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Net worth/savings of analysts and associates?

With the high cost of living in nyc and annoying taxes, it seems that most analysts after a 2 year stint end up with about 10k - 30k in savings. I'd imagine that associates and up would save much more assuming they don't spend beyond their means.
I thought it would be interesting to get some data points from current 2nd year analysts/associates et al. on how much you are actually able to save from your ibanking years.

P.S. for analysts who end up going to business school, would schools like HBS, Wharton offer financial aid since 15k in the bank is definitely not enough to cover 100k in tuition?

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Comments (231)

Mar 21, 2010

Loans, loans and more loans.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

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Mar 21, 2010

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto
so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

Mar 22, 2010
IB13:

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto
so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

This prick is a FRESHMAN (1st year uni). He's been going around giving advice to people with actual jobs, and now he's posting about how much money he'll save as a banker ROFL..

He changed his username from Tradex after he got called out on the previous thread...what a loser.

Mar 22, 2010
Shimness:
IB13:

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto
so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

This prick is a FRESHMAN (1st year uni). He's been going around giving advice to people with actual jobs, and now he's posting about how much money he'll save as a banker ROFL..

He changed his username from Tradex after he got called out on the previous thread...what a loser.

Lol..you seriously have no brains. Knowledge is not measured by status. Your claim automatically carries with it a subordinate claim, that claim holds that every one who is in high school, in their first year of university, and working in physically demanding jobs are all stupid and cannot use RESEARCH skills to surf the web, interview professionals in multiple areas, and learn beyond the constraints of their curriculum.

You represent the word dumb royally. You come off as immature, and frankly irrelevant. I've been living on my own for 3 years now and know just how much things cost thank you.

P.S, I only pass advice to others when I have researched the subject and know what I'm talking about. You're an angry little man, sexually frustrated I'm going to assume from you're demeanor. Just because you were an absolute idiot as a Freshman don't assume that's the norm boy, I have a 3.8 GPA.

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Mar 27, 2010
IB 13:

Lol..you seriously have no brains. Knowledge is not measured by status. Your claim automatically carries with it a subordinate claim, that claim holds that every one who is in high school, in their first year of university, and working in physically demanding jobs are all stupid and cannot use RESEARCH skills to surf the web, interview professionals in multiple areas, and learn beyond the constraints of their curriculum.

You represent the word dumb royally. You come off as immature, and frankly irrelevant. I've been living on my own for 3 years now and know just how much things cost thank you.

P.S, I only pass advice to others when I have researched the subject and know what I'm talking about. You're an angry little man, sexually frustrated I'm going to assume from you're demeanor. Just because you were an absolute idiot as a Freshman don't assume that's the norm boy, I have a 3.8 GPA.

hahahahaha only a 3.8 gpa from easy first year courses? That's fucking pathetic. I have a 4.0, please shine my shoes idiot 3.8.

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    • 1
Mar 29, 2010
ggrbc][quote: IB 13:

hahahahaha only a 3.8 gpa from easy first year courses? That's fucking pathetic. I have a 4.0, please shine my shoes idiot 3.8.

My SAT score is greater than or equal to both of yours', and IB13 is never going to settle down unless we give him a way to get out of this discussion while allowing him to save face.

//IlliniProgrammer taps his finger to his sideburns, gives both of you his mind-control stare, and forces both of you to stop bickering. : D

Seriously, everyone who makes it to NYC or into investment banking is pretty smart. 'Nuff said. No need to get into a pissing match in a discussion that's supposed to be about saving money.

As for saving money, the rules are pretty simple:

-Find a roommate your first year.
-DON'T live in Manhattan.
-Try to avoid NYC taxes
-Save 15-20% of your take-home salary. (Yes, it's possible if you follow the first three rules and are a moderate drinker)
-If you want to go to grad school, max out your 401k to shift income from years where you're earning lots of money (now) to years when you're not earning money (school, when you can withdraw money from an IRA penalty-free to pay for tuition.)
-Save all of your bonus money.
-Make conservative equity investments that are relatively uncorrelated with banking. (Pipelines, healthcare, utilities)

Oct 5, 2016

Misspost

Mar 22, 2010

IB13, here is what you initially wrote:

IB13:

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto
so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

You are clearly counting the chickens before they hatch pal. Being a damn freshman with a finance internship during the summer is light years behind having a full-time offer in hand. Focus on shit that is actually reachable at this point in your life, nailing 18 year old chicks, Christmas vacations with your family and having more than one semester with a 3.8.

    • 1
Mar 22, 2010
BobbyLight:

IB13, here is what you initially wrote:

IB13:

By my calculations, I should save about 40-50k a year. I have non refundable tax credits to offset my first year taxes with, for my 2nd year I'll pay my siblings to transfer their credits to me and so wont pay taxes again. I'll be in Toronto
so I should get by easy with 2300 a month (1000 rent, 300 bills, 1000 for rest). Thats about 27600. that gives me about 22k to spend on suits, watches, gifts for my parents etc. leaves me with 50k initially which leaves me with 10k for unanticipated expenses..

You are clearly counting the chickens before they hatch pal.

I already know my tax credits for the year, from the past two post secondary years and my financial adviser gave me estimates for the 3 remaining years. I already live on 2300 a month and I live comfortably, so what egg has yet to hatch? The compensation is a median.

I don't really see the crime behind collecting data and making assumptions based on that data, do bankers not do that? create various scenarios based on various assumption? like the impact of giant oil rig fire on the price of oil when acquiring an oil company perhaps?

And I already do all the freshman crap. I don't need to choose between being informed and partying. I can do both as long as they dont' come in conflict.

Hypocrisy and elitism seem to be a running gag in this thread.

Mar 21, 2010

With trust-fund or without ?i bet half the people here dont need to worry about money for as long as they live.

Mar 21, 2010

The top tax rate for NYC residents will go up to 60% by 2013, once Obama's plans get passed. It will be tough to save.

Mar 21, 2010
jjc1122:

The top tax rate for NYC residents will go up to 60% by 2013, once Obama's plans get passed. It will be tough to save.

get your facts right man, the top bracket goes up to 110%, the more you work the deeper a hole you'll be digging for yourself. I'm planning on escaping to Mexico, I hear the richest man in the world is from there. If he can make it big, surely others can too.

Mar 21, 2010

Current Third Year Analyst - I've saved $100k (which includes 401k matching) still paying off the minimum payments on my student loans. Excludes my third year bonus which I've yet to receive.

Mar 21, 2010
madgames:

Current Third Year Analyst - I've saved $100k (which includes 401k matching) still paying off the minimum payments on my student loans. Excludes my third year bonus which I've yet to receive.

Nice. Did you live on a certain fixed budget? What happens when you leave? can you cash your 401k? I'm assuming you'd be able to but would be taxed your current tax level.

Mar 21, 2010

hi madgames, that's amazing
would you say that the amount you've saved is typical of a 3rd year analyst?
any tips on how to cut expenses/save on taxes (tax credits?) as an analyst?

Mar 21, 2010

Similar story here - slightly over 100k.

Threw my second year bonus into anything that was long risk and ended up making some good dough. Was long cash prior to Lehman - that 5% WaMu CD that I bought the day after Chase bought their deposits was a fantastic deal.

