What's the smartest thing a recent graduate can do with the money they earn from their first job/bonus?

Just curious what the brilliant minds of WSO have to say about this. Obviously it's a good idea to pay down debt and not spend your money on a sports car, but also given the current interest rate environment - maybe it makes sense to pay down school debt slowly and invest all disposable income into the market?
Should I save for a property right away?
Should I live at home for as long as possible?

What would you do if you could go back to being 22 right out of school to make yourself richer today?

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Comments (163)

Jun 4, 2018
whatsapitchbook:

Should I live at home for as long as possible?

What? No. Move out immediately. Be your own man/woman.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Most Helpful
Jun 4, 2018

False. If you're working a very high paying job directly out of school (banking) and have the opportunity to live with your parents for your analyst years, absolutely do this. If your parents live conveniently close enough to your job, this will literally be ~100k after tax that you will pocketing, or 150k pre-tax. The majority of the income of any young person's first job will go towards rent, especially if you live in a big city. There is no shame in doing this financial no-brainer. You will have the rest of your life to wear the big boy pants and all the independence and responsibility the comes with it, but this way you will have a 2 year financial head start on your peers. Moreover, the money you save can put you on the path to property ownership in your mid twenties, which is one of the most proven avenues of wealth generation (if you plan on living in your home 5+ years). This is all of course assuming that you and your parents have a good relationship and both parties understand the nature of your job / schedule.

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Jun 4, 2018
iggs99988:

False. If you're working a very high paying job directly out of school (banking) and have the opportunity to live with your parents for your analyst years, absolutely do this. If your parents live conveniently close enough to your job, this will literally be ~100k after tax that you will pocketing, or 150k pre-tax. The majority of the income of any young person's first job will go towards rent, especially if you live in a big city. There is no shame in doing this financial no-brainer. You will have the rest of your life to wear the big boy pants and all the independence and responsibility the comes with it, but this way you will have a 2 year financial head start on your peers. Moreover, the money you save can put you on the path to property ownership in your mid twenties, which is one of the most proven avenues of wealth generation (if you plan on living in your home 5+ years). This is all of course assuming that you and your parents have a good relationship and both parties understand the nature of your job / schedule.

This isn't a monetary decision for me. To gain independence and spread your wings is to live.

To find your true self and true desires, you must detach from parental roles and free yourself to provide direction for the beginning of the rest of your life. Without this independence, you are living under their direction, under their wants/needs to a certain extent. You are saving money, but at what cost? What is the opportunity cost of making a misstep in the initial trajectory of your life?

True, you may go to work and perform well and come home to dinner with Mom and Dad and they will applaud you on your bonus and hard work. But, how long have you been listening to them? Is this path your true path? What if you want to do something that they do not approve?

The first couple years after graduation are an outstanding time to find your heart's desires and the direction you wish to travel for the rest of your life. So, choose these steps wisely.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Funniest
Jun 4, 2018

Operating under the assumption that said young individual entering the workforce is intelligent, grounded, and has had the opportunity to live independently and find himself (whatever that means) during the four years spent on a college campus, I'm not sure how much "wing spreading" to "live" will be taking place for an overworked analyst coming back to his Hells Kitchen shithole studio at 2 am.

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Jun 4, 2018

Lmao this almost made me tear up man.

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

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Jun 6, 2018

Sending all of my money to rent, student loans, and expenses for most of my 20s certainly didn't make me feel very free at all...

Don't live with your parents for ages, but if you swallow your pride for a year and put a $100K in the bank, you're going to be way better than off than a bunch of "free" people who are 5 years older than you.

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Jun 10, 2018

Joseph Kennedy Sr, one of the richest Americans of the 20th century, intellectually independent and tough as nails, lived in his parents' home while being the president of a small Boston bank, running his own "tourist bus" enterprise with a friend and managing the books of a real estate company he ran with another friend. This was all in his mid to late twenties.

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Jun 6, 2018

$100k? Wtf? Even if you live in manhattan, unless you are a dumbass analyst, you shouldn't be paying more than $2k a month which is roughly $25k total x2=$50k + furniture of $5k tops=$55k

Yeah if you can live at home it's great to have $55k to put away but then again if your parents live in manhattan or in commuting distance money probably is not a concern for you lol

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Jun 4, 2018

If someone knew the answer I doubt they would be on WSO.

RIP LEHMAN
RIP MONACOMONKEY
RIP THEACCOUNTING MAJOR

    • 8
Jun 4, 2018

If you have 1-2 months off before you start work, travel the world. There's very few times in your life where you'll have a few months off like this again before retirement. This isn't an ROI decision with your money, but a life experiences decision.

