Money - What is your goal?


I think we would all agree that high compensation is one of the main factors that drives so many young and ambitious people to the world of finance.

I am surprised however that there is often very little dialog on this site surrounding "Money". How to handle it, what to do with it, what certain folks own financial goals are who are already in the industry.

The recent "$10MM - Realistic" post inspired me to try and create a more detailed thread that hopefully those who currently work in the industry would want to chime in on and comment how they handle their money, how they invest, and what their goals are.

As to my situation - I would say that one of the main reasons I chose to pursue banking was because of the pay (among many other things of course). Currently a 2nd year analyst in a product group at a BB (non NYC) and before this did a few different things with my firm. For me this career path allowed me to maximize my earnings for the skill set I have and the interests I have.

All things said I am 26, with a networth of about $400K and would consider myself an index investor. I save as much as I can and plan to try and live as simple as I can until I hit the low seven figure club (perhaps $2.0 - $2.5MM). I focus on maintaining an asset allocation that I like (80/20 currently) and also focus on investing as much as I can.

Realistically my goals are $1.00MM by 30 and $5.00MM by 40. With basic return assumptions, aggressive savings, and continuing to (hopefully) climb the ladder this is doable. In all honesty, I do like my job, group, firm, etc. and do still hope I am with them for many years to come. I don't think I will ever stop working - but may consider doing something a little less demanding as I get older. I also think I would want to take some risk off the table once over the $4.00MM or $5.00MM mark - perhaps shift down to 50/50 and let it ride.

**Anyways - my question for everyone else. Where are you currently in your financial journey? What are your goals? What are your plans? How do you invest? What is your asset allocation? Fire away! **

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Comments (103)

Jul 8, 2020 - 1:36pm

Dang dude 400K at 26. You are killing it. I would love to see your budget or hear more about how you saved that much.

I am trying to hit the 1 MM mark by age 35 and then 3.5 MM by 55. However I do have to say I am pretty bearish on the climb in comp since I am at a MM and so I budgeted out a similar haircut in my analyst pay to the rest of the positions through my career. So I think these numbers are relativity low end.

My plan is also to try and get a few rental properties to uses as income in early retirement and let the net worth just grow till I can take distributions.

Jul 8, 2020 - 2:24pm

Good deal, keep plugging away. Futures are always uncertain and just have to focus on what we can control.

I was able to work full time through college, while living home with my parents (commuted to state school). My all in cost of tuition was probably like $40k so was able to graduate without student loans (paid for college in cash from job) and also saved up about $70k.

Leveraged my work experience / story of working full time through college (the job was an entry level job in consumer/retail banking) into where I am now.

Always saved aggressively and helps I'm not in NYC and live in LCOL area.

Will also admit working full time right out of High School was a lucky break.

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Jul 8, 2020 - 9:29pm

I was able to work full time through college, while living home with my parents (commuted to state school). My all in cost of tuition was probably like $40k so was able to graduate without student loans (paid for college in cash from job) and also saved up about $70k.

I'm sorry but you couldn't pay me enough money to live at home with my parents during college.

Oct 25, 2020 - 4:56pm


And do what after?

I always find comments like this hilarious which often imply that there is nothing else do on this planet other than work and accumulate money.

Do what? Anything of the million things you may enjoy: painting, cycling, lifting weights, traveling the world, working at a non-profit, teaching high school whatever,...there are literally a million things you can do if you have a nice $2 million cushion in the bank.

A better question might be for everyone else, "What are you NOT going to do?" since you plan to waste half your life working and building that $2 million to $5 or $10 million. What would you do with your life if you weren't so obsessed with hitting a random number in your bank account?

Jul 8, 2020 - 2:15pm

I hope to get to 1M net worth by 30. I'm 28 now and pretty close. I'd like to be $10M plus by the time I'm 45 or 50. Idk we'll see. I'm constantly trying to learn as much as I can, read as many books as I can, and I have a side hustle to help me get extra income in addition to my day job.

At this stage of my life, I think about money and making more of it more than anything else.

EDIT - Now that I think about it, net worth isn't really "real" money. I like income better. $500k+ a year working for myself would be nice.

Jul 8, 2020 - 4:39pm

Also ages 45 to 55 is the main earning ages for most people so, If you can hit a million by age 30 ( I would even say 35) you can definitely get in the rang of 3-5 MM by peak earning years and then kill it for a decade and get to 10 MM

  • Prospect in Other
Jul 8, 2020 - 10:51pm

What does that sort of money feel like? Is it a weight off your shoulders and a quiet confidence, or do you feel even more stressed/worried about maintaining what you have and reaching for more?

