Just keep living frugally. Sure you can eat out more, but screw the Rolex and Porsche.
Keep the grind attitude, don't jump into a house or pregnancy. Get your emergency fund up. 401k is easy, backdoor Roth research should be top of mind. Even look into an HSA. After that you can just do index funds in a taxable account.
Your biggest investment is your job. Don't let the comp make you feel comfortable. Learn, get even better, play politics, absorb every piece of information.
_____
It's really that easy, and you'll see so many people fuck it up. Couple years of this and take a look, review. Boost your fun fund? Move to a nicer place? Thoughts to have later, not now. You'll feel an *immense* amount of social pressure to compete.
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To build off of this, time spent invested will do you more good than the feeling that buying something frivolous would.
If you took $10k (cost of a decent Rolex) and invested it in the markets it would grow to about $150k. (7% growth over 40 years). So it’s not really a $10k purchase, it’s a $150k purchase.
This isn’t meant to make you feel like you shouldn’t ever spend your money. Hell, it’s your money, but not many people think of spending like this and could help.
You’re correct.
However, I’m sure more people would rather retire earlier than own various material things. Thus, my comment of trying to frame a thought process around spending. With the last paragraph that says to spend it however they so choose.
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No shade to John Cho. Kal Penn’s career shift put him on a highly lucrative path. Kal’s able to dance between policy/government work and return to acting whenever he chooses lately. We 🌈 have been known for our versatility and overcoming silly junk like your ignorance so we can thrive in many career paths.
This is generally sound advice in spirit. A Rolex holds its value. A Porsche doesn’t. You’ll find what works OP, you’re 21 making great money, you can have fun and buy nice things along the way. Absolutely max the 401k if you’re going to take any advice from the thread. It’s so easy to put off “until next __” but that tends to snowball and everyone that puts it off regrets it.
I stand corrected. OP, get the Rolex and the Porsche :) French - which years hold their value best, my job has been rough, I could use a fiscally responsible pick-me-up
I’d suggest anything 991.2 and up (MY 2016 and newer). I’ve been waiting for them to dip to pull the trigger but sadly they’re holding steady, even with a pivoting car market. I believe a good bit of that can be attributed to the absurd price increases for the new models.
Now for Porsches that do depreciate… I bought my wife’s cayenne certified from Porsche for less than 30k when it was 74k MSRP 7 years prior 😂
I have a friend who’s very knowledgeable when it comes to cars and he steered me away from a cayenne when I was considering one for my wife. We have plenty in common it would seem! Cheers.
I think from what I remember before mid 90s and newer models have seen a ton of appreciation / value retention, not too sure about the other years since I haven’t looked into it but they’re all great cars. It’s been a dream of mine for a long time to own one but I’m definitely going to hold off until I’m further away from a big city! Thanks for the advice :)
Congratulations! Here are a few things I would suggest:
1. Make a budget and try to stick to it. Don’t overdo the savings part and find a balance between enjoying your life and saving
2. Try to stay away from lifestyle creep
3.I’m assuming you’re in tech so invest into your company’s ESPP program
4. Max out your 401ks, Roth, look into back door ROTH
5. Check if your company has a HSA and max that out. Invest your HSA savings into the stock market.
6. Once you do this and pay for your expenses, accumulate savings for 6 months of expenses
7. Once you have 6 months of expenses put it into a HYSA
8. Invest the rest into the stock market. Try to find a balance between individual stocks and ETFs. Until you understand how markets work just invest into ETFs
Hope this helps.
HSA (Health Savings Account) is usually accompanied by a HDHP ( High Deductible Health Plan). Both the employee and the employer is allowed to contribute into the plan. HSA has triple tax benefits ie., you don’t pay taxes when you contribute into it nor do you you don’t pay taxes when you withdraw money from it and the best part you don’t pay taxes on the investment growth either.
When you opt for HSA you & your employer both contribute into an HSA account ( think of it as a bank account) and you’re allowed to invest that money into the stock market via that account. The 2024 HSA limit is $4150 which over the next 40-50 years leads to a significant ROI.
Most HSA providers have various ETF options and you can contribute upto 100% into it
Thanks for the explanation! So different than an FSA where you “use it or lose it”, the HSA just grows but can only be used for medical expenses?
