What to do with my bonus??

Hey guys!

I am brazikian monkey and for the last days I've been thinking about what I am going to do with my bonus. I'm already in my third year working but have changed jobs in the last two, so this will be my first real bonus.

For my country, I will earn something about 30 - 40 K and i realized that if I just invest my bonus not using at least a part of it for something, I would not feel I had really earned it.

I don't want a new car.
For what I get on fixed salary I am already able to do some nice travels during my vacations.
I can just buy some stuff but there is anything big in my plans right now.
I may keep it to help me on mba but as I will already get a big lending to pay that will last 20 years, I don't se much sense.
I could use as a part for buying a house, but is not one my priorities right now.

So, what do you normally do with bonuses? What do u think I should do with mine?
I am thinking about using about 20% of it to start some service for community and use a part of it to help me in mba preparation (booms, consultants, etc).
Investing in a business is discarded too.

Thanks!!

Region: 

Comments (420)

Feb 14, 2016

30-40k is not much money. I personally saved it and invested it long term on the financial markets through a diversified allocation. Knowing I would use these savings in the context of a real estate acquisition in the next 5-10y, I did not have a very long investment horizon and thus invested with an allocation of 30-35% Equities.

I did offer myself a nice watch (2.5k, not going after 10+k watches for the time being) as well as new clothes for a total of 2.5K. Planned great vacations ahead, not luxury but atypical and looked for great experiences : helicopter flying courses, art courses.

I know it will sound counterintuitive to this forum but I mostly do not see the point of a MBA if you are in a good graduate program which leads to Associate without going to a MBA. Save yourself the money, learn online, read great HBS books and focus on your professional network and the quality of your personal relationships. This is the most difficult part to master.

Good luck -

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Feb 16, 2016

Really nice awnser LKM, thank you very much!!

Thinking a little bit more, I'll probably diversify between:
- buying some minor stuff; (10%)
- upgrade my vacations with some experiences (I liked the ones you put up there); (10%)
- save for some stuff in the future; (40%)
- start a NGO or entepreneuship project; (40%)

I believe that will make me feel that I am enjoying the money but not just spend recklessly as a compulsory buyer.

Feb 16, 2016

You can donate it.

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Feb 16, 2016
realjackryan:

You can donate it.

Thats not the intention realjackryan.

I want to take advantage of the money although in a smart way, not just flushing into consumer products or just saving for 'future projects' that I still do not have.

Feb 18, 2016

Oh, Invest it.

Learn More

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Feb 20, 2016

seriously, use it to buy a portfolio of 4-5 stocks, and trade the portfolio a few times a week. You cannot possibly imagine the thrill of watching a price chart tick when you have serious money on the line.

Use both a daily and a 4hour chart, and put a bollinger band on those charts to help you decide when to buy and when to sell (using limit orders). If done well, in a year you may be able to DOUBLE the $$.

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Feb 22, 2016
ironnchef:

seriously, use it to buy a portfolio of 4-5 stocks, and trade the portfolio a few times a week. You cannot possibly imagine the thrill of watching a price chart tick when you have serious money on the line.

Use both a daily and a 4hour chart, and put a bollinger band on those charts to help you decide when to buy and when to sell (using limit orders). If done well, in a year you may be able to DOUBLE the $$.

Haha thank you @ironchef. I may give a chance on that with a part of the money.

Feb 23, 2016

Save, Invest, buy a real suit.

Feb 24, 2016
FutureTrader21:

Save, Invest, buy a real suit.

Thx FutureTrader.. those will be under my priorities!

Feb 25, 2016

Hey Tulio
Don't just invest to invest, be smart if you can't find where to put your money just hold it.
The suit....is key, no one likes to look at a schmuck.

Good luck!

Feb 25, 2016
FutureTrader21:

Hey TulioDon't just invest to invest, be smart if you can't find where to put your money just hold it.The suit....is key, no one likes to look at a schmuck.

Good luck!

You are right. I decided to break like this:

  • buying some minor stuff; (10%)
  • upgrade my vacations with some experiences (I liked the ones you put up there); (10%)
  • save for some stuff in the future; (50%)
  • start a NGO or entepreneuship project; (30%)

The suit will be included in the 10% (!)

Feb 25, 2016

Next year's bonus:
1) Max out 401k
2) car repairs without the wife noticing
3) new shotgun
4) balance on mortgage

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Feb 25, 2016
Double Doubler:

Next year's bonus:
1) Max out 401k
2) car repairs without the wife noticing
3) new shotgun
4) balance on mortgage

You're going to pay off 4% debt and you're in finance? Seriously?

    • 1
Feb 25, 2016

Whatever you do, for now, avoid putting any of it into an ETF, mutual fund, or putting it to use in some broad market strategy.

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Feb 25, 2016

A. Lange & Sohne...

Feb 25, 2016
shortstack:

A. Lange & Sohne...

You have impeccable taste my friend! What reference?

Feb 25, 2016
  1. Max out 401k
  2. Moved the rest to fidelity for investing
Feb 25, 2016

50% the tax man
Of the remainder:
50% savings towards house downpayment
20% personal investing account
20% vacation fund
10% general spending

Wouldn't you rather spread out your 401(k) investment throughout the year? Barring a big drop making things really cheap right when you happen to get your bonus. Unless you guys have far more options and are actively trading your 401(k) it seems like averaging throughout the year would make more sense than just a lump sum contribution.

Also do any of you consider putting some of that money into your fund rather than PA? I'm rather restricted in my personal trading so I would like to have money in the fund that I think will compound at a much better rate over time than the ETFs/mutual funds I can invest in with my PA. Obviously this would elevate my risk of tying my income and savings to the same entity though.

