Retrenched Investment Bankers (Where do they go to?)

Originally Posted by Unregistered

I am in a similar situation but still not retired yet at 49. Do you have a family to support when you retire at age 43? What do you think is a comfortable networth for one to call it a day and retire in Singapore?

Depends. If you want to live a decent upper middle classlife style bare minimum should be $5 million...

Originally Posted by Unregistered

Depends. If you want to live a decent upper middle classlife style bare minimum should be $5 million...

Thanks, $5 million is a number that I have heard from other retirees too. I suppose if one can earn 5% investment return, then $250k per annum will be a comfortable amount to live a "upper middle class life style" as you mentioned. Unfortunately, my investment return averaged 3% to 4% for the past decade and so I will need a larger capital amount to generate the $250k a year passive income stream. You were smart enough to invest in multiple investment properties early on while I have been patiently waiting for property prices to come down since 2010 and holding on to too much cash, which dragged down the return of my portfolio.

Theory and real life can be and usually are a world apart.

Theory says if your NW is $5m and you invest it for 5% return, you will get $250k a year to live on happily.

Real life: NW is $5m

Primary home : $1.5M (may appreciate in value over time but not giving cash flow yearly)
CPF : as eg. MA = $104k (couple), SA = $350k (couple), OA = $500k (couple)
Assuming below 55 yo, total held up in CPF = ~ $1m

Emergency cash :$100k
Stocks : $1.4m (spread over various stocks from high risk-high return and low risk-low returns)
Average ROI from stocks ~ 5% or $70k dividends pa.

Investment property at $1m
Rental income : $30k pa nett.

Total cash flow per year = $100k

If the above sounds realistic, it is because it is.

We are above 55 and upon reaching 55, our yearly CPF interests are available for withdrawal.

In our case, our NW is well above $6M and our passive income is only $150k pa for use (including CPF interest). If you really want $250k passive income, before you reach 55, the $5m should be investible net worth (not including your home and not including money in your CPF). In short, you need a total NW of no less than $6.5M to $7M!

Now you know why we are not retiring yet.

Originally Posted by Unregistered

Thanks, $5 million is a number that I have heard from other retirees too. I suppose if one can earn 5% investment return, then $250k per annum will be a comfortable amount to live a "upper middle class life style" as you mentioned. Unfortunately, my investment return averaged 3% to 4% for the past decade and so I will need a larger capital amount to generate the $250k a year passive income stream. You were smart enough to invest in multiple investment properties early on while I have been patiently waiting for property prices to come down since 2010 and holding on to too much cash, which dragged down the return of my portfolio.

Originally Posted by Unregistered

Theory and real life can be and usually are a world apart.

Theory says if your NW is $5m and you invest it for 5% return, you will get $250k a year to live on happily.

Real life: NW is $5m

Primary home : $1.5M (may appreciate in value over time but not giving cash flow yearly)
CPF : as eg. MA = $104k (couple), SA = $350k (couple), OA = $500k (couple)
Assuming below 55 yo, total held up in CPF = ~ $1m

Emergency cash :$100k
Stocks : $1.4m (spread over various stocks from high risk-high return and low risk-low returns)
Average ROI from stocks ~ 5% or $70k dividends pa.

Investment property at $1m
Rental income : $30k pa nett.

Total cash flow per year = $100k

If the above sounds realistic, it is because it is.

We are above 55 and upon reaching 55, our yearly CPF interests are available for withdrawal.

In our case, our NW is well above $6M and our passive income is only $150k pa for use (including CPF interest). If you really want $250k passive income, before you reach 55, the $5m should be investible net worth (not including your home and not including money in your CPF). In short, you need a total NW of no less than $6.5M to $7M!

Now you know why we are not retiring yet.

Thanks I agree it is better to be conservative in retirement planning than to come back to the work force after retiring for a few years and find money not enough. You may not even be able to find a job by that time! That is why I am still working even though my NW is above $5m not because of greed but more due to prudence. For you as a couple (assuming your kinds have all grown up and on their own), what would be the amount of passive income that you would be aiming before calling it quits?