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Jun 4, 2018
thexfactor336:

If you have 1-2 months off before you start work, travel the world. There's very few times in your life where you'll have a few months off like this again before retirement. This isn't an ROI decision with your money, but a life experiences decision.

Yeah, this is what I did. I highly recommend it.

I traveled for a couple months. I went back to Europe and also down to Africa. I surfed Jeffrey's Bay in South Africa and ran into Kelly Slater down there in a random bar when he was surfing the Billabong Pro. I even got a picture with him. Pretty surreal. He was playing the guitar in a bar. Anyway, yeah I went to Capetown and also sampled some wine in Stellenbosch, then flew back up to Europe to pick up some clothes in Milan and then back to the US to start working.

I actually went to the city I was moving to after graduation, lined up an apt a couple months in advance and then traveled, flew back to my old city, packed everything in my car and drove straight to my new apartment. It worked out really well.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

    • 5
Jun 4, 2018
Isaiah_53_5:
thexfactor336:

If you have 1-2 months off before you start work, travel the world. There's very few times in your life where you'll have a few months off like this again before retirement. This isn't an ROI decision with your money, but a life experiences decision.

Yeah, this is what I did. I highly recommend it.

I traveled for a couple months. I went back to Europe and also down to Africa. I surfed Jeffrey's Bay in South Africa and ran into Kelly Slater down there in a random bar when he was surfing the Billabong Pro. I even got a picture with him. Pretty surreal. He was playing the guitar in a bar. Anyway, yeah I went to Capetown and also sampled some wine in Stellenbosch, then flew back up to Europe to pick up some clothes in Milan and then back to the US to start working.

I actually went to the city I was moving to after graduation, lined up an apt a couple months in advance and then traveled, flew back to my old city, packed everything in my car and drove straight to my new apartment. It worked out really well.

How much can travelling like this cost though? My parents are middle-low class income and can't support me through travels, buying a car, rent, or helping me pay down school in any way. Is travelling going to be a good investment for me still?

Jun 4, 2018

I disagree with the 'move out immediately' comment. If you can live there for even an extra year, you're talking between most likely 12-20K of extra money to be able to put towards an investment/down payment on a house, etc. I don't think you should live at home that long, but it's definitely acceptable until you're 23. It gets really depressing watching the rent check go out the window every month for 5+ years.

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Jun 4, 2018
MonkeyWrench:

I disagree with the 'move out immediately' comment. If you can live there for even an extra year, you're talking between most likely 12-20K of extra money to be able to put towards an investment/down payment on a house, etc. I don't think you should live at home that long, but it's definitely acceptable until you're 23. It gets really depressing watching the rent check go out the window every month for 5+ years.

Yeah, good luck dating.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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Jun 4, 2018

Most girls I dated from 22-27 lived with their parents - it's not like the majority of people are trust fund babies with a loft all to themselves. If you spend one year being disciplined and saving some $, you can buy your own place much quicker. Much easier to date/bring women home to a place you own outright rather than to a one bedroom apartment that you've partitioned and are living in with 3 of your closest friends and 200+ rats living in your ceiling HVAC.

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Jun 4, 2018

Maybe not the "smartest," but I plan to donate $10K to my Catholic high school. They'll probably make me a junior board member.

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Jun 4, 2018

that display name and this decision, good on u

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

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Jun 8, 2018

Ben Kim is that you?

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Jun 4, 2018

I'm not even investing in a 401k so I don't have room to talk but I'm billing the firm for every meal i consume as an analyst so thats that.

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

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Jun 4, 2018

lmao you're losing out on hundreds of thousands of dollars over time... even the opportunity to become HNW, or even very HNW

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Jun 4, 2018

well im only about a year into my analyst gig maybe i should turn a new leaf and invest

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

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Jun 4, 2018

I mean you are and you aren't. If you're not investing the money in anything else then yes, but if you are not investing in a 401k but then use the after tax proceeds to invest in something else like an after tax account/IRA or real estate, it's probably a 50/50 shot which would be more profitable over time. You are going to get taxed on the 401k eventually. There's a high likelihood that the tax rate only increases with time as opposed to decreases, so you may take a bigger hit to value later while you get the tax benefit today. If you avoid a 30% payment today but it's 40% in the future it's not really beneficial unless you hit a period where your returns are absurdly out sized over the term your 401k is active.