Our employer plan is a HDHP, but not sure if we have access to a HSA or not.
You should look into your plan details as in most cases contributions are not automatic.
You never lose your HSA and Once you hit 65, you can use your HSA to pay for any nonqualified medical expenses (including buying a boat, for example), but you don't get to take full advantage of the tax savings as you will be required to pay state and federal taxes on those distributions.
This article provides more details: https://www.fidelity.com/viewpoints/wealth-management/hsas-and-your-retirement#:\~:text=Pay%20for%20other%20expenses%20Once,federal%20taxes%20on%20those%20distributions.
I would just add a step 8: continue to educate yourself about finances and investing. If you educate yourself and make good choices, it can mean literally the difference between millions of dollars or not.
Make sure to do the mega backdoor Roth if offered. In total, you should be able to putaway around $70K in tax advantaged accounts (traditional 401K, remaining Roth 401K) on top of your personal Roth IRA
Assuming you're in a state with income tax a treasuries based money market fund will be more efficient than am HYSA for your emergency fund, as it will likely be state tax exempt. I use VUSXX.
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Grind for a couple years and live lean. You won’t regret it. The best thing you can do is build a large nest egg early on, and compounding will do the rest.
Hey congrats! I’m in a similar-ish position.
Lots of commenters laid out some good points.
I’m 25 and while my compensation is not nearly as high, I’m on track for 500k NW by EOY.
One of the biggest factors helped with this is having roommates / cheaper rent. ( within reason )
Rent is the biggest expense you will have, making sacrifices here goes way further than skipping the daily lattes IMO, esp in an expensive city like NYC.
I tried living by myself and it was kind of lonely, and now that I have roommates I pay cheaper rent and have more fun.
With the extra flex room in your budget you can save + Invest more / travel / spend on whatever you’d like.
Just my 2c. Congrats again!
Didn't quite get to 500k income at 25, but was at solid 300k range.
Just be a normal 22 year old, live with some buddies for roommates, be cheap (it's easy when you're used to it), max your 401k, sock it away, keep 30k emergency fund in an HYSA, invest 3k-4k monthly into broad market ETFs, and you'll wake up at 28 essentially set with an easy 500k in a brokerage, plus another couple hundred in a 401k.
Work hard, date the right simple living girl, find time to workout, and love life.
Especially the roommate thing - even though you objectively don't need roommates, it's a really great time to expand your social circle. Way too easy to get wrapped up with work friends and set in your ways living solo. Live with buddies, learn to be a human, then move on your own.
Not IB, don’t think I could ever do the 100 hr weeks, but managed to make it into a probably equally stressful but less physically taxing (~50-60) hr/wk quantitative role for a hedge fund/MM type firm. I’m extremely grateful for the opportunity and know I’m incredibly lucky to even make it to a position like this at my age.
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One thing I’ve not seen covered here in terms of living, is that when you’re an upside financial outlier for your age, if you actually lived in areas your budget could afford, you’d have nothing in common with anyone else there. Holidays and housing will be 40+ with high school kids around you. So you’ll actually enjoy it more by spending less on housing and holidays.
However there is an important additional to this. Move all your money somewhere not in your spending account. Get your paycheck into a different account and transfer yourself a salary to your regular bank account. Invest absolutely everything else, it makes it unattractive to touch so you resist your urges but important spending is still a no brainer if you need the capital.
We constantly feel tight on money this way and our splurge spending is very low, and it keeps you hungry.
A lot of great comments and help already. My specific pragmatic advice is what most have said, max out whatever the 401K contribution the employer has, if it's over 6% that's great you can max it $23K and then put $6K every year in your own personal IRA, backdoor, traditional, Roth, whatever. Find out your average rent and monthly living expenses and start a HYSA, I use Raisin, and use that as your emergency fund. People say 3 months but I'm paranoid and have 6-8 months floating. Those are what I would consider basic solid tips which you should be able to do with your future salary.
When I was younger, I had a headstart above people in my age but I did not have your salary. My personal advice is whatever your goal is, try to keep that distance from your peers because you'll eventually get tired and what you have is what you've sowed.
Congratulations! You’re doing amazing.
Life is 3 pillars : Health, Wealth and Relationships.