Rent has gone down. Vacations are cheap. Been taking a vacation a month and just living the life.

The Obama tax grab is horrendous.. real estate is looking more and more attractive as a place to stash cash.

Mar 22, 2010
eric809e:

Similar story here - slightly over 100k.

Threw my second year bonus into anything that was long risk and ended up making some good dough. Was long cash prior to Lehman - that 5% WaMu CD that I bought the day after Chase bought their deposits was a fantastic deal.

Rent has gone down. Vacations are cheap. Been taking a vacation a month and just living the life.

Your story sounds pretty similar to mine.

I graduated without any debt and I had managed to save a lot of money from salary my first 12 months and I was only 1/3 invested from my first bonus in September '08. Went with the 5% Wamu CD; bought lots of boring regulated pipeline MLPs in January, February, and March when they were yielding 12-14%; now they are yielding 7%.

Now that everything seems like a bad investment, including cash, I'm doing adventure sports. Since nobody can afford to do hang gliding and motorcycle racing right now, top-notch instruction and vehicles/supplies are CHEAP. We've actually got a whole contingent from work heading up to Ellenville to go hang gliding in a few weeks. If we get a double-dip and go into a depression, I would prefer to starve to death while doing something fun than starve to death while being bored.

Mar 21, 2010

what is the 401k matching plan at BBs? 50% of the first 6% of your salary? or dollar for dollar up to X%?

Mar 21, 2010

mine for 6% up to 100k. So basically 6k each year although that will drop this year.

I don't throw money around, but like to eat and live well. Have taken 6 weeks of vacation (you get 3 weeks between your 2nd and 3rd year). Eat out at a nice restaurant once a week maybe more depending on how much I'm working, etc.

It's important to enjoy the money you make if you have the time or you're going to have a really miserable 2 - 3 years.

Mar 21, 2010
Mandata:

P.S. for analysts who end up going to business school, would schools like HBS, Wharton offer financial aid since 15k in the bank is definitely not enough to cover 100k in tuition?

All-inclusive cost of business school (tuition + living expenses) is about $160k.

Mar 23, 2010

all the bschools offer financial aid packages in the form of loans or grants...lots of fellowships out there as well...no need to worry about savings, unless you want to pay for the full 160K yourself. you're really in all likelihood going to take loans and pay em off with your jobs post bschool

Mar 21, 2010

I think 100K is reasonable after 3 years when you factor in 401(k) matching. Figure less if you are aggressive in paying off your student loans. Honestly, considering analysts and associates working in NYC are going to be at or near the top tax bracket I would take every opportunity to sock away money in 401(k), IRA, whatever.

I will never, ever understand why anyone would support increasing taxes. I don't want rich or poor to pay more, Jesus, we pay enough already. Govt should try doing more with less like just about every American family has learned to do.

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Mar 22, 2010

6 weeks vacation, are you a banker in Canada or France? 100K after two years is pretty impressive and questionable if living in NYC

Mar 22, 2010

Well we need to level out the discussion here. "saving" 100k in the 401k is not the same as saving 100k. You have to pay taxes on that when it comes out. About 60k of that prob was tax deductible going in, so aprx 30% of that will disappear. That about 80k. Still pretty impressive.

I'm sure some people ball out and spend it all. Anyone have any good tax suggestions?

Mar 22, 2010

Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Masters in Finance HQ - The #1 site for everything related to the MSF degree!
MSFHQ

Mar 22, 2010
AnthonyD1982:

Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Been living on my own 3 years now, got a college diploma in financial services along with a couple of licenses before moving to University. I'm not a child, thank you.

Mar 22, 2010
IB13:
AnthonyD1982:

Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Been living on my own 3 years now, got a college diploma in financial services along with a couple of licenses before moving to University. I'm not a child, thank you.

You are in college yet you've projected bonus savings for your "first and second year," do you understand how stupid that sounds at this point? Focus on getting internships and then a FT offer, it's not as easy as you'd like to think it is.

Mar 22, 2010
BobbyLight:
IB13:
AnthonyD1982:

Whoa, relax kid. All your research is great, but much like until you live on your own you don't really know what it is like so true with this topic. Relax and if you are going to spout gospel atleast qualify your opinion with the fact that you haven't even finished school yet.

Been living on my own 3 years now, got a college diploma in financial services along with a couple of licenses before moving to University. I'm not a child, thank you.

You are in college yet you've projected bonus savings for your "first and second year," do you understand how stupid that sounds at this point? Focus on getting internships and then a FT offer, it's not as easy as you'd like to think it is.

These are estimates based on Bay street median earnings. You seem to just look for a way to exploit my educational status. I'm a frshman, so what? Does that automatically disable me from asking other bankers about compensation?, from looking at the numerous publications on the issue? If your comment holds truth we wouldn't be able to write any assignments here at monkey freshman year classes.

P.S, I already have an internship lined up for the summer.

Oct 3, 2016

You're like, a huge douche. Also, Investment Bankers are good at sniffing out bullshit. Try and tone your personal brand of it down a notch.

Mar 22, 2010

Don't complain. Law school is $210k including living expenses. And the majority of law students didn't have cushy jobs pre-law school. And lawyers make less than post-MBA associates. That's okay though, lawyers have more job security than ibankers. Much rather be a bankruptcy lawyer right now.

Thank god I'm taking a withdrawal from the Bank of Mom and Dad and won't have any student debt.

That said, $100k seems possible based on wall street salaries. Then again, you never know with obama's tax increases.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

Mar 22, 2010

Listen, lets steer this pissing match back on topic or I will lock the thread.

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Mar 22, 2010

Let's discuss this adventure sports further. I am VERY interested. Been skydiving, but nothing more than that.

How is hang gliding?

Mar 22, 2010

would the people with the 100k savings mind listing some more detailed figures or a breakdown?
i'm interested in any advice on how to cut expenses/save on taxes as an analyst
p.s. any tax saving tips?

Mar 22, 2010

^
me too

Mar 22, 2010

Living with roomates saves a lot. My first two years I lived with 4 other people. Mind you this was a HUGE apartment, but rent was reasonable and we split all expenses 5 ways.

Also you can use your "dinner" money for groceries which helps.

Also having a girlfriend and taking girls out can be killer, so you need to manage dates accordingly. E.g. never take a first or second date out to dinner, only do drinks etc etc

Mar 22, 2010

The only way i can see one saving $100k plus after a 2-3 year analyst stint, is if their parents paid for their UG, in other words, you would have to be debt free to rake in such a savings.

Mar 22, 2010

I don't know, when you figure in 401(k) with match it isn't such an outlandish figure. If with match your 401(k) contributions are around 10% your talking about ~21K with no growth. 3 years of bonuses with some reasonable savings could bring you fairly close.

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Mar 23, 2010

Peter_27 - don't forget: you can have scholarships and grants/loans. Many also work multiple part-time jobs as well. Some of my previous part-time jobs were pretty lucrative - valet (drive cool cars, make cool tips), sat tutor (many rich parents will pay top $ for higher test scores - $100+/hour is a drop in the bucket for them and a ton of money for a college student).

For those thinking about business school, a 529 account is a great way to save tax free and gets you a NY State tax credit.