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Jun 4, 2018

live at home if you can without question.

be careful where you spend your money. buy HIGH QUALITY things - furniture, backpacks, clothes, electronics, etc whatever it is. Go with more is less and higher quality over cheap.

The $30 backpack isn't better than the $130 of high quality given how much use you get out of it for example.

obviously invest money, we are on a finance website...

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Jun 6, 2018

I spent half my money on gambling, alcohol and wild women. The other half I wasted

If the glove don't fit, you must acquit!

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Jun 6, 2018

I am more or less in the same position as you. My thinking is sock away as much $$$ as possible in your analyst years. Assuming your family lives in or near the city where you work it makes sense to bite the bullet socially considering your hours might be prohibitively long - so why shell out so much money on rent? Additionally, it makes sense to at the very minimum take the 401K company match since that's free money after it fully vests. I would dice up the rest for your expenses and invest the remainder according to your risk appetite. Main takeaway: hedge against unpredictable events in the future (getting laid off, bootstrapping a startup, etc.) by saving as much money as possible until things stabilize.

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Jun 7, 2018

Take your time live at home for <12 months to find a decent place and save up some cash. If you rent out a room in an existing setup you wont have to buy much furniture and the costs would be minimal monthly while affording you full flexibility of an adult. In the meantime, save up your cash and do something "good" with it, use it to travel, invest a portion of excess, buy decent clothes for your new job, etc. Enjoy these next few years.

Jun 7, 2018

I invest my money on poker tournaments. Will revert back when I win the WSOP this year

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Jun 11, 2018
whatsapitchbook:

... invest all disposable income into the market?...

Short the VIX

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Jun 4, 2018
HermitFromThePH:
whatsapitchbook:

... invest all disposable income into the market?...

Short the VIX

Thanks arbitrage andy

Jun 11, 2018

I blew 300k* (half my liquid assets) before turning 28.

And here I am, still alive but barely hanging on.
Thank goodness for fast cars, air travel, and aneorexic girls.

*a serious of stupid trades.

Jun 4, 2018

lol why trade when you can just buy & hold?

Jun 16, 2018

Be frugal and invest in multi-family real estate. Stay away from SFH, condos, and townhomes. I started around your age, I'm now 25 and own 81 apartments.

Dec 11, 2018

Respect

"Be persistent and you will get, be consistent and you will keep it, be grateful and you will get more"

phuckQuotes

Jun 16, 2018

One thing I DEFINITELY regret was not taking advantage of IRA tax rate arbitrage before/during business school.

While you're working, you're saving the full marginal rate on any investments you make in your retirement account. If you take out the funds the year you complete the first year and start the second, your income will be whatever you pick up from a summer job, so your marginal rate will be very low.

There's a 10% early withdrawal penalty, but the likely round-trip tax benefit will help pay some of your business school bills. Not a ton of dough, but why not?

Dec 11, 2018

Invest in a start-up. Kitten Mittens.

Dec 11, 2018

Setup a Vanguard account, spread it out across 4-5 funds, let someone more experienced than you make the investing decisions. Just keep plowing money into it, and you'll be amazed at how much you accumulate.

Dec 11, 2018
djfiii:

Setup a Vanguard account, spread it out across 4-5 funds, let someone more experienced than you make the investing decisions. Just keep plowing money into it, and you'll be amazed at how much you accumulate.

incredulous response

you may as well give him bernie madoffs number 5 years ago.... Guaranteed way of making money? Doesn't exist.

Whenever i get some cash i'll be putting it into property to rent out, no mortgage purchases. Whatever happens to the value of houses, or the economy, I'll be earning in real current value currency, guaranteeing me an income to sustain a decent quality of life.

Dec 11, 2018

Hookers and cocaine.

Dec 11, 2018

Check out how most of the landowners in the world got their fortunes....

Trusts ===> Buy property ====> rent or sell leasehold ====> Buy more property with profits.

djfii

"Setup a Vanguard account, spread it out across 4-5 funds, let someone more experienced than you make the investing decisions. Just keep plowing money into it, and you'll be amazed at how much you accumulate."

You could be being incredibly ironic and suggesting that he will lose it all, and be amazed by that, but I doubt it. At no point did you mention what the returns would be, the risks involved and the fees if he makes money/costs if he doesn't, how fast he can access his money if required.

I will answer your sarcastic comment at the end: Food is perishable, and i stand to inherit enough land to sustain myself off so do not adjust my plans for that too much in the current climate (Weather).

