That is more money than 95 percent of the people and

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make over $100,000 a year. That is more money than 95 percent of the people, and it’s definitely more money than your parents. It’s probably more money than you really know what to do with. Do you know what I mean? All of that, it does change you. A twenty-four year old making over $100,000 a year was standard practice on Wall Street front offices in the 1990s. With an mba , most Wall Street as- sociates, usually in their late twenties, would be making in the $200,000– $300,000 range by their second year. This compensation creates such hype around striking it rich that most Wall Streeters stick with jobs and life- styles that they often do not enjoy. As Jacob Carnoy observes, a few of his friends who graduated from Princeton in 1989 and managed to stay em- ployed on Wall Street are now making windfalls. He describes one friend who ‘‘freaked