Feb 25, 2016

I'm a big fan of plowing it back into my fund. My fund's pretty old and well-established so I don't think there's a ton of elevated risk by tying my income / savings together. Even if there is, I'm young - I'll survive.

Feb 25, 2016

Company maxes out the 401k contribution (unless that doesn't count correct me if I am wrong).

Bought a place with last years bonus.

A small chunk is going to a vacation the rest is going to go towards investments.

Feb 25, 2016

Use it on a Lotus Elise tho

Feb 25, 2016

bottles and models ;)

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Feb 25, 2016

Pay down some debt....

Greed is Good!

Feb 25, 2016
  1. Payoff my crippling credit card debt
  2. Go to the titter
  3. Bank of Hellman's
Feb 25, 2016

It depends on how the inflation projections are looking for the next few years. Low inflation means bonus goes into income producing assets, high inflation means bonus gets spent/invested in the market. Never underestimate the power of inflation to murder your returns.

Follow the shit your fellow monkeys say @shitWSOsays

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

Feb 25, 2016

.

Feb 25, 2016

What are your thoughts on investing it all in real estate for the income tax shield?

Are bonuses taxed at the 50% windfall rate in NYC?

"Everyone has a plan until they get punched in the face."

Feb 25, 2016

Pretty old myth. You get it back in your tax return.

http://www.thestreet.com/story/990258/1/when-the-t...

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Feb 25, 2016

Max out retirement account from salary on a bi-weekly basis. For the most part live the lifestyle of my salary.

Bonus waterfall:
1) pay off student loans
2) balance held as cash for house deposit
2a) try to have 50-75% invested across asset classes, balance in cash depending on market

Feb 25, 2016

last year i bought a rental property in san diego which i think was a pretty good way of forcing me to save it. this year will probably need to pay down some student loans, and start saving for a down in this god awful silicon valley housing market... go away techies, nobody likes you.

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Feb 25, 2016

1) Pay off all the debts and 2) Save all the remaining money. You need to save up as much as you can just in case: 1) you got fired, 2) want to move to another job or 3) take a break. You will feel a lot better knowing that you got a massive cash cushion. Many many years ago, a friend of mine lost his associate job at an investment bank, he ends up having to live on social security - until he found a new job (that took him a year in a very bad market condition). That is totally not cool. Save it up right now and you will thank yourself later.

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Feb 25, 2016
Harvey Halstein:

<

p>1) Pay off all the debts and 2) Save all the remaining money.

I debate about the debt paydown. I don't like having debt but with my student loans at ~3% it seems dumb to pay that down any faster than I have to.

Feb 25, 2016

2013 bonus: Bought muscle car
2014 bonus: Repairs to muscle car after I smashed it up

Feb 25, 2016

Paying down debts wasnt as attractive when the market was up 15-30% / yr in a bullmarket for the last 5 years but if the mkt continues to be choppy, some people may want to make a larger than normal debt paydown here.
15-20% for spending / vacation for the year
50% into the fund
Sweep the rest to pay down student loans

Feb 25, 2016

My boss told me to spend it all on a vacation with friends in Saint-Tropez, which is what I did. Believe it or not, it is possible to spend an entire bonus in a week there.

Best Response
Feb 25, 2016
Iloveoptions:

My boss told me to spend it all on a vacation with friends in Saint-Tropez, which is what I did. Believe it or not, it is possible to spend an entire bonus in a week there.

Your boss wants you to be cash poor so he owns you. Can't believe you fell for it.

For someone who loves options, you just limited yours.

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Feb 25, 2016

Okay John LeFevre...

Feb 25, 2016

Bought a couple pieces of real furniture, the rest went into the PA. I prefer having the liquidity of my PA vs. 401k/IRA and only deposit what the Company will match in the 401k. Down payment, start a family, wedding, business venture, etc. in 10-15 years and want access to capital.

Feb 25, 2016
rpc:

Bought a couple pieces of real furniture, the rest went into the PA. I prefer having the liquidity of my PA vs. 401k/IRA and only deposit what the Company will match in the 401k. Down payment, start a family, wedding, business venture, etc. in 10-15 years and want access to capital.

I agree with the PA > 401k mentality. Liquidity is very important. It can be very tough to get money out of your IRA until retirement unless you are a first time home buyer.

Feb 25, 2016

Save it for co-investment opportunities

Feb 25, 2016

-Max annual contribution to Roth IRA
-Some to vacation savings
-Some to a new bottle of scotch (or two or three)
-Some to general savings
-Some to general spending

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes

Feb 25, 2016

I skim off ~$2k for vacation and fun expenses

Max out Roth IRA/401K
Rest goes into brokerage account

Feb 25, 2016

This site is like an aspergers meeting ground or something.

Feb 25, 2016

Given his job risk working at a HF and fact there can be huge swings in total comp, it's not a bad thing to pay off debt right now. We are not in the midst of a raging bull market right now so the opportunity cost is not as great. Sure you can buy the dip or index but there's an inherent risk working in this field and paying down debt / mortgage is a means to de-risk your future income.

While real estate may not have as attractive returns as the market, real estate is still an investment.

Feb 25, 2016

This article seems to do a good job at explaining the average investor's options and I'd invite you to read it: http://www.mrmoneymustache.com/2012/02/24/pay-down...

Feb 25, 2016

Tangentially related to this, how many people are contributing to IRA's? I saw a few people mention Roth IRA contributions for their bonus but that pretty much only applies to first year analysts before you surpass the income limits. Obviously you won't get the tax deduction on the traditional IRA either but 20+ years of tax deferred growth could still be pretty powerful with compounding. You lose the liquidity but it seems worth it, and it's only $5,500 a year which isn't a huge amount.