Jul 8, 2020 - 2:25pm

I've been putting away about $50k a year for the last three years, so that coupled with solid market returns (at least last year...) have boosted me to close to $200k in NW.

Originally had hoped to hit $1mm at 30 but now think it'll be closer to 35, especially factoring in possibility of getting an MBA, starting a family, etc.

Long-term goal is to keep saving roughly 50% of after-tax pay, so expect my lifestyle to scale as my pay rises, and ultimately hit $2mm by 40, $4mm by 50 and retire with $6mm+. That would allow for roughly $200k to $250k a year at a conservative 3.5% draw rate.

All in equity right now (mostly index funds), aside from some emergency funds, and expect to be largely equity focused until late 40s / early 50s where I'd likely want to de-risk.

  • Investment Manager in HF - Other
Jul 8, 2020 - 2:30pm

I'm closer to mid career and considering making a switch (potentially better lifestyle).

As for savings up to this point I have focused on a few things:
1) paying down housing
2) index funds (relatively simple due to #3) Small relative to #3
3) invested in fund (most of my net worth)

The rest is for fun (and vacation home).

As for goals I'm at a point where I'm considering taking a hit in the comp to have a more reasonable lifestyle.

Jul 8, 2020 - 2:34pm

I like this approach. The most important thing is to do the heavy lifting in the front end while your young so that you can make decisions like this once you're older.

If you get the portfolio big enough at an early age you can let compounding do the rest of the work vs. relying on adding additional principal

  • Investment Manager in HF - Other
Jul 8, 2020 - 11:06pm

When I say lifestyle I'm talking about the work life balance and stress. In terms of lifestyle that the money affords me it is great, but I have saved a good amount and I think I'm ok with moving more toward a balanced life, although I'm not sure.

Working at a HF has the stresses of performance (every year is a new start, every year you must perform or you might lose AUM), the compensation can be pretty variable, and the hours can be tough especially in markets like we have now. In general the hours are fine, I think I'm lucky as I manage my own schedule and I don't have these stupid late nights, but it is ~7:30 AM - 8 PM or so, with random other calls/meetings late or sometimes over the weekend (and I am constantly monitoring phone and markets, etc). I think it is more around the constant stress on comp and performance, need to constantly be thinking of ways to improve things, etc.

As for the lifestyle it affords, that's the other side, and something that I'm not sure I'm ready to give up but unsure. You have a lot of freedom to travel and basically afford most things you want (within reason). I'm at the point where cash income is 7 figures a year, so plenty of room to have fun and save money. I imagine I would take a 50% or so hit to income in most other professions.

  • Associate 1 in Other
Jul 8, 2020 - 2:44pm

im from a poor country. the country in which I am in now has a minimum salary that beats anything back home. i dont think about money. i just want a job that I enjoy and access to good postgrad education.

any BB job would make me successful compared to people I grew up with. front office, middle office, back office, doesnt matter.

if I was born and raised in a good country I'd definitely have specific goals like most people here.

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Jul 8, 2020 - 3:16pm

I haven't really focused on net worth as a goal but rather just looked at salaries and think that at the time I am earning X amount of money, my living conditions will be different and unpredictable, making it hard for me to estimate savings at this stage. Associates at my firm pull $250-$300 and VPs pull around $500 all in, so I'm just more focused on those numbers as they are more near term and relevant to me at this point.

Jul 8, 2020 - 3:19pm

Everyone is throwing out numbers as a goal but I think you need to look at money as a tool to achieve some type of broader goal / lifestyle / feeling

Why do you want $1mm by 30? Or $2/5/10mm by 40?

Freedom to not work? Confidence that you are rich? Extravagant lifestyle?

I think you should think about the goal and work backwards from there to derive "your number". In my opinion, the goal and motivations are almost more important than people's net worth

You will also be amazed at how your views of money change as you get older. Maybe you don't mind a more modest lifestyle now so you can save a lot but what if you have a family? Maybe you will decide sending your kids to private school and living in a nice house and neighborhood is more important than "your number"

Jul 8, 2020 - 4:35pm

I get your work backwards method, and asking what does the extra net worth really get you at the end of the day and how much do you really need to get a certain lifestyle. But I don't think there is anything wrong with being young single and trying to stock away as much as possible in the mean time without have an grand idea of what your life is going to look like.

So I guess it saving and investing today is for freedom sake. It's much harder to wake up when you are 40 and say "I want to retire and you have nothing in the bank, realizing you need to go put on the golden handcuffs for another 15 years.

