought 3 homes in this shitty area 2 were way before anybody knew what was to come and 1 as the gay community was moving in I'm talking about 20,000 a pop on average some less for a steal. Fast forward 10 years this place is bustling think Bed-Stuy, Chelsea, Dumbo...grandmother had sold 1 right out for $500,000 not sure after tax and fees but still a hefty return. One she had renovated and keeps for her self the other 1 she made a deal were she got the same number of units in the new building as she had with the old house...so if the new building had say 50 units she got 6 of them...she is now living in a condo with a view of the east river & NYC skyline with a nice chunk of change in the bank/invested and and rent is coming in every month at least $2,800 per unit.
The point I am trying to make and I thank my grandma for this lesson is think long-term. Do you really need this expensive place in your 20's? My grandma survived communism, has no college education, and worked herself to the bone for 20 years in order to make these moves..she is now having fun traveling all over the world filling up her passport because that what she always wanted to do.
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