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http://rankings.ft.com/rankings/emba/rankings.html
EMBA graduates from top schools, who are experienced professionals usually already at Director or Senior management levels, and usually aged 35 or older:
(US only)
Wharton: $263K
Kellogg: $220K
Chicago, Columbia: $201K
These programs and the others all cost over $100K in tuition. Graduates usually got to these salaries by experiencing 75%-100% salary jumps in the years after graduating, meaning they were only making $150K-ish before hand.
So again, where are these "mass affluent"? They're not coming from the B-schools as you posited. Maybe they're coming from Uranus. Dunno.
Footnote: only VPs and SVPs at Fortune 500 companies make $300K plus. There numerous smaller companies in the BA with VPs and SVPs making somewhere around 200Ks, or even less.
Even the one I know who did make $1M in the good years in high finance needed to take out mortgage to buy a $3.5M home because he didn't have enough cash at the time of purchase. These guys have extremely high operating cost. This guy and his wife go on vacation with their nanny.
Brand,
Yup. You nailed it. I'm just a JBD (jealous bitter doctor)!
This fascination with salary, again, reeks of MP/FR/CR. I get a distinct sense of deja vu here with this conversation.
OO
Dead on. I'd say there are certain hot compliance-related and M&A related finance jobs where Senior Directors at F500 are pulling in over $300K; maybe $350K tops. But those are very few. Like companies that have a separate Chief Accounting Officer or red hot M&A. I'll bet there aren't 500 of those jobs total in the entire BA.
And OO hit it squarely when he pointed out that investment banking is cyclical.
Eventually the binge on corporate liquidity will end, and then M&A will dry up. IBs will hit the streets in droves. Very very very few will ever find jobs making anything in sight of their old salaries. Most good ones will settle into corporate roles for 50-70% of their IB salaries. Most of the average ones will have trouble even getting those jobs, as there will be a glut of overeducated finance guys who're light on quant and heavy on schmooze.
Randy H says: I’ll bet there aren’t 500 of those jobs total in the entire BA.
But are there even 500 houses on the market in the $2.0-3.5M range? If every one of those people was new to the Bay Area this year and bought a house, that would mean all those houses are going to move. Some of them at a premium, because the schools are better or they have water views.
And why focus on only one industry? There is plenty of ass effluent across the spectrum of the diverse Bay Area economy. In the last few years, a lot of it pooled in real estate!
Skibum, being a doctor is very prestigious. You are a professional and thus you get to mingle with realtors who consider you their peer in their professional circles.
Malcom---I'm curious, which do you think is more important? Physically healing people, or healing people's souls by helping them to achieve the American Dream?
Brand,
We should not forget the mortgage finance professionals and the debt collections professionals :)
Brand, a house is so much more permanent than good health. That is kinda tough. I guess I don't know.
I would choose the real estate professional if a new car comes with the house.
astrid: Mortgage brokers are like ancient alchemists. They can transmute modern lead into gold! Just think, for a few shuffles of paper, you can take a hefty commission and pass off all the risk... er, investment grade paper to a bank or hedge fund.
We mortgage brokers are pretty humble, but it's really not the sort of job that just anyone can do. You've got to attend several seminars, and there's even a test! In contrast, I figure that pretty soon robots will be setting broken bones and reading X-rays. If people have been doing those things for thousands of years, how hard can it really be? That's why we don't let doctors hang out at our parties. It's nothing personal---there's just a bar you have to jump to hang with our crowd.
Malcom says: Brand, a house is so much more permanent than good health. That is kinda tough. I guess I don’t know.
What's more important, a long, bitter life lived throwing money away to rent, or a shorter life lived in the happiness and comfort of your own home? Houses are forever, Malcom. You can't say that about health. That's why we're pushing for the Japanese model of 100 year mortgages. It's possible that one day we will be authorizing 103% loans guaranteed only by your immortal soul. Think of how rewarding that will be!
Eventually the binge on corporate liquidity will end, and then M&A will dry up. IBs will hit the streets in droves. Very very very few will ever find jobs making anything in sight of their old salaries.
Randy,
In fact, isn't it a typical scenario for M+A activity to shoot up during the last throes of an economic expansion, to the extent that it's almost a harbinger of upcoming recession?