With pay going up and rent staying low, it shouldn't be too hard for incoming analysts to save. However, part of it also depends on what "bucket" you are in. There is a ton of talk about top bucket numbers, but that's only for the top 10-20%.

Mar 23, 2010

B-schools do NOT like to give financial aid to bankers. I had 0 savings and it was a pain getting a loans but no scholarship (despite stelar academics and emerging market experience) - I asked why other people were getting scholarships even though they clearly had no financial difficulties (i.e hink people with instantly recognisable last names that sound like big big existing companies, doctors, lawyers, familly business types). Answer: I put in my essay i wanted to go back to finance and therefore told that i would make back the money very quickly anyway.

So if you are smart you can do like my friends who i) hide all their savings in their parents bank accounts 2) understate all their assets iii) overstate all expenses iv) understate salary as much as they can v) mention that they want to set up hospitals in Africa after graduation and vi) go on to work for Goldman / Mckinsey anyway.

Mar 23, 2010

" can you cash your 401k? I'm assuming you'd be able to but would be taxed your current tax level."

if you withdraw early (ie pre retirement age, except for a few unique scenarios) you pay all taxes at current levels and a penalty rate. it's not a good idea.

for 401k matching it ranges. some places do 5% on the first 100k...some do more than that on total comp. I know shops where b/w pension and 401k matching you can be getting close to 10% of your salary, for free.

Mar 23, 2010

10% of your comp i mean...up to the irs limits.

Mar 23, 2010

401(k) match is entirely based upon deferral of salary. You can defer $16,500 this year into your k plan if you're under 50. Most companies are going to match anywhere between 3-6%. Some less some more. Anybody not taking advantage of the "free" match money is an idiot.

Mar 23, 2010

"Most companies are going to match anywhere between 3-6%"

but it can be 3-6% of your contribution...or 3-6% of your comp. quite a difference

Mar 23, 2010

6% of my comp up to 100k for me (at a BB)

Mar 23, 2010

"6% of my comp up to 100k for me (at a BB)"

ok take advantage of that. there are places who will match much more.

on the flip side, i know of no big law firm that does any sort of 401k matching...

Mar 24, 2010

just curious, anyone living in sf care to comment on the saving too?

Mar 24, 2010

2nd year analyst - have saved almost nothing. Most of my salary goes to living expenses while my bonus went to paying off debt, wardrobe, and a well-needed vacation. As an above poster said, girls are a total drain on funds. I think I modelled out that including dinners, drinks, and assorted entertainment, I've spent over $1,500 year to date on girls (figure includes spending on myself [e.g. my portion of the dinner] that I would have forgone had I not been with said girl).

Mar 24, 2010
Juwanna Mann:

I think I modelled out that including dinners, drinks...

You're not a banker, are you?

Mar 25, 2010

After 2nd year - I had about 135-140k

Mar 25, 2010

how did you guys save 100k+ in 2 yrs? what's your lifestyle like? please elaborate...like others, i'd be intersted to know. thx

Mar 26, 2010

I work in MO and my net worth is $110K. 2 Years ago it was negative $7k ($10K savings, $17K student loans). Of course, this includes retirement money (401K and IRA - $66K ROTH money), which B-Schools can't touch.

This was mainly due to two factors:
1. Investing in highly leveraged mutual funds at the beginning of last year
2. I still live with the parents so that obviously plays a factor (although I am moving out in July)

My lifestyle sucks. I am cheap and hardly ever drink.

Mar 26, 2010

not having to pay rent is awesome...that's almost $20k saving per year > $35+k over 2 years right there.

Mar 27, 2010
dairyman_crick:

not having to pay rent is awesome...that's almost $20k saving per year > $35+k over 2 years right there.

It may seem that way, but all of this constant bickering and fighting with my parents is really annoying. Hence, why I plan to move out in July when a few of my friends graduate and come to NYC. Not to mention I share a room with my sister, which sucks less since she's away for college until May.

There's like zero space in the house so it's really really hard for me to find quiet time to study for the CFA and GMAT (when the time comes). Usually I have to study on the subway or schlep an hour each way to the Main Library in Midtown.

Mar 28, 2010

IB13 is this you?
I'm "IB"_2014 from the other forum that you visit once in a while.

Mar 28, 2010

I am a third year analyst in i-banking and my net worth is $130k. I have only have 2 full bonus cycles. I live in NY. I graduated with 15k in net worth. It is possible, friends.

Mar 28, 2010
broadandwall:

I am a third year analyst in i-banking and my net worth is $130k. I have only have 2 full bonus cycles. I live in NY. I graduated with 15k in net worth. It is possible, friends.

come on dude, why don't you be a doll and explain HOW it is possible with telling us HOW you managed to save that amount of money. And, how much of that savings is bonus and salary?

Mar 29, 2010
BobbyLight:
broadandwall:

I am a third year analyst in i-banking and my net worth is $130k. I have only have 2 full bonus cycles. I live in NY. I graduated with 15k in net worth. It is possible, friends.

come on dude, why don't you be a doll and explain HOW it is possible with telling us HOW you managed to save that amount of money. And, how much of that savings is bonus and salary?

I work in capital markets and I'd like to think it's possible for a thrifty analyst in IBD. You can save $5-$10K out of salary your first year if your rent is less than $900-$1000/month and you're a moderate spender (eating out 1-2x/week, no ridiculous spending your first year). Second year, you get a $10K salary bump, so you can save more like $10-$15K your second year out of salary, plus the money you save from bonus. Third year, maybe $15-20K. So we're talking about $35K in savings from salary and then maybe another $33K/year from year-end comp. Also, we don't know how much of this money is pre-tax or post-tax.

You won't be able to wear Armani suits, go to Tahiti for vacation, or live in a penthouse with a balcony facing Central Park, and you might have to do some of your own cooking on the weekends, but you can have a comfortable life with plenty of room in the budget for occasional fun stuff (heading out to Jones Beach, going skiing in VT, doing ice dives on Lake Ontario, etc.)

Mar 28, 2010

to broadandwall: can you pls elaborate on how you saved up that much? lived at home? thanks.

Mar 28, 2010

yeah broadandwall, please elaborate.

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Mar 30, 2010

I know this is irrelevant, but my brothers net worth is 1.1 million.

He was one of the first 100 employees to be hired by YouTube (Steve Chen) and when they were acquired by Google for 1.65 bill, he cashed out his stocks and fucking became a millionaire. In fact all his coworkers became millionaires or multi-millionaires off of that. How's that for 5 years out of college

Mar 30, 2010
Theteller:

I know this is irrelevant, but my brothers net worth is 1.1 million.

He was one of the first 100 employees to be hired by YouTube (Steve Chen) and when they were acquired by Google for 1.65 bill, he cashed out his stocks and fucking became a millionaire. In fact all his coworkers became millionaires or multi-millionaires off of that. How's that for 5 years out of college

You raise a good point- you don't have to do banking or finance to become a millionaire or a "baller". I think it's healthy for folks thinking about finance to realize this- both for their sake and the sake of the long-term economy. (The US will need a lot of start-ups- and brilliant people with good ideas- to go back to being a producer economy)

If anything, I think the aggregate income of a lot of folks hired into finance in the past 5-10 years would be higher if the folks who really enjoy doing something else got into those industries.

Oct 5, 2016

$1,000 month rent? Where the hell are you guys living? Middle America?