Feb 25, 2016

No bonus season yet for me, but I would suggest clarifying where you're at. Being in NYC or Houston makes a big difference on how much you're going to be able to save.

Feb 25, 2016
nb84:

No bonus season yet for me, but I would suggest clarifying where you're at. Being in NYC or Houston makes a big difference on how much you're going to be able to save.

NYC.

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Feb 25, 2016

What about models & bottles?

Feb 25, 2016

75k will allow you to rent a place for $1500/month, get all your insurances, and put a couple hundred in your 401k. You will maybe save a bit each month but you tend to buy stuff like a watch or tv. Also, when you go out (which you will) you can easily spend 100-200 a night. You think crazy, well you will find out soon enough. You can save your bonus but tend to spend a bit of it on vacation trip or something nice.

Feb 25, 2016

dont worry models wont cost you anything because you have zero shot of dating on especially one your work schedule. Its the bottles that get you. Id suggest you befriend a promoter, saves a ton and easy to meet girls.

Feb 25, 2016

I max out my 401k each year. My 401k is mostly tied up in my firm's various investments and in a blend of mutual funds. My bonus goes to a new shiny toy (like an iPad or something I don't need), a new suit and sink the rest into a diversified mutual fund portfolio. I am toying with the idea of paying off my share of the rent in advance.

EDIT: for the record, I live in queens to save money.

Feb 25, 2016

no bonuses yet
Curious...how much money can you save if you don't drink alcohol? From what I understand, alcohol is a costly habit. Is it possible that if a person abstains from alcohol to save a noticeable amount of money($300+ a month)?

Greed is Good.

Feb 25, 2016

it's definitely doable to save that much money through two years without breaking a sweat...depends on your lifestyle though obviously. but for me, hasn't been hard and i go out / eat out frequently

Feb 25, 2016

I've saved about $25k from my first year and that was spending pretty liberally ($2500/month in fixed expenses, $5k watch at bonus time, three new suits at $1500 each). Unless you're a big shopper or heavy coke user, you just don't have time as an analyst to spend a lot of money. Dinner is paid for 5 nights a week and then you get home and go to sleep.

Frankly, I don't even care about saving a ton, though. My eye is on earning potential, not saving wealth. Living frugally and saving an extra $10-15K is pretty meaningless in the grand scheme of things; I'd rather enjoy what little free time I have. God knows most 23-year olds do.

Feb 25, 2016

$5K watch? $1500 suits? More power to you for not caring I guess but I would be kicking myself so hard right now if I spent that kind of money at 23 on those things. I see that kind of stuff as a worthwhile purchase when it represents like 1-5% of my annual income. For example, if I am lucky enough to make associate, and make $225K my first full year, and all my b-school debt is paid by my last stub bonus, I can see treating myself to a Rolex or something, but making 120K a year in NYC with B-school in my future and I am assuming some undergrad debt you might have, that seems like a bad time to buy something like that.

To each his own though...

Feb 25, 2016

[quote=jc100021]....b-school debt .... [quote]

AHAHAHAHAHA thank you Allah for the oil ! Scholarships from the Saudi government (paid in full, including room & board) include a monthly stipend ($2750 USD for undergraduate students, $4000 for grad students, +$1500 if your spouse is accompanying you, +$900 for each child that is accompanying you....best part: untaxable lol)

^trying to piss you off , as you can see

Greed is Good.

Feb 25, 2016
jc100021:

$5K watch? $1500 suits? More power to you for not caring I guess but I would be kicking myself so hard right now if I spent that kind of money at 23 on those things. I see that kind of stuff as a worthwhile purchase when it represents like 1-5% of my annual income. For example, if I am lucky enough to make associate, and make $225K my first full year, and all my b-school debt is paid by my last stub bonus, I can see treating myself to a Rolex or something, but making 120K a year in NYC with B-school in my future and I am assuming some undergrad debt you might have, that seems like a bad time to buy something like that.

To each his own though...

I'm lucky enough that I don't have undergrad debt and my father would likely pay for, or help me pay for B-School. (Which I may not even go to.)

Like I said, let's say I don't buy those watch or those suits. Really, how much does $10k matter in the grand scheme of things?

Feb 25, 2016

I've gone through a few bonus cycles. I generally save 60-70%. I've definitely known a bunch of analysts/associates who go out and buy a nice watch with their bonus. Interestingly enough, most of the guys I work with are also pretty low key, despite getting pretty nice year end payouts.

For me, it's not really that appealing (i am a girl, after all). I spend enough money throughout the year on shopping and travel.

The way I see it, you have two options: 1) Save most of your bonus and don't save any of your paycheck. 2) Save more of your paycheck and squirrel more of your bonus away.

Feb 25, 2016

You're only young once, splurge it on models & bottels!
Pamper the girls and live life the easy way, you can think about saving later when you're a VP at the earliest.
Now is the time to buy a Patek Phillippe, and to borrow on your future income to buy a Porsche 911 Turbo.
Ever heard about borrowing enabling you to consume what you want, when you want it? It's all a matter of indifference curves.
So do the only rational thing and spend big.

Feb 25, 2016

Konig,

I would rather work for it than have it given to me. ;)

Feb 25, 2016
jc100021:

Konig,

I would rather work for it than have it given to me. ;)

You work for it just like the National Merit Scholarship kids in the U.S., nothing different in the way you get it (albeit theyre more generous).

