As an analyst I was saving around 5-10% of gross. Wife and I are now saving about a third. Percent will go up as our incomes go up. We also are still paying down significant graduate school debt between the two of us. Lifestyle inflation definitely happens, but you should still have your savings rate go up, it just never goes up as much as you expect unless you are really strict.

 

I have a projection worked out with various assumptions about earnings, savings, and investment returns. I have it calibrated so I can determine at what point my savings/investments would be able to throw off an income equivalent to my salary. My goals were set by changing the assumptions such that my cross-over point is equal to age 45. I intend to hang it up then and do what I wanna do.

"And where we had thought to be alone we shall be with all the world"
 

I target about 40% of take-home each month (with a minimum of 30%) and 50% of net bonus. That's on top of 10% into 401k and not counting any equity compensation.

"And where we had thought to be alone we shall be with all the world"
 

I currently don't save anything. Embarrassing, I know. Savings has been something that I need to get better on. I used to save ~30%-40% of my paycheck, but for some reason I've never gotten back into the mindset after my startup failed and I lost everything.

My current overhead and lifestyle basically has me living paycheck to paycheck. For younger monkeys out there, I'd warn you not to fall into this trap.

 

I have a sweet deal on my apartment through my roommate, it's about half what others in the area pay. I only eat out a few times a month, buying most food in bulk at costco. Work is less than 10 miles away so I bike there (it's actually faster, I get my cardio, and my path has no stop signs/lights/cars for 90% of it), but I typically work from home 3x a week. I've already invested in all my hobbies so there's almost no reoccurring costs there. I can go into more detail if you're curious, but a lot of what I learned is from my cult of mr money mustache.

 

Roughly 16.8% of gross pay goes to savings and I put 15% of gross in a ROTH 401k. I'm not a huge spender but I don't live like I'm poor either. live in a low COL city.

For anyone struggling to save, I suggest: - mapping out your monthly expenses - EVERYTHING. Rent, utilities, gas, groceries, phone bill, gym membership, spotify, netflix, haircuts, weekly lunches, etc (I do 1 weekly lunch a week that I budget for). Definitely limit how much you eat out unless your firm gives you $25 a day if you stay past 8pm or whatever. ALSO: think of large 1-time annual expenses such as: car insurance, renters insurance, contacts, car tag renewals, presents for family, oil changes etc -- add these all up and divide by 12 - add this number as "expenses" in your budget. You're effectively amortizing large expenses to account to for so you don't blow your savings with things you should've known you had to pay for, just not on the monthly

  • aiming for a minimum of 10% 401k contribution, 15% is best if possible.

  • putting a % of your paycheck directly into a savings account. My employer lets me direct deposit my check up to 4 different accounts. The rest should go into a checking account. I'd try to put at least 10% of your gross pay into the savings account if possible.. if not, start small and increase over time. Each raise, you should increase your % that goes directly into your savings account - my entire raise this year went into increasing my savings % - perfect way to avoid lifestyle creep.

  • Once you have an idea of your fixed / mostly fixed expenses (i.e. groceries will vary by a couple $ a month, same with gas), figure out your monthly free cash flow - which i define as 2 bi-weekly paychecks that go directly into your checking, less your budget. This is how much "Spending money" you get a month - try NOT to spend over it. If you only get $150 a month of FCF to spend , don't buy 3 rounds at the bar for your 5 buddies or it'll be gone in 2 nights.

  • Now, 2 bi weekly paychecks x 12 months = 24 pay stubs. The other 2 will be used for unexpected expenses - they ALWAYS fucking happen. god damn. I like to mountain bike and just dropped $200 unexpectedly on repairs/tune-up.

I don't care if you're a big baller making $500K+ or whatever a year. You're still broke if you spend $500,001 a year.

EDIT Other useful tips:

  • NOw that you have your budget, you need to track your spending. I like to put EVERYTHING I possibly can on ONE credit card (and pay it off in full every month). This makes tracking your spending incredibly easy. In fact, the only things I don't pay via credit card are rent, water, and gas (heating).

You should update your spending in excel once a week if you have time. literally takes 5min - take credit card balance and subtract your CC statement amount = spend to month (you might want to start tracking on the day of your credit card statement date - mine is the 15th so that's the "new month" day for me. Also, periodically check to see if you're under budgeting for "semi fixed" expenses, namely groceries and gas.