Oct 6, 2016

Doable in Houston, Chicago, LA, or Charlotte for bankers

...or get roommates

Oct 6, 2016

LA? Are you living in Compton near USC lol?

Oct 7, 2016

I'm in Houston which is way cheaper. I wouldn't personally live on that in LA but I've heard of people doing it since most people have cars and some don't mind the commute.

Oct 7, 2016
npa2392:

$1,000 month rent? Where the hell are you guys living? Middle America?

2010

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Oct 7, 2016

$0.00 but would be about the same if I wasn't paying that in school loans.

YOLO

Oct 7, 2016
yeahright:

$0.00 but would be about the same if I wasn't paying that in school loans.

YOLO

Yup

Oct 7, 2016

It's very possible to end up with over 200k. That's if you have self control.

    • 4
Oct 7, 2016
BTbanker:

It's very possible to end up with over 200k. That's if you have self control.

???

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Oct 7, 2016
BTbanker:

It's very possible to end up with over 200k. That's if you have self control.

Hahahah what????? That is the most ludicrous statement I've heard in a long time. Self-control like living with your parents and evading taxes maybe. And the best part is you even said "very possible".

    • 1
Oct 7, 2016
BTbanker:

It's very possible to end up with over 200k. That's if you have self control.

Is this serious?

    • 1
Oct 7, 2016
BTbanker:

It's very possible to end up with over 200k. That's if you have self control.

Man I want some of whatever you're smoking. I'd be impressed if most people's take home reached 200K.

My goal for my first year is $25 - 30K - won't be in NYC so bonuses are smaller.

    • 1
Oct 7, 2016

200k must be assuming you get a 70k+ bonus....or score some big return on some investment

    • 1
Oct 7, 2016
wadtk:

200k must be assuming you get a 70k+ bonus....or score some big return on some investment

200k is completely impossible unless you are top bucket both years, live at home or pay next to nothing in rent, never spend money on going out / entertainment, eat seamless and save leftovers for lunch the next day, never party, don't have a gym membership and have no student loans. On top of all the above, you would also have to live in a state like Texas with no state taxes, and you would need to have a substantial return on investments...

What actually happens:

You might be top bucket, but top bucket is 50 or 55k instead of 70k. You don't live at home, but live near the office because you need to maximize sleep, there goes $1500/mo (reasonable estimate in Manhattan), you pay for lunch every day and drink a coffee every now and then. You also go out 1 night a week to blow off some steam and prevent yourself from ending your life. You pay state and local taxes to New York and Manhattan. You buy new suits because you wear through your old ones. You take a vacation because you haven't done anything fun or relaxing in longer than you can remember.

Long story short... NOBODY saves 200k in two years as an analyst post '07 unless they live at home and invest like Soros around their 90-100 hour weeks. I would argue that it would be pretty difficult for an MBA to come close to that level of savings.

Saying that it's reasonable to save 200k if you are diligent as an analyst is almost entirely laughable.

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Oct 7, 2016

no chance of saving 200k.... Are you working in the Midwest? 100 would be possible then. MIDWEST IS SO CHEAP IT BLOWS MY MIND!

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Oct 7, 2016

100k

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Oct 7, 2016

6/10 for troll effort on $200k. Next time, pick a less obviously fake number for better effect.

Oct 7, 2016

I saved ~50k which basically meant I spent about every dime of my salary (hard not to spend $300/weekend on food and booze in NYC if you want to be social) and hung on to my bonuses.

Oct 7, 2016

lol... I should have said 300k.

Oct 7, 2016

The sage rule is always live on your base, bank your bonus. I didn't follow that. At all.

YOLO.

if you like it then you shoulda put a banana on it

Oct 7, 2016

I'd say $300k is the norm

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Oct 7, 2016

The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.

Oct 7, 2016
SanityCheck:

The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.

Oct 7, 2016
SanityCheck:

The average analyst in NYC is living off the base and at most saving 10k of it a year. Usually you'll save both bonuses which in these times can be 50k each (averaged out) or even less. Just to pick 100k pretax as a round number, you'll probably save around 65,000 if you live very frugally, but in my experience most analysts save between 0-50k.

Truth

Oct 7, 2016

They got banking jobs in the midwest? At Charles Schwab?

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Oct 7, 2016
Disjoint:

They got banking jobs in the midwest? At Charles Schwab?

Minneapolis has quite a few.

Oct 7, 2016
Disjoint:

They got banking jobs in the midwest? At Charles Schwab?

There is this place called Chicago in case you haven't heard.
There, you can live off $1200-1500 a month if you live frugal lifestyle.

I'm not in IB so I have time to go out and spend a lot more, and I still spend on average less than 2000 a month.
100k is ambitious but reasonable after two years.

Oct 7, 2016
qweretyq:
Disjoint:

They got banking jobs in the midwest? At Charles Schwab?

There is this place called Chicago in case you haven't heard.

There, you can live off $1200-1500 a month if you live frugal lifestyle.

I'm not in IB so I have time to go out and spend a lot more, and I still spend on average less than 2000 a month.

100k is ambitious but reasonable after two years.

I am close to 85K now after just under year (granted I started with a 30K surplus and and only 5K of subsidized loans).

Key is this:
- Contribute 401K to maximum IRS limit ($17,500)
- Put your money to work
- Don't pay an arm & leg for a dumb apartment you will never be in

Oct 7, 2016

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years
- 104k if top bucket
- 80k if middle bucket
- 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers:
- Maxing out all pre-tax deductibles
- Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride
- I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

Oct 7, 2016
gdxx:

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years
- 104k if top bucket
- 80k if middle bucket
- 62k if worst case scenario, bottom bucket

Planning

Oct 7, 2016
F. Ro Jo:
gdxx:

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years
- 104k if top bucket
- 80k if middle bucket
- 62k if worst case scenario, bottom bucket

Planning

As the Bard said, the best-laid plans of mice and men often go awry

Oct 7, 2016
gdxx:

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years
- 104k if top bucket
- 80k if middle bucket
- 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers:
- Maxing out all pre-tax deductibles
- Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride
- I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

worst case scenario = you on the street bruh

Oct 7, 2016
gdxx:

NY BB

I just calculated and I'm planning to save (POST-TAX) at the end of the two years
- 104k if top bucket
- 80k if middle bucket
- 62k if worst case scenario, bottom bucket

Pre-tax, these numbers are 180k, 140k, and 116k respectively.

This is including max 401k matching, so that's a portion of the money that's not touchable.

This does not taking into account pay raises and bonus raises in the second year, as I'll probably upgrade my quality of living spending accordingly.

Value drivers:
- Maxing out all pre-tax deductibles
- Rent and utilities add up to less than $1,350/month. I'm sharing a three-bdrm with two friends in Manhattan. My room is tiny but at least I get my own room and the commute to work is a 10min train ride
- I'm putting a hard cap on monthly discretionary spending. 50% of discretionary go towards drinks/going out (liquor diet). 20% go towards lunches not comped by Seamless. The rest go towards new clothes/random things that pop up.

Hopefully this is a helpful reference point for anyone wanting to leave frugally in NYC. Happy to clarify anything.

On what planet are you making 180k pretax as first year analyst in banking at a bulge bracket?