I don't live in the US so accumulating a bullet cache is not an issue. I'm not trying to fight off the zombie apocalypse, but for me the mass hoarding of wealth by the rich, and instability in currencies/sovereign debts in the major currencies could lead to hyperinflation in one of them/or a massive increase in the cost of living.

I wish to protect myself against those eventualities and will do so by buying property to rent. This guarantees AN income in a relevant and meaningful currency. It may not result in a profit on my investment but it is highly unlikely that I will not have a comfortable life, if I don't make any suicidal decisions.

I would like to hear why you think it's retarded. Calling someone out on the internet isn't hard. Give reasons if it's so obvious.

Growing population, increased lifespan. Commodity prices soaring.

Dec 11, 2018
trazer985:

Check out how most of the landowners in the world got their fortunes....

Trusts ===> Buy property ====> rent or sell leasehold ====> Buy more property with profits.

djfii

"Setup a Vanguard account, spread it out across 4-5 funds, let someone more experienced than you make the investing decisions. Just keep plowing money into it, and you'll be amazed at how much you accumulate."

You could be being incredibly ironic and suggesting that he will lose it all, and be amazed by that, but I doubt it. At no point did you mention what the returns would be, the risks involved and the fees if he makes money/costs if he doesn't, how fast he can access his money if required.

I will answer your sarcastic comment at the end: Food is perishable, and i stand to inherit enough land to sustain myself off so do not adjust my plans for that too much in the current climate (Weather).

I don't live in the US so accumulating a bullet cache is not an issue. I'm not trying to fight off the zombie apocalypse, but for me the mass hoarding of wealth by the rich, and instability in currencies/sovereign debts in the major currencies could lead to hyperinflation in one of them/or a massive increase in the cost of living.

I wish to protect myself against those eventualities and will do so by buying property to rent. This guarantees AN income in a relevant and meaningful currency. It may not result in a profit on my investment but it is highly unlikely that I will not have a comfortable life, if I don't make any suicidal decisions.

I would like to hear why you think it's retarded. Calling someone out on the internet isn't hard. Give reasons if it's so obvious.

Growing population, increased lifespan. Commodity prices soaring.

Not going to explain anything. You're not worth our time. This post just sealed it.

Dec 11, 2018
trazer985:

Check out how most of the landowners in the world got their fortunes....

Trusts ===> Buy property ====> rent or sell leasehold ====> Buy more property with profits.

djfii

"Setup a Vanguard account, spread it out across 4-5 funds, let someone more experienced than you make the investing decisions. Just keep plowing money into it, and you'll be amazed at how much you accumulate."

You could be being incredibly ironic and suggesting that he will lose it all, and be amazed by that, but I doubt it. At no point did you mention what the returns would be, the risks involved and the fees if he makes money/costs if he doesn't, how fast he can access his money if required.

I will answer your sarcastic comment at the end: Food is perishable, and i stand to inherit enough land to sustain myself off so do not adjust my plans for that too much in the current climate (Weather).

I don't live in the US so accumulating a bullet cache is not an issue. I'm not trying to fight off the zombie apocalypse, but for me the mass hoarding of wealth by the rich, and instability in currencies/sovereign debts in the major currencies could lead to hyperinflation in one of them/or a massive increase in the cost of living.

I wish to protect myself against those eventualities and will do so by buying property to rent. This guarantees AN income in a relevant and meaningful currency. It may not result in a profit on my investment but it is highly unlikely that I will not have a comfortable life, if I don't make any suicidal decisions.

I would like to hear why you think it's retarded. Calling someone out on the internet isn't hard. Give reasons if it's so obvious.

Growing population, increased lifespan. Commodity prices soaring.

the premise of your strategy is that currencies are so devalued that they become useless, thus owning real property outright shields you from currency risk. But you are relying on rental income from people that will be paying you with currency. Since, in your world, currency is no longer useful..... see the problem you have?

Summary: shut the fuck up. If global currency markets collapse, we'll all have bigger things to worry about that investing for retirement, and no whack job fringe strategy you dream up will protect you from the armed masses that rape / pillage / murder their way across the world searching for food and other resources. And, since you can't reasonably prepare for an eventuality like that, you might as well get on board with the current system and benefit if things do work out ok.

dipshit

Dec 11, 2018

Hi, I am a land owner. I am worth alot of money.

Follow the shit your fellow monkeys say @shitWSOsays

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

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Dec 11, 2018

Hi, I am a Vanguard fund holder. I am worth alot of money.

Dec 11, 2018

OOOOOOOOOOOOOOHHHH SHIT SON DJFIJIJGIF JUST FUCKED YOU UP SON.