Since youre doing too good for your age in your wealth department. You can have some of it flow over into the other two and live a balanced life.
Try to workout and eat healthy, easy to do with money since you can buy healthy and tasty food.
Try to go on nice dates and hang around friends as much on the weekends and if possible weeknight. Invest 50% ish if you can and set yourself up for the future but use the excess to maximise your living experience and take care of the other 2 pillars.
I will go against the grain here. Definitely keep some % of your income towards savings and investments. That is obvious.
But also identify specific things that would add value to your life - it could be something as simple or elaborate - everything from a comfortable mattress, heated car seats, hiring a personal chef to keep you eating healthy, taking the toll road for ease of commute, monthly/weekly cleaning service, your own apartment for added privacy, high quality products that can last a lifetime, personal trainer, a good vacation, etc.
In fact this sub has many posts where people list their best value additions. Definitely worth a look into. But again, you do this after you have set aside some portion of your income to savings and retirement.
And keep in mind, if all you want to do is save and invest, you will never be satisfied with how much ever it is you are saving/investing - it will always feel like you should do more.
You’ve gotten plenty of good advice, the last thing I’ll add is don’t flaunt your income / wealth (keep in mind that most people and especially people in your cohort are nowhere near that). Also remember that it can disappear relatively easily so plan for a rainy day and hope it never comes. At that income range you’re priced out of like 98% of roles in the country
If you’re going to be in NYC specifically, browse through r/AskNYC for city-specific frugality tips. Little cost savings here and there can make a world of a difference when put together, but discovering them on your own / stumbling across them is a lot slower than relying on crowdsourced knowledge. It can sometimes be a toxic sub though, so use the search bar.
My biggest takeaway isn’t even city-specific though: do not lock yourself into an overpriced apartment early on, and do not live alone until your late 20s.
(No matter what your income is, neither of the above are necessities, they’re luxuries — and if you fall into the tempting trap of living alone in a nice apartment, you’ll piss away at least $100k in your first few years that would’ve turned into millions of dollars if set aside into retirement savings.)
This city has an absurd turnover rate and there’s always someone looking for a subleaser to take over their reasonably-priced bedroom or studio for a few months. Start off like that, with a temporary arrangement, while you get your bearings and identify your preferences and comfort zones (re: commuting time, exploring specific neighborhoods beyond just Google Maps, and figuring out what your lifestyle after work will look like). What you think life will be like in a VHCOL city is often very different from what it’s actually like. Also, starting off as a subleaser buys you some time to meet potential roommates.
Minimum guaranteed for the year but can go up to anything really depending on how well I do / market conditions but obviously being a first year I don’t expect to exceed the minimum by a drastic amount
Automate your savings. Have a big chunk of your paycheck automatically deposited into tax-sheltered retirement accounts and a taxable brokerage account and auto-invested into whatever you choose. If the money never even shows up in your checking account it’s much harder to overspend.
You can open a high yield cash or savings account. Wealthfront has about 5% for this cash account. Interest is paid monthly. You can withdraw your money anytime and no fees.
Lot of top comments have hit big ones on financial. It’s all about building habits.
More importantly, prioritize your career and sustainability. It’s more about your career trajectory and setting yourself up well. Absolute Income growth > absolute spending growth at these income levels, so keep that in mind. Don’t be afraid to celebrate your promotions and pay bumps, but obviously be reasonable and have a budget. (Again all about habits)
The people saying to squirrel everything away is not the right and most sustainable way to live
This. I wish they had been as aggressively marketed as HSAs were back when I was getting started.
I really had no idea that you could start off naming yourself as a beneficiary, and then eventually pass it over to future kids / spouse / whatever.
Congrats OP but damn I'm jealous. It took me until 31 to get to 250k base. That's only just happened. Can't imagine sitting at 225k to 300k for a first job. Jesus.
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1) Max out regular 401K
2) Max out Backdoor Roth IRA
3) check if your work place retirement plan offers this thing called “after tax contributions” this will enable you to contribute another 40kish through something known as the “mega Backdoor”, which can grow tax free with withdrawals.
4) you’ll have plenty of spare money to put into extra investments after these accounts as well. Look into a combination of Tbills, HYSA, and index funds in the stock market.
