Do bankers make millions?
Investment bankers typically earn salaries in the $200,000 to $700,000 range, with bonuses that can bring their total income up to several million dollars per year. To amass a million-dollar fortune, an investment banker would need to save and invest a large portion of their income over a period of many years.
There are many that have made $100's of millions. And so in that space, there are plenty of billionaires. So if you start out as an investment banker and become a hedge fund manager you've got a decent shot at becoming a billionaire. But if you stay in investment banking, you basically have no chance…
According to the BLS, the lowest earners for bankers and related professions earned about $40,206 per year in 2022. Meanwhile, at the other end of the spectrum, the highest earners made about $189,613 annually. As mentioned previously, the median salary for bankers in the United States in 2022 was $67,475.
Investment Banking Director Salary + Bonus: There's a bit of a bump over VP-level compensation, but not necessarily a dramatic one; the typical range for total compensation might be $800K to $1.2 million per year, with the majority in the bonus (as of 2022).
Investment bankers make money through the fees charged to their clients. As discussed above, this includes underwriting fees for arranging the sale of securities and advisory fees for providing strategic guidance.
Sure, anybody can make a good living being a doctor or a lawyer or an investment banker where you can make ~$200-500K per year a few years after you finish with your studies, but you hit a ceiling very quickly unless you start your own practice (aka start your own business).
- Commercial Banker. Salary range: $110,000-$179,000 per year. ...
- Banking Consultant. Salary range: $154,000-$171,500 per year. ...
- Investment Banker. Salary range: $107,500-$123,500 per year. ...
- Banking Services Advisor. ...
- Bank Secrecy Act Officer. ...
- Bank Examiner. ...
- Business Banker. ...
- Merchant Banker.
Major banks are considered a good career path because of the diverse job opportunities available in this industry. Working at major banks is one of the best ways to ensure job security and stability in a banking career.
In general, Universal Bankers tend to earn a higher salary than Tellers. This is because Universal Bankers typically have a broader range of responsibilities and may handle tasks beyond traditional teller duties, such as opening new accounts, processing loans, and providing financial advice to customers.
If you work in an investment banking division (IBD), or pretty much any other sector of financial services, you are likely spend a healthy part of your day dealing with career-related stress. The working hours, the responsibilities, the external pressures to deliver consistent compelling results – they all add up.
Can you live off a million in the bank?
About a third of millionaires say it's possible they will outlive their savings, according to the 2023 Planning and Progress Study from Northwestern Mutual. The financial firm surveyed 2,740 high-net-worth individuals with investable assets of at least $1 million. However, some financial experts say not to worry.
On average, a first-year investment banker makes a 5-digit salary, in the range of $70,000 – $90,000, while a 7-digit salary is considered above average and is difficult to achieve for most people in their careers.
People in the upper-middle class typically have college and, very often, graduate or professional degrees; live in the suburbs or in fairly expensive urban areas; and are bankers, lawyers, engineers, corporate managers, and financial advisers, among other occupations.
Moreover, according to a study by Bank of America, millionaires keep 55% of their wealth in stocks, mutual funds, and retirement accounts. Millionaires and billionaires keep their money in different financial and real assets, including stocks, mutual funds, and real estate.
- Chief financial officer (CFO)
- Investment banking.
- Hedge fund manager.
- Private equity associate.
- Actuary.
Annual Salary | Hourly Wage | |
---|---|---|
Top Earners | $86,000 | $41 |
75th Percentile | $68,500 | $33 |
Average | $44,910 | $22 |
25th Percentile | $24,500 | $12 |
So, in answer to the question, a $450,000 salary is VERY good.
Position Title | Typical Age Range | Base Salary (USD) |
---|---|---|
Analyst | 22-27 | $100-$125K |
Associate | 25-35 | $175-$225K |
Vice President (VP) | 28-40 | $250-$300K |
Director / Senior Vice President (SVP) | 32-45 | $300-$350K |
1 | Goldman Sachs | $98,726 |
---|---|---|
2 | First Republic | $98,322 |
3 | Bank of America Merrill Lynch | $79,828 |
4 | Quicken | $71,437 |
5 | Deutsche Bank | $70,405 |
Age plays a huge factor in the decision-making process. Wall Street is an up-and-out industry. Unless the goal is senior management, most people in finance are out of there by age 50. That's not at just the biggest investment banks, either.
Is banking a lot of math?
There is a lot of math within the banking industry. However, we have tools on our computers to do the math for us (excel, computer applications, etc.). The important thing bankers must understand are the financial concepts behind the math.
It is exceptionally difficult to become a banker without a college degree. Many bankers go on to pursue advanced degrees, such as an MBA, which makes the field even more competitive. Some jobs in the industry, such as being a bank teller, only require a high school degree.
Investment banking hours are much longer than those in other jobs because of four main reasons: Huge Clients Pay Your Bank Huge Fees: When a company is paying your bank $50 million, $10 million, or even $1 million to advise on a deal, you have to do whatever it wants at any time of the day.
Role | Base Salary ($) | Average Year-End Bonus (% of base) |
---|---|---|
Analyst | $100,000 - $120,000 | 50% - 100% |
Associate | $150,000 - $200,000 | 50% - 100% |
Vice President (VP) | $200,000 - $225,000 | 50% - 150% |
Senior Vice President (SVP) | $250,000 - $500,000 | > 100% |
A high school diploma is the basic qualification for a bank teller position. Tellers who complete bachelor's degrees, for example, are typically eligible for more advanced positions, such as personal bankers, personal financial advisors or loan officers.