<p>I think this is a pretty good read for those of you are interested in investment banking. IITians</a> - Wall Street is a trap!!</p>
<p>wall street is prestigious though.</p>
<p>It is an interesting read indeed. But I think he's got it wrong with the 18 hours a day, 7 days a week...no doubt it's a lot of hours, but not 126. More along the lines of 90. </p>
<p>"5. Will doing this job take you to top B-schools??
NO!!! People hate I-bankers in top B-schools."</p>
<p>Wow.</p>
<p>"Finally, don;t be fooled that I-bank is a very prestigious professon. They are not. After all they are a middle men, just like your house broker. they are given only as much respect by the industry and others as you give to your house broker."</p>
<p>Hmm, ok. Besides the grammar, I think he has it a little mixed up. I hope others don't think that an I-Banker is a glorified 'house broker'. </p>
<p>I understand that he is trying to inform people of the profession, and that he was correcting the writer of that article. But some of the things he notes, is a little to the extreme. Just my thoughts :D</p>
<p>"Assume you will earn $100000 and you are based in NY. Be aware that your basic will be much less and your bonus will make a chunk of it which uncertain. Assuming you are making 100K, your federal tax-28%, state tax-8%, Social Sec tax-6% and Medicare-1.5% will eat up at least 40%. So you are left with total 60K cash. Now, even if you share a house in NY, it will cost you at least 2K per month with related expenses. So there goes your another 24K, you are left with 36K. Now you could argue that you will not have time to do anything so you will save all this money. I hope that you will spend at least 6K on vacation and other entertainment. So you are left with 30K. Which is like 13Lac rupee. This money for working 7 days a week, 18 hrs a day for doing a mind numbing job which does not teach you anything but stamp you with an I-banker sticker which is a stigma in learned societey. I am sure you could save similar money in India, little less may be, and along the way could have much larger impact."</p>
<p>$30,000 in extra cash is alot for a 22 year old living by himself. Most people are stuggling to break even every year. Besides thats just for an analyst, no ones becomes an ibanker to be an analyst thats just something you do as you try to work yourself up to MD.</p>
<p>The guy on the site is probably someone who saw all his Indian friends go places in life and he was just falling behind.</p>
<p>Um...with the tax thing....you can take out all sorts of deductions and take all sorts of credits which can possibly reduce your tax bill to around $30k for a $100k paycheck. You get deductions for any and all money you may have to spend for work (this includes clothing, computer, cellphone, even a car) and dollar-for-dollar credits for any and all money you pay to pay off your college loans. If you have siblings, have them live with you and a) you get a lower tax rate-they can legally be defined dependents-and b) you get a deduction for every dollar you spend to take care of your sibling.</p>
<p>So you can definitely reduce your tax burden by a lot. And I believe the tax bracket for $100k is 25%, not 28%. The average person spends 35% in taxes, not 40%. And after you take all the deductions that you possibly can, the tax bill would be around $25k.</p>
<p>Also ibanking definitely takes you to business school. Are you kidding me. Ibankers need a high UGPA in the first place to break into ibanking, then they need to have quant skills to survive their 2-3 years in ibanking. Good quant skills=>good GMAT scores. Good GMAT scores+good GPA+working at Goldman Sachs for 2-3 years=The Wharton School of Business or Harvard Business School.</p>
<p>The tax bracket is 28% for $100k- and the average person doesn't make $100k per year..</p>
<p>Ok...whatever....anyways, if one was determined enough, one can definitely reduce one's taxable income considerably, thereby reducing one's tax bill considerably. </p>
<p>Nobody, and I mean nobody, pays the full 40% tax rate.</p>
<p>futurenyustudent is way off. Just so that no one is misled here ...</p>