If anyone's interested, I have an excel template that I can share if you PM me. IT's nothing too elaborate but It's easy to use.

 

people forget to realize/mention -- it all depends on how long you want to/expect to live.

some people prefer the short fast life some people prefer the long leisurely life.

it seems like most workers assume they'll live to ripe old ages (70+) ^ a fact which bothers me. you could die tomorrow.

 

You're right that we don't know how long we expect to live, but if you want to be fully rational about this, you should maximize something along the lines of

P(Life Expectancy=70)x(Utility from S savings)

Adjust size of S as you see fit. Like you said, most people assume they'll live to ripe old ages; I'd say that's a valid assumption given how as a whole we are likely to live longer than we have in the past.

 

From day 1, I basically planned to save 0% of salary and 100% of bonus. Started out at 70k base - spent it all The 80k - spent it all Then 90k - spent it all

And so on Now, I'm basically at the point where I live a lavish life (business class on long distance, 5 star hotel, 3 vacations/year, random tech gadgets) and still can't spend the $150k base so I'm forced to save. Currently saving about 20-25% of that

 
roversam:
Now, I'm basically at the point where I live a lavish life (business class on long distance, 5 star hotel, 3 vacations/year, random tech gadgets) and still can't spend the $150k base so I'm forced to save.
Wait till you have kids. I think 200k is borderline poverty level if you are living with kids in Manhattan.
I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
 

Yeah I mean I'll definitely be cutting down on some of the stupid stuff but can't imagine base salary (I'm already at firm MAX) is enough to survive in NYC with a family. I live down in TriBeCa so know how expensive things can get.

Realistically, I'm hoping my spouse will be bringing in some money too (maybe in a more stable job) and that should help. Not there yet.

Also saw your comment below on 1M+ cash savings... would it be rude to ask about total net worth? Given your ~20yrs of experience, I'm assuming its a large number

 

I would highly consider anyone who would want a starting guide on how to save, read the book,

"The Index Card". I bought this book after listening to NPR News on a Weekend Edition where the author was on the show talking about savings and finances. I thought it was interesting and decided to purchase it. It helped laid out a guide line on how to save in increments over time. Understandably, majority of the people on here are financially savvy, in terms of concepts/terminology. However, it is still a good starting point.

Saving wise, I aim to save at least 10-15% of my pay after taxes and budget my spending so I can throw the rest into my ROTH IRA Account. So...between $150-300 monthly.

No pain no game.
 

At the moment around 30%...increased from 20% cause of opportunities and eh... "reasons".

Did not really rise that number up before but i am now earning enough that i don't need to cheat my own goals or instantly would feel any kind of financial pain as part of daily life.

 

For what it's worth, I too spend my base almost completely, though now that I am single again it's proving to be difficult. Obviously, I max out my 401k contribution (my income is too high to contribute to an IRA, unfortunately), it would be silly not to considering the employer match. After that I split my bonus more or less evenly between various investments (at the moment I am sitting on a 7-figure pile of cash, which is pretty sad) and donor-advised funds for that warm-and-fuzzy.

I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
 

Quick note: your income is too high for a ROTH IRA, but I don't believe there is a limit to a traditional IRA (I could be wrong, but I certainly haven't hit it if there is).

Google Backdoor Roth IRA.

Essentially you contributing to a traditional IRA and then convert it to a roth. You lose the current year income tax deduction that a Roth has, but retain all other benefits of a Roth IRA. At Bonus time I do this with $5500 for me and $5500 for my wife. Its easy and all institutions should be able to do this. I can do it easily with Fidelity online.

twitter: @CorpFin_Guy
 
accountingbyday:
Quick note: your income is too high for a ROTH IRA, but I don't believe there is a limit to a traditional IRA (I could be wrong, but I certainly haven't hit it if there is).

Google Backdoor Roth IRA.

Essentially you contributing to a traditional IRA and then convert it to a roth. You lose the current year income tax deduction that a Roth has, but retain all other benefits of a Roth IRA. At Bonus time I do this with $5500 for me and $5500 for my wife. Its easy and all institutions should be able to do this. I can do it easily with Fidelity online.

Doesn’t it make sense mostly if I think my taxes are going to be higher when I retire?

I have a friend who lives in the country, and it's supposed to be an hour from 42nd Street. A lie! The only thing that's an hour from 42nd Street is 43rd Street!
 