Dec 11, 2018

you're presuming a lot to think that there wouldn't be complete political upheaval in the US in response to an event like hyperinflation of the dollar. You're also presuming a lot to suggest that it would be localized to the US, since the dollar is the reserve currency used by the entire planet. The idea that property rights would survive that process is re-donkulous.

Dec 11, 2018
djfiii:

you're presuming a lot to think that there wouldn't be complete political upheaval in the US in response to an event like hyperinflation of the dollar. You're also presuming a lot to suggest that it would be localized to the US, since the dollar is the reserve currency used by the entire planet. The idea that property rights would survive that process is re-donkulous.

glad to see we've stopped the name calling.

Given that every man and his dog has a gun in the US, I can see it certainly being harder for people just turning up and taking your land. I won't pretend to understand the US though so I wouldn't stand by that other than as a logical deduction. I live in Europe and we clearly see property very differently, understandably given the difference in size of land available. It's what I will be doing, it's what my family are doing, and it's what some of our well off friends are doing with the majority of their incomes, with spare cash going into cash generative businesses that yield regular dividends.

Dec 11, 2018

i'd invest in a few good stocks, i.e. Apple, McDonald's, Yum Brands and a decent index fund.

Dec 11, 2018

good luck with that.

I don't know why you're surprised at being called a dipshit when you quote a very reasonable suggestion and call it incredulous. Your position assumes a level of certainty about the way things are going to play out that is completely unreasonable. As far as I'm concerned, my approach is far more likely to succeed than yours, and my basis for believing that is at least as bullet proof as yours.

Dec 11, 2018
djfiii:

good luck with that.

I don't know why you're surprised at being called a dipshit when you quote a very reasonable suggestion and call it incredulous. Your position assumes a level of certainty about the way things are going to play out that is completely unreasonable. As far as I'm concerned, my approach is far more likely to succeed than yours, and my basis for believing that is at least as bullet proof as yours.

The kid has something terribly wrong with him, not sure why you are trying to educate him. I think you'd have better luck training a dog to shit in the toilet.

Dec 11, 2018

your post came across as a way of reaping in huge rewards with very little effort (other than signing over cash). This simply doesn't exist, in my cynical view of the world. Your approach may have a higher probability of success, but what are the losses if it fails? These aren't quantifiable and so arguing this is a futile exercise. What returns do you anticipate from a vanguard account?

Dec 11, 2018
trazer985:

your post came across as a way of reaping in huge rewards with very little effort (other than signing over cash). This simply doesn't exist, in my cynical view of the world. Your approach may have a higher probability of success, but what are the losses if it fails? These aren't quantifiable and so arguing this is a futile exercise. What returns do you anticipate from a vanguard account?

Let's say I expect an average 6% return over 25 years. That's fairly conservative. If I bank $100k each year, and earn 6% on average, a quick and dirty calculation (i.e. not accounting for actual swings in returns, or timing of deposits throughout the year), gives me about $5M in 25 years. And that assumes zero balance today. That's enough to live on dividend / interest income (for me), with little or no impact to principal. And that doesn't take into account what I already have in the bank, which would put me at $10M in 25 years.

You might make more on real estate, but you have the headache of dealing with tenants, with evictions, with upkeep, with liability, with risk of costly property damage, etc. I don't know how it is in Europe, but over here, a lot of renters don't give a shit about treating your property like it's their own, so you can expect to constantly be replacing carpets, cabinets, painting walls, etc, So, feel free to make that choice for yourself but don't condescend to people that take different approaches to investing. Just because you're paranoid about hyperinflation doesn't mean everyone else has to be.

Dec 11, 2018

In Western Europe property always pays off. Many families maintain a constant, stable income this way (at least in the UK).

Not sure about the US - But what do I care about the US, the dollar's not the only reserve currency in the world.

Just Do It

Dec 11, 2018

"Get your porsche off my fucking land"

Just Do It

Dec 11, 2018

Give it to me. My portfolio (equities only, no short strategy) is up 17% since March 2011.

Just sayin.'

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.

Dec 11, 2018
mhurricane:

Give it to me. My portfolio (equities only, no short strategy) is up 17% since March 2011.

Just sayin.'

Excuse my french, but I'm in France.

Dec 11, 2018

Trazer is disagreeing with some pretty smart people, but on some level, he has a valid argument.