Originally Posted by Unregistered

I am really surprised to read that investment bankers and senior bankers are earning only $12k to $14k pm. Thought they were all boasting that they earn big bucks.

If $12k to $14k pm was their actual salaries then many are really living beyond their means.

So would you prefer "High" salaries but short shelf life or slow but steady progression till retirement at 55 or 65.

I am in the slow but steady type of profession. Starting salary was really low (below $2k) and current pay above those investment and senior bankers and into my 32nd year of work.

Because of the initial low salary, I built up the habit of frugal and simple living. We currently own 2 condos and 2 cars (mass market type, nothing fancy) and our passive income is $150k pa.

dont want to burst your bubble but SG$12k-14k is the starting pay for investment banking fresh grads at most bulge brackets like jpm ms gs barclays ubs cs and even MMs like hsbc don't pay too far off. it is the industry standard. the previous poster was likely referring to a sales person (probably a senior personal banker at a retail bank, or perhaps an A3/associate working in the sales and trading division of a bulge bracket). investment banking does pay among the top of all salaried jobs in the universe... an acquaintance of mine got poached 2 years out of university from a bulge to a top boutique, think HL/greenhill/moelis. slightly over 20k monthly, base.

the previous posters are right that you can easily retire in your mid 30s comfortably if you lead a normal lifestyle, you don't even have to be frugal. but i don't think it ever happens cuz young ppl these days just want to show off. and showing off is the only way you get to hang with the big boys, especially if you wanna be in IBD for the long haul.

Originally Posted by Unregistered

dont want to burst your bubble but SG$12k-14k is the starting pay for investment banking fresh grads at most bulge brackets like jpm ms gs barclays ubs cs and even MMs like hsbc don't pay too far off. it is the industry standard. the previous poster was likely referring to a sales person (probably a senior personal banker at a retail bank, or perhaps an A3/associate working in the sales and trading division of a bulge bracket). investment banking does pay among the top of all salaried jobs in the universe... an acquaintance of mine got poached 2 years out of university from a bulge to a top boutique, think HL/greenhill/moelis. slightly over 20k monthly, base.

the previous posters are right that you can easily retire in your mid 30s comfortably if you lead a normal lifestyle, you don't even have to be frugal. but i don't think it ever happens cuz young ppl these days just want to show off. and showing off is the only way you get to hang with the big boys, especially if you wanna be in IBD for the long haul.

Isn't Houlihan Lokey considered MM?

Originally Posted by Unregistered

Isn't Houlihan Lokey considered MM?

think MM is more like a catchall term for anything you cannot classify as a bulge or elite boutique. like hsbc or nomura, like they're definitely not BBs but neither are they boutique. the line is never clear because MM is supposed to suggest smaller (literally middle market) deal sizes on average but some elite boutiques do both megadeals and MM deals. granted HL is often classified as MM but they command so much respect these days i put them on the same level as an elite boutique

The very successful IBs will just retire and enjoy life. They made so much fortune so why worry about finances. Retrenched engineers will become taxi or Uber drivers.

Originally Posted by Water

Hi everyone, I'm curious if anyone has any idea where do retrenched investment bankers in Singapore usually end up at? I've heard from news sources quite frequently that numerous have been retrenched due to the unfavourable market in South-East Asia.

I would imagine that investment bankers would typically be highly driven and smart, and thus would seek great alternatives around. I've also read recently in an article that an Investment Banking Director opened up his own website as he could not find any other IB jobs around. He also mentioned about the tough market conditions, and that he knows of others who also could not find jobs.

I'm wondering if anyone here has any stories to share?

For curiosity's sake, what is the overall annual compensation to be expected for a year 1 analyst doing M&A at a bulge bracket?

Originally Posted by Unregistered

For curiosity's sake, what is the overall annual compensation to be expected for a year 1 analyst doing M&A at a bulge bracket?

Minimum of SGD 120k. If your desk does well, expect a 3 month bonus at least.