How do you spend your bonus?

Jamie Dman's picture
Rank: Baboon | banana points 119

When you got your first bonus, how did you feel? how did you spend it? How much of it did you save? How are you spending your bonuses now?

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Comments (56)

Nov 21, 2017

I like to spend my bonus on a diversified basket of low-fee index funds. Also, my favorite flavor of ice cream is vanilla, and I spend my mornings power-walking around the neighborhood and listening to NPR.

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Nov 21, 2017

I like your style.
OP is not a mensch.

heister:

Look at all these wannabe richies hating on an expensive salad.

Nov 21, 2017

with the 1980's style Walkman headphones?

Nov 21, 2017
TippyTop11:

with the 1980's style Walkman headphones?

And heavy sweatbands on my wrists.

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Nov 24, 2017

"I am also 177 CM in height, plan to have 2.5 kids, and plan to get wed to a woman who wears between the sizes of 16-18. Additionally, Layne is actually a mere pseudonym. Please feel free to call me Joseph, or Joe as my 5'3" mistress calls me by" ;P

Nov 25, 2017

No long walks on the beach?

Nov 26, 2017

I like CHOCOLATE.

Nov 21, 2017

Best advice I ever heard was spend 100% of your salary, save 90% of your bonus. Bonus usually goes towards a nice trip.

Nov 21, 2017

This, agreed. After maxing out your 401k, feel free to spend salary, but always have saved 100% of bonus.

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Nov 21, 2017

Pretty much what I did. I usually don't even manage to spend all the salary despite my borderline alcoholism, but agreed on saving large parts of the bonus.

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Nov 21, 2017

I donate it to the Bernie Sanders campaign, he is so much wiser at spending it than I am. He is my shepherd and I his sheep.

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Nov 21, 2017

I was wondering why you were lamenting about the fact that you were working longer hours for seemingly lower wages :P

Nov 23, 2017

Reddit in one sentence

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Nov 21, 2017

Hookers and blow, my friend.

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Nov 22, 2017

saved my first bonus. For my second, I lived in an awful place trying to save money so I spent a large majority of it securing an awesome spot and styled it out. looks effing pimp. planning on investing my 3rd. 20% into savings account 50% into the market 20% into small projects i'm working on, 10% into my wardrobe, 10% into my social life/trips.

Best Response
Nov 22, 2017
itsanumbersgame:

planning on investing my 3rd. 20% into savings account 50% into the market 20% into small projects i'm working on, 10% into my wardrobe, 10% into my social life/trips.

You will surely be top bucket for always giving 110%!

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Nov 23, 2017
More Leverage:
itsanumbersgame:

planning on investing my 3rd. 20% into savings account 50% into the market 20% into small projects i'm working on, 10% into my wardrobe, 10% into my social life/trips.

You will surely be top bucket for always giving 110%!

Your nickname provides the answer on how he gets to 110%

Nov 23, 2017
itsanumbersgame:

saved my first bonus. For my second, I lived in an awful place trying to save money so I spent a large majority of it securing an awesome spot and styled it out. looks effing pimp. planning on investing my 3rd. 20% into savings account 50% into the market 20% into small projects i'm working on, 10% into my wardrobe, 10% into my social life/trips.

Jesus

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Nov 22, 2017

Save it for a rainy day.

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

Nov 23, 2017

As a salesperson I save for the day that technology will take away my job.

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Nov 23, 2017

"My rabbi (mentor) balks when I tell him I'm going to invest my bonus in a diversified equity portfolio so that I am better positioned to buy an apartment the following year. "Why the fuck are you going to worry about trying to save money now? Why struggle to save one dollar today when it'll be easy for you to save ten in just a couple of years? Spend that cash. Believe in yourself, baby."

It makes so much sense that I convince a few of my analyst class friends to go to Saint-Tropez the following month, with the sole purpose of spending our entire bonuses in five days. That assignment turns out to be significantly easier than we had anticipated."

Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals by John LeFevre

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Nov 28, 2017

Straight to Hell was the book that blew the door off the hinges for my naive, freshman self.

"Buy cheap, sell dear" -Graham

Nov 23, 2017

Advice I got from a pretty smart guy, I happened to want a motorcycle at the time: He said, go buy the fucking motorcycle, it'll be part of your bonus, and put the rest into 3-5 high risk, high return investments and enjoy the shit out of your new bike. Next year, take some of the cash to go do something awesome that will make you feel like working is worth it, and invest the rest in high risk, high return investments and so on. Some of your investments are going to work out, some won't, but the winners will far outpace the losers, and you'll have cool stuff and great holidays to enjoy.

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Nov 23, 2017

I'm in the wrong job by the sounds of it. Everyone's purchases seem to indicate their bonuses are considerably high!

Are the KPIs harder to hit for bonuses in IB v.s. Tier 1?