Most individual fortunes tend to be made through small businesses and real estate. Yes, stocks are a lot more liquid, but you're (1) paying a lot of money to management, (2) suffering from agency costs, and (3) suffer from accounting risk and (4) insider trading if you have a lot of turnover. Finally, of course, we are in the midst of a ~15-20 year cycle where the markets enter and exit at about the same price (11,000) (Same thing happened with the DJIA at 1000 from 1965 to 1983; same thing happened from 1929-1947 with the DJIA at 100)

If you own a condo that you live in or rent out, you don't have to worry about all of that- assuming you have responsible people on your condo board. You pay your $6000/year in property taxes, $300/month in maintenance, and collect your $1500/month spread in rent.

A condo that you happen to live in and own outright is even better. Collecting investment income in one place and spending it on rent in another is much less tax-efficient than owning property and not paying the economic rent in the first place.

So given cap rates of 5%, dividend rates of 4% on utilities, and the fact that the cap rate you "earn" or avoid paying taxes on in an apartment you own outright is completely tax-free, and 5% state taxes, you're really getting the equivalent of a 6.25% dividend stock by buying your apartment rather than investing in the stock market.

That said, property values don't always go up and can lose fundamental value. Just ask any landlord in Detroit who used to be collecting $700/month on a $100,000 house and is now getting $200/month on a $30K house.

But finally, unless OP lives in Detroit or in a really bad section of town, he can't afford to buy real-estate yet with his summer income. I would advise him to take advantage of his low-tax high-savings situation and stick it into a Roth IRA and also buy some Series I savings bonds.

Dec 11, 2018

L
M
F
A
O

Dec 11, 2018
oldmansacks:

L
M
F
A
O

Shaddup.

Dec 11, 2018

fair enough. I don't know if you've ever been a land lord, but it's almost never the case that a 1 month security deposit is going to cover the cost of damages if there are any. Either way, I suppose I'm willing to pay that premium in exchange for freeing up my time. but to be fair, you're taking a different angle than trazer. His rationale was that the world is coming to an end, so the only sane place to park your money is in hard assets. I dismissed that as paranoid. Your argument on the other hand, is that you can optimize your returns more effectively with those hard assets (real estate in this case), which is true, and is a completely reasonable basis to make the decision to invest your eggs in real estate (assuming you also want to invest that extra time and energy).

also, that calculation was fairly arbitrary. Maybe assume, instead of $100k each year for 25 years, it goes up by $5k each year so that on year 25 you contributed $220k to savings. At the same 6% average return, you have $7.75M at year 25, and $11.75M at year 30. Or maybe you get a little aggressive and open accounts with a couple hedge funds (admittedly I have no idea what kind of minimum balance is required for that little adventure... $1M+ ?), and you pull of an average 8% return. Then you have $10.1M at year 25, and $16.2M at year 30. Even inflation adjusted numbers provide a pretty good living from dividends at those levels.

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Dec 11, 2018

Thank you for the clear and easy explanation. Sometimes I have difficult with some of the videos posted because they go so fast and seem really complex. You broke this down nicely.

Dec 11, 2018
GA1000:

Thank you for the clear and easy explanation. Sometimes I have difficult with some of the videos posted because they go so fast and seem really complex. You broke this down nicely.

+1

Dec 11, 2018

Thanks for the explanation. Always learn something from these vids

I didn't say it was your fault, I said I was blaming you.

Dec 11, 2018

This guy is one of the best mentors (top 2).

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.

Dec 11, 2018

Thanks for the video, learned something as always.

Dec 11, 2018

You unemployed?

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

    • 1
Dec 11, 2018

What I did with my first bonus back in the days:
- Saved a good majority and allocated part of the savings to equity investments.
- Bought a nice watch.
- Took a trip with 15 friends (2/3 of them from my analyst class). We ended up spending a lot more than planned (boat rentals, bottle service, car service, dinners, etc).
- Got two custom tailored suits and a half dozen shirts from one of these HK-based tailors + 2 pairs of spiffy shoes.
- Bought a few gifts for people that mattered, and said "Aaah, don't worry it's on me!" way too many times at the end of dinners and/or drinks with friends not in banking.

Then you face reality and got to go back to living within the means of your base salary. The key is to not subsidize your 2nd year spending habits with your bonus -- an easy temptation.

I can tell you of different stories, like that banker-girl in my group who used almost all of her bonus to pay off her massive credit card debt. (She complained about how it was impossible to live on a 1st year base salary, while putting her $2.5k Burberry coat on.)

Dec 11, 2018

Wow did even now coats cost that much, well so you say you used to work in the industry or you still do, and thanks by the way, for not being a douche.