Greed is Good.

Feb 25, 2016

Fuck all this noise about earning potential...every grand i save equates to earlier retirement. Personaly rather keep adding to my etrade and 401K then buying a cool watch or car....

Feb 25, 2016

What are you all saving for? To me, the point of making a (relative) ton of money now isn't to retire "early" but to have an awesome life while you're still young enough to have fun. I don't want to be the 55-year old in a Porsche living out the dreams he should've lived out as a 30-year old. And guess what? I'll still have 60-75k in the bank after my two-year analyst stint.

Feb 25, 2016
milkman84:

What are you all saving for? To me, the point of making a (relative) ton of money now isn't to retire "early" but to have an awesome life while you're still young enough to have fun. I don't want to be the 55-year old in a Porsche living out the dreams he should've lived out as a 30-year old. And guess what? I'll still have 60-75k in the bank after my two-year analyst stint.

The difference between you and a lot of people in this thread is you have no idea the actual value of a dollar. I'm not meaning this in an asshole kind of way, but you have daddy to pay for all your shit, most people don't. $10k saved now and invested properly is worth a shit load more than $10k 30 years from now.

Feb 25, 2016

Why do you guys wanna work in private equity and don't lever up yourself?
Spending that excess cash on toys, bottles & girls is the best way to keep yourself motivated. Think of yourself as your own manager. Here you have a principal agent problem. You will become lazy when you have a lot of cash in your 401k and stop working hard.
The smarter thing is to buy a really expensive watch (it better be loud!) that reminds you how hard you have to work to maintain your excessive life style. Then you bury yourself in debt to buy a nice Turbo, a dream appartment and a great house in the Hamptons. Also, you get a really hot and bitchy girlfriend (model) who whenever you come home reminds you of the nice things she has bought at Gucci today.
Fuck man, you will work hard and generate some kick-ass "return on life (ROL)".

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Feb 25, 2016
Il Cavaliere:

Why do you guys wanna work in private equity and don't lever up yourself?
Spending that excess cash on toys, bottles & girls is the best way to keep yourself motivated. Think of yourself as your own manager. Here you have a principal agent problem. You will become lazy when you have a lot of cash in your 401k and stop working hard.
The smarter thing is to buy a really expensive watch (it better be loud!) that reminds you how hard you have to work to maintain your excessive life style. Then you bury yourself in debt to buy a nice Turbo, a dream appartment and a great house in the Hamptons. Also, you get a really hot and bitchy girlfriend (model) who whenever you come home reminds you of the nice things she has bought at Gucci today.
Fuck man, you will work hard and generate some kick-ass "return on life (ROL)".

That's pretty much what our group head tells us. He encourages us to lever ourselves up, because, he says, "How are you going to deal with a product [debt] that you don't understand or have yourself?"

Feb 25, 2016

So far I've saved 100% of my bonuses to use as trading capital. Unfortunately I am rather loose with my base, I don't spend a ton on rent so have some discretionary income but it all gets wasted somehow.

Feb 25, 2016

The guy that lives in the penthouse in my building was living paycheck to paycheck and making bank, just got laid off and couldnt even join us at our table for the super bowl because he has absolutely no savings. I have a great time just don't see the need for a Porsche in downtown Chicago...I would rather have a fucking mazda that i own than a BMW that i'm still making payments on.

Feb 25, 2016

I plan to always have savings of at least 9-12 months of total living costs (rent, food, gym etc), and then have a seperate savings for stuff like retirement, childrens college. Until i have that saved up I live fairly frugally.

But I guess Im not one to judge life quality by the price of my watch and have no intentions on buying expensive cars/watches.

Living pay check to pay check is very risky in the case you lose your job, having living costs covered for the next year gives you a lot of freedom, and to me that is more valuable than any car.

Feb 25, 2016

I'm not looking - or expecting - to get rich off of an analyst stint - I whole heartedly believe in the "long-game" mentality - but was just curious if it is naive to think you can actually save your bonus, which people have said you can. Currently, I'm planning on spending all of my salary and saving my bonus. Honestly, and I am a pretty lose spender, it's not the smartest thing to spend everything you have, and I'll spare everyone the reasons why or a discussion on the future value of money! This is the budget I've been looking at (rent, electricity/gas and cable/internet are split over three people, payroll taxes are subtracted from after tax income, food is based on a $20 a day allowance):

Monthly Bi Weekly Weekly

Income After Taxes $4,130.7 $2,065.3 $1,032.7

Rent $1,500.0 $750.0 $375.0
Food $608.3 $304.2 $152.1
Electricity/Gas $100.0 $50.0 $25.0
Health Insurance $150.0 $75.0 $37.5
Payroll Tax $446.3 $223.1 $111.6
Phone Bill $80.0 $40.0 $20.0
Cable/Internet $33.3 $16.7 $8.3
Total Expenses $2,917.9 $1,459.0 $729.5

Income After Taxes $1,212.8 $606.4 $303.2
and Expenses

Regardless, I would be nice to not have to scramble after an analyst stint to afford a bag of Raman noodles your first semester in b school, or wait for your first paycheck at a PE shop to afford dinner, or be able to take a vacation after finishing your analyst stint or be able to comfortably begin as an associate without having to depend on a signing bonus, etc. etc.

fdba Emory Blaine and BBA or otherwise trying to find the perfect pseudonym.

Feb 25, 2016

I max out my 401k. (Planning on using the cash to buy a house during B School, you avoid city taxes and avoid the 10% penalty . On top of that I'm not ridiculously frugal, but minimum $50k in the bank is doable for any analyst.

