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How much money have you saved?

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?

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Comments (340)

Feb 24, 2017

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

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Feb 26, 2017

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

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May 23, 2017

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.

Mar 2, 2017

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
Feb 13, 2017

checks student loan balance

Approximately -$104,678.00

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Feb 17, 2017

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.

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Feb 17, 2017

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.

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Feb 17, 2017

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.

Feb 17, 2017

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.

Feb 18, 2017

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.

Feb 17, 2017

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

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Feb 21, 2017

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

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Feb 21, 2017
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.

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Feb 24, 2017

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'.

Jan 31, 2018

@IlliniProgrammer How do you expect to make any good money coming from a lower-ranked state school though? I can go to my state-school and get out with no debt but pretty much no opportunities because recruiting is non-existent. It's all about that leverage.

Feb 25, 2017
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!

May 24, 2017

This guy is rationalizing his own bad decisions.

heister:

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

Feb 28, 2017

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

Feb 13, 2017

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.

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Jan 31, 2018

Citi's e-savings account gives you ~5%, and you can have 5 withdrawals a month. Works well for me.

Jan 31, 2018
StreetLuck:

Citi's e-savings account gives you ~5%, and you can have 5 withdrawals a month. Works well for me.

is this still available?

Jan 31, 2018

I would say 2x your monthly cost of living, and then have your liquids be 4-6x your monthly cost of living. No science around those figures, they just sounded right when on paper.

Jan 31, 2018

4-5k here.

Jan 31, 2018

I've got like $18k in there, what a waste.

Jan 31, 2018

500 and the rest is in a high yield savings account. If I overdraw my bank automatically withdraws the required amount from my savings account so I dont suffer from an overdraft fee which is pretty nice.

Jan 31, 2018

Hey Guyjer, what bank is this, and how high yielding is the savings?

Jan 31, 2018

I use BoA and the yield is like 5%. If you want anymore details you can go to their website

Jan 31, 2018

Citi esavings pays 4.75% now, but is still available. the problem with these deals is that over time your rate decreases...

Jan 31, 2018

I essentially keep 2k minimum in my account. I treat this as my own personal "zero balance", so that you can monitor spending habits but not risk having overdraft fees.

The rest of my savings is in a savings account with Countrywide. They are offering over 5% for accounts over 50k. Not bad, although this drops to just over 3% when you factor in taxes. I am actually paying a decent chunck in taxes this year, mostly related to interest income. Bleh...

Feb 13, 2017

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.

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Jan 31, 2018

exactly 1.368 millions dollars

Jan 31, 2018
uva07:

exactly 1.368 millions dollars

hahaha funny shit

Jan 31, 2018
uva07:

exactly 1.368 millions dollars

hahaha funny shit

Jan 31, 2018

live in a cardboard box and eat nothing but ramen noodles..you will have $150 million by the time you are 30

Jan 31, 2018

live in a cardboard box and eat ramen noodles until you are 35 you will have a twillian zillion dollars. Just think of how many mansions, mercedes, and patek philippes you could buy!

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Jan 31, 2018

twillian zillion dollars = mad fratty

Jan 31, 2018

The money is in this industry would matter after 32. Until then, its about having a roof over your ahead, when you do get home.

Jan 31, 2018

sharp_in1008, ur wrong... i am living proof... i don't start til the summer and i'm already living like a king

Jan 31, 2018

Good call! Spend that signing bonus like there's no tomorrow.

Jan 31, 2018

Saving money in your 20's is for wimps and women. Real ballers live from paycheck to paycheck.

Jan 31, 2018

I know that this may sound like a really stupid question to some of you, but I was wondering what the difference was between a md and a department head are? Also, what is the difference in te salaries? Thank a lot for you comments.

Jan 31, 2018

Hah that's so childish!! You could quad-triple your sign-on bonus and then quad-triple it again and quad-triple it again with some wise investments.

