Pages

2/24/17

I'm 25, and I feel like I have hardly any money saved. I'm looking at going to b-school soon, and will definitely have to take out loans. I don't think that's surprising, but it just got me thinking about how much is normal to have accumulated at this point in my life.

Also, how are y'all investing your savings?

Comments (292)

2/24/17

for me: 25: maybe 30-50k; 33 1.3mm, by 40, 4.3mm.
1.5mm in eq in my nyc apt
900k cash (waiting for investment opp)
1.4mm in equities
500k retirement accts

Financial Modeling
2/26/17

Oh FYI a mortgage is debt so it doesn't count towards equity sorry pal

5/23/17

I think he is talking about built up home equity. If you have a home worth 2.5 million and have a million dollars in mortgage debt, you have an equity of 1.5 million dollars. One caveat is that due to the illiquidity of a house and the inability to really sell it (Are you really going to sell your home? You are going to need to rent a place, resulting in higher expenses even if you do.) it is questionable to include it in net worth.

3/2/17

Not sure why you shot monkey s*** for this. Very instructive to see what it looks like (financially) to be a successful professional. Mind telling us (rough terms, no need for specifics) what you do/did?

Best Response
2/13/17

checks student loan balance

Approximately -$104,678.00

2/17/17

Right there with you buddy. $-107K. and that was going to a high ranked State B school. I cant imagine what happens to those poor souls who go to like Emory or Notre Dame on full loans.

2/17/17

ND undergrad alum here, one of the things that actually even made ND an option for me was the absolutely fantastic financial aid I got. Managed to graduate with only about 20k in loans.

2/17/17

Yeah not shitting on ND (though eff your basketball team), but I am using Emory and ND as stand-ins for quality non-top 10 business school who are private universities. And I wouldn't go back to ND for B-school. One of the best things about my grad school choice was it was a different region and a different network I can tap into. If you, for example, had the option between UNC or Notre Dame or like UCLA. Obviously, if you are looking for a Chicago focused life and aren't going to Booth or Kellogg, ND is great. But if you don't know where you want to end up, or are thinking you might move around throughout your career, The fact that I have these two networks to utilize has been a godsend. And this is especially true if you find a school with good academics where sports is a religion in undergrad.

I just had a phone call for 30 minutes at the end of market with a CIO of a major mutual fund company because he was an alum of my B school, and I saw him speak at a conference in September. And I just got invited to a buy side conference gratis in March because of my undergrad. Neither are Ivy's or equivalents. But they are the kind of schools where people are ferociously loyal and constantly trying to help their own. And even people with degrees from rival sports schools are people you can network with.

That all being said, if you can get into HBS or Stanford or Wharton, then do it, but with a cost-benefit analysis of a 200k trade for an elite network. Otherwise, find the best rank you can go to with a big fat alumni base that is the cheapest in time and money. And double dipping won't help as much if it's not a top school.

2/17/17

I didn't take your comment as an insult, I agree with your analysis of the worth of ND's B-school. It's getting better quickly but I won't be surprised if it never breaks top 10 or 15. Based on my current progression I'm beginning to wonder if I'll ever need to do an MBA since my comp is already approaching post-MBA levels and I'm getting tons of opportunity to advance.

As far as network goes I don't think much can compare to ND alumni base in terms of the willingness to help. Only drawback is how few make it this far west.

2/18/17

Good stuff. As someone in business school, don't go unless you absolutely need to. It's been the proverbial "golden gun" for me. You get one shot to drastically change careers with a full time program.

Down the line, if you just need to continue to build out your network, you can do an executive MBA. eMBAs have a crazy fun time, I was literally just talking this afternoon with our admissions director and she was noting how much fun they have the weekends they are here.

2/17/17

I wouldn't worry about anything in your 20's. In 20's its more about getting your career and life in order. You should start thinking about savings etc in your 30s. Get it all out of your system in your 20s

Age: 25

Undergrad Loans (from a worthless college): 124,131.4

Paid for my own wedding and paying partially for my wife's education: ~30K

Savings: 10k

2/21/17

While I somewhat agree with your philosophy you do know about the power of compound interest, correct?

2/21/17
EazyMuthaf.ckinE:

While I somewhat agree with your philosophy you do know about the power of compound interest, correct?

I agree with this.

You know what sucks? Having student loans in your 30s.

Being in your 30s is like being in your 20s, except your back hurts, liquor isn't as kind on your stomach, and it's harder to wake up in the morning.

Even though 65 is closer, the prospect of working until 65 is a lot more depressing at age 30 than it is at age 25.

Your 20s are about getting your career and life in order, but you also need to start getting your finances in order.

I can't tell you how good it felt to hit 30 with a graduate degree, no student debt, and equity in my home. That's something you guys should try to aim for if you can. If you personally can save $25K/year (which isn't a huge stretch relative to what you've managed to save so far), you can have your student loans paid off by 30, and have something on the order of $20K left over towards a down payment on a home (assisted by reductions in interest on the loan as you pay it off).

Make it your goal to get out of debt by 30. You can do this.

2/24/17

Exactly this - thank you. I'm 26, about to go to B-school (fully paid for by the employer). 400K net worth. I'm excited for my 30s, precisely because my financial position won't be as precarious as others'.

2/25/17
shootersix66:

I wouldn't worry about anything in your 20's. In 20's its more about getting your career and life in order. You should start thinking about savings etc in your 30s. Get it all out of your system in your 20s

Age: 25

Undergrad Loans (from a worthless college): 124,131.4

Paid for my own wedding and paying partially for my wife's education: ~30K

Savings: 10k

Nice job!

5/24/17

This guy is rationalizing his own bad decisions.

heister:

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

2/28/17

Right there with you! Feels good to know that there are plenty of folks with negative NW due to student loans!