It’s possible that one day we will be authorizing 103% loans guaranteed only by your immortal soul. Think of how rewarding that will be!
I'd take the house and mail in the soul.
Skibum, being a doctor is very prestigious. You are a professional and thus you get to mingle with realtors who consider you their peer in their professional circles.
:)
Yes, got the reference. In fact, that one should be one of the ridiculous realtor (TM) quotes - (to paraphrase) "we are professionals, just like doctors, lawyers etc., and we can't understand why there aren't more TV shows about our glamorous lives"...
Peter P - As long as we are able to print money, we will always be able to bail everybody out. This is the common ideal in socialcapitalism.
Well, this illustrates the importance to participate in asset inflation whenever possible.
So again, where are these “mass affluent� They’re not coming from the B-schools as you posited. Maybe they’re coming from Uranus. Dunno.
Well, Uranus rules surprises. You never know... :)
BigBrother Says:
We’re talking about the ‘mass affluent’ who are buying these 2-3 million homes.
And WE are talking about the 'mass effluent' that is your primary contribution.
HTH
SP
Dang it, just saw that Brand has already made the 'mass effluent' comment w.r.t. Big Blather's comments.
SP
HARM Says:
:lol: I’m seriously considering sending her flowers & candy.
You better do it before Brand beats you to it.
SP
Kathleen Pender is cool. She is a voice of conscience and sense in the very heart of the bubble. Her calm sanity towers above San Francisco like the eye of the hurricane. We will look back on her impassioned pleas for responsibility like we enshrine Shiller for decrying the "irrational exuberance" the dot com bust.
I envison her as cross between Jodi Foster and Lena Headey as Queen Gorgo of the Spartans in 300. [steeples fingers like Mr. Burns] She is... eeeexcellent. Smithers, my jaunty cap! :o
Wow! Where can I sign up to be one of the mass effluent? Gee, all the losers I know who have been at their professions here in the "special" (and by "special" I mean complete with short busses, helmets, and drool cups) Bay Area aren't making anywhere near $300k. Even the CEO of our organization who has only been a professional psychologist for over 25 years makes only about $120k. Gosh, I think I need to stop wasting my time interning as a psychotherapist to be and start studying real estate. I mean, it takes like a couple semesters at Laney College and you have to take a test too. So, it's at least as difficult and rewarding being a RealWhore as it is to be a doctor, psychotherapist, dentist, etc.
Oh, and I can help so many more people find inner peace and serenity when they become FBs as they work 80+ hours per week to afford their mortgages as a RealWhore. Then I can get invited to all of the coctail parties that BagBrooder gets to go to.
By the way, has anyone ever noticed that the word mortgage has the words "mort" and "gage" in it? "Mort" is the French word for death and well, guage is a measure... So, is a mortgage "the measure of death" then?
Oh, and "mort" in English means, "The note sounded on a hunting horn to announce the death of a deer." So perhaps one could say that a mortgage is the measure of the note sounded on a hunting horn to announce that another FB has been killed by a mortgage broker... Oh and "broker," oh the possibilities are endless....
No man is an island, entire of itself. Therefore never send to know for whom the bells tolls; it tolls for thee.
Ass effluents signup will be at the backdoor of the Blue Oyster.
BigBother,
Randy H - Pls re-read. How many times do i have to say this? 300K+ is after 10-15 YEARS OF EXPERIENCE.
Please re-read yourself before telling me to re-read. That's why I posted the EMBA salaries, which are people with 10-15 years of experience. Salaries from top schools are well below your mythical $300K.
Here, let me say it slowly, and without understatement.
Not
that
many
people
make
over
three
hundred
thousand
dollars
a
year
regardless
of
how
old
they
are.
I suggest you look up the words "hoards" and "mass".
Oh yea, before I forget, you're a choad.
I think Big Brother has a point. I heard somewhere that just the top 50 richest people in US can buy every single house without needing a mortgage. Since there are more than 50 rich people in this country, the housing market is going to remain strong. In addition, all these rich people need doctors and lawyers. By being doctors and lawyers of rich people, they are also rich. The rich people need investment bankers and hedge fund managers to manage their load of cash, so these are additional rich people.
That proves that there are hoards of rich people. And as long as their are rich people, houses will keep selling at high prices. Yes, and I forgot to mention about the rich heirs of rich dead people. QED.