Jan 31, 2018

i'll give you a serious answer...though you are heavily dependant on the payouts in the last few years and less so on your rate of return.

if you save 10k/yr as an analyst (conservative) and 100k thereafter, you wind up in the mid 600s by 30. but you can use excel or a calculator that can price annuities to play around with this.

Jan 31, 2018

If you are frugal you should be able to save your bonus and something from your monthly pay packet (I would say c. 25% of the net figure)

I haven't run the numbers but that should give you a reasonable amount by 30

From the ghetto....

Jan 31, 2018

depends on your definition of reasonable.

but you are living in the terminal values, that's what will make or break your 'number' in general

Feb 15, 2017

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

Feb 17, 2017

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

Feb 20, 2017

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."

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Feb 15, 2017

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.

Feb 21, 2017
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.

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Feb 25, 2017

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

Feb 25, 2017
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.

Feb 25, 2017

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.

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Jan 31, 2018

Spend your salary, save your bonus. Calculate savings based on analyst performance.

Jan 31, 2018

Never lived in NYC but I would guess your total pre tax comp would be like 150k or so and take home about half of that after taxes and however much you put in your retirement. So call it 75k after tax, then subtract ~25k for rent and however much you spend on other stuff (probably 1-2k per month and dont forget to include any big purchases, so maybe 10-20k? Might be a little low). So saving 25-40k per year sounds reasonable.

Feb 14, 2017

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.

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Feb 14, 2017

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.

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Feb 14, 2017

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.

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Jan 31, 2018

I would be joining DB this summer in the investment banking group. Training would be in London but moving back to NY after that. In terms of amount. I would barely have enough for cloths and food. Apartment rent including security deposit is about 8000 grand, that savings gone. So credit cards looks like the way, spending as little as possible. My advice, save as much as you can because first month would be an outlay of cash.

Jan 31, 2018
IBDrake:

I would be joining DB this summer in the investment banking group. Training would be in London but moving back to NY after that. In terms of amount. I would barely have enough for cloths and food. Apartment rent including security deposit is about 8000 grand, that savings gone. So credit cards looks like the way, spending as little as possible. My advice, save as much as you can because first month would be an outlay of cash.

Hey, I start at DB too!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Jan 31, 2018

Guess I might be seeing you at the orientation in the summer.lol. Small world

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Jan 31, 2018

Are you talking about the DB's Graduate Training program in London ? (I'm assuming you're based out of the US.) From what I've heard DB should take care of all our expenses in London (rent,food etc.) Plus the signing bonus should kick in by the end of the training period.

Jan 31, 2018

Better you spend the money you have now during the remaining free time. Visit friends and family or travel to some exotic countries because the next time you'll have three free months is when you switch jobs

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Feb 13, 2017

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

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Feb 14, 2017

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

Feb 14, 2017

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

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Feb 14, 2017

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.

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Feb 14, 2017
  • SB'd, thanks for elaborating and thank you for your service.
Feb 15, 2017

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

Feb 15, 2017

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.

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Feb 17, 2017

Why are you doing an MBA?

Feb 17, 2017

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

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

Feb 18, 2017

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.

Feb 19, 2017

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.

Feb 20, 2017

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!

Jan 31, 2018

Total? Including retirement? I'm 23 and have around $17K saved. No debt. In CF though, not high finance.

Jan 31, 2018

22, 10k saved

Jan 31, 2018

Let's face it, it's all about how much your parents help(ed), your social life and your bonuses.

Jan 31, 2018

22, first year analyst. ~ -62k. Gotta love them loans.

Jan 31, 2018

20, still in school...25K in the bank, been interning/working year round since freshmen year.. Also on a full ride, so no student debt or payment of tuition.

Jan 31, 2018

21, 17K in IRA/Other

Jan 31, 2018

23, 2k or so. Fuck you, student loans and CC debt and industry that underpays all their employees.