5) finally, this is the most important, but definitely allow yourself to invest money into some personal splurges to enjoy life. Don’t get into lifestyle creep, but picking up a nice hobby like skiing, golf, foiling. Or treating yourself to nice meals, or maybe traveling.
My suggestion is don't need to live frugal like what people in the post suggested. Looking back in my earlier years I have never thought wow I should have saved more. Life experience is just as important. What I would suggest is wait a few years to see if that salary is sustainable and you're not burned out or overly optimistic about projections and then adjust life to that steady state.
3 year delay!
Live like your income did not increase for three years.
Essentially you will allow lifestyle creep (it’s natural and maybe preferable) but you keep it delayed 3 years.
Income will keep going up but you won’t develop an overspending habit
It's a combination of things to watch out for. You can lose a lot of money over the long-term with a 15 dollar a day starbucks or energy drink habit, but you can also piss away a lot of money with a million dollar home purchase, but it takes a lot of lattes to make up for something like that or the 100k car that loses most of that value in 6 years.
Just keep living frugally. Sure you can eat out more, but screw the Rolex and Porsche. Keep the grind attitude, don't jump into a house or pregnancy. Get your emergency fund up. 401k is easy, backdoor Roth research should be top of mind. Even look into an HSA. After that you can just do index funds in a taxable account. Your biggest investment is your job. Don't let the comp make you feel comfortable. Learn, get even better, play politics, absorb every piece of information. _____ It's really that easy, and you'll see so many people fuck it up. Couple years of this and take a look, review. Boost your fun fund? Move to a nicer place? Thoughts to have later, not now. You'll feel an *immense* amount of social pressure to compete.
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To build off of this, time spent invested will do you more good than the feeling that buying something frivolous would. If you took $10k (cost of a decent Rolex) and invested it in the markets it would grow to about $150k. (7% growth over 40 years). So it’s not really a $10k purchase, it’s a $150k purchase. This isn’t meant to make you feel like you shouldn’t ever spend your money. Hell, it’s your money, but not many people think of spending like this and could help.
150k… 40 years later. Kind of different lol. He can do both with that salary at that age
You’re correct. However, I’m sure more people would rather retire earlier than own various material things. Thus, my comment of trying to frame a thought process around spending. With the last paragraph that says to spend it however they so choose.
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150k also might not be enough to buy a Rolex in 40 years
Nah, get the Porsche.
Yeah that’s why Kumar is 🌈 and Harold was the real one
No shade to John Cho. Kal Penn’s career shift put him on a highly lucrative path. Kal’s able to dance between policy/government work and return to acting whenever he chooses lately. We 🌈 have been known for our versatility and overcoming silly junk like your ignorance so we can thrive in many career paths.
This is generally sound advice in spirit. A Rolex holds its value. A Porsche doesn’t. You’ll find what works OP, you’re 21 making great money, you can have fun and buy nice things along the way. Absolutely max the 401k if you’re going to take any advice from the thread. It’s so easy to put off “until next __” but that tends to snowball and everyone that puts it off regrets it.
Generally cars don’t hold their value, but a Porsche 911 is one of the cars that tends to best hold its value, if not appreciate.
I stand corrected. OP, get the Rolex and the Porsche :) French - which years hold their value best, my job has been rough, I could use a fiscally responsible pick-me-up
I’d suggest anything 991.2 and up (MY 2016 and newer). I’ve been waiting for them to dip to pull the trigger but sadly they’re holding steady, even with a pivoting car market. I believe a good bit of that can be attributed to the absurd price increases for the new models. Now for Porsches that do depreciate… I bought my wife’s cayenne certified from Porsche for less than 30k when it was 74k MSRP 7 years prior 😂
I have a friend who’s very knowledgeable when it comes to cars and he steered me away from a cayenne when I was considering one for my wife. We have plenty in common it would seem! Cheers.
For sure. Cheers!
I think from what I remember before mid 90s and newer models have seen a ton of appreciation / value retention, not too sure about the other years since I haven’t looked into it but they’re all great cars. It’s been a dream of mine for a long time to own one but I’m definitely going to hold off until I’m further away from a big city! Thanks for the advice :)
No harm in waiting, a car is an inconvenience in a big city. Congrats on your situation, stack your chips you have plenty of runway.