<p>First of all, you can't deduct any "business expenses" until those expenses add up to at least 2% of your adjusted gross income. Then, the expenses have to be for business purposes -- in other words, your computer that you use to visit CC and surf the web, and your cell phone that you use to call your friends if you ever get out of the office to see them, are generally not deductible. Many employers will give you a blackberry/cellphone for business use only. Go over your minutes because of personal useage and find yourself in a lot of hot water. </p>
<p>Deductions are much more limited that what you stated. For example, you will never legally be able to deduct a Brooks Brothers suit on your taxes. (The only professions that are entitled to deduct clothing on their federal taxes are professions such as police officers and nurses, who have to purchase uniforms that can not be worn outside of their jobs.). Also, living with your siblings, unless they are minors and you have been declared their legal guardian, will geneerally not allow you to take a deduction for them. Furthermore, you can only deduct student loans until your gross income reaches $50,000, when the deduction begins to be phased out. There is no deduction for student loans available at all for someone who makes more than $65,000. That doesn't leave a lot of deductions for our baby banker making $100,000. </p>
<p>So, here's the story for our example of a baby I-banker living in NYC:
$100,000 income (I assume you're including bonus here)
Federal tax rate - 28%
FICA (social security) - 6% (though you max out at about $90,000)
Medicare - 1.5%
NY State tax rate - 8%
NY City tax rate - approx. 3.65%</p>
<p>Less:
Contributions to health insurance, dental insurance, vision insurance - typically $150-300/month
Co-pays for prescriptions and doctor visits - varies, usually $15-50/per
401k contribution? You've got to retire someday
Rent - varies - probably about $2,000 per month
Student loan payments - varies
Toothpaste, shampoo, floss, etc. - as little as $30/month with store brands
Food - lunch at work every day - $8-$10/day - the rest depends on whether you cook or eat out - minimum of $200/month
Subway - at least $40/month (assumes you will get car service home every night since an I-banker will never get home until late)
Taxis- occasionally?<br>
Gas/Electric - $50/month, except in summer when it will be double with a/c on
Cable - $100/month
Phone - maybe you need it, maybe you don't
Internet access - $40/month
Car - payments can be any amount, garage is easily $350-$500/month (I don't think that most younger people keep cars in the City)</p>
<p>There are other costs, too, but I guarantee you won't be getting rich on $100,000 in NYC. Taxes take a huge bite, don't fool yourself.</p>
<p>yea I agree that $100,000/yr ain't enough in NYC. But it makes you wonder how all those people living there are getting by, The average condo is like 1 million now and surely they all don't make six figures.so how does someone get by in NYC? And how much do you need to be making in order to have a luxurious lifestyle there.</p>
<p>yea I agree that $100,000/yr ain't enough in NYC. But it makes you wonder how all those people living there are getting by, The average condo is like 1 million now and surely they all don't make six figures.so how does someone get by in NYC? And how much do you need to be making in order to have a luxurious lifestyle there.</p>
<p>Let me clarify. I did not say that you couldn't live on $100,000. Of course you can! Most NYC residents live on a whole lot less. I was just clarifying that for all of the hours that a junior investment banker works (100+ hours a week is not unheard of -- junior lawyers, too, for that matter), the lifestyle, or what little life one has left after working so many hours, isn't glamorous, in the get your name on Page Six and mingle with the rich and famous kind of way. Living in luxury in NYC depends on what you consider luxurious. Does luxury mean taking helicopters every weekend to your home on Gin Lane in East Hampton, a chauffeur driven Bentley and designer shopping sprees at Barneys? Or does luxury mean sharing a summer house with some friends in