Jan 31, 2018

[deleted]

Feb 14, 2017

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

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May 11, 2018

28 - IBD senior associate

900k net worth. Composition:
Personal Brokerage: ~700k
401(k)'s: ~200k

Achieved through diligent saving and investing of min 70% of all after tax income monthly and placing into s&p, high yield, and preferred stock. Same instruments, completely automated, month over month over month since first job.

Market has been strong tailwind on equity portion but portfolio now generates 30k in annual dividend income, also automatically re-invested and continuing to snowball. First million by far hardest, whereas the second million will become significantly easier given income scaling while maintaining even higher savings rate %, dividend income continuing to grow, and increasing 401(k) and profit sharing matches from employer.

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Feb 14, 2017

Late 20's, a little over $1mm

Graduated with no student debt and skipped business school

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May 12, 2018

how do you not have money saved?

if you work in finance and are taking home say $4-5k a month after tax (conservative), spending $1.5k-$2k on rent... where is the rest going that you cant put some away?

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Feb 14, 2017

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

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Feb 14, 2017

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

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Feb 15, 2017

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)

Feb 15, 2017

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

Feb 15, 2017

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.

Feb 16, 2017

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.

Feb 16, 2017

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.

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Feb 17, 2017

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

Feb 17, 2017

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.

Feb 18, 2017

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.

Feb 15, 2017

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

Feb 22, 2017

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

Feb 17, 2017

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

Feb 18, 2017

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.

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Feb 14, 2017

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?

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May 21, 2018

[]

Feb 15, 2017

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?

Feb 18, 2017

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.

Feb 14, 2017

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.

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Feb 14, 2017
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.

Feb 15, 2017

Is the home mortgage free?

Feb 15, 2017
Options Market Maker:

Is the home mortgage free?

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

Feb 15, 2017

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.

Feb 16, 2017

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

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

Feb 14, 2017

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.

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Feb 15, 2017

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

Feb 16, 2017

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.

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Feb 20, 2017

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.

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Feb 20, 2017

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!

    • 1
Feb 14, 2017

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)

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Feb 14, 2017

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

Feb 14, 2017

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...?

Feb 14, 2017

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

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Feb 14, 2017
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.

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Feb 14, 2017

Yeah I was going to say that too.

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Mar 2, 2017

@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

Feb 15, 2017

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.

Feb 14, 2017

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

Feb 14, 2017

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.

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Feb 14, 2017

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

...

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Feb 15, 2017
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.

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Feb 15, 2017
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.

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Feb 22, 2017
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.

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Feb 15, 2017

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

Feb 15, 2017

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

Feb 15, 2017
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.

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Feb 27, 2017

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

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Feb 14, 2017

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

...

Feb 14, 2017

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.

Feb 14, 2017

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.

Feb 14, 2017
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.

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Feb 14, 2017
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.

Feb 15, 2017

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.

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Feb 15, 2017
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).

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Feb 15, 2017

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.

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Feb 15, 2017
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.

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Feb 14, 2017

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.

Feb 14, 2017
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?

Feb 14, 2017

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

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Feb 14, 2017
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.

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Feb 18, 2017

Why pay cash when loans are 2%?

Feb 14, 2017

This is really solid. How did you manage it?

Feb 14, 2017

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.

Feb 15, 2017

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

Feb 15, 2017

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

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Feb 15, 2017

Is this NYC? Or different city?

Feb 15, 2017

SF

Feb 15, 2017

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

Feb 15, 2017

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

Feb 15, 2017

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.

Feb 14, 2017

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.

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Feb 14, 2017

25 - ~85k in cash accounts.

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

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Feb 14, 2017

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.

...

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Feb 20, 2017

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.

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Feb 14, 2017

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).

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Feb 15, 2017
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.

Feb 16, 2017

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

Feb 20, 2017

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

Feb 20, 2017

Who said I worked in IBD?

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Feb 21, 2017

Your profile says IBD....

Feb 21, 2017

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).

Feb 14, 2017

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).