Overall, from what I can see so far there has not been anyone that has thrown out "I need to be a billionaire by age 11" and most of the numbers have been reasonable. And I have run the numbers assuming one income for my whole life. If I have a family there will be a second income to support children and extra life expenses.

So I am going to shift the burden back to you to say, What am I missing out on by saving and investing more today?

Jul 8, 2020 - 9:04pm

I didn't mean my post to come off as if you don't have a reason to save and invest then just blow it all and don't save

Nothing wrong with being content with your lifestyle and having some money left over to save. When that starts turning into, I need such and such number by this specific age then I think you have to start asking yourself why you want that

Maybe your $5mm by 40 target is more about you having a successful career and moving up the ladder than the actual number. Or it means you want to afford a sick apartment and vacations in your 30's. Or it means homeownership and being settled down

It's a good question to ask to get to know yourself and your goals and can reveal the person you want to be

  • Prospect in Other
Jul 8, 2020 - 10:47pm

I'm not quite sure how much money I want and exactly how I would want to spend it. On one hand, there are nice and expensive things out there that I really want to own. For example, my hobbies are photography and cars. Camera systems and lenses are ridiculously expensive, and my dream car is a Ferrari F430 so I don't have to say much more on that. But beyond hobbies and possessions, I just need enough money to take care of myself, to give my family a great life, and maybe eventually to leave a more significant impact. I've seen what life in poverty is like, and I never want to get to that point.

  • Associate 2 in IB-M&A
Jul 9, 2020 - 10:56am

Good news is that you should be able to get a 430 for pretty cheap, they're known for having a lot of issues, many of which were solved with the introduction of the 458.

Jul 8, 2020 - 4:44pm

Nice work OP. Killing it.

I haven't had the chance to save much as I put everything I had (wasn't much) early on into my business. Everything I earn goes back into it in one way or another. Ultimate goal is the exit in the next 2-3 years and retire in the mid-high 7+ figures (depending on a few factors of course) then do something new. If my net worth was liquid I'd probably just retire now.

"Out the garage is how you end up in charge It's how you end up in penthouses, end up in cars, it's how you Start off a curb servin', end up a boss"
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Jul 8, 2020 - 4:54pm

Kudos to you man. The best way to build wealth is through owning your own business. I definitely am not creative enough or risky enough to do something like that.

If you can get it to work though (like it seems you have) there is a much higher ceiling and the sky really is the limit.

Get a good exit and you can literally do whatever you want the rest of your life

Jul 8, 2020 - 5:15pm

Appreciate it. That's the plan for now.

To your points, there's certainly a level of risk that you have to be comfortable with. Not many people are willing to accept the risk and volatility regardless of the upside of a successful exit. TBH it can suck and be scary and there are time that I envy my fellow monkeys that are on the 'straight and narrow' road to riches like OP and many others on the thread.

I'm more of a gamblin' man but to each his/her own. There's no single path which is the greatest part about capitalism.

"Out the garage is how you end up in charge It's how you end up in penthouses, end up in cars, it's how you Start off a curb servin', end up a boss"
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Jul 8, 2020 - 9:54pm

Thanks for the thread OP. I am a first-gen student from nyc. I've been raised to basically get my family out of our financial situation and have been working super hard to get there. I've been working since 10th grade, won a few scholarships, a few internships which have helped me save up a little over 100k. I'm an SA this summer at a BB, and wanted to hear any advice for someone coming out of college with no debt and some cash to work with. How should I be investing?

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  • Prospect in IB-M&A
Jul 8, 2020 - 10:22pm

My advice would be to invest in index funds and then just let those ride. They should provide pretty consistent returns and if you invest a decent amount into them and hold on to them for the long run, you will be sitting pretty.

  • Would love to hear any other suggestions though from more experienced professionals.
  • Prospect in Other
Jul 8, 2020 - 10:49pm

It's great to hear what you've been able to build for yourself. All the best of luck to you and your family, man.

  • Associate 3 in PE - LBOs
Jul 8, 2020 - 11:09pm

Can you describe the bridge that led from $70k right after graduation to $400k in 4 years? Is it roughly equal say $165k of investment income, $165k salary contributed (you socked away 40k a year)? Or was majority of that $400k today from say a bonus last year etc.

Jul 8, 2020 - 11:48pm

$70k at 22, and then (rough numbers) I was stocking away about $60k a year post graduation. The rest would be from returns.

When I graduated I moved to the City I am in now with the same firm. Did a few other things before breaking into IB, but was still making all in close to $90-100k.