Every month I save 30% of my salary, then the 70% is what I use for my expenses. I'm working as a Web Designer at Petstreetmall which is an online store that sells pet supplies.

 

Putting $1k/mo in my brokerage account (I'm staying liquid for b-school or house down payment) and also saving ~$150 per month to get the employer 401k match. This all translates to ~23% of my gross monthly income (yep, I make about $60k). Some months I save less than $1k but I catch up with my tax return and the yearly performance bonus.

I'm hoping to keep saving 20% of the gross until I hit a level where I don't need to spend the remaining 80% and can save the extra.

 

Starting out saving 15% of gross is fantastic. I've been a proponent of delayed gratification my entire adult life and I am now old enough to be able to report, categorically, that the practice works as prescribed.

Learning to live below your means and paying yourself first is a near bullet-proof plan for having a successful financial future.

Someone on these boards put it quite eloquently several months ago when they typed: "I only spend money on things that will make me smile on my death-bed." I thought this was quite a profound view of life with regards to frivolity. Keeping up with the Joneses with the McMansions is out, the sharing economy has displaced the previous generations' perception of rugged individualism. Millennials wanting to DO more as opposed to OWNING more is changing the complexion of our society,..... but I digress.

I max out ROTHS for both my bride and me ($13,000/yr.), max out my HSA ($6900/yr.), currently deposit $500/month is my taxable retirement acct (won't have access to 401k until next Jan.), and put $300/month is savings acct. However, both kids' college is already paid for, house is paid for, autos paid for, ie. zero debt so I can afford to save about 20 - 22% gross. Obviously, I'm in a different financial situation than many on these boards as I probably have a couple decades on most members.

That said, a major congrats to everyone out there who is actually saving for their future and making it a priority. You will thank yourself in the future.

 

In a regular month/year: 58% of take home pay 6% gross pay in 401K 6% gross pay in 401K matching 100% of annual bonus (20-30% of salary)

I'm frugal, but not cheap. A few things that help me save loads.. I stopped partying a while ago, I don't eat out excessively, I live in a modest apartment, I drive a modest car, and I don't buy materialistic things. The only thing I find myself splurging on is travel, which I seldom ever have to buy outright because of good travel deals and travel points/miles.

 

Provident consectetur aliquid accusantium maiores. Sint consequatur qui asperiores fugit qui saepe eum. Et autem dolores corrupti autem voluptatum.

Perspiciatis enim dolores ex sed quos. Eos quod fuga impedit ad quia voluptatibus.

Perspiciatis occaecati ipsa enim quia aut eum corporis provident. Impedit corrupti ut fugit quis mollitia fuga eum. Aut veritatis alias voluptatem. Ut minus eos rerum in.

Quae expedita aperiam et voluptatem maxime. Dolorem commodi amet aliquam repellat voluptatum. Nam rem nulla dicta accusamus voluptate sunt. Qui doloremque id officia ullam.

 

Maiores ducimus quasi rem. Accusamus excepturi delectus rerum nihil. Soluta amet explicabo alias.

Molestiae dolorem ex maxime delectus et. Dicta eligendi perspiciatis debitis occaecati qui fuga rem libero. Et perferendis accusamus harum perferendis aliquam sit non. Eos vero a eos quo dolorum et commodi.

Earum quis vitae quasi cumque voluptas qui nesciunt. Culpa nulla repellat est cum.

Ea labore qui et laboriosam iure delectus et. Ut ut earum delectus assumenda voluptatem ut. Aut cum quos sed accusamus quo soluta. Accusantium ad earum voluptatibus nemo eum asperiores.

 

Molestiae aliquam alias unde corporis totam. Perspiciatis voluptas et dolore debitis ipsa. Est totam veniam quasi ex quia qui.

Ipsa error ut molestiae. Quis animi sequi voluptas sapiente necessitatibus optio rerum et.

Ipsam quisquam ut est repellat eaque id. Delectus tenetur natus quia non quis voluptas. Reprehenderit cum reiciendis odit consectetur ut. Velit autem expedita eum unde debitis omnis. Dolores nemo accusamus ut rerum itaque. Nostrum architecto eius sed.

Asperiores ut odio consequatur consequatur nihil voluptatibus voluptas. Illo natus mollitia sed error repellendus. Veritatis aut quia dolores ipsa. Dolorem nisi et qui quibusdam.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $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
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
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...”