And to talk about common man. My friend's house is worth over 1M according to Zillow. So he is rich too. Another person I know just moved into a 1.5M house. So he is even richer.
This site is for "loosers". People here are not only jealous about homeowners, but also jealous of rich people. They deny the mass existence of rich people.
Checking in after a long time. Seems like Face Reality has started posting under the name of Big Brother. Arguing with these folks is pointless. They will change their screen name and start posting the same sh1t again.
We need to develop a bot to respond to them, so that we can focus our energy on more meaningful discussions.
Well, the hard part is not just the $3M price tag, but the perpetual carrying cost about $50K + after tax money for property tax and home insurance alone.
Nowadays, gardeners, lawn service and pool services start to charge based on zip codes. If you live in San Jose, your quote will be a quarter of those living in foothill Saratoga. Plumbers and contractors? Oh sure, Mr. $3M, you can afford a minimum charge of $250 for coming out to your house, right?
Welcome to the high-flying lifestyle of "mass effluent", yeah, certainly substantial cash flow effluence.
Back on topic. Admittedly, this is not new, but often seen.
Homes, when priced competitively, are selling within 45-90 days. If priced 5% below market value...they sell with a few weeks!
Market value of a painting I have, is 100K, but if you want to buy it now, I will give you 60% discount over this "market value".
There are quite a few choice quotes at
http://realtytimes.com/rtmcrloc/California~Tracy
Kim: "I want to be effluent, Mum. Effluent!"
Kath: "You are effluent, Kimmie. Look at all you have - a Hyundai, a half-share in a home unit, a DVD, a mobile ..."
Kim: "I want to be effluent, Mum. Effluent!"
Kath: "You are effluent, Kimmie. Look at all you have - a Hyundai, a half-share in a home unit, a DVD, a mobile ..."
HARM, EBGuy,
BACK OFF!
(I saw Kathleen first!) :)
Agreed, more than drive a dagger through the heart of the misguided notion of even entertaining a bail-out she really does strike at the core of the bubble!
How about this? Let's have potential bail-out recipients write an essay as to why they should be eligible for more free money and allowed to stay in "their" homes! Winners.... (and they're ALL "winners" here) gets instead an autographed "Guide to Financial Responsibility" signed by no less than Kathleen herself!
Brand Says:
You know, I think most people on this forum are envious of the young investment bankers making $200K/year to start. And what about the MBAs who got their degree at the University of Phoenix? $400K/year minimum.
_____
No. U of P is $600K per year min. to start. Stanford, Colombia, etc. $5M+ per year.
As for doctors, sure they only start out at $400-$999K per year but 10-15 years out they're making 15-20X that amount plus 50 free houses thrown in.
Please, enough of this sh-t already.
DS - I love Kath and Kim. Truly cringworthy comedy, like Alan Partridge used to be.
Wait a sec, worst drop in home sales in 18 years? Can't be, can it?
http://money.cnn.com/2007/04/24/news/economy/home_sales/index.htm?postversion=2007042410
Weren't realtors just in the past few weeks talking about "hitting bottom" and that this year will be a year of "sure but steady" sales? Where are all the a$$ effluents to bail us out?
Speaking of the NAR's EHS numbers, can anybody tell me how the for-sale inventory managed to fall between February and March.
ozajh Says:
> Speaking of the NAR’s EHS numbers, can anybody
> tell me how the for-sale inventory managed to fall
> between February and March.
When homes are selling fast developers put EVERY home for sale in to the MLS (even before they get a CofO). Now with home sales slow they just list a few as "for sale" (even if they have 100 unsold sitting vacant on the street or in the condo tower)...
And a quick look over at CR indicates I'm not the only one having trouble swallowing the fall in inventory...
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As Suggested by Muggy:
Post your most ridiculous realtor quotes. Even better if they're from the web and you can post a link. (It's a good chance to practice using TinyUrl while you're at it).
FAB (FormerAptBroker) gets us started with:
He also said that all "normal professional people" in their 30s are easily earning from $300K to $1.5M. Really, I'm laughing on the inside.
That sets a high bar. But if you can top "Big Brother's" ridiculous quote, have at it...
Randy H
#housing