2/13/17

Early to mid 20s. About $30k. Mostly in stocks, I do have a number of cds set in a ladder as SHTF money though. I've also got some equity in my house.

2/13/17

Genuinely interested in the responses on this one. Would help if people explain their age/experience as opposed to just an arbitrary number, for context.

2/15/17

Just out of curiosity, why did you decide to go for a MSc Finance? Your consulting gig seems solid.

2/17/17

Seriously, That MSF is fucking gold. I just had a friend who had limited banking experience, state university undergrad from the Southwest, did an MSF, immediately got a job with a top foundation and is now an AVP at a huge quant shop in Ct. year and a half younger than me, and I have the MBA, but people dont care as much if you can look them in the eye and sell them shit if you can python and C++ your way to cross directional model victory

2/20/17

Axe Capital?

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."

2/15/17

How do you like Chicago? Cost of living seems great from what I've heard, but are there any hidden costs we aren't aware of? Weather-related commute delays, income tax considerations, being a Cubs fan, etc.

2/21/17
BubbaBanker:

How do you like Chicago? Cost of living seems great from what I've heard, but are there any hidden costs we aren't aware of? Weather-related commute delays, income tax considerations, being a Cubs fan, etc.

Saw this post recently.

Chicago is a nice city for 7.5-8 months of the year.

In the summertime, it's a cleaner version of NYC; a freshwater Miami on Lake Michigan. Garbage collection is done in alleys. Owning and driving a car is easier. There's Grant and Lincoln Parks, mile after mile of city beaches (people will bring a swimsuit to work downtown and do open water swimming off of Ohio Street),

We have the Art Institute of Chicago, which has the largest collection of impressionist paintings after the Louvre (most of them got here during the Columbian Exposition). Not to mention the Chicago Symphony Orchestra.

Lake Michigan (along with the other Great Lakes) is the coolest and sometimes the most overlooked feature of the Midwest. It's 22,900 square miles of fresh water, hundreds of feet deep on average, and 900 feet deep at the lowest point (between Green Bay and Muskegon). There's even several chains of islands (IE Washington Island on the Niagara Escarpment). Off of Chicago, there's sailing and races (including the Mackinaw), windsurfing, and a bunch of other water sports, including diving. Between the Indiana and Wisconsin state line, there are over five dozen shipwrecks off of Chicago, some of which are 150 years old.

Winter sucks. But most buildings have fitness centers and indoor pools. Some have their own grocery stores. I find I need to do less walking in Chicago.

2/25/17

Well if you can withstand the daily murders it's SO SO. Avoid south and west side... and certain, ahem ahem... well ya know

2/25/17
PointPleasant:

Well if you can withstand the daily murders it's SO SO. Avoid south and west side... and certain, ahem ahem... well ya know

You've obviously never visited Chicago north of Roosevelt Road.

Chicago south of Roosevelt Road is Detroit. North of Roosevelt Road is Calgary in the Winter and San Diego in the summer.

2/25/17

Well I live in River North, but unfortunately to get to certain places I have to drive through choice areas. So yeah, avoiding certain... groups.

2/14/17

So people are giving you MS without actually saying why. I used to think similarly to you when I was younger, but by Freshman or Sophomore year you'll realize that "doubling these values in a year or two" isn't feasible and by senior year or when you start working you'll realize that reading books and studying a college curriculum alone won't really make you "financially savvy". You're probably top of your class or close to it in highschool as well, but when you start college you'll also realize that there are a lot of people that are just as smart as you are.

2/14/17

Why are you tryna work 40 hours a week in high school? Enjoy yourself and stop obsessing over money. You'll be earning way more per hour after college and will regret not having more fun as a kid.

2/14/17

Take some online classes, work on improving your college apps, play sports. No matter what your internship is I don't think spending a year working before college is all that worth it. Intern the summer before college definitely, but there are still plenty of opportunities available to you that should take precedent.

2/13/17

I'm 29 and have 220k saved. I'm about to spend half of that on an MBA though.

2/14/17

Jesus. 29? What do you do/what area are you in?

2/14/17

That's not that uncommon for people who work in M&A.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

2/14/17

I'm an army officer who is about to get out and go to grad school. After undergrad as a Lieutenant I started at $46k per year. Right now I make about $102k, which is the most I have ever made, but I've lived in some shitty places with very low cost of living (rural south, crummy army towns, etc). For example, I told you what I make now, and my rent is $995/mo. Basically, I've lived off of 2/3 or half my pay for my whole career. Never been paid an ungodly salary, but low cost of living has helped me maximize savings/investments.

2/14/17
  • SB'd, thanks for elaborating and thank you for your service.
2/15/17

Plus that Captain pay jump is helping! You use a starter loan as well?

2/15/17

Yes I did, and what phenomenal luck I had. I got the loan (30k at 1.49%) in my junior year in February 2009. While most of my classmates bought expensive trucks, I bought a 5k car and invested 25k in March and April 2009, which happened to be about the lowest point in the market over the past 20 years.

2/17/17

Why are you doing an MBA?

2/17/17

Thank you for your service! Did you join the army after UG or before?

"You adapt, evolve, compete, or die." -Paul Tudor Jones

2/18/17

Who the hell is making you pay $100k for an MBA? At my business school they'll cover anything GI Bill won't if you get accepted. Top25 school, PM me if you're interested in details. And thank you for serving.

2/19/17

I'm going to an M7 school where tuition is 65-70k per year. I have 80% of the GI bill so it'll basically subsidize about 20k. you only get yellow ribbon matching if you qualify for 100% of the GI bill so I don't get as much as a lot of military guys who have 100% of the GI Bill. I will get a good chunk to help with housing cost and my wife is going to be working for the next 2 years so that'll help with living expenses. But, at the end of the day, I'll have to write a check for about 40-50k per year for tuition.