I also live in LCOL, own my place (so building equity instead of not doing so by renting), and also have lived entire time with my GF which helps as well.

Jul 8, 2020 - 11:19pm

I'd advise everyone here who's still in college but has some money to start a roth ira because you can't contribute to those once you hit 137k gross income as a single filer. Was surprised when I read that a few months ago. For truly retirement investing, I'd be 100% in equities till midlife. That would be money that you aren't afraid to take a big hit on because you're legitimately planning on not needing to withdraw from it for decades.


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Jul 8, 2020 - 11:38pm

I wish someone had told me this when I was 18. Tax free gains, it's an absolute no-brainer. I only started contributing to mine last year but wish I had started much earlier.

Jul 9, 2020 - 10:40am

100% agree. Since it's post tax, I don't believe there is any sort of penalty if you suddenly need to withdraw money (assuming 5 years of owning it - I think that this is correct, fact check me though). The current maximum allocation is $6k a year. Obviously save as much as you can, but I would prioritize allocating just enough to get the match with your company 401k and allocating the maximum to the Roth. Also, some of these company 401ks will charge you high management fees and they don't give you a ton of freedom to invest how you would like whereas you can set up your own Roth and choose what to invest in.

  • Intern in Other
Jul 9, 2020 - 7:51am

Hey, I'm actually the OP of the $10M - Realistic post haha. I think this thread is more of what I'm getting at.
I'm currently studying at a target, and I hope to break into IB. I don't rly have too many expenses rn, so I'd love to save $1M by 30 and and hopefully $10M by 30. (I have ~2k in the bank rn from some part time work.)
I would love any feedback on what I should be doing this early!

Most Helpful
  • Business School in IB-M&A
Jul 9, 2020 - 11:22am

I would say don't do any side gigs.

Don't try and buy or sell stock (assuming you aren't buyside) or buy and rent real estate, or do anything other than Plan A. I see people all the time trying to do something on the side to make an extra 10-20k a year not realizing they make 200k+ at their jobs and 50% of their compensation is performance based. If you spend your time trying to be the best investment banker (or any high finance position) that will pay off way more than any side gig. I always find it so funny when I hear people spending hours and hours doing research on which stocks to pick when they could just get the SPY and spend that time being better at their jobs. The marginal X% (you probably won't beat the SPY) won't be more material in compensation than the difference in top vs. mid/bottom bucket, or missing your Director promote because you don't go after clients. If you go all in (20's - 40's) on the types of careers people discuss on this forum, it will pay off much better than any side gig, unless you manage to start a mid/high 7 digit EBITDA startup on the side.

Edit: I would like to add that this way of thinking is not applicable to every career. High finance however is incredibly competitive so it does apply. A knee surgeon can do surgeries from 35-70 years old and if every hour of his free time is filled with golf and buying real estate he/she can still do knee surgeries for 30+ years. They might fall behind but they won't get fired and lose all their clients money.

  • Managing Director in IB - Ind
Jul 9, 2020 - 11:49am

Agree with this 100%. I do not know anyone at senior levels with side-gigs. Maybe some pet projects, but if you want to maximize $$$ then making another client call or prospecting trip has better ROI than any side gig.

Jul 10, 2020 - 11:26am

Sorry, this is pretty bad advice and a pretty binary / unsophisticated way to look at things. You can be successful as an investment banker and also as a public markets investor; they aren't mutually exclusive. I've made 300k+ in the markets investing in individual stocks since the March lows by reading a decent amount and not killing myself with research, while still maintaining my performance at the day job.

Jul 9, 2020 - 11:41am

I'm a bad example. I have made 170-600+ a year throughout my working life (I'm 32).

I have saved 70,000- that's it. I have a pretty large 401K but still I've been irresponsible. All of you newer guys, please pocket some of your base or bonuses. I have a ton of nice things but the golden handcuffs feel tighter than ever.

Jul 9, 2020 - 8:24pm

I actually don't know what my exact net worth is, the last time I checked, the balance across all my various liquid accounts was about $1.7 million, but I also have some significant illiquid assets (e.g. real estate, stakes in privately-held companies, etc.)

When I was younger, I used to make goals like "X net worth by age Y," but now I simply focus on living below my means and putting excess savings into the market. I've said this before, but it's worth saying again, instead of making goals like the above, simply live below your means and put the excess (minus some emergency funds that stay in very liquid and stable assets) into the market.

Einstein said (apocryphally) that compound interest is the "eighth wonder of the world."

A dramatic (but not completely far-fetched) example: $100,000 turns into approximately $100,000,000 if you can compound at 18.85% for 40 years.