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Nov 23, 2017

20% on BS (watches, shoes, club, women)

80% savings/paying off debt

Nov 24, 2017

Hah! There's another solution to this: no bonus, therefore no problem. No need to worry about choosing a BMW or picking the right mutual funds.
Wait....everyone else got bonuses? Kid you not: I earned more bonus as a graduate trainee auditor at a big four than working a front office capital markets role.

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Nov 24, 2017

I always save 100% of the bonus and try to save something out of my salary

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Nov 24, 2017

Unfortunately saving all of it. Plan on living in NYC for the long term so saving for a co-op down payment. Only about 120k to go...

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Nov 24, 2017

I rented out the whole "sex island" and all the girls for a weekend. Make sure to bring a tub of KY, a lot of neosporin and a whole lot of pain meds (my back still hurts sometimes) if you want to survive.

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Nov 24, 2017
the_gekko:

I rented out the whole "sex island" and all the girls for a weekend. Make sure to bring a tub of KY, a lot of neosporin and a whole lot of pain meds (my back still hurts sometimes) if you want to survive.

Maybe throw some little blue pills in the mix... after a few hours straight Jimmy needs a boost

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Nov 24, 2017

Straight Jimmy can be a slacker sometimes, that's for sure. Best solution is a doctor supervised cocktail of sildenafil citrate, red bull and erythropoietin to get to peak performance for the main debauchery sessions.

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Nov 24, 2017

I'm pretty plain vanilla compared to most here, ha. I've primarily spent my salary and saved all of my bonus. Of course, I'm certainly nowhere near the caliber of Illini. He has saving down to an exact science :)

Despite my personal view, I do think both sides have merits. Don't feel the need to save when there's something you really desire to have (not to say burn it all on hookers and blow, but if that suits your fancy do proceed ;P).

A macbook pro you wanted to buy? A new audi? an omega seamaster? a bespoke suit? You can absolutely go ahead and spend on any of these or thereabouts of the same without feeling guilt. Presumably, you will be in the industry for a long time, and will continue to build purchasing power well into your 20's and 30's and beyond as well. The one thing you don't necessarily want is to be in a place 10 years down the line where you have all the money you could desire, but regret not spending on that [ ], which you really wanted that first year out of college but preferred to save instead.

Live slightly below your means and never spend more than you can reasonably afford has always been a mantra I tried to live by, but I'll always opt to splurge on something that I feel is meaningful for me. Doing so ultimately will allow you to experience the best of both worlds :)

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Nov 24, 2017

The way a person uses their bonus reveals a lot about their character and priorities. My first bonus, I gambled away. I was up almost 100K GBP before losing my shirt.

My second bonus, I put mostly in the markets, and since the markets have been well-bid for the past 7-8 years, I've done fine with a diversified portfolio (which I largely didn't touch after making my allocation decision).

My next couple of bonsuses, I invested in a range of early-stage tech companies. I got lucky, and happened to get in early with a company now raising $50M in a growth round. I helped them secure funding from a top 5 VC a couple of years ago, and the payout is going to be substantial when they get acquired.

I took some money off the table in a subsequent funding round from that company and one other so I had some liquidity, which I have largely blown on overpriced suits and expensive business trips I couldn't quite justify on the corporate card. Some of that is now paying dividends from a networking and deal-sourcing perspective, but most has been fairly wasteful. That said, you never know where deals or opportunities are going to originate. And I can write some of it off against my taxes.

More recently, I have been selectively donating a portion of my bonus to charities that I don't just like, but want to work with. Philanthropy is the smoothest path to power in the West, so I would consider this for all of you future rainmakers. The issue, of course, is that transitioning from VP to director or MD (or principal to partner on the buy-side) requires a large network who call you. You don't always want to be beggaring yourself for deals. And you may have noticed that capital is cheap, so simply being able to fund something isn't sufficient to close a quality transaction..

The more you invest in yourself and your network early in your career, the more opportunities will flow your way. Or, you could save for that down payment on that overpriced apartment you won't own for more than a couple of years hoping the market doesn't turn before you want to upgrade.

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Nov 25, 2017

Fascinating stuff on charitable donations, and all-too-true on the apartment sentiment.

Great post, +1 SB

Nov 24, 2017

Rumor has it our bonus may be tiny.

So probably just a weekend of blow and some bitches.

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Nov 24, 2017

My first bonus was 1x my salary and i was blown away by it. Every year since i see more and more just how cheap i was to my bosses. I paid off my student loan.

Array

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Nov 25, 2017

I bought the latest Robert Palmer album, which I was trying to enjoy. However, Evelyn, my supposed fiance, was buzzing in my ear.

"Work ethic, work ethic" - Vince Vaughn
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Nov 26, 2017

I come back to this movie Margin call 2008, time and again and I like the boardroom scene the most.

