How much will you be able to save and spend? To answer these questions and boil the salary down to a more useful picture of what these earnings relate to, here is a simple breakdown of the living costs you might expect, living and working in Central London:. If you currently live beyond zone 3 or 4, renting a place more central is commonly seen as the most viable option. WiFi, electricity, gas and water were also taken from the article linked above within the paragraph on accommodation.
Taking into account these living costs per month, here is a breakdown of the total average salary:. The total breakdown is only useful in terms we can easily grasp, so here is a breakdown per day and per hour:. I have calculated these hourly figures assuming 16 hours per day, 5 days a week - some may dispute these figures for investment banking, but this is intended to be an average over a whole year.
Firstly, I have illustrated the differences in pay between banks before making the more important point that there are many other qualitative factors that might make working at one bank much more desirable than another regardless of marginal pay differences. The graph below depicts the after-tax difference between the highest paying bulge bracket and all the others according to the Dartmouth Partners report. Fine, we know that salaries clearly vary between banks and during the dislocation of increasing salaries, the variation between banks is going to increase as well.
But what about beyond salaries? Lifestyle differences, level of toxicity and friendliness in the firm culture are very tangible factors that influence your satisfaction and quality of life on the job. Appreciating these qualitative factors is especially important if you feel disheartened that someone at another bank is supposedly getting a much 'better deal' than you.
When looking at the average investment banking salaries from sites like the Corporate Finance Institute CFI , you may notice that US salaries are higher than London ones. Firstly, when confronting the notion that salary must be your top priority, I strongly recommend reading the part of the 4hr Work Week which talks about 'definition' where Tim Ferriss discusses the importance of finding out just how much we need to earn to become independent of our financial situation - it is probably lower than most of us think.
Secondly, on whether investment banking is for you if money is the main driving factor: It is true that a career in investment banking could lead you with several hundred thousand pounds stored up in investment or savings years down the line. But unless you stay in the industry for well over a decade and reach to Managing Director level, where salaries are largely dependent on deals you lead for the firm, it is easy to overestimate how much you can make in the industry.
Thirdly, if you're driven by the idea of financial independence, remember that a higher salary comes with a greater risk of wanting to scale up life expenses - this is very difficult to counteract and may lead to feeling more trapped than before starting full-time work.
When someone is on a high salary and everyone around them is spending more on nicer accommodation, more expensive fashion, expensive restaurants, gadgets and the like, it is easy to see how a career that was supposed to bring more financial independence might create financial isolation. These alternative career paths overcome some of the downsides of IB while sharing some of the benefits - as a side note, the investment banking division does not offer the highest salary among these alternative options.
On the other hand, you can never be certain about the future and perhaps the Big Tech scene will soon change or be broken up in an unrecognisable manner. Another career path you may consider is a more independent self-employment trajectory where you move into entrepreneurship and create alternative sources of income, although this is probably much easier said than done. Another caveat is that the industry comes with a lot of uncertainty. Taking into account those insights and caveats, if you're still interested in pursuing a career in investment banking then be sure to check out the game plan summary for applying and landing a summer internship in the sector.
This game plan is at the heart of this site and has one aim: to help you gain clarity on what can be such a challenging and competitive application process. The inspiration to make this game plan came when applying to internships myself and finding the power of clarity in reducing stress and making the process seem so much more possible - hopefully the divide and conquer strategy I follow in that game plan summary post will motivate you to keep pushing forward.
As a final note, I found this TED Talk a fascinating, confronting perspective on whether investment banking is the right career. Click here to manage your subscriptions. Sign In. Don't have an account? Register Now! Search Jobs. The new salaries for investment bankers in London, by bank by Sarah Butcher 05 October Follow MadameButcher. London banking recruiters: "Brexit isn't cause of talent shortage".
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As the charts below show, the standard salary for a first year analyst in an investment bank in London is now £60k ($81k), which is far below. Salary · Average starting salaries for corporate investment bankers are around £30, to £40, · After three or more years, this rises to up to £50, The estimated salary for a Investment-Banker is £48, per year in the London, United Kingdom Area area. This number represents the median, which is the.