Feb 25, 2016

Of you could just not go to business school, not a requirement...

Feb 25, 2016

TimRay, are you saying you did that or its possible?

Feb 25, 2016

You should probably just give your bonus to me - that way you don't have to make any difficult choices on how to use it.

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Feb 25, 2016

+1.

Feb 25, 2016

+1.

Feb 25, 2016

Making me laugh after wanting to punch a hole in my wall when I saw my y/e bonus - a silver banana for you

Feb 25, 2016

You can always buy bonds.

Feb 25, 2016

Bonds, stock, and real estate are the biggest three, but since it sounds like you don't want to do any of those, I'd just put it in your mattress.

Feb 25, 2016

Put it to work via one or more P2P sites.

Feb 25, 2016

buy gold bullion. it's on sale.

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Feb 25, 2016

these types of posts are @"thebrofessor" favorite. Must include him

Don't imagine it will be large enough to get into some alternative funds, but there are some solid funds out there that can you those returns with decent risk/return. Also some funds that are in the P2P space if you aren't so inclined to do it yourself.

Feb 25, 2016

Thanks bro but I hate these threads with a fiery passion. I created a thread that addresses any question like this, but it's lost beind 100 pages of GS fluffer vs ms janitor vs saks fo sales. Also because it's always the usual suspects in these threads. Janky says gold, dingdong says strippers, fuld says low cost etfs, other users give specific names, and I want to blow my brains out. People wonder why this country has people who are so idiotic when it comes to personal finance, threads like this do NOT help.

Op, in short: emergency fund first and foremost. Then do whatever, have some fun, go golf in Torrey pines, go to Toronto and get a high class hooker, go to Vegas on a bender, whatever, just don't listen to stock tips from strangers without doing your own due dili

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Feb 25, 2016

Limited partnership. Oil, real estate, etc.

Feb 25, 2016

If you truly don't know, then put it in the bank and let it sit there until you do know what YOU want to do with it. There is no rush to spend/invest money (you can always do that), and rushing such a decision usually isn't worth it. So build that emergency buffer as @"thebrofessor" says. Who knows what tomorrow will bring, you might get laid off, fired, sick, friend/family member may be in need, markets might tank (ie. buying opportunities) etc etc etc.

You may suddenly one day decide you want to go to grad school, travel, get a hooker, go on a bender, buy more property, donate it all, etc etc etc. And the money will be sitting there safely for you to use it then.

In other words, no need to rush into anything or force something that is not there.

Good Luck

Feb 25, 2016

Lending Club

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Feb 25, 2016
Semi-Socratic:

Lending Club

I love LC. I'd be a liar if I said I wasn't leveraged out the wahzoo on LC. I've been getting good returns thus far.

Feb 25, 2016

Doesn't a 700+ credit score equate to like a 6% interest rate? What are you able to borrow at?

Feb 25, 2016

How do you not know what to do with your money? You got into the industry to make gobs of it, so if you don't know what to do with it, why stay?

Feb 25, 2016

Buy a Rolex

Feb 25, 2016

also I have a better question: why do you hate stocks? I know you said don't ask, but I don't care, that seems silly for someone in PE to not appreciate the growth potential of that part of the capital structure.

Feb 25, 2016
thebrofessor:

also I have a better question: why do you hate stocks? I know you said don't ask, but I don't care, that seems silly for someone in PE to not appreciate the growth potential of that part of the capital structure.

I have to agree here. I'm stocks only for the last few years and frankly don't understand why anyone wouldn't want a piece of the action given EVERYTHING went on sale a few years ago. Ratchet up the stops and have at it, strike while the iron is hot.

OP, you won't do stocks or RE and want minimum 6% growth in a low interest environment: what do you realistically think your options are in financial markets? If you're really hungry, find some startups and throw a few grand at each one.....if only one grows rapidly, then you're golden. Otherwise, perhaps revise your expectations to be more in line with reality.

Feb 25, 2016
Feb 25, 2016

Pay off your credit card debt if you have any. Guaranteed 18% (or whatever it is annualized now days) return from paying it off so you don't have to pay interest.

Feb 25, 2016

BDSM Escorts to punish you for posting another of these useless threads...

Feb 25, 2016

Lend money to ukraine, they will pay it off. I swear.

Feb 25, 2016
karypto:

Lend money to ukraine, they will pay it off. I swear.

Funny thing is that WSJ just had an article about a successful bond investor in CA I think that owns over 10% of Ukraine's bonds!

Feb 25, 2016

How about Argentina? I hear they're good for it.

Feb 25, 2016

No stocks? Futures contracts on commodities it is

Then nothingness was not, nor existence. There was no air then, nor heavens beyond it. Who covered it? Where was it? In whose keeping? Was there then cosmic water, in depths unfathomed?
-- Nasadiya Sukta

Feb 25, 2016

Trade UGAZ and DGAZ short-term

Feb 25, 2016

Real estate, hands down. Interest rates are so low right now, the first thing I'd do if I could afford to would be to buy income generating real estate, like a rent house or apartment complex.

Feb 25, 2016
FinanceGuy15:

Real estate, hands down. Interest rates are so low right now, the first thing I'd do if I could afford to would be to buy income generating real estate, like a rent house or apartment complex.

You're advocating leveraging yourself to the hilt for an illiquid, expensive and time consuming asset?

Feb 25, 2016

put the money into the PE fund

Feb 25, 2016

Help me pay off my student loans, thanks.

Feb 25, 2016

don't buy bonds, buy rims. Shod your ride with some 24 inch spinners, it's gonna be dropping more panties than you can handle. Have a merry xmas.