Dec 11, 2018

If we're talking about bonus... Spend on some nice clothes, one nice vacation with the woman, send some home to the family, invest the rest (which ends up being > 50%)

If we're talking about base... Rent.

Dec 11, 2018

Pay off student loans and any other debt, ully invest in 401k, IRA and start a brokerage account. Enjoy a vacation and buy yourself a gift. Save the rest

Dec 11, 2018

I like stuffing my pillowcase full of crumpled $100 bills, helps me sleep like a baby.

Dec 11, 2018

1st year analysts aint got no mo money.

Why? Because the rent is too damn high.

Dec 11, 2018
FutureQuant:

1st year analysts aint got no mo money.

Why? Because the rent is too damn high.

You seem to be a litany of second and third hand information. Plenty of analysts live more than comfortably within their base and still have enough left over to splurge every now and then.

It isn't a king's ransom but it isn't a penance either.

Dirk Dirkenson:

Shut up already. Your mindless, reflexive responses to any critical thought on this are tedious. You're also probably a woman, given the name and "xoxo" signoff, so maybe the lack of judgment is to be expected.

Dec 11, 2018

GoldmanRacks, shame nobody has responded. Maybe one of these topics will help:

If we're lucky, the following pros may have something to say: @Gman660 @bekele @white33matt

You're welcome.

Dec 11, 2018

bump

Dec 11, 2018

lol

WSO's COO (Chief Operating Orangutan) | My Linkedin

Dec 11, 2018

hilarious. pretty interesting stuff haha

Dec 11, 2018

How does one "stumble" over this?

Dec 11, 2018
BTbanker:

How does one "stumble" over this?

My guess is that he was googling 'sweet gelatin cubes,' happens to me without realizing probably twice a day.

Dec 11, 2018

Where is this from? You know, monkeys don't engage in sexual behavior for pleasure. Only human and dolphins do.

Dec 11, 2018
Invilliers:

Where is this from? You know, monkeys don't engage in sexual behavior for pleasure. Only human and dolphins do.

maybe there's an innate satisfaction from procreating.

Dec 11, 2018
Invilliers:

Where is this from? You know, monkeys don't engage in sexual behavior for pleasure. Only human and dolphins do.

http://www.q-group.org/archives_folder/pdf/spring2...

http://www.time.com/time/health/article/0,8599,170...

There you go.

Dec 11, 2018

They're clearly incentivized somehow to reproduce otherwise it'd never happen. Just so happens that human males enjoy busting a nut.

This is awesome though. Prostitution is the most basic transaction after all.

Dec 11, 2018

Chanel and LV Boutiques in Midtown..already made one trip the past weekend...Invest the rest..

Dec 11, 2018

bought bought 20 shirst from footlocker and some cologne from TJ Maxx and a 1994 honda civic from ebay and save 15% of the total compensation then donate the rest to American Diabetes Association

Dec 11, 2018

nice work

Dec 11, 2018

im buying KOOL...

...the brand, not the smokes

o yea, and the rights to every Vanilla Ice song ever made

'word to yo mutha'

Dec 11, 2018

down payment on a new 911 turbo...

Dec 11, 2018
johnp686:

down payment on a new 911 turbo...

Buying a Turbo as an analyst?? LOL. Enjoy bankruptcy.

Dec 11, 2018

Nobody going to Scores to "make it rain"?

Dec 11, 2018
Texasmade:

Nobody going to Scores to "make it rain"?

hahahaha, pacman jones style.

If I got a bonus like that I'd definately try to find time to make my way to vegas.

Dec 11, 2018

Why would you want a Porsche Turbo anyway, I mean...Mazda Miata's are fabulous.

Three cheers to going on a 1 month bender...

Dec 11, 2018

I'm going to spend my money at the Dior Homme boutique, buying 400 dollar sunglasses and gay looking polos and black skinny jeans.

Then, I'm going to go out with my analyst buddies and get hated on the whole night for spending 2000 on quite possibly the gayest outfit ever.

Rock on.

Dec 11, 2018

Why does anyone care what how an analyst wants to spend their bonus? It's their money.

Dec 11, 2018

Asking someone how they are going to spend their bonus is like asking someone what they are interested in. People will spend their money on what interests them, regardless of whether it is bonus money or normal wages.

Dec 11, 2018

i'm going to milk and honey on thursday or friday night, and i'll probably drop a lot of cash in doing so.

Dec 11, 2018

I was interested in seeing what % ppl were planning to save in particular.