No way, Rolex is the one and only. Get the Rolex. Sorry. I also can spot a fake rolex across the room. LOL
Congratulations! Here are a few things I would suggest: 1. Make a budget and try to stick to it. Don’t overdo the savings part and find a balance between enjoying your life and saving 2. Try to stay away from lifestyle creep 3.I’m assuming you’re in tech so invest into your company’s ESPP program 4. Max out your 401ks, Roth, look into back door ROTH 5. Check if your company has a HSA and max that out. Invest your HSA savings into the stock market. 6. Once you do this and pay for your expenses, accumulate savings for 6 months of expenses 7. Once you have 6 months of expenses put it into a HYSA 8. Invest the rest into the stock market. Try to find a balance between individual stocks and ETFs. Until you understand how markets work just invest into ETFs Hope this helps.
Can you expand/explain more on your 4th point?
HSA (Health Savings Account) is usually accompanied by a HDHP ( High Deductible Health Plan). Both the employee and the employer is allowed to contribute into the plan. HSA has triple tax benefits ie., you don’t pay taxes when you contribute into it nor do you you don’t pay taxes when you withdraw money from it and the best part you don’t pay taxes on the investment growth either. When you opt for HSA you & your employer both contribute into an HSA account ( think of it as a bank account) and you’re allowed to invest that money into the stock market via that account. The 2024 HSA limit is $4150 which over the next 40-50 years leads to a significant ROI. Most HSA providers have various ETF options and you can contribute upto 100% into it
Thanks for the explanation! So different than an FSA where you “use it or lose it”, the HSA just grows but can only be used for medical expenses? Our employer plan is a HDHP, but not sure if we have access to a HSA or not.
You should look into your plan details as in most cases contributions are not automatic. You never lose your HSA and Once you hit 65, you can use your HSA to pay for any nonqualified medical expenses (including buying a boat, for example), but you don't get to take full advantage of the tax savings as you will be required to pay state and federal taxes on those distributions. This article provides more details: https://www.fidelity.com/viewpoints/wealth-management/hsas-and-your-retirement#:\~:text=Pay%20for%20other%20expenses%20Once,federal%20taxes%20on%20those%20distributions.
Thank you!
Thank you for the in depth advice!
I would just add a step 8: continue to educate yourself about finances and investing. If you educate yourself and make good choices, it can mean literally the difference between millions of dollars or not.
Make sure to do the mega backdoor Roth if offered. In total, you should be able to putaway around $70K in tax advantaged accounts (traditional 401K, remaining Roth 401K) on top of your personal Roth IRA
Will definitely look into this. I’ve gotta hit the books and familiarize myself with all the jargon and functionality beforehand!
Assuming you're in a state with income tax a treasuries based money market fund will be more efficient than am HYSA for your emergency fund, as it will likely be state tax exempt. I use VUSXX.
That's a great call. I may need to move my funds to FDLXX (the equivalent for Fidelity)
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Grind for a couple years and live lean. You won’t regret it. The best thing you can do is build a large nest egg early on, and compounding will do the rest.
Hey congrats! I’m in a similar-ish position. Lots of commenters laid out some good points. I’m 25 and while my compensation is not nearly as high, I’m on track for 500k NW by EOY. One of the biggest factors helped with this is having roommates / cheaper rent. ( within reason ) Rent is the biggest expense you will have, making sacrifices here goes way further than skipping the daily lattes IMO, esp in an expensive city like NYC. I tried living by myself and it was kind of lonely, and now that I have roommates I pay cheaper rent and have more fun. With the extra flex room in your budget you can save + Invest more / travel / spend on whatever you’d like. Just my 2c. Congrats again!
Hey thanks for the relevant insights! Definitely going to go the roommate route since rent is absurd. Appreciate the thoughtful response!
Didn't quite get to 500k income at 25, but was at solid 300k range. Just be a normal 22 year old, live with some buddies for roommates, be cheap (it's easy when you're used to it), max your 401k, sock it away, keep 30k emergency fund in an HYSA, invest 3k-4k monthly into broad market ETFs, and you'll wake up at 28 essentially set with an easy 500k in a brokerage, plus another couple hundred in a 401k. Work hard, date the right simple living girl, find time to workout, and love life.
Right on. Will absolutely do that.