Feb 25, 2016

Take a few books and read a bit on Asset Management and uncorrelated assets (Yales unconventional portfolio).

Look towards risk parity strategies, target your volatility to generated the 6-7% you are talking about over a very long period of time with a volatility that you are happy with (since it was your first consideration)

Or you could just buy penny stocks, YOLO

Feb 25, 2016

Working in banking at a major BB, I've quickly come to realize that most bankers do a terrible job at investing their own money. I've had conversations with Directors and MD's who did not understand the mechanics of their own 401K and who couldn't tell the difference between Traditional vs. Roth.

In any case, don't listen to most of these bozos who are telling you what do buy. Anyone who mentioned real estate or bonds is tripping balls. Unless they correctly identified the fact that as an unsophisticated 20-something year old investor your only channel to those 2 asset classes are ETFs, these idiots have no clue what they are talking about. I am 99% confident that probably only 1% of WSO has ever dabbled in options/futures. I pretty much stopped reading as soon as i read "alternative investment fund".

I was going to do my usual troll thread about levering up and buying anything with a high expense ratio so you could painfully watch your hard-earned bonus erode, but it's almost Thanksgiving (practically Christmas) and so I am feeling a lot more charitable. As a few of the brighter ones on this forum have correctly identified, it would serve you well to dump 50-66% of your bonus on low cost ETFs. Stick to 2-3 domestic/international equity ETFs and don't be too afraid of going all equities here. Keep it simple. You should be thinking capital appreciation and not income. Use the rest to buy electronics, new clothes, or plan a vacation.

-MD NASTY

Feb 25, 2016

Working in banking at a major BB, I've quickly come to realize that most bankers do a terrible job at investing their own money. I've had conversations with Directors and MD's who did not understand the mechanics of their own 401K and who couldn't tell the difference between Traditional vs. Roth.

In any case, don't listen to most of these bozos who are telling you what do buy. Anyone who mentioned real estate or bonds is tripping balls. Unless they correctly identified the fact that as an unsophisticated 20-something year old investor your only channel to those 2 asset classes are ETFs, these idiots have no clue what they are talking about. I am 99% confident that probably only 1% of WSO has ever dabbled in options/futures. I pretty much stopped reading as soon as i read "alternative investment fund".

I was going to do my usual troll thread about levering up and buying anything with a high expense ratio so you could painfully watch your hard-earned bonus erode, but it's almost Thanksgiving (practically Christmas) and so I am feeling a lot more charitable. As a few of the brighter ones on this forum have correctly identified, it would serve you well to dump 50-66% of your bonus on low cost ETFs. Stick to 2-3 domestic/international equity ETFs and don't be too afraid of going all equities here. Keep it simple. You should be thinking capital appreciation and not income. Use the rest to buy electronics, new clothes, or plan a vacation.

-MD NASTY

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Feb 25, 2016

hardooooooooo

Feb 25, 2016
MD_Nasty:

Working in banking at a major BB, I've quickly come to realize that most bankers do a terrible job at investing their own money. I've had conversations with Directors and MD's who did not understand the mechanics of their own 401K and who couldn't tell the difference between Traditional vs. Roth.

They don't know the difference between a Roth and a traditional because at that level you don't make peanuts anymore; when you earn above a certain sum you can't invest in those. Roth and Traditional accounts are for poor people or fresh off the press analysts... Your MD knows the difference, but properly couldn't be bothered with you.

Back to OP - I see you live in London and you own your flat - if you leveraged you have already gotten a massive return on your investment, well done. Relax and sit back.
Stick to cash if you are worried of public equity. 6 and 7% involves a lot of risk. Everything is inflated at present, I keep my cash in the bank and I wait on the next bubble to deflate. It takes patience and is extremely frustrating when for the last 3 years everyone has been making bank in equity, and you are just holding your balls in your hands making less than 20bps in interest... Patience... Although hedge out and FX part of your cash in USD for when your time comes to BUY the market.

Somebody mentioned EM early on... Wait the fuck up for this. It's in a right old mess at the moment with Brazil, SA, Russia down the toilet with further room to go down.

Feb 25, 2016

puts in USO

Feb 25, 2016

Invest your money in an emerging market fund.

Wait I gonna check one for you.

Here, go and invest you bonus : Templeton Emerging Markets Bond A (Qdis) USD

Stay calm

Feb 25, 2016

Since I live in London too and do not have a spare penny, I plan to earn some money and start trading, since you already have the money, why dont you trade for yourself if your job allows you to

Feb 25, 2016

Surprising no one mentioned a garage upgrade as another potential great way to spend that bonus, along with girls & watches...

As for the OP, if you're not keen on other asset classes than RE then it could be time to take some investing course or at least start reading. There are plenty of good books on the topic

Funny thread all the way, +1 @LCandB

Feb 25, 2016

The reason your bonus is taxed at a higher rate is not because it's a bonus but because it increases your marginal. Whether you contribute your bonus or base to your 401k, your total income and thus tax liability would be identical, assuming you contribute the same amount of either your bonus or base salary.

Feb 25, 2016

You are looking at this too short term. Your annual take home is going to be the same post tax either way. From a time value of money perspective, you are actually better off putting it all into the year end bonus, not because of the marginal tax rate increase. What you've laid out is the right decision but for a slightly different rationale.

Feb 25, 2016

If you put in all 18K you would be missing the company match for the rest of the year. I would suggest putting in 18K - Your annual contribution - Company Match every year. For example assuming 85K base and a 5% matching.

