<p>Okay so for about a year I have planned on being an economics major and going to NYU. I either wanna become an economist or a stockbroker. At this point I’m starting to get really unsure about my starting salary and how well ill be able to pay of my NYU debt while still affording to live in New York. My dream is to work on wall street and become wealthy one day. I know moneys not everything but I want to live comfortably. Am I choosing the wrong degree or am I just being ridiculous? What’s the best degrees for getting high up into a company to be able to afford a lifestyle and eventual family?</p>
<p>You are not choosing the wrong degree. You aren’t ridiculous either. It makes sense to ask the question. Getting high up in an organization is more about how you perform and not the degree you earn.</p>
<p>To be a professional economist, u will need a graduate degree. </p>
<p>The degree would likely be a top end MBA. But there are many ways to get there.Having a good undergrad degree from a solid institution is helpful. But how much debt are we talking about, there are levels that will hold you back too much. Knowing how to research job placement and starting salaries would be a good skill to have.</p>
<p>These are good worries to have.</p>
<p>According to the Bureau of Labor Services, the median salary for a stockbroker (which they put in the category of "securities, commodities, and financial services sales agents) is $71,720. That’s middle-class comfortable in most places, but not exactly a sky-high salary. Salaries overall are higher in NYC, so I would expect that figure to be closer to $90-100K in NYC - again, very comfortable, but not yacht money or million-dollar brownstone money.</p>
<p><a href=“http://www.bls.gov/ooh/sales/securities-commodities-and-financial-services-sales-agents.htm”>http://www.bls.gov/ooh/sales/securities-commodities-and-financial-services-sales-agents.htm</a></p>
<p>Of course, the range is huge. The middle 90% range is between $32,030 and $187,200. I think everyone knows that the highest-profile, most successful stockbrokers can make mid-six-figure and higher salaries. But if we’re talking law of averages, know that you’ll probably be somewhere in the middle, and even if you are in the lucky top 10% - someone in the 90th percentile of salaries for stockbrokers isn’t even cracking $200K (and these numbers aren’t dragged down by bottom salaries, because they are based on the median).</p>
<p>Whether or not you can afford to repay debt and live in NYC depends on how much debt you take on and how you want to live in NYC. I’m from Atlanta, GA, a pretty low cost-of-living area. $70K would be an above-average salary there - not quite upper-middle-class, but you could afford a nice-sized house in a desirable neighborhood, drive a good quality car, live in a desirable school district, etc. The salary comparison wizard at CNN Money says that the equivalent of that in NYC is nearly $160K (Bankrate confirms).</p>
<p>Anyway, let’s say that you get really lucky and start at a Wall Street management consulting firm after college and you make $75K - $50K base and $25K in bonuses ([see</a> here](<a href=“Management Consultant Salary Report | 2023 Consultant Salary”>Management Consultant Salary Report | 2023 Consultant Salary)). Let’s assume that you actually use $5K for moving costs; after taxes (federal, state, and city), a generous estimate of your take-home pay is something like $54K, which is something like $4500/month.</p>
<p>If you borrow $100K to attend NYU, assuming 6.8% interest and standard repayment, your loan payment will be $1162/month. That’s over a quarter of your monthly take-home pay. You now have a bit over $3,300 to live on in NYC. If you want to live alone, you’ll fork over at least half of that for rent in a decent studio or one-bedroom in a nice-ish neighborhood. (At $1500-1700, no Tribeca or West Village - a nice neighborhood in Brooklyn or Queens or maaaaaaybe a cheap bargain in the upper Upper West Side? Definitely Harlem, Washington Heights, Inwood - you know, the cheap areas of the city.) You’ll pay less with roommates, but still at least $1,000. So now you’re looking at $1500-2000 leftover to eat, pay utilities, pay health insurance, invest for your retirement, buy clothes for your fancy new job, pay for transportation, and pay for entertainment and other miscellaneous costs.</p>
<p>I mean, you’ll live. You could even live comfortably. It’s not like you’ll have to live in the street, but you won’t be living high on the hog, taking trips and wild parties and all that NYC has to offer for the wealthy.</p>
<p>Also, remember that you don’t have access to this money year-round. If your base salary is $50,000, you’ll only get that throughout the year, and then maybe a $5K signing bonus and a $5-10K year-end bonus. So really, I’d say you’re probably working with ~$3300-3500/month after taxes. Take away that $1162 and suddenly you have $2300/month at best. Now you HAVE to spend half your salary on rent even if you are sharing with friends.</p>
<p>You can play around with the loan calculator on Finaid.org to see what numbers make sense - you can look up current rental rates on Craigslist. Borrowing only $75K would give you an extra $300 a month ($863), and $50K cuts your loan payment by more than half ($575).</p>
<p>*</p>
<p>You’ll make real NYC money with an MBA. Stern has statistics on this; the base salary mean for those in banking is $102,473 and is $100,000 for diversified financial services. That doesn’t include a signing bonus ($30-45K) or a year-end bonus ($32-40K).</p>
<p>Let’s 1) say that you got a slightly higher than average salary and 2) work with the mean base + signing for right now, and say that you’d be getting paid about $150,000 with that. After federal income taxes you are taking home about $115,000. I’m too lazy to figure out the state and city taxes, so let’s just work with that for a moment. That’s over $9500/month. That’s good money. But now you borrowed $100K for your NYU undergrad and then $120K for your business degree, so you’re $220K in debt. That’s going to cost you $2531/month (assuming a 6.8% interest rate - which is really lowballing it because with that much debt, you aren’t just taking out federal Direct loans) on a 10 year repayment period. Now you’re living on $7,000/month. Can you still live well? Well, yeah, sure. Very well, actually - even your take-home pay after taxes and student loans is still more than most households in the U.S. make.</p>
<p>But again, it depends on where you want to live and how you want to live. You won’t be buying a million-dollar brownstone and directing your driver where to take you to work. Even on $150K with no debt you can only afford to buy something for about $600K, which is an apartment in a nice co-op in NYC. With $2500 in monthly debt you’re looking at reducing your purchasing power by nearly half - $350K, which is like a nice apartment in a cheaper neighborhood. Searching on Zillow, that’s a small apartment (studio to 2-bd depending). You could still rent a luxury apartment, but it will take a chunk out of your income.</p>
<p>*</p>
<p>So anyway, the moral is - you can life a comfortable life on that kind of salary in New York as long as you don’t borrow too much. So don’t borrow too much money. It would be better for you to keep small undergrad debt and then go get your MBA at Stern or another top business school than it would be for you to borrow big at Stern and then borrow big for the MBA, too.</p>