Bridgehampton, going out to dinner at a nice restaurant occasionally and buying off the rack dress shirts at Barneys? What kind of a life would you want to have? Yes, a one-bedroom condo in a nice neighborhood in Manhattan (we're talking 700 to 800 square feet) is expensive -- there is one for sale in my neighborhood right now for $825,000. That said, there are more affordable neighborhoods, co-ops are a wee bit less expensive than condos, and plenty of my professional friends have saved up money over a period of years and bought an apartment in Manhattan. Remember -- some people choose to live on credit card debt (so don't always believe that the person with the nicest car, house, watch, etc. is the wealthiest person), some people choose to spend everything that they make, and some people choose to live well within their means. </p>
<p>How do you envision yourself living? What do you want your lifestyle to be?</p>
<p>working one's way up to MD? Uh, the odds of that happening is probably 1 in 1000, great odds, wouldn't you say so? :eek:</p>
<p>That article is a lot closer to reality than your average CCer's idea of Ibanking.</p>
<p>
[quote]
Cable - $100/month
[/quote]
</p>
<p>How much cable are you getting? Cable+Pay Per View+all the fancy channels+TiVo?</p>
<p>I would estimate cable at more like $25-30, $75 max with cable internet.</p>
<p>
[quote]
NY City tax rate - approx. 3.65%
[/quote]
</p>
<p>Which won't apply if you don't live in NYC. You can definitely find cheaper apartments outside NYC in the Fort Lee area or even Newark. That saves $3650 plus whatever difference in rent. With that money you can buy a car and travel to work without problems, since you can easily get a good functioning car for $7-10k (even for closer to $3-5k), new one for $16k. </p>
<p>Living in NYC and vicinity isn't as expensive as people think it is. Besides, you'll get more room per dollar 20 minutes outside Manhattan anyways. I would say that one commutes for 20 minutes, even more, even if one lives in NYC.</p>
<p>Making 100K in NYC is about the same as making 50K in St. Louis or Kansas City</p>
<p>Hmmm....REALTOR.com begs to differ.</p>
<p>Here's the St. Louis vs. NYC analysis:
<a href="http://www.homefair.com/homefair/servlet/ActionServlet?pid=200&tool=salarycalculator&previousPage=116&cid=realtormoving&gate=realtor&fromState=MO&toState=NY&salary=50000&fromCity=2965000&toCity=36F0007&ownrent=rent%5B/url%5D">http://www.homefair.com/homefair/servlet/ActionServlet?pid=200&tool=salarycalculator&previousPage=116&cid=realtormoving&gate=realtor&fromState=MO&toState=NY&salary=50000&fromCity=2965000&toCity=36F0007&ownrent=rent</a>
It tells me the equivalent of $50k in STL is $65k.</p>
<p>Here's the Kansas City vs. NYC analysis:
<a href="http://www.homefair.com/homefair/servlet/ActionServlet?pid=200&tool=salarycalculator&previousPage=116&cid=realtormoving&gate=realtor&fromState=KS&toState=NY&salary=50000&fromCity=2036000&toCity=36F0007&ownrent=rent%5B/url%5D">http://www.homefair.com/homefair/servlet/ActionServlet?pid=200&tool=salarycalculator&previousPage=116&cid=realtormoving&gate=realtor&fromState=KS&toState=NY&salary=50000&fromCity=2036000&toCity=36F0007&ownrent=rent</a>
It tells me that $50k in Kansas City is $68k.</p>
<p>So making $100k in NYC is closer to making:</p>
<p>$70k-$75k in Kansas City (NYC equivalents=$95k-$102k)</p>
<p>$75k-$80k in STL (NYC equivalents=$99k-$106k)</p>
<p>the most intelligent thing to do to cut down on costs would be to live with roommates. the fact of the matter is, you'll never see your roommates so you probably will never have issues with them and they'll love you because you'll rarely be home.</p>
<p>A nice 1 br in NY will cost $2500-3000. In KC it's $1,000. That scale is so bogus. I'd say 50 in KC= 100 in NYC.</p>
<p>Who cares?!?!?! What other job lets you walk down wall st everyday?</p>
<p>hot dog vendor on wall st.</p>
<p>
[quote]
A nice 1 br in NY will cost $2500-3000.
[/quote]
</p>
<p>Where did you look? Trump Place, overlooking the Hudson?</p>
<p>If you have objections to REALTOR.com's scale, then take it up with the president of the National Association of REALTORS. I don't make up these figures.</p>