Annual 401k Contribution - 85K.05 = 4250
5% Matching - 85K
.05 = 4250
18K - 4250 - 4250 = 9500
Obviously you can tweak this to fit your base/company match but you get the idea, max out the amount your employer will match because that guarentees an instant 100% ROI.

Feb 25, 2016

Can't buy bottles or models with 401(k) savings, OP. Spend it all and help stimulate the economy.

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Feb 25, 2016
CRE:

Can't buy bottles or models with 401(k) savings, OP. Spend it all and help stimulate the economy.

And who said anything about retirement? THIS IS FINANCE! You do it until you die.

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Feb 25, 2016

looks like somebody doesn't understand the difference between taxation and withholding

Feb 25, 2016

Well I'm not in IB or on Wall St, so I haven't gotten a big bonus yet in my career, but I can say that after I got my first year-end bonus, I blew it in similar fashion.

Traveled to visit my friends from college on the weekends in a few weekends: 3 trips, about $600 airfare total, about $100 spending cash total (Since I visited my friends usually payed for the tab)

Significantly upgraded my wardrobe: A couple suits for $600 total, about $300 at Banana Republic, and about $300 at J Crew, Couple pairs of shoes from Jos A Bank for $200

Xbox360 and games: $500 total

My bonus was about 2k after tax, so I went a little bit over that, but since I'm young and have some savings, I could afford it.

Feb 25, 2016

hmm i thought your signing bonus is part of your first pay check, aka you don't get it until you're already working?

Feb 25, 2016
noway:

hmm i thought your signing bonus is part of your first pay check, aka you don't get it until you're already working?

It depends and usually the contract says when you'll get your signing bonus

Feb 25, 2016
noway:

hmm i thought your signing bonus is part of your first pay check, aka you don't get it until you're already working?

Depends on the shop. My MM sent it in February / March and said to use it to cover moving expenses etc. Some places include it in your first paycheck.

Feb 25, 2016
noway:

hmm i thought your signing bonus is part of your first pay check, aka you don't get it until you're already working?

You're right. I actually completely overlooked the "signing" part and thought he was speaking of first bonus in general. My year-end was part guaranteed for me signing, but I guess not officially a signing bonus.

Feb 25, 2016
noway:

hmm i thought your signing bonus is part of your first pay check, aka you don't get it until you're already working?

My bank (BB) is paying them out next spring. Its going to be taxed about 50% so there isn't much to blow/save

Feb 25, 2016

Store a small portion of it if you don't have any savings built up. If you do -- hop on some planes and travel. Buy a nice gift for your girlfriend (you're about to fall off the face of the earth for two years). If you don't have one, purchase a nice big TV for your apt. Use the rest to improve your general lifestyle - nicer dinners, take taxi's instead of public transportation, few nicer clothes, etc.

I wouldn't recommend blowing it on a single large purchase. I know a guy who purchased a new BMW months in advance of receiving his bonus. When bonus time came, he regretted having to give it all back to the car dealership while the rest of us were able to blow the cash.

Feb 25, 2016

"fresh kicks" "trips to ac". "ball out hardbody"? Do they give bonuses at Rutgers now?

Be sure to help "ya moms" and invest in things that can't fail, like restaurants, night clubs, and record labels.

Feb 25, 2016

+1 on everything compbanker said: save at least some if you don't have much saved yet, then spread most of it out so your overall quality of life is better. you'll get the biggest return on it if you improve multiple aspects of your lifestyle.

of course, the signing bonus in one of my offers was split 50-50 between when you sign and your first paycheck, so you might not even have the option of blowing it all at once.

Feb 25, 2016

Plans:

Spend some to travel
Small wardrobe upgrade.

Store most for rent/food etc.

Feb 25, 2016

How about a 401k plan?

Feb 25, 2016

Pay off the ludicrous amount of debt accrued to this point?

Still not sure if I want to spend the next 30+ years grinding away in corporate finance and the WSO dream chase or look to have enough passive income to live simply and work minimally.

Feb 25, 2016

came with first paycheck for me, wish they had told me that beforehand though...offer letter said 'prior to your start date', and i asked a couple of times in between and was told 'soon' or 'at least two weeks before you start', etc...

Feb 25, 2016

Mine will be used to pay for the first months rent, deposit, furniture, suits, etc. I really wish they would give it to us before we started.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

Feb 25, 2016

No debt at this point :D. Yeahhhhh, it's like that.

Mine comes 90 days after signing, and relocation comes with the first paycheck.

Gotta buy the gf some rocks, and payback the cakeflow I owe the fam, but aside from that, this money is to be blown.

Feb 25, 2016
Anonymous1:

. Gotta buy the gf some rocks, and payback the cakeflow I owe the fam, but aside from that, this money is to be blown.

is this real life.

Feb 25, 2016

ROTH IRA

Let n be a fixed positive integer greater than 1...

Feb 25, 2016

There is really no scenario that would justify a) giving all different tenured analysts same bonus b) bonus being 20% of below-street base c) throwing all analysts in the same (shit) bucket.

This place sounds like they don't give a shit about performance, because they don't compensate accordingly anyway. Odd, because my work product would definitely suffer if I knew I were to be compensated equally in any case.

Seems like they are fine with inevitable employee turnover and feed everyone the same "keep it up" BS to keep the game going. I would definitely look to lateral ASAP, especially now that you have 1 year and experience under your belt.

Feb 25, 2016

How are your analytics? If you are comfortable running DCFs, LBOs, Accretion/Dilution models, SOTP (Sum of The Parts from SCRATCH, start interviewing.

If your current firm has had you working more on pitch books and running models from a template, please beef up your skills prior to interviewing.