Oct 7, 2016

Rufiolove - That's at the end of TWO years, read the first line.

For the first three months into the job, I've been under-budget. Have hope guys, this is definitely possible.

Oct 7, 2016
gdxx:

Rufiolove - That's at the end of TWO years, read the first line.

Thx for the clarification. My response was in reference to 2 years. Thx

Oct 7, 2016

@heuthan: worst case scenario - you on the street

Oct 7, 2016

1st year here at BB...at my current monthly savings rate, I'm saving a MINIMUM of 20k off my base..I save a MINIMUM of 1650 per month...some months i've even saved around 1800...it can be done

Oct 7, 2016
quag_mire:

1st year here at BB...at my current monthly savings rate, I'm saving a MINIMUM of 20k off my base..I save a MINIMUM of 1650 per month...some months i've even saved around 1800...it can be done

hey asshole where do you live?

Oct 7, 2016

I live in midtown in a doorman elevator building, and pay 1650 in rent for my own room + bathroom (i have the master bedroom)...the reason I can save that much is that i spend close to nothing on food, thanks to seamless, which saves around 400-500 a month, and I also walk to work (10 min walk), so that saves another 100 on a subway card...all my expenses are basically going out on weekends/random shopping for clothes etc...also i dont have any student loans

Oct 7, 2016

Yeah, dude, you clearly have no idea how much analysts at BBs make these days. I would say top bucket 1st yr is about 60k and bottom can be as low as 20k depending on the bank.

Oct 7, 2016
mrb87:

I would say top bucket 1st yr is about 60k and bottom can be as low as 20k depending on the bank.

This is accurate. It varies between banks AND groups within the bank (e.g. TMT vs FIG vs LevFin). I got second bucket and got 40k as 1st year bonus (BB industry coverage). Bottom bucket at my bank got laid off.

I was able to save 55k cash (not counting 401k and benefits) in my first year. Regional office. I live pretty modestly. I was also getting killed, so I wasn't able to spend as much time/money at the bars as I would have liked. But when I did go out, I would spend more money or buy more rounds for my friends because I was flowing with cash. I went out on average 1 night per week, but I usually didn't go as big as I would have liked because I was always too tired or had to work the whole next day/night.

If you're consistently working 90 hours a week, you'll save a lot more money than the analysts working 70 hrs/wk because that extra 20+ hours is what kills any life outside the office (and therefore significantly lowers expenditures). Also, you'll eat more Seamless and hopefully get a bigger bonus than the 70/wk pack.

Epilogue: I retired after my first year as an analyst with $75k in my PA (had $20k life savings before I started). Now, I'm enjoying the good life. What will I do? Not sure, but it feels good to have $75k in the bank.

Best Response
Oct 7, 2016

Being frugal and living within your means are all well good but I feel these threads turn into an orgy of "I'm the cheapest son of a bitch on the Street" and then IlliniProgramer comes in lays down his ultimate tales of thrift to be +1'd.

Things like vacations, girls, nice gifts for family members, etc are all expensive. That doesn't mean they are always a negative. There are two kinds of people who live in shithole apartments the size of a closet, eat the same food every day, work 100 hours a week, and are miserable: Foxconn employees and junior bankers trying to squeeze every nickel out of their salary.

When I sit down at the end of the year I'm not going to say to myself "Could have bought 15 extra shares of GOOG with the money I spent on vacations and golf" or "Gee shucks I'd have an extra 100 shares of GIS if I didn't take my girlfriend out to nice restaurants"

Go out and try to enjoy life a bit - I knew a very talented equity analyst with a sick job at a HF that got diagnosed with cancer at 27 and was dead within a year.

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Oct 7, 2016
Gray Fox:

Being frugal and living within your means are all well good but I feel these threads turn into an orgy of "I'm the cheapest son of a bitch on the Street" and then IlliniProgramer comes in lays down his ultimate tales of thrift to be +1'd.

hahahaha, that made me lawl.

Oct 7, 2016

as gray fox puts it, live your life and that will not always be cheap but experiences are what makes it exciting and shape us.

Oct 7, 2016

so you saved 75% of your after tax income?
....

Oct 7, 2016

I earned 40k in 2011 and 80k in 2012 (including bonus) as a first-year analyst. My effective tax rate for this 120k was ~25% I think, which means that I earned ~90k after tax. I was able to save 55k of this. So, I was able to save ~60% of my after tax income. This seems reasonable to me. My after-tax paychecks were ~$2k. I paid $1250 in rent and I usually kept my monthly credit card bill under $750. Jan-March were horrible months as far as hours and my cc bills were like $300! Didn't have cable (no time). I was able to save like 2-2.5k per month after tax plus my 40k bonus (~30k after tax). So my savings were somewhere between $45-55k (I made some money in the markets from this too). Note: my credit card bills were much higher in college when I was going out 5 nights per week + trips all the time. Since I quit, I spend more money on leisure (bars, sports equipment/gear, weekend trips), but I moved back home to save on rent and food. I'm retired for the rest of this year--at least.

Oct 7, 2016

my effective tax rate so far is 33% :|

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Oct 7, 2016

16 months in as a consultant... I'm at 35k. Probably helped by the fact that I put a very large chunk of my paycheck into my 401k since its pre-tax.

Oct 7, 2016

I just plotted my credit card expenses for the last 3 years. The average bill was $900 before I was analyst. While I was analyst, average bill was $400! December 2011 was $60 and March was $160!!! Those were by far the worst months of my life. Since I quit, my cc bills have returned to $900 (on 2 months so far). Interesting.

Oct 7, 2016

I started out with 30k in the bank and ended my 2 years with 150k. I did invest like Soros though (through luck)

Dec 31, 2016

Is $2.25mm of savings after 7 years realistic in IBD? Just made a post about it but this girl (The Money Habit Blog) said she was able to save $2.25mm after 7 years (earnings plus index fund investing). Probably from like 2009-2016. Know the markets were up but this still seems high given NYC taxes and she was still spending ~24k a year. Of course I have never worked in IBD or maybe she was a trader. Believe she was working for JPM.

Dec 31, 2016

Yeah it's possible if she ended at VP or higher.

Dec 31, 2016

Gotcha thanks. I figured 3 years analyst, 3 associate, then 1 VP but maybe she did more like 3/2/2 which makes sense. Hopefully she'll detail at some point .

Dec 31, 2016

Hard to say really. She might have had no student loans and an initial starting point from her parents. Interesting blog to read, though. Taking a look now

Dec 31, 2016

Just did some back of the envelop math on this because I'm bored waiting to go out for New Year's, and the risk of someone checking my math / nitpicking on numbers/assumptions, I find it very hard to get to 2.25mm after 7 years (I call it 7.5 years because she wouldn't have quit before her bonus in year 7...also apologies for the formatting here)

Level Year Pre-Tax Income Post Tax Income Rent/Expenses 401k match Investable $ ROI Total Savings
AN1 0.5 $98 $59 ($21) $6 $43 25.5% $43
AN1/AN2 1.5 145 87 (42) 9 54 108
AN2/AS0 2.5 198 119 (42) 12 88 224
AS1 3.5 250 150 (54) 15 111 392
AS2 4.5 325 195 (54) 18 159 651
AS3 5.5 400 240 (54) 18 204 1,021
VP1 6.5 500 300 (66) 18 252 1,534
VP2 7.5 600 360 (66) 18 312 2,237

Some key assumptions--

Assumes $25k signing bonus for analyst in year 0.5 and a stub bonus (I know some banks give full bonuses in June for analysts but that is not how I did this).