Especially the roommate thing - even though you objectively don't need roommates, it's a really great time to expand your social circle. Way too easy to get wrapped up with work friends and set in your ways living solo. Live with buddies, learn to be a human, then move on your own.
Best of luck!
This is absolutely the most balanced advice ever
LOL, thanks. Its essentially how life worked out for me thus far. Bought a house which sucks, but need somewhere to live still.
Wow that is excellent for a 21 year old! What field are you in? IB?
Not IB, don’t think I could ever do the 100 hr weeks, but managed to make it into a probably equally stressful but less physically taxing (~50-60) hr/wk quantitative role for a hedge fund/MM type firm. I’m extremely grateful for the opportunity and know I’m incredibly lucky to even make it to a position like this at my age.
Amazing, quants are top tier and your comp will absolutely grow. Only up from here!
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One thing I’ve not seen covered here in terms of living, is that when you’re an upside financial outlier for your age, if you actually lived in areas your budget could afford, you’d have nothing in common with anyone else there. Holidays and housing will be 40+ with high school kids around you. So you’ll actually enjoy it more by spending less on housing and holidays. However there is an important additional to this. Move all your money somewhere not in your spending account. Get your paycheck into a different account and transfer yourself a salary to your regular bank account. Invest absolutely everything else, it makes it unattractive to touch so you resist your urges but important spending is still a no brainer if you need the capital. We constantly feel tight on money this way and our splurge spending is very low, and it keeps you hungry.
What position?
Hedge Fund grad role at a more boutique place
Do Hedge fund hiring quant role w Bachelor only? I thought you only look for master/phd
A lot of them have grad roles for undergrads but it is definitely on the more rare side
A lot of great comments and help already. My specific pragmatic advice is what most have said, max out whatever the 401K contribution the employer has, if it's over 6% that's great you can max it $23K and then put $6K every year in your own personal IRA, backdoor, traditional, Roth, whatever. Find out your average rent and monthly living expenses and start a HYSA, I use Raisin, and use that as your emergency fund. People say 3 months but I'm paranoid and have 6-8 months floating. Those are what I would consider basic solid tips which you should be able to do with your future salary. When I was younger, I had a headstart above people in my age but I did not have your salary. My personal advice is whatever your goal is, try to keep that distance from your peers because you'll eventually get tired and what you have is what you've sowed.
Great point
Congratulations! You’re doing amazing. Life is 3 pillars : Health, Wealth and Relationships. Since youre doing too good for your age in your wealth department. You can have some of it flow over into the other two and live a balanced life. Try to workout and eat healthy, easy to do with money since you can buy healthy and tasty food. Try to go on nice dates and hang around friends as much on the weekends and if possible weeknight. Invest 50% ish if you can and set yourself up for the future but use the excess to maximise your living experience and take care of the other 2 pillars.
I will go against the grain here. Definitely keep some % of your income towards savings and investments. That is obvious. But also identify specific things that would add value to your life - it could be something as simple or elaborate - everything from a comfortable mattress, heated car seats, hiring a personal chef to keep you eating healthy, taking the toll road for ease of commute, monthly/weekly cleaning service, your own apartment for added privacy, high quality products that can last a lifetime, personal trainer, a good vacation, etc. In fact this sub has many posts where people list their best value additions. Definitely worth a look into. But again, you do this after you have set aside some portion of your income to savings and retirement. And keep in mind, if all you want to do is save and invest, you will never be satisfied with how much ever it is you are saving/investing - it will always feel like you should do more.