In the scene at the roof top of office building with Peter and Seth, he says that out of the 2.5 million that he made last year, he spent on
Tax: 1.25 million = 50%
Mortgage: 300k = 12%
Sent to parents: 150k = 6%
Car: 150k = 6%
Restaurant: 75k = 3%
Clothes: 50k = 2%
Rainy Day: 400k = 16%
and Entertainment (booze, etc.): 125k = 5%

I am curious if the breakup of Will Emerson's annual expenses is kind of standard for all the top guys. Cheers!
link

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Nov 26, 2017

Can anyone summarize the debate between splitting the bonus between savings and student loans? This is after blowing a chunk of it on bottles of course.

Nov 26, 2017

Save enough to have some liquidity in the event shit hits the fan and then think about paying down your loans more aggressively. Basically, in the event you lose your income, it's better to have the money on hand to service your expenses for a bit than to be debt free but absolutely broke.

Completely unrelated aside, but over the weekend I ditched my iPhone for a Note 8 and now posting is a dream.

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Nov 27, 2017

You're in Asset Management my dude you should know this. Pay off loans if you can't invest & beat their interest rates. If you can, do that.

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Nov 27, 2017

My understanding is to:

1) Max out 401k
2) Have several months of living expenses saved (I've heard ranges of 3 to 6 months)
3) More aggressively pay down loans

Nov 26, 2017

Last year w/ my first bonus:

  • I put a third into my portfolio, which has a lot of my SA money and some cash my parents gave me.
  • I spent a few grand on some new business clothes
  • I went on a pretty fun trip, had a few nice nights around the holiday season
  • Got the girlfriend some nice shit, aka a classier way to pay for sex
  • Paid off the credit card bills I wracked up during the year

This year's plan:

  • Save and invest a third again
  • Move and buy down security deposit on a nice place
  • I have a watch in mind
  • Some more shit for my new gf, planning on going to the Carribean with her
  • Pay off the credit card bills again - gotta do this or shit gets bad real fast.
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Nov 27, 2017

rolex

Nov 27, 2017

Maybe we've all gone soft or just grown up - but very glad to see the majority of folks are actually saving their bonus. I've learned in recent years to effectively save my salary and then bank my bonus - it ends up working out pretty well and if you have a decent target bonus as a % of base you can save a decent amount.

Otherwise, to answer the question more directly, about 90% will go directly into savings and the rest will be for something discretionary - whatever that might be i'm not sure. Probably a trip but who knows. I'm struggling to invest in the market at this point in time for a variety of reasons and am focusing right now on adding selectively to some sectors but largely in cash (which has been an awful, awful drag on performance).

And now that I've realized this is about your first bonus - yes, I spent the entire thing on a trip - luckily I think I've gotten most of my dumber mistakes out of the way with money.

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Dec 4, 2017

Not to go off topic but if you look at the household savings / net worth data for the average American, it is still terrifying.

Dec 8, 2017

I track what I spend every month, and where it all goes, the sums that leave my account into the 'Entertainment' column and the black hole that is 'Cash', that's terrifying.

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Nov 27, 2017

This will be my second bonus season out of school. I'll put half towards student loans a quarter towards something discretionary and a quarter in various cryptos.

Dec 8, 2017

first off, it blows my mind how you got into banking without knowing how to invest your money....and i dont mean that in an offensive way...just came outta left field...

but if i were you, i would do some research about the different investment vehicles (i.e. REITs, ETFs, index funds, mutual funds, etc.) and get comfortable with each one, and i mean REAL comfortable (i.e. know the rationale behind each one, the pros and cons, etc.)...

i would recommend dividend paying stocks as a starter, one's with a decent yield (say 4-5% or higher), for you to get your feet wet in investing...then probably move up with the risk curve and really hone down on a few companies that interest you (both in terms of the company's financials and their operations/products) and invest in that stock if you really believe in it...you can even go higher up on the risk curve and go for your BABA's and other blue chip stocks.

last advice...like all things in life, never have all of your eggs in one basket...one word, DIVERSIFY.

Good luck

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Dec 8, 2017

"The way to become rich is to put all your eggs in one basket and watch that basket very carefully."

Dec 8, 2017

Like Bill Ackman?

Dec 8, 2017

Well yeah, I can think of many worse people to take after in the industry than Bill Ackman. The most alpha will be found with conviction in your positions, not through risk mitigation. Understandably, that's not a popular thing to say when it comes to investing other people's money, and it obviously isn't the right strategy for everyone, but it is where real wealth is made.

Consider entrepreneurs, who (when successful) have the ability to far out earn any of us finance guys. It is because they put everything they have into that one basket and dedicate themselves to it like a motherfucker. I was only half serious with my statement, but it does hold merit amongst many of the most successful investors. Don't get me wrong, diversification is a great theory and is fantastic for your retail or obligation-based investors, but in general for the educated investor that wants to become wealthy, not preserve wealth, it is an overstated and misunderstood concept. That's just my opinion though.

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Dec 8, 2017
Dec 8, 2017