That's only possible if you are Warren Buffet, you say?

Not necessarily, in fact, since you are managing much smaller amounts of money in your personal portfolio, you could potentially make even greater returns, but let's say you compounded at just 11.7% for 40 years instead (the return of the S&P 500 over the last 40 years with dividends reinvested) - you end up with ~8.3 million

TL;DR - live below your means, put the excess in the market, and let the magic of compound interest do it's thing. The sooner you start the better.

  • Business School in Other
Jul 10, 2020 - 9:54am

How is your net worth 1.7 million 2 years after B-School?

Net worth was approximately 250k before I started B-school last year. Had four years of work experience in high finance.

Jul 9, 2020 - 9:16pm

I'm 30 and a 3rd year VP at a BB (analyst promote) with about ~1mm in net, all of it in equities/funds/401k except maybe 50k in walking around money. I should probably have about ~200k more but New York is an expensive city and I blew a lot on vacations, restaurants and going out throughout my 20s.

Goal is 5mm by 45.

Jul 16, 2020 - 11:22am

Not at all. Especially now that my post tax cash bonus is around 200k so it comes in a lot quicker now when I run a tighter ship.

When I was younger that extra money I potentially overspent had a much bigger impact on my lifestyle and material happiness. I don't really care as much about that stuff now so it was good to get it out of the system when I was making less money.

  • Intern in IB - Ind
Jul 10, 2020 - 9:30am

Seeing some big numbers in this thread..what kind of lifestyle can you live with 20-30m liquid? Thinking a lot of the younger guys are just throwing out huge numbers without really understanding the corresponding lifestyle associated (Could be more than they really need)

Jul 10, 2020 - 12:38pm

I mean 20MM can easily return 1MM a year in dividends/interest. and then after tax you walk with 650K. Assuming limited housing costs, you could, buy a new super car every year, travel with a 150K budget and have still have 200K left over for general spending and Country club membership.

Sounds like a pretty good life to me.

  • VP in S&T - FI
Jul 11, 2020 - 4:57pm

I'm in my early 30s and around 2MM net worth. I live a pretty standard life in a HCOL city nothing extravagant but if I want to do something I do it. I have never really set a goal in terms of where I wanted to be and when, but I'm pretty happy with the way things are going. I can't remember the last time I worried about money or looked at a bills, and that for me is really powerful and is all the motivation I need to get out of bed in the morning.

In terms of investing I have a pretty standard 80/20 strategy of mostly low cost ETFs, don't own any property but I do play around on various debt based crowdfunding platforms in small size. Don't really see myself buying a house until I have a family and decide I want to settle down, until then I am totally content renting, and really don't want the headache of being a homeowner. I wish I had a little more hustle and drive to try to own some income producing RE or some other business on the side but it just seems like a hassle I don't want to deal with and its lack of liquidity concerns me.

I enjoy what I do and I don't really have a number in mind to walk away but I do think about where I would need to be in order to do something less demanding or take a flyer on a job at a startup where I would be sacrificing cash comp for the hope of hitting a big payday. I have a couple of very successful pro athlete friends (multiple time all-stars, guys who have made 50MM+ in their careers) who are nearing retirement age and they are thinking about what they are going to "do" with the rest of their lives. Its something that is so far off for me but it is interesting to think about. You want something that you enjoy going to where you have some sense of responsibility but not too much. Maybe work at a golf course or a gym, something that I enjoy but not too much pressure.

Jul 11, 2020 - 8:58pm

At 26, after nearly two years in operations, I'm at several thousands in savings. I have never worried about money and got into banking because I thought it confers status and legitimacy of sorts eg in regards to my (future) personal brand. My plan is to progressively establish my own lifestyle ie fashion and interior design brand afterward

Jul 16, 2020 - 10:54am

"cocaine and hookers my friend."

"Full speed ahead, damn the torpedoes." -U.S. Navy General Farragut
  • Intern in IB-M&A
Oct 25, 2020 - 4:04pm

Starting FT next year, but really interested in personal finance topics. I've read a lot of posts on here about how even in banking people are not able to retire in their 40s or 50s due to lifestyle creep, etc. Has anyone here worked in NYC for a few years, saved up a decent amount, and then moved to a smaller city? Looking to do something along these lines with a move from IB to corporate after a few years and getting out of VHCOL areas. Grew up basically in the middle of farm lands so even "lesser cities" are more than enough going on for me, but thought starting in NY in the largest office would be beneficial to start. Would love to hear from you guys if anyone has done that or if it is a feasible thing to do.

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