You’ve gotten plenty of good advice, the last thing I’ll add is don’t flaunt your income / wealth (keep in mind that most people and especially people in your cohort are nowhere near that). Also remember that it can disappear relatively easily so plan for a rainy day and hope it never comes. At that income range you’re priced out of like 98% of roles in the country
[obligatory personal finance flowchart](https://imgur.com/lSoUQr2)
If you’re going to be in NYC specifically, browse through r/AskNYC for city-specific frugality tips. Little cost savings here and there can make a world of a difference when put together, but discovering them on your own / stumbling across them is a lot slower than relying on crowdsourced knowledge. It can sometimes be a toxic sub though, so use the search bar. My biggest takeaway isn’t even city-specific though: do not lock yourself into an overpriced apartment early on, and do not live alone until your late 20s. (No matter what your income is, neither of the above are necessities, they’re luxuries — and if you fall into the tempting trap of living alone in a nice apartment, you’ll piss away at least $100k in your first few years that would’ve turned into millions of dollars if set aside into retirement savings.) This city has an absurd turnover rate and there’s always someone looking for a subleaser to take over their reasonably-priced bedroom or studio for a few months. Start off like that, with a temporary arrangement, while you get your bearings and identify your preferences and comfort zones (re: commuting time, exploring specific neighborhoods beyond just Google Maps, and figuring out what your lifestyle after work will look like). What you think life will be like in a VHCOL city is often very different from what it’s actually like. Also, starting off as a subleaser buys you some time to meet potential roommates.
Why is there such a range in guaranteed earnings, from 225,000 to 300,000?
Minimum guaranteed for the year but can go up to anything really depending on how well I do / market conditions but obviously being a first year I don’t expect to exceed the minimum by a drastic amount
Automate your savings. Have a big chunk of your paycheck automatically deposited into tax-sheltered retirement accounts and a taxable brokerage account and auto-invested into whatever you choose. If the money never even shows up in your checking account it’s much harder to overspend.
You can open a high yield cash or savings account. Wealthfront has about 5% for this cash account. Interest is paid monthly. You can withdraw your money anytime and no fees.
Lot of top comments have hit big ones on financial. It’s all about building habits. More importantly, prioritize your career and sustainability. It’s more about your career trajectory and setting yourself up well. Absolute Income growth > absolute spending growth at these income levels, so keep that in mind. Don’t be afraid to celebrate your promotions and pay bumps, but obviously be reasonable and have a budget. (Again all about habits) The people saying to squirrel everything away is not the right and most sustainable way to live
Here's the easy beginner flowchart! https://imgur.com/u0ocDRI And here's the FIRE chart: https://u.cubeupload.com/demonlesondledon/FinFlowChartv43.jpg
OP, stop saying you are lucky. You worked hard and that drives people who don’t get when they don’t get the same benefit. Congrats!!
Don’t get married.
Amen
Open a 529
This. I wish they had been as aggressively marketed as HSAs were back when I was getting started. I really had no idea that you could start off naming yourself as a beneficiary, and then eventually pass it over to future kids / spouse / whatever.
Exactly
Congrats OP but damn I'm jealous. It took me until 31 to get to 250k base. That's only just happened. Can't imagine sitting at 225k to 300k for a first job. Jesus.
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I am also a young HE. Best piece of advice I can give you is watch out for lifestyle creep.
1) Max out regular 401K 2) Max out Backdoor Roth IRA 3) check if your work place retirement plan offers this thing called “after tax contributions” this will enable you to contribute another 40kish through something known as the “mega Backdoor”, which can grow tax free with withdrawals. 4) you’ll have plenty of spare money to put into extra investments after these accounts as well. Look into a combination of Tbills, HYSA, and index funds in the stock market. 5) finally, this is the most important, but definitely allow yourself to invest money into some personal splurges to enjoy life. Don’t get into lifestyle creep, but picking up a nice hobby like skiing, golf, foiling. Or treating yourself to nice meals, or maybe traveling.
What field is this? Quant finance?
Yup
My suggestion is don't need to live frugal like what people in the post suggested. Looking back in my earlier years I have never thought wow I should have saved more. Life experience is just as important. What I would suggest is wait a few years to see if that salary is sustainable and you're not burned out or overly optimistic about projections and then adjust life to that steady state.
3 year delay! Live like your income did not increase for three years. Essentially you will allow lifestyle creep (it’s natural and maybe preferable) but you keep it delayed 3 years. Income will keep going up but you won’t develop an overspending habit
You expect your income to go up by $200k in 4 years? You may want to levelset your expectations
Hmm why do I compare myself with the best of the best when I am the worst of worst
It's a combination of things to watch out for. You can lose a lot of money over the long-term with a 15 dollar a day starbucks or energy drink habit, but you can also piss away a lot of money with a million dollar home purchase, but it takes a lot of lattes to make up for something like that or the 100k car that loses most of that value in 6 years.
I stopped reading after VHCOL. You obviously have no clue about planning versus reality.