2/20/17

This is what happens when you don't live NY

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

2/14/17

25, have 35k saved from 3 years of work.

2/14/17

Late 20's, a little over $1mm

Graduated with no student debt and skipped business school

2/14/17

I'm also planning on skipping businesses school, feels like for M&A or equivalent, CFA is more relevant and also much cheaper

2/14/17

I have actually heard the opposite. CFA is for Investment Management and Public Markets. MBA is about Management, Strategy, and corporate finance, which the IB skill-set is more similar too

2/15/17

Could not agree more. Do not waste your time or money on the CFA unless you are headed into Investment Management. An MBA is much better suited for IB success (if only for the network you will develop)

2/15/17

Doing the CFA. Nothing about it is relevant for M&A.

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/15/17

My IBD friends also confirm that CFA doesn't help M&A.

But while this thread is about age and savings I'd like to say that I personally found CFA useful in terms of my personal wealth planning and attidude to risk and reward, although I have a general knowledge and interest about such matters anyway.

It also changed my perspective on mortgages. TBH the CFA materials in this regard can also be found online but the course gave me more motivation to understand these subjects early. People rightly focus on income but often neglect the personal spending and investment part of the equation. As a result they often only start to diversify and generate passive income later in life (this is and hidden opportunity cost).

The behavioural finance element was also interesting for me with regards to my shorter term trading.

2/16/17

Nothing? Not even the sections on corporate finance? or accounting?

I work in consulting, not M&A so not trying to be combative but it seems like there is definitely material that applies. I totally agree that the program is much more applicable to careers in investment management btw.

We get the world we deserve.

2/16/17

OK it's not nothing, but it definitely isn't much. It spends much more time talking about portfolio management, econ, equity, and fixed income. The CFA in general is much more useful for investing, wealth management, and equity research.

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/17/17

The CFA is a great thing to have, however why everyone is saying it is useless for M&A is because the amount of time you would spend going through the CFA vs the amount of time you would spend getting a MBA when correlated to the amount of benefit you would receive the MBA far outweigh the benefits from the CFA.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

2/17/17

You're looking at it from a time perspective? Why not look at the $4,000 price tag versus $250,000.

CFA is great for investments, and is almost a requirement if you're looking to be a PM. MBA is for (duh) business and great for upper levels of M&A.

2/18/17

I work in IBK/M&A, have my MBA, and have taken level 2 CFA (note I said taken 2). CFA is somewhat helpful, but you really benefit from the MBA. People expect you to be able to speak around strategy/valuation/industry, no one expects you to calculate duration by hand as in the CFA.

BB, Associate, Coverage

2/15/17

Would be nice to know what you path out of school has been. Thanks!

2/22/17

More than happy to discuss any details via PM but prefer to keep things relatively vague on the forum

2/17/17

Can I ask how you managed to graduate with no debt and save 1mm? Were you working during school? Full ride?

"You adapt, evolve, compete, or die." -Paul Tudor Jones

2/18/17

That's being smart. Good work. Hope you were able to have fun in the process. Although being 30 with $1m in the bank is a great place to be.

BB, Associate, Coverage

2/14/17

I'm 24, have been working as a consultant for 2.5 years. Have ~80k saved. The question I will be facing in 2-3 years: If I have 125k in the bank, and make 125k...is there a reason to get an MBA?

2/15/17

I'm with you. Do I really want to stop making money for 2 years to spend 200k so that I can make a few more a year?

2/18/17

I'm an MBA career changer from engineering who worked at MBB over the summer and going back full time.

My opinion is that if your firm direct promotes (most do) then do not get an MBA. Depending on the consulting firm, most people will never look past the firm. The skill set I see in managers at my firm is exactly the skill set people want to get from an MBA. No need to pay for it if when you can get paid for it.

Financial Modeling
2/14/17

30 years old. Director in LevFin. $250k in savings, after purchasing a home, paying off $80k in undergrad loans, and paying for my wife's MBA.

2/14/17
mitchr2:

30 years old. Director in LevFin. $250k in savings, after purchasing a home, paying off $80k in undergrad loans, and paying for my wife's MBA.

Holy crap that's incredible. Kudos to you sir.

2/15/17

Is the home mortgage free?

2/15/17
Options Market Maker:

Is the home mortgage free?

If that home is in NYC and he put 20% down, it's awesome either way.

2/15/17

Agree that it's awesome either way but just wanted to be clear as 80% mortgage vs no mortgage is obviously a substantial difference and distorts the dataset. Pepole compare wealth differently so just wanted a clear comparable.

Kudos to the guy anyway.

2/16/17

I put 20% down. Home is in Center City Philly.

Also, Illini -- thank you for all of your advice, always enjoy reading your posts.

2/14/17

I'm 24 and have about 3k in the bank, 6k in my 401k, and -75k of student loans. These comments definitely make me depressed. It will differ from person-to-person based on their school, amount of family support, cost of living, etc...

I wouldn't compare yourself to others when you are in your 20s. This is the time to really get on the right career path and get all of your fuck-ups out of your system. One of my buddies (23 at the time) from college wanted desperately to get into IB in NYC. All he had was a 2003 honda civic with all of his clothes in it, and a few hundred bucks to live on before having to go back to the midwest to live with his parents. He crashed on our couches for a solid 2 months, eating tuna and ramen and hustling for meetings/interviews, and eventually got into a boutique firm. He sold his car for the rent deposit and is now finally keeping his head above water and on the career path he wants. Point is, your savings account should not be a measure of your right or wrong decision making this early in your life.