In year 2.5, she gets a stub analyst bonus and a stub AS bonus as she transitions into the associate role (note she's promoted after 2 years of being an analyst).

Spends $1,500 per month on rent as an analyst, $2,500 per month as an AS1-AS3 and $3,500 a month as a VP. Associates are less likely to have roommates and VPs likely aren't living in studios.

Assumes $2k per month in other expenses--this likely is on the low end.

For effective tax rate I assume an all in effective rate of 40%.

401K match I kept it simple and have this at 6% of total income (maximum of $18k contribution limit). Realistically signing bonsues and (I believe) normal bonuses wouldn't be subject to this match.

Assumes that all money is invested at period end for simplicity.

I took rough guesses at all in pay--VP is pretty variable so it's likely she had bang out years here--my figures here are more for mid-bucket.

Based on the math above, she'd need a 25% return per year to hit $2.25mm--this isn't happening. If I add 20% to pre tax income above (would be top bucket or close to it), you'd still need a 16.5% ROI--again this isn't likely over a long period on index funds. The S&P had a 13.4% CAGR from 1/1/09 to 12/30/16. which is still well short. She likey had at least some comp in her bank's stock, which likely has appreciated since the financial crisis, so perhaps this makes up a bit of the gap.

She certainly had no student debt in these figures and very likely had some decent savings before beginning her job. I'd venture to guess she also was top bucket or close to it. So based off these rough calcs, yes it's possible but not really a realistic goal. If I plugged in more realistic assumptions I'd say savings of around $1.5mm after 7 years a bit more realistic (assuming no kids, divorce, good health and other caveats).

Dec 31, 2016

Another huge caveat to this is it ignores the fact that if she was at a BB firm, a larger chunk of her pay was likely deferred/not vested--if you retire sometimes firms will accelerate this,l but they do that more for old MDs--if I told my firm I was retiring at 28 and asked that my deferred comp not be forfeited, they'd laugh in my face.

Dec 31, 2016

Yeah I believe there was some kind of deferred comp involved which don't know the details of. I also thought a lot of it would be forfeited though given she wasn't so deep into her career but we need more details..

She lived on ~24k for all 7 years I believe. But I also read she did some significant traveling right after she graduated (must have been funded?) and she also started investing at 19 so probably some gifting there or maybe she worked throughout college etc but this probably couldn't be substantial money? Then also I read she took a sabbatical in the 7 years she was working. (You can do that so early in your career?!!). She definitely had no students loans thanks to merit based scholarships and some help from parents. She was at JPM to the best of my knowledge.

Yeah I hope she'll do the play by play at some point cause its definitely impressive especially if she did it from 0 to $2.25mm. We already know she didn't have student loans etc. It would be less impressive if she was gifted a significant amount of money at 18 or 19 etc although still congrats to her.

May 7, 2017

bump. Lets hear more net worths?

May 7, 2017

I plan on spending most of my 60K and saving as much of my bonus as possible

May 7, 2017

At $60K annual salary you'll automatically have 35% in federal income tax withheld. Then you lose another 7% or so in state income tax. Then there's also FICA and other withholdings... all in all you'll only take home around 50% of that, so we're looking at $30K, maybe slightly more.

An apartment in Manhattan will be around $1000-1500 on the VERY low end and maybe even that's too low (haven't lived there in a few years). Any lower and you might put your life/health in danger.

So let's just assume midpoint and say $15K a year on the apartment... so that is $15K you have left to save. But obviously there are other expenses like transportation, utilities, misc. personal stuff etc... so that drops your disposable income to $10K.

My advice: don't worry too much about saving all this money in your first year. Your bonus is what counts. If you never do anything fun in an attempt to save all this money, you will go insane. Have some fun, and focus on saving/investing your bonus.

May 7, 2017

you do not get 35% federal withheld making 60K, not even close. your marginal tax rate is 25% up to $77,000, and your average tax rate is lower than that. Once you add in FICA and state and city tax, it adds up to about 35-40% total withheld.

May 7, 2017

But you'll get taxed after bonus and unless your emploer sucks he'll give you a fairly good bonus which will put you above 77k.

Reality hits you hard, bro...

May 7, 2017

But you'll get taxed after bonus and unless your emploer sucks he'll give you a fairly good bonus which will put you above 77k.

Reality hits you hard, bro...

May 7, 2017

Tax rates are based on marginal dollars earned. Your first 77k will be taxed in their respective buckets (google tax rates to find exactly what they are). Once you hit the 77k threshold, every dollar over that is taxed at the new rate. Therefore, your 60k from salary will not be getting taxed at the maximum rate.

May 7, 2017

To sum it up in a nice accounting fashion:

Income: 60,000
Less FICA, FUTA, SUTA: 6000
Federal tax: 15000
State tax: 4800
Gross Income: 34,200
Less Housing Expenses: 18000
Transport Expenses: 1800
Food expenses: 7500
Partying & drinking expenses: 2500
Laundry, Electricity & water: 2000 (you save a lot on electricity cause you never get a chance to be at home)
Total Expenses: 31800
Savings: 2400
Savings + Bonus(Lets assume its 100% of base after tax): 2400 + 40000 = 42400(try and invest or save that for B-school, but in my opinion, I'd put it in a mutual fund and chill out)

May 7, 2017

Guys, you can definitely afford to max out your 401k over the year, decreasing your taxable earnings. Plus, your first "stub year" where you work from june to december you won't be anywhere near the higher tax brackets and should get a refund.

May 7, 2017

Guys, for additional investing, what investments do you choose. Are you fans of low-cost mutual funds (indexes) or something else? I am looking to start saving and keeping it in the fund for 30 years or so.

May 7, 2017

i save the maximum amount that my firm will match ~4% and have about $250 a week of disposable income... meaning shopping drinking eating out etc. This is after all other necessary expenses like dry cleaning, utilities, breakfast/lunch money. Some weeks im working all day and night so i have more cash to spend the next week. Outside my 401k i dont save. Saving will come when its bonus-time.

If you want to save more than that, you will just have to cut back on going out, which i do not recommend, because you will almost definitely go crazy.

May 7, 2017

Don't worry about saving your first year. Enjoy the transition and the move up from college life.

May 7, 2017

If you follow your budget, you'll do fine. Also good to not include bonus figures in your calculations.

I followed a budget quite strictly my first 6 months, then ramped up my rent, then started to eat a little better, then paid more for rent again, then decided to spare no expenses to ensure that I live well.

Basically, if you cut corners in some parts of your life to save up a bit extra, it'll catch up to you.

So I save a bit less every month now than when I first started, even though I earn a good percentage more.

Analysts should be able to, all-in, save at least $20k a year. Obviously, the further away from fees you move and the closer you get to adding value to assets, the potential is greater.

May 7, 2017

yeah i agree

If I were extremely frugal, i'd probably pay 800 for rent, buy cheap groceries and bring my lunch,

But I'm not, I live comfortably but I don't go splurging on 2000 dollar suits, 1000 dollar watches, 100 dollar steak dinners, and bottles for random girls at the club...every night like Bateman.