And in giving everyone an opportunity to bask in it.

Dec 11, 2018

My philosophy is that if you're planning on getting a Porsche, you should be able to afford actually BUYING the thing...not just putting a down payment on it, leasing the thing for three years and then having nothing to show for the $40k+ that you just sunk into it.

Dec 11, 2018

if my first comment wasnt ridiculous enough, i thought that maybe some of you would get it the third time around

but for those who are still confused, this is how i am really going to spend my bonus...

bender in vegas. thats right. all of it

i thought a car would too closely resemble an "investment." this moneys burning a hole in my pocket, so if you'll excuse me, i have a plane to catch...

catching on yet?

Dec 11, 2018

johnp, johnp...

Dec 11, 2018
azwethinkweiz:

johnp, johnp...

And they, are chanting, his name...

::johnp, johnp, johnp::

That just worked too well.

Dec 11, 2018

Start shoving it up yer ass till you have enough holed up in there for six months worth of not working. Margin of safety. First rule.

"...all truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

  • Schopenhauer
Dec 11, 2018
seabird:

Start shoving it up yer ass till you have enough holed up in there for six months worth of not working. Margin of safety. First rule.

I already have 6 months living expenses.

Dec 11, 2018

I'd wait and see what other news comes up in the markets. No one really has a clue right now.

I'd start maybe in a month or two maybe putting a 2-3K at a time into the markets.

I like FTR, paying a 10.3% dividend. with stable growth. Not sure if it would make sense with only 10k maybe 40-50k saved up. with 10k I'd buy APPLE at incremental dips (like now) for the next year or so. Or throw 10k in AAPL long and sit.

Dec 11, 2018

buy physical gold

Dec 11, 2018

Can you please list your expenses so I can plan a saving schedule for myself next year?

$4k after tax income - $900 rent - expenses = $2.2k in savings, so your non-rent expenses are $1.3k per month?

Dec 11, 2018

900 in rent is unrealistic when budgeting I guarantee that you will be spending more than that unless your lucky like the OP and can rent a friends apartment on the cheap.

Dec 11, 2018

You are already long the market by working in a bank. Have you heard about diversification? Do not invest in equity. As simple as that. That said, given I work markets and sometimes I can see good opportunities, I'll take it (but that happens about once a quarter...) So not investing per se, more like opportunistic money making. (IE: BP after the oil spill, SocGen after the fake rumours in the market, etc...)

If you got cash I suggest you save up for a mortgage, but plenty of people will tell you not to. If you buy a flat, effectively paying the return on your investment based on yourself, that's a pretty good investment; as you don't have to worry about anyone making payments to you but yourself.

So look for the best saving rate you can find out there while saving up for a mortgage kiddo!

I heard Greek bonds pay 21% for 10 yr bonds as well...

Dec 11, 2018

Trade TVIX. Volatility in this market is a given. I've been buying dips and selling 20% gains for the past couple of weeks.

My name is Nicky, but you can call me Dre.

Dec 11, 2018

^^You don't have a 30 day mandatory holding period?

Dec 11, 2018

high-yield savings. don't play with it yet. you're too young

Dec 11, 2018

you can invest in my company..we're trying out a new line of sports supplements that allow you to do situps when you cant see, hear, or smell

I eat success for breakfast...with skim milk

Dec 11, 2018

Poker

"Every man should lose a battle in his youth, so he does not lose a war when he is old"

Dec 11, 2018

I use HSBC, which probably has the best customer service / branches of any of the UK based banks.

You should look in to a Jersey based account. The main difference is the tax treatment; as I understand it, you will pay a lower marginal, but won't get the standard deduction. Your HR should be able to advise you on this, and will be able to facilitate the process. I personally use an onshore account, because the tax difference is minimal and the convenience factor is significant; for instance, on shore branches won't be able to help you if you have an offshore account.

As for how to put your money to work, I avoid equities because the FSA is crazy, firm policies, etc. Easiest option is putting in to some sort of mutual funds. You can look at ISAs, although I'm not sure if that'd be worth it as a foreign citizen. Personally, I just put my money in a mix of fixed-income and angel capital investments.

Dec 11, 2018

I think above sounds like sound advice. Especially with dealing with HSBC compared to some of the other banks. Coming from another country within the EU I first was quite shocked with how bad customer service seemed to be in UK banks.

However, after having switched bank twice I finally ended up with HSBC and I must say they are in a class of their own.

"It's a little like wrestling a gorilla. You don't quit when you're tired you quit when the gorilla is tired"
-Robert Strauss