2/15/17

I'm in a very similar situation to you, would you mind saying your comp for context? You can PM me

2/16/17

First year out of college I was making 50k. I am now (second year) making 55k base with a 20% bonus end of year. I work in CRE, second tier market, so definitely not on par with typical "finance" comps on these forums.

2/20/17

Wouldn't pay too much attention to this thread. There are people on wso who work in IBD and have their parents pay their student loans. These are the same noobs who get turned down by chicks in West Village and shit on how BO is not prestigious enough.

2/20/17

Don't act like living in NYC/Cali is not insanity. 40% of your pay instantly gone in Taxes. Likely closer to 50%. 30% is gone in Rent. 20% is food and other amenities. 10% is income. 10k-15k is the most money you can save off of $150k/Year living in NYC. Are you serious?

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

2/14/17

My first three years (22-25) saved pretty much $0, but did save $10,000 in various retirement accounts. My employer at the time did not give out bonuses and pay was crappy to begin with (LP in tier 3ish city)

2/14/17

25, Paid off 28k of student loans with about 5 k to go. No money in the bank, 9k total in 401k/ Roth IRA. Life is hard when you're starting from behind. Good thing I workout, and cook almost all of my meals every week.

I read a book and you should have '"' your age * pre tax annual income / 10'"' saved up

2/14/17

I may be reading it wrong, but how does that make sense?

Ex: Someone who graduates at 21, works for 3 years (now 24), making 60k yr1, 65k yr2, and then bump to 70k yr3. That's 195k total income. Before anything. Using your formula would mean that person should have 24 * (70k/10) = 168k saved up...?

2/14/17

It looks like a lot better model for someone in their 30s. Basically impossible in your mid 20s.

2/14/17
MonopolyMoney:

It looks like a lot better model for someone in their 30s. Basically impossible in your mid 20s.

And also really dangerous advice in your 50s or 60s.

One rule of thumb is that assets generate 4% sustainable returns after inflation.

That means you need 25x your cost of living to retire. 5-6x your income probably isn't going to cut it.

2/14/17

Yeah I was going to say that too.

3/2/17

@IlliniProgrammer I like this "multiple of cost of living" approach. The only nuance I'd add is the geography penalty that many of us suffer. If I were to "retire", I definitely wouldn't stay in London. I would move back to my home country/place of origin. Cost of living is dramatically lower there, plus I'm spending money now because of a time/value trade-off (i.e. dry cleaner, takeaway vs cooking etc.).

Just did some scratch pad calcs, and I think the all-in cost of living would probably be 30-40% of London. Also - in this I'm assuming a new built/modern fully furnished house. Come to think of it, quality of life might actually be better!

On topic:
- Graduated with no student debt and ~20K cash
- 1.5y work exp

Illiquid equities & other assets ~65
Liquid equities ~10
Cash ~40
No debt
NAV ~115

This is conservative, b/c my illiquid investments are marked at cost and contain one or two that in my view are worth 2~3x as much as when I invested.

Realize I might be living a bit too frugal..

DYEL

2/15/17

I know it is strange, but I got that formula from 'The Millionaire Next Door'. I never really gave it much thought on how your age will affect it.. but I would say the book is catered toward 20-30's. It probably expects you to be a millionaire by 60.

2/14/17

First year IB analyst. Have saved ~14k so far from the job.

2/14/17

After three years, I had saved up about 30 months' worth of living expenses. This included 401ks, emergency savings, etc. Mind you, it was 30 months' living expenses, not 30 months' income.

By the time I went to grad school after five years of work, this had increased to roughly 60 months. However, I entered grad school rich and exited poor. :)

One of my completely made-up and arbitrary personal finance rules for wall street professionals is the 80/20 rule: Try to save 80% of your bonus and 20% of your salary.

One piece of advice for b-school: max out your 401k contribution. Tuition and expenses can be withdrawn from a pre-tax IRA (rolled over from a 401k) penalty-free. Furthermore, if you attend school full-time, it's unlikely that you'll be earning a whole lot of money during the fiscal year that covers your second and third semesters. This puts you into a low tax bracket and is a great time to pull money out of your IRA to pay for school. Perhaps you're in the 25 or 28% or 33% tax bracket right now, but during school, you'll be in the 10 or 15% tax bracket.

Furthermore if you become a resident of a state that does not tax income (IE TX, FL, WA, NV if your parents live there) or if you are a resident of IL which exempts retirement income (EG you attend Booth or Kellogg and choose to deem that your permanent residence), IRA withdrawals can be done state-tax-free. For students attending school, residence is almost a state of mind. Naturally there are a lot of caveats-- you'll need to change your drivers' license, bank statements, car registration, and voting registration to reflect your residency-- and some states have their own rules for trying to claim people as residents (NY has a rule that anyone who spends 183 days in the state and maintains a permanent home with a kitchen, bed, and bathroom is a resident), but if your parents live in an income-tax-free state and you stay in campus housing or if you go to Booth or Kellogg, you may be able to avoid state tax on the withdrawals if you play your cards right.

So basically, maxing out your 401k contribution avoids something on the order of 33-40% state and local taxes right now, and when you pull the money out during your MBA, you may be able to pay as little as 10-15% marginal taxes on the withdrawal.

In other words, if you sock $50K more than you otherwise would into a 401k, invest it in cash (or whatever you'd invest in to pay for grad school) and pull it out during your second and third semesters to pay tuition, you might be able to save something on the order of $10k in taxes. This figure might increase to something on the order of $30K if you can deduct your tuition as a business expense (see IRS Pub. 970). This sometimes applies if you work for a few years prior to your MBA and return to the same industry. IE if you leave IBD as an analyst and return as an associate.