Anyways, yeah 20K per year is defin doable...hope to exceed that by a significant margin though!

May 7, 2017

If my fuzzy math is correct, assuming $70k, taxation of 35% federal/state/local (if any), single, $50k bonus, no car and NOT NYC, you could probably save $50k easily. You could probably take care of day to day expenses for about $30k a year, assuming your firm doesn't cheap out and decide to stop reimbursing you for late night food.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

May 7, 2017

Chicago?

May 7, 2017

HomerS, your bonus is what will really impact your savings/net worth. Lots of kids end up in complete debt before they even get their bonus. I have excluded bonus from the $20k assessment; if you don't splurge throughout the year, it should be pretty do-able. I spend nearly half my salary on my apartment, but that's because it's an apartment will impress just about anyone in their early-mid 20's, unless you're an NBA athlete or Megan Fox. Otherwise, I find my biggest expense to be plane tickets (I work in what you could call an emerging market) and taking friends out when they come and visit me - if you're working in your own country, I can guarantee your expenses in these areas will be significantly less than time. Consumption: if as an analyst you consume like a vice presisdent, you will most certainly end up abusing the plastic, and your bonus will mainly be there to service your debt - if it even does.

What is the pension plan like, and how will you invest your savings?
I had cashflow issues (until this year, I had to pay my rent 4 months at a time, which really adds up) so I couldn't put my savings into equities until recently.
Is your employer the sort that will pool all analysts/employees together, or do they reward individual performance? If the former, you are essentially dependent on your firm's/division's performance, and you should never discount the possibility of a bad year (which lots of people outside GS and JPM had last year).
Associate promotion: if you make it to associate, certain banks give you a "promotion bonus". It's sizeable.

By the way, I am assuming you are working for a bank. If you're a consultant, add 20 per cent to your salary savings, but your bonus will be minuscule.

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May 7, 2017

I'm not a consultant.

I just have no clue what the bonus will be like.

That is why I'm not counting it in my savings.

Whatever the bonus (since it varies so much), I still plan to save as if I had no bonus. This way the bonus is just icing on the cake for later years.

I do travel quite a bit if I have time, but I still don't imagine i'd spend 10,000 bucks on that per year.

I love to party sure, but I'm a different kind of partier and not into the splurging bottles and models. So I don't really lose any cash over that stuff.

Anyways, I plan on investing in ETFs for the most part. Mix of EM, and NA ones

May 7, 2017

If you're in consulting though you probably could get away with not springing for a nice apartment, since you're on the road 4-5 days a week anyway. Maybe even get rid of your apartment altogether and store stuff with the parents. You're probably best of getting an apartment near the airport but within reasonable distance from your base office although you'll probably only go there maybe once a week. So that's going to mean significant savings over IB where you're home almost every night.

btw, $10k is a lot of money for travel. If you travel off season (who the hell wants to travel during peak season anyway? I sure as hell don't-too crowded) and join a frequent flyer program, it could take you far. It's not like things get any more interesting during peak season.

I'm so glad I'm going into corporate law. Pay is completely lockstep and base is 80-90% of your total comp.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

May 7, 2017

Search. This has been broken down 100x by location, and even by line items of things you will be spending money on.

May 7, 2017

savings ha ha ha lol :)

May 7, 2017

I tried to save about $500/month out of my salary my first year, plus all of my bonus. Then again, I am kinda notorious for being a little too thrifty.

May 7, 2017

Not as much as I would like.

May 7, 2017

$0 because pimping ain't easy.

May 7, 2017

i'm sure that if you're in investment banking, you should be able to throw together a simple personal budget that gives you your monthly budget.

May 7, 2017

budget is for wimpsy, we go out and do model and bottle.

May 7, 2017

wsj has a book about this...

May 7, 2017
toobig2fail:

wsj has a book about this...

What's the name of it?

May 7, 2017
May 7, 2017

You can't have an IRA. I-bankers make more than the income limit (something in upper five digits) on IRA contributions.

Donate the full $15,500 or 20% of your salary, whichever limit hits you first, to your 401(k) each year. Beyond that, it's also possible to save from each paycheck. Especially if you live in Jersey or Brooklyn and don't live for the "models and bottles".

(There are no clubs in Jersey and models probably won't date you if you live there either. If these things are of concern to you... pay the piper and live in Manhattan so that you can buy some new friends and date a model who is barely fluent in her native tongue. She'll enjoy spending your money even more than you will.)

May 7, 2017

Thanks NYSE.
For the 401(k) would I need to choose a type of fund and investment style? What is recommended or is it just personal preference?

  • Slams

...

May 7, 2017

No problem, slams.

You can invest in a number of things through most plans, so research all the options and pick a few different good funds. If you don't have the time or just want to make it easy, go with a simple index fund for the bulk of your cash. Like the Vanguard 500 Index Fund or something similar. You can always switch to another fund whenever you want down the road.

May 7, 2017

The income limit for IRA's is 110k. you might not exceed that as 1st yr, especially in the coming years. i certainly didn't

May 7, 2017
Jimbo:

The income limit for IRA's is 110k. you might not exceed that as 1st yr, especially in the coming years. i certainly didn't

if they're BB, they'll exceed 110k, at least in the next 2 years, unless they are a shit analyst.

May 7, 2017

You actually can have an IRA at any income level you just don't get the tax deductions when you put money in, but still get the benefits of letting your money grow tax defered until retirment.

I belive that the 110k limit is for a Roth IRA.

May 7, 2017

You can always have an IRA, just your contribution will not be tax deductible.
For Roth IRA, the limit starts at 150k and you won't qualify at 160k. However, because in 2010, you can convert your traditional IRA into Roth IRA, you can max out your IRA from now till 2010 and convert it to IRA then.

May 7, 2017
sonyyy:

For Roth IRA, the limit starts at 150k and you won't qualify at 160k. However, because in 2010, you can convert your traditional IRA into Roth IRA, you can max out your IRA from now till 2010 and convert it to IRA then.

Sonyyy, it looks like the Roth IRA limit starts at $95k and completely shuts you out at 114k just like traditional IRAs (click[/embed]here). Maybe you used the numbers for married filing jointly? I doubt too many analysts have that filing status.

May 7, 2017

20% contributions is a great way to start. My company matches 5% after a year, and I'm sure all the banks do that too. Company matching is literally free money. Currently, I still have student loans (private, variable interest rate) I am working to pay off, by at the end of this year I will go to 25-30% (usually the max you can contribute.) Living comfortably on 3/4 of your paycheck is totally possible, and because the $$ going to your 401K never hits your bank account, you never miss it, and it is exciting to watch your savings grow. As far as stocks, okay to invest pretty aggressively now, as you won't be using it for a long time. Diversification is good- a blend of growth, index, doesn't really matter a whole lot right now. May be a good idea to have some international in your portfolio too. Best of luck.

May 7, 2017

Sonyyy, I didn't realize the limits on Roth were higher. Sweet! There are a lot (vast majority) of analysts in that area between 95k and 150k.

May 7, 2017

Haha my parents decided to open an IRA for me on my birthday (I know that is depressing). I know it was pretty smart but it is 4,000 i won't see till im like 68.