Susan

Feb 25, 2016

Alot of lower MM guys don't understand the value of a strong junior team, and thus don't know how to manage and incentivize one properly - hence why they're in the position they're in. No sense in just sitting around steamed about it though, get out and try to lateral somewhere.

Feb 25, 2016

You do realize that analysts in other cities (aka Charlotte, Houston, etc) get paid the same as analysts in NYC for the most part. Thus, you shouldn't be deflating numbers to figure out comparable pay in regional cities, but rather inflating numbers. Good try though.

Feb 25, 2016
eaglehead03:

You do realize that analysts in other cities (aka Charlotte, Houston, etc) get paid the same as analysts in NYC for the most part. Thus, you shouldn't be deflating numbers to figure out comparable pay in regional cities, but rather inflating numbers. Good try though.

He's seems to be trying to show how much New York sucks for non-ballers. He wasn't belittling people who work in other cities.

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Feb 25, 2016
eaglehead03:

You do realize that analysts in other cities (aka Charlotte, Houston, etc) get paid the same as analysts in NYC for the most part. Thus, you shouldn't be deflating numbers to figure out comparable pay in regional cities, but rather inflating numbers. Good try though.

The base pay is relative but what I'm trying to show implicitly is the purchasing power. The reason for deflating the numbers is because the cities used have a cost of living lower than NYC. I suspect that Charlotte and Houston, if they do pay the same, don't have the same costs of living as NYC. If you want to verify this for yourself, click on the cost of living hyperlink in the article and enter the numbers.


WreckEmFinance:

i would tithe, then i would allocate a small portion for fun purposes, then i would save the rest. i'd probably spend it in Texas, Houston metro area. or buy some hunting gear. of course, i still have one more year of undergrad. but it's good to dream! i'm really looking forward to graduating and getting out there.

Glad to hear that and I hope you enjoy the fruits of your labor down in Houston!


Cartwright:

Jacksonville, Durham, and Salt Lake City? Are we talking about bank tellers? Are you a real person or some sort of link generating bot?

Your source is quite possibly retarded because 70k is base for every BB 1st yr analyst.

No idea on BAML bonuses but I recall someone in that DB article about Wells commenting that there were 2 tiers below what was reported as "bottom"..but no one knows what they got. Thus 25k might be a standard double-secret bottom bucket across the board.

As an aside, I would rather eat my own dandruff than visit Business Insider.

No. Read my previous article, Want A Career On Wall Street, Plan On Moving From New York City and you'll see the relevance of these cities. I only used the BAC-ML reported base salary plus I have salary ranges from an IB alumnus of mine that corroborated similar numbers so I don't see the issue. Could you clarify it better? Also, I didn't use the WF pay as that wasn't the focus of the article nor mine but I agree that is a possibility.

As far as the Business Insider is concerned, I too take it with a grain of salt.


Taylor Sandoval:

I would buy a new wife.

Laugh out loud!

Who Am I? | See what GMngmt is all about at About.Me

Feb 25, 2016

I remember reading this on vault years and years ago: http://www.vault.com/wps/portal/usa/vcm/detail/Car...
You can tell how dated it is by their use of the phrase "e-money."

Feb 25, 2016

Oh yeah - the guys in our NYC office all rent apartments with roommates, and the guys in Cleveland and Detroit (consulting) are buying places.

Feb 25, 2016

Having been born in Cleveland - and still having friends there - I was envious of their grills, in-ground pools, and spacious two-bedrooms. But then again, they don't live a 5 minute walk from Broadway, or a 10 minute cab ride from the Doughnut Plant (great place...Grand and Essex), and they certainly don't live anywhere near a world capital of politics, finance, culture, cuisine, fashion, dating...etc.

Life is about trade-offs. You can't have it all. But you can have more if you live in New York.

P.S. Cali isn't bad either.

Feb 25, 2016

i would tithe, then i would allocate a small portion for fun purposes, then i would save the rest. i'd probably spend it in Texas, Houston metro area. or buy some hunting gear. of course, i still have one more year of undergrad. but it's good to dream! i'm really looking forward to graduating and getting out there.

"Everything comes to those who hustle while they wait."
-Thomas Edison

Feb 25, 2016

btw, Houston was rated the best "city for your dollar" in a recent article, though I am not questioning GMngmt's methodology or anything. I believe it was in the Houston Business Journal if I am not mistaken. And with the Shale play/Fracking boom that's happening, there's plenty of opportunity to get in with some IB's or AM's or an energy analyst/ trading position. Houston is hot! and not just because it's August! of course I'm from there so I'm plenty biased in that regard...

"Everything comes to those who hustle while they wait."
-Thomas Edison

Feb 25, 2016

Buying Houston bal life.....

Your 120 in NYC is 120 in Houston but goes even further

I see 78 cents of every dollar in Houston

Feb 25, 2016

Jacksonville, Durham, and Salt Lake City? Are we talking about bank tellers? Are you a real person or some sort of link generating bot?

Your source is quite possibly retarded because 70k is base for every BB 1st yr analyst.

No idea on BAML bonuses but I recall someone in that DB article about Wells commenting that there were 2 tiers below what was reported as "bottom"..but no one knows what they got. Thus 25k might be a standard double-secret bottom bucket across the board.

As an aside, I would rather eat my own dandruff than visit Business Insider.

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Feb 25, 2016

So

Feb 25, 2016
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Feb 25, 2016
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"Everything comes to those who hustle while they wait."
-Thomas Edison

Feb 25, 2016
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"Everything comes to those who hustle while they wait."
-Thomas Edison

Feb 25, 2016
Feb 25, 2016