2/14/17

Can you just write a book on personal finance? If you already have one, where do I buy it?

...

2/15/17
IlliniProgrammer:

(NY has a rule that anyone who spends 183 days in the state and maintains a permanent home with a kitchen, bed, and bathroom is a resident)

\

Woah there. Those are high end amenities for NYC apartments, like windows or running water.

2/15/17
CRE:

IlliniProgrammer:(NY has a rule that anyone who spends 183 days in the state and maintains a permanent home with a kitchen, bed, and bathroom is a resident)

\

Woah there. Those are high end amenities for NYC apartments, like windows or running water.

LOL. I know. Kinda hard to fit everything in there sometimes. And the bed increases the rent by $500/month. ($600/month if it's a long twin, $800/month if it's a queen)

Point being that if you live in the dorms at Columbia, you're not a resident. Especially if they kick you out at the end of the school year. Then it's really hard for the NY Department of Revenue to claim you have a permanent place of abode. Your dorm room probably does not have its own kitchen and may not have its own bathroom. On top of that, you have to move all your stuff out in May.

If you worked in NYC IBD and decide to keep your rent-stabilized apartment while you attend CBS or Stern OTOH, you still have a permanent place of abode and are still therefore a resident.

2/22/17
CRE:

IlliniProgrammer:(NY has a rule that anyone who spends 183 days in the state and maintains a permanent home with a kitchen, bed, and bathroom is a resident)

\

Woah there. Those are high end amenities for NYC apartments, like windows or running water.

http://www.newyorker.com/magazine/2012/03/19/tax-m...
I have always loved the first half of this story, about Julian Robertson's quest in 2000 to avoid being taxed as a NY state resident.

MM IB -> TMT Corporate Development

2/15/17

I would also buy the book. I'm already driving a rusty Honda.

2/15/17

Does this imply saving 80/20 of after-tax income or pre-tax?

2/15/17
renjim:

Does this imply saving 80/20 of after-tax income or pre-tax?

Pre-tax for pre-tax savings (IE 401ks). After-tax-income for after tax savings.

Mix and match the two if you'd like, but don't forget that if you save 10% of your income pre-tax and 10% of your take-home post-tax, you're really only saving 10% + (1-10%)*10%= 19%.

** For the sticklers out there, there are also employer deductions and there's some convexity to the tax schedule. Rather than get bogged down in the details, let's just use a simple system that divides a pretax number by a pretax number, a post-tax number by a post-tax number, and avoids double-counting.

2/27/17

But actually though - if you wrote a book on personal finance and charged $30 a pop, I'd still buy it

2/14/17

This thread makes me feel awesome and terrible at the same time.

...

2/14/17

26 years old in Asset Management - At 25 I had $135k saved and was able to do that because I lived at home for 2 years after school for the purpose of saving as much as possible so I could buy a Chicago condo. Right now I have $75k in my brokerage account/401k after purchasing a $355k condo with 20% down and renovating it.

2/14/17

What area did you buy the condo? Looking to buy one myself and just started doing some research. Any helpful hints would be appreciated though! Looking in roughly the same price range.

2/14/17
explosions09:

What area did you buy the condo? Looking to buy one myself and just started doing some research. Any helpful hints would be appreciated though! Looking in roughly the same price range.

Also a bit curious. I bought in Lakeshore East two years ago.

Here are my hints as a buyer from two years ago. I caught most of these in time, but I missed out on the title insurance finagling:

1.)Find a buyer's agent, and use a discount broker who will rebate their commission

http://lucidrealty.com/real_estate_commission_reba...
As you know, sellers pay their realtor a commission to sell a condo. Typically in the Midwest, this fee is 5%. And the seller's agent splits the fee with the buyer's agent. If you choose the right buyer's agent, you can pay them an hourly rate and get the commission kicked back to you in exchange.

I was pretty deliberate in my search-- I only did showings on about 15 condos-- twice on the one I ultimately bought-- but spent only 17 hours of my realtor's time buying a condo. 2.5% of $360K is $9,000. Subtract 20 hours @ $125, and you net $6500 towards closing costs, which are substantial in Chicago.

2.) Talk to the seller before he talks to his lawyer and see if you can get him to use EntitleDirect or Silk Title for the closingThis will save you about $1500 over using Chicago Title. Chicago Title pays a kickback to the seller's lawyer, however. It's great to be thrifty-- just not cheap, and I want everyone (but Chicago Title) to walk away from the transaction a winner. That means you ought to agree to kick in a few hundred bucks to hand over to the seller's lawyer. The seller should do the same (they will save a couple grand using Entitle Direct or Silk), and everyone wins and saves.

3.) Chicago has a real estate sales tax. It works out to 1.25% for the buyer and seller combined. There are also other various fees that condo associations charge to move in and move out.

4.) If your previous owner was a landlord, bank or pied-a-terre, don't forget to apply for the homeowner's exemption This saves you roughly $450 per year in taxes, but you can only take it after you've owned the home for a full calendar year.

5.) You already know about the federal deduction, but the state of IL gives you a 5% credit on property taxes paid Again, this is only deductible in arrears, after a year or so of ownership.

6.) Shop your rate. Look at mtgprofessor.com, boxhomeloans.com, or provident.com.

7.) Fannie Mae/ Freddie Mac have an 80% LTV risk tier and a 75% LTV risk tier on condos. Typically you save a quarter point on your rate by coming up with 25% down vs 20%, so that last 5% of financing is really costing you something like 8 or 9% If you can put 25% down on a condo, do it.

8.) You probably don't qualify, but homeowners earning less than six figures can get a mortgage credit certificate for buying their first home, if their city issues them-- which Chicago does. This gives you a federal tax credit equal to 20% of their mortgage interest at the end of the year.