May 7, 2017
guyjer:

Haha my parents decided to open an IRA for me on my birthday (I know that is depressing). I know it was pretty smart but it is 4,000 i won't see till im like 68.

Yeah, it's depressing your parents gave you $4,000. Depressing to me, jackass! Go kill yourself now. :) BTW, if you leave it in until you are 68 it'll be worth around $1 million* by then, not $4,000. Your parents are such assholes, they just made you a millionaire.

*This assumes you are 20ish and that it will grow at 12.5% annually.

May 7, 2017

By the time you actually see it, it'll be a lot more than 4K! That is actually a really smart gift...

May 7, 2017

hahahaha yeah i got in om my 19th, forgot about the magic of compound interest. Hmmmmm but if we discount that back to the Present Value it is only about 700,000 to 800,000

May 7, 2017

Jesus.... a four thousand dollar birthday gift? My mother sent me a card a week late (it didn't say Happy Birthday on the front, but it was written inside), and I'm grateful she remembered that much.

Who gives four thousand dollar birthday gifts? Who the hell complains about four thousand dollar birthday gifts? Dude, even if you can't do the TVM calculations, at least you can understand that that's money you don't have to save.

Someday, you will be incredibly grateful. That's a staggering sum of money, and it's now safe from your callow indiscretions. :)

May 7, 2017

I'm stil broke lol

May 7, 2017

Wait... did you just complain about being given a gift with "only" a $700,000 future value? (And that's future value, not present value. You will want to learn this cold before you interview with investment banks.)

Nonetheless, $4000 is a huge sum of money. You could add up every birthday and Christmas gift I've ever received from anyone and it wouldn't total $4000. Don't take it so lightly, man.

May 7, 2017
Mis Ind:

Nonetheless, $4000 is a huge sum of money. You could add up every birthday and Christmas gift I've ever received from anyone and it wouldn't total $4000. Don't take it so lightly, man.

Same here. Add in graduation gifts, still not there. I'm going to start slapping him.

May 7, 2017

Dumbass - you can take the $4000 principle out w/ no penalty if it's a Roth. I'm surprised you bankers are so concerned with saving for retirement as a first year analyst on a shoestring. Yeah, save early, diversify, blah blah bullshit. If you all plan on attaining BSD status by your 30s pulling in $5m/year, who the fuck cares about $4000 grand now - spend it on a trip you won't be able to take when you are 30 and married.

Personally, I'm going to dump into my 401K ONLY to the match (it is free money), but do some more exciting things with when I start making some real coin (and I might take a loan from my 401K to do so!). It's all about angel/early-stage venture investing. Pump your $50k after-tax bonus into 2 ventures via a local Angel Group, and use next year's bonus for another 2, or as dry-powder so your common doesn't get diluted in the next round. 5 years later you're 10% owner in 6-8 ventures, and if one hits big with an up-round recap or liquidity event and instant 20x return on your common (very common these days, especially with glut of PE money, even though you naysayers are right that the IPO market is crap for VC backed exits) - all of a sudden your $200k total investment is worth $2M off of one big hit (plan to completely write-off 7 out of 8) and you have some ammo for bigger targets - Buffet didn't get rich chasing 8% returns in index funds.

That being said, my first investment with a couple partners - a 5.6% ownership stake in a medical services company - is still EBITDA negative and burning cash like crazy. Some asshole VC will come in an demand liquidation preferences (and get them) and probably wash the common out completely - And THAT'S if I'm lucky, because a HUGE exit might still put a few bucks in my pocket or at least make me whole, alternative is to shut the lights off and pay no one. Oh well, it's a learning process right - Michael Jordan didn't dunk the ball the first time he picked it up.

May 7, 2017
PoolSideBanker:

Dumbass - you can take the $4000 principle out w/ no penalty if it's a Roth.

Is it true that you can pull all the principle out of a Roth IRA with no penalty? I heard this somewhere else, but all the research I've done suggests that you can only pull principle out penalty-free if you pull it out before the end of the year in which it was contributed.

I'm sure I'm just missing something. Can anybody provide a link?

Thanks in advance.

May 7, 2017
PoolSideBanker:

My first investment with a couple partners - a 5.6% ownership stake in a medical services company - is still EBITDA negative and burning cash like crazy.

Hey, I have some spare cash. Is it too late to get a piece of this gem?

Your real estate (mobile home) idea actually does sound like you might not lose your shirt, but just make sure you start getting a return on your investment from the beginning instead of hoping that the metro growth overruns it in 10 years. With high energy prices, the civic tendency moving forward might be for cities to build denser with public transportation instead of building out with just highways and cars.

You can see this trend already post-RE-boom with real estate prices diving 30% in 2006 for the exurbs of Northern Virginia (like Ashburn and Sterling) while falling only 5% closer in (like in Arlington and Alexandria).

May 7, 2017

PoolSide what year are you?
Thats a pretty interesting approach there.. how certain are you that one will hit big? this something you seen someone else do? I don't know about how that works there :) 2m sounds nice lol.

  • Slams

...

May 7, 2017

Slams - I graduate undergrad May and start as an analyst in July. I had no idea what an Angel Investor / Venture Capitalist was until I came to college, and luckily I got hooked up with the right group of people and a couple great mentors. One of said mentors just scored a nice one - 3 months ago a big PE group gobbled up a financial services company he was in, and his seed $100,000 investment as well as his $250,000 participation in the Series A venture round from 2001 netted him just over $6 million. Thing is, he has 30 years experience in this stuff, knows how to protect his investment, knows how to leverage or replace executives if need be, demands a board seat and knows how to drive a company towards liquidity - all invaluable skills learned from the school of hard knocks. Just as valuable, he has the capital base to suffer some of these losses and take the risk, whereas I don't.

How certain am I that one will hit big? I wouldn't bet my left nut on it, but I'm not a risk-averse investor by any means - so what if I go broke, I'll just work a few more years until I build back my capital base. The guy I mentioned above had some epic disasters before his first successes, and now he's a millionaire many times over. I AM confident, however, that given 20 years of financial experience, network-building, and a little real-world pain/gain investing in startups that I will be have an edge over 99% of early-stage investors and bring the next generation of great companies to the market.

In the mean-time, other private investments can diversify the risk of this big hit. Believe it or not, the next investment we might make is in a mobile-home retirement community. Great current income and cash flow, low maintenance costs (simply give the managers a free space), we're long-term bullish on the underlying raw land (right on outskirts - metropolitan area will engulf it in 10 years), and can you think of a better BABY-BOOM play? Supply and demand wins the day - rents will skyrocket. Above all, this shit excites me - 401k investments don't. What if you die before 59 and you can't cash that shit out?

May 7, 2017
PoolSideBanker:

Above all, this shit excites me - 401k investments don't. What if you die before 59 and you can't cash that shit out?

What if you do? I plan for things as if I will be alive to see them, it's the only logical way to look at things. 59A1/2 isn't anywhere near "death-age" unless you live a risk-filled lifestyle where you use really cheap parachutes to skydive. And I will probably look just like I do today at the age of 59 with the way medical science progresses. We'll all live to 110, and 59 will be our mid-life crisis when we cash in the 401k's and buy a small country thanks to all that tax-free appreciation shielded from the IRS for all those years.