If you were to go about calculating a discount rate to NPV financial decisions (i.e., lease or buy a car, or house, etc…), how would you compute your own discount rate? Would you use a risk free? Would you determine what the expected return of your investments are (e.g., 75% S&P and 25% bond fund)?
Question for all the folks with more experience than me.
| +300 | Looking to raise a Billion Dollar Fund - College Junior | 41 | 1d | |
| +283 | What to expect during your IB summer internship and how to secure the full-time offer | 17 | 1h | |
| +243 | It doesn’t need to be this way | 35 | 1h | |
| +162 | Career Bankers, Was It Worth It? | 56 | 52m | |
| +144 | Biggest gripe in IB: people with no balls | 39 | 21h | |
| +117 | MD Can’t Unplug | 32 | 12h | |
| +91 | I FINALLY DID IT, I GOT A FT OFFER! | 17 | 2h | |
| +89 | RBC M&A vs PJT RSSG | 14 | 3d | |
| +60 | BofA Assoc who died had sought to leave, citing long hours | 15 | 1d | |
| +51 | Feeling really lost in IB | 15 | 2d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
wacc?
In a sense, right? But pretend I’m all equity (ignore credit cards and such), then how does one arrive at a person’s cost of equity?
capm?
About tree fiddy
My cost of capital is simple:
Max 401k yearly
15% of post tax paycheck into brokerage (my rent is not low & I like to have fun in my 20s)
Entire bonus into brokerage
Doing that I’m well off while still being able to spend money on drinks with friends & fun with ladies
Can you hit us with some numbers? Hard to do that in nyc I feel but curious how you’re making it work.
Base comp between 230-300, call it 250 to make math simple. 250/12=20ish a month pre tax. Max 401k, around 2k per month contribution, is 18k pre tax. This results in 24k + employer match yearly. Adds up. Let’s say 40% all in tax = 11ish post tax. 15% of that is ~1.6k a month that always goes in brokerage to dollar cost average a bit. That leaves around 9k a month. To make numbers easy, let’s say 5k a month for a nice 1 bedroom. That leaves 4k a month for miscellaneous shit like energy and cell phone, and then have a couple grand to play with a month.
Bonus is variable but 1 or 2 good years and your portfolio is sitting pretty dumping it in.
Maxime quos quibusdam est consectetur. Aut est autem sint nulla.
Reiciendis veniam atque perspiciatis molestiae laboriosam quisquam sapiente. Odio est ut recusandae ad. Molestiae assumenda aut voluptatibus dicta.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...