If you can come up with 25% down (as opposed to paying points), use a discount broker, and avoid Chicago Title, I estimate you'll save about $12500 in closing costs on a $350K transaction. For the slightly more obvious stuff that isn't well-advertised but most finance people ought to know, there's another $750 or so per year in state and local discounts and rebates from owning your primary (not vacation) home.

2/14/17
IlliniProgrammer:

Here are my hints as a buyer from two years ago

Not sure why I have to be the first to SB you. These are the types of post most valuable on this website in my opinion.

Anyways back on topic;

mid to late 20s with no student debt
$15K Cash
$20K 401K
$12K in Equities
~$90K in equity in my condo

Not too bad overall, unless something goes horribly wrong I should be scaling these numbers up pretty quickly over the next few years.

Learn more about crypto currencies and ask all your questions at www.thecoinboard.com - I check and reply to questions multiple times a day.
2/15/17

I bought in the West Loop/Fulton Market area, right off of Fulton and Desplaines basically. It's a hot area though so it's tough to find good deals. There are a TON of overpriced places right now.

My #1 tip is that if you have the ability to really wait for the right place to come along, do it. I can't stress that enough. Don't jump into something based on when your lease is up... take your time and find the best deal possible. It took me 17 months of waiting, but it was WELL worth it. I ended up with a 1,150 sqft 1 bed/2 bath that I was able to convert into a 2 bedroom and have a buddy of mine renting the second room from me.

Second tip is based on the first tip @IlliniProgrammer gave, below - Find a good buyer's agent. I did my condo searching mainly on RedFin and I think it's a great tool... avoid using their realtors though - I did it because they offered a $2,000 credit on closing costs, but I ended up having to do the vast majority of the leg work with my lawyer and the realtor's lack of timely responses almost made the deal fall through. I'm biased because of my bad experience, but finding a buyer's agent that you trust and that is actually good at their job is huge and worth foregoing the credit in my opinion.

2/15/17
DBW521:

I bought in the West Loop/Fulton Market area, right off of Fulton and Desplaines basically. It's a hot area though so it's tough to find good deals. There are a TON of overpriced places right now.

My #1 tip is that if you have the ability to really wait for the right place to come along, do it. I can't stress that enough. Don't jump into something based on when your lease is up... take your time and find the best deal possible. It took me 17 months of waiting, but it was WELL worth it. I ended up with a 1,150 sqft 1 bed/2 bath that I was able to convert into a 2 bedroom and have a buddy of mine renting the second room from me.

Second tip is based on the first tip @IlliniProgrammer gave, below - Find a good buyer's agent. I did my condo searching mainly on RedFin and I think it's a great tool... avoid using their realtors though - I did it because they offered a $2,000 credit on closing costs, but I ended up having to do the vast majority of the leg work with my lawyer and the realtor's lack of timely responses almost made the deal fall through. I'm biased because of my bad experience, but finding a buyer's agent that you trust and that is actually good at their job is huge and worth foregoing the credit in my opinion.

I really like the idea of paying the buyer's agent by the hour and then pocketing the rebate. Takes all of the conflicts of interest out of it. I went with Lucid Realty, got Denise Mitchell, and she was a great agent. Completely worth the $125/hour.

And I still think Streeterville or Lakeshore East offers an interesting long-term value proposition. When the neighborhoods change, when the cool kids move to Rogers Park or wherever, Streeterville will still have Lake Michigan, Oak Street Beach, Michigan Avenue, and a short walk to downtown (not to mention Booth and Northwestern). Lakeshore East will still have Grant Park, Lake Michigan, and the Art Institute. Some of the older buildings (EG John Hancock, Lake Point Tower, Harbor Point, One Mag Mile) have the best views, have all of the new building amenities, and still cost only $350-450/square foot depending on the view and how recently the unit was renovated. The HOA fees are higher, but the new building HOA fees aren't sustainable while the older buildings are.

Having lived in NYC for five years, I was smart enough to spend an extra $25/square foot on a high floor and a decent view, parts of which were hard to block. If I had to do everything over again, though, I would have spent another extra $50 or $75/square foot on the view. I have a partial view of Lake Michigan-- it's about 5 degrees from 10 feet back in the apartment; 30 degrees if you sit in the windowsill.

If the bathroom or kitchen have issues you don't like, you can fix that. If you want hardwood floors, you can install them. If you don't like the view, that's hard to fix. If you're in the west loop you most likely have some pretty awesome views. My one thing is that during the day, lake views are really nice. (During the evening, city and park views are nice).

2/15/17

I missed your by the hour comment - I think that's a great idea. I will absolutely look into that next time around.

I personally recommend looking in areas that are more up and coming because that's where you'll get the most bang for your buck (West Loop/West Town, maybe Wicker?), but that's just my opinion. I stole my place for $287 sqft (the $355 purchase price included a deeded garage spot for 25k) and comps in the area are significantly higher than that. I think the city is only going to expand further West, which is why I chose the area that I did. Walk-ability in the West Loop is great... within a 10 minute walk I have 3 grocery stores (one is directly behind my building), a lot of the best restaurants in the city, night life is expanding, and the amount of luxury apartment high rises that are going up is insane so there is money coming into the neighborhood. Also, HOA costs in the West Loop are minimal compared to River North/Streeterville/Lakeview East.

2/15/17
DBW521:

I missed your by the hour comment - I think that's a great idea. I will absolutely look into that next time around.

I personally recommend looking in areas that are more up and coming because that's where you'll get the most bang for your buck (West Loop/West Town, maybe Wicker?), but that's just my opinion. I stole my place for $287 sqft (the $355 purchase price included a deeded garage spot for 25k) and comps in the area are significantly higher than that. I think the city is only going to expand further West, which is why I chose the area that I did. Walk-ability in the West Loop is great... within a 10 minute walk I have 3 grocery stores (one is directly behind my building), a lot of the best restaurants in the city, night life is expanding, and the amount of luxury apartment high rises that are going up is insane so there is money coming into the neighborhood. Also, HOA costs in the West Loop are minimal compared to River North/Streeterville/Lakeview East.

That's a pretty darned good deal.

One thing I'll say is that HOA fees tend to increase for a building's first thirty years or so, and then they tend to flatten with respect to inflation. If you buy in a 30 or 50 year old building that doesn't do special assessments, you know that HOA fee is going to basically track inflation. If you buy new, just be aware that that figure could double on you with respect to inflation over the next 30 years.

2/14/17

24 $100-110k saved. 0 student loan debt

Community college. full ride to non-target school. Just bought a brand new tesla model s. Life's great.

2/14/17
DrizzyDrakeGraham:

24 $100-110k saved. 0 student loan debt

Community college. full ride to non-target school. Just bought a brand new tesla model s. Life's great.

$64K question: did you pay cash?

2/14/17

Haha if I learned anything from finance..use leverage. It was ~$90k with all the bells and whistles I wanted. Did not pay cash. But the pocket doesn't hurt too bad when rent is under $1k a month

2/14/17
DrizzyDrakeGraham:

Haha if I learned anything from finance..use leverage. It was ~$90k with all the bells and whistles I wanted. Did not pay cash. But the pocket doesn't hurt too bad when rent is under $1k a month

I come from a family where, if you can afford to buy a car that costs more than $5K, you can afford to pay cash. If a car costs more than you can pay cash for, you can't afford it. :-)

But good for you and hope you enjoy it. I am probably going to buy a 1-2 year used Ford Fusion or Ford Mustang as my next car.

2/18/17

Why pay cash when loans are 2%?

2/14/17

This is really solid. How did you manage it?

2/14/17

I spent a number of my younger years growing up in poverty so I know a thing or two about being frugal. You might even say that I'm too frugal...on things that don't involve nice cars and bottle service.

2/15/17

That's really impressive. What was your first job after college?

2/15/17

MM IB. Did 1.5 years in a MM IB, then left to a >$1B HF. pay is in line with some megafunds

2/15/17

Is this NYC? Or different city?

The fool thinks himself to be a wise man, while the wise man thinks himself to be a fool.

2/15/17

SF

2/15/17

How is your rent <1k if you're living in SF

2/15/17

Rent control and i live with my long-time gf.

2/15/17

You must have been grandfathered into some cush rent control or your long term gf is about 5 years old than you, given you're 24. Either way, kudos.

2/14/17

23, bought a car cash for about 5k to commute to work and I have 2k in student debt left to pay off (god almost done).. so I guess my net worth is 3k.

Im making 100k now so this will probably be much better in a year.

2/14/17

25 - ~85k in cash accounts.

Don't let Bernie Sanders find this tread or it's all over for capitalism.

26 Broadway
where's your sense of humor?

2/14/17

Due to new environmental standards, Bernie Sanders will be "re-purposing" your salary to help 13 year old prospective monkeys have 53k in their bank accounts. Because you cheated the system.

...

2/20/17

Bernie's big on correlating success to cheating. In his mind you had to cheat to be successful. If you're unsuccessful look at your poor habits and skill set, or mind set therein lies the answer. +1 sb for the witty response.

26 Broadway
where's your sense of humor?

2/14/17

Late 20s, -$6000 (more if you count my student loans, though my parents are paying that). It doesn't help that my previous job made ~$55k and rent in my city is $1.8k for a studio. Getting better now that my job pays more and my rent is lower (girlfriends ftw).

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/15/17
N0DuckingWay:

Late 20s, -$6000 (more if you count my student loans, though my parents are paying that). It doesn't help that my previous job made ~$55k and rent in my city is $1.8k for a studio. Getting better now that my job pays more and my rent is lower (girlfriends ftw).

You got a new girlfriend and you think your expenses are going to DECREASE?

Please explain.

2/16/17

Not a new girlfriend. And we live together, so we split the rent.

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/20/17

You work in IBD and have your parents paying for your loans? C'mon man.

2/20/17

Who said I worked in IBD?

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/21/17

Your profile says IBD....

2/21/17

Only because there's no option that describes what I do, and that's the closest. I see why you assumed that though. There's also a significant difference in IBD and corporate banking pay (I am technically in corporate banking, though involved in credit risk).

"There's nothing you can do if you're too scared to try." - Nickel Creek

2/14/17

26 y/o. Had about $10k in cash until I started my first job at 22. Saved none of my first year, about 5% of 2nd year, 10% of 3rd year, 50% of 4th year, currently saving about 60% of my 5th year comp.

My living expenses have not really changed since I started working whilst income has gone up c.140%, so all incremental income goes straight to investments (save from a few one-off treats here and there).

2/14/17

Currently on track to graduate from my MBA at about 30ish with just about $0 saved up. Probably no debt, either, though, so I've got that going for me. Could probably graduate with a small nest egg if I cut down on the drinking and travelling, but then what the hell is the MBA for?

2/14/17

25 with 3.5 years of work experience in IB (A->A promote): ~$185K total savings (also paid off an additional $30K of student loans)

Save all bonus, max out 401K, and live in a large non-SF/NY city

2/15/17

How much of your salary did you save?

2/15/17

About 10-15% on top of maxing out 401K. Though admittedly a larger portion of that is from the Associate salary bump while keeping similar living costs.

2/14/17

28, ~$400k

2/14/17

26 y/o. ~33k. All in S&P 500 index fund.

2/14/17

29, ~$150k, most of it saved in the last couple of years.

Working in consulting + living in NYC + an expensive wife takes its toll.....

2/15/17

fucking women

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

5/24/17

SB'd for cheap lol.

'I'm jacked... JACKED TO THE TITS!!'

2/14/17

27, no student debt thanks mom and dad, did 1yr consulting, have done 2.5yrs banking saved $150k including checking savings, PA and 401k

2/15/17

Late 20s, ~$160k. no student debt because of parents, made ~70k to 100k for first few years of career in low COL cities.

2/15/17

Navy officer here- I have about $100k, 80% in TSP (which is essentially a military version of a 401k w/ no employer matching) and 20% in brokerage (blue chip stocks that pay dividends, JNJ, GE, etc...)

I'm jealous of some guys in here who have 400k at 30. I have been lucky to be deployed a lot so I have been able to save, but it's pretty tough to save 400k at 30 when you're only making 80-90/year.

The good news is that business school is free w the GI bill so I won't have to worry about undertaking 6 figure debt to finance an MBA.

2/15/17

25 with more than $200k and in FT employment for a year (comp < $100k). Started with $10k at 18, saved zealously, and have beaten the local bourse by 25% p.a. Still can't get a decent position in either AM or BB.

2/15/17

to anyone who's upset about what they've accumulated/not accumulated, there is hope.

I have several clients in their late 30s/early 40s who are millionaires that started off poorly in their 20s, due to a combination of student debt, careless spending, or personal misfortune. live below your means long term and you'll be fine. people who use money to keep score will never be completely satisfied, because there will always be someone richer than them.

that being said, kudos to all of you who've started to build a solid financial foundation.

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

2/15/17
thebrofessor:

to anyone who's upset about what they've accumulated/not accumulated, there is hope.

I have several clients in their late 30s/early 40s who are millionaires that started off poorly in their 20s, due to a combination of student debt, careless spending, or personal misfortune. live below your means long term and you'll be fine. people who use money to keep score will never be completely satisfied, because there will always be someone richer than them.

that being said, kudos to all of you who've started to build a solid financial foundation.

+1 SB.

One quick suggestion-- sometimes if people are looking for baselines for where they ought to be in terms of financial security, a kinder, gentler way of doing comparisons is to talk about months' expenses worth of savings, especially with competitive finance people. I will tell people I have something on the order of 4 to 8 years expenses' worth of savings depending on how conservative your accounting is and how you measure it. I don't tell people what that amount of money is. :-)

If people go around comparing dollar amounts of money, someone is always going to feel bad (often it's me, LOL).

2/15/17

totally agree, I can't tell you how many people have this idea "I need $X in order to have made it," no no no. it depends on lifestyle. yes, your $X may be higher if you have a house in the city, a beach place and a timeshare in cabo, but if you live simply, that $X is lower.

sharing net worths without any context is like measuring biceps, yeah, bigger looks better, but don't take it out of context. I know people with millions and millions who'll spend all their money, and people with only a pittance at retirement who'll probably double their net worth by the time they die.

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

2/15/17

25 yo
~$290k after paying off loans

40% bonds
30% equity
30% cash

using the $10-15k returns to cover living expenses so i only use income for rent and luxuries

2/15/17
exlurker:

25 yo~$290k after paying off loans

40% bonds30% equity30% cash

using the $10-15k returns to cover living expenses so i only use income for rent and luxuries

Why such a high % to bonds?

2/17/17

Over time it has the least volatility among different allocations. You experience the least number of negative years. Should technically produce 6-7% returns annually as well. I'm focusing on building a nest that gives me predictable passive income.

However, I will make riskier bets when I have some excess .

Also market is a little expensive right now, so i can shift more to stock when I feel comfortable with it

2/17/17

really hope by bonds you mean t bills or high quality revenue munis. credit spreads are as tight as they've ever been, and anything other than plain vanilla will get whacked just like stocks. on a relative basis, stocks are cheaper than bonds.

that being said, you're right about vol, but only if you're talking about the boring parts of bonds

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

2/17/17

spot on, bonds are mostly muni, tips and then international bonds

2/15/17

lol
33, 3 kids, mortgage, probably 30K saved now?
I have 2 start-ups on the go, hopefully one of them takes off.
Lets see

2/15/17

28 , married
~$225k combined home equity/savings
No debt other than home mortgage, subject to change with MBA.

2/15/17

19, 13k. Does anyone have any general tips for how much money I should aim to save throughout college? Like a basic metric that I can use to know i'm saving the right proportion of income? I try to always keep more than 10,000 in my bank account but for no particular reason other than it being an arbitrary threshold.

2/15/17

Start investing bud. If you're making more than a couple thousand a year, I'd recommend some index funds in an IRA. Your pick between Roth or Trad.

There really is no metric, I'd recommend getting a head start on a post graduation emergency fund of 3-6 months of your expected expenses. I've got friends who ran flat broke out of money the summer after graduation because their jobs didn't start until September and they instantly moved to their city and started living like a king.

Realistically you won't make much in college so have fun with what ever you do make. Anything you don't need after that, save it.

2/15/17

Great that you are thinking ahead. I second MonopolyMoney, get a jump start on that emergency fund to the extent possible.

I'd also suggest making contributions to a Roth IRA since you are in a low tax bracket. You could use services like Wealthfront or Betterment which has low fees and can set up auto transfers from your checking account so you don't have to make the decision every month, it just happens. The annual contribution limit for a Roth is $5,500, which comes out to ~$460/month. If you're able to max this for the four years you're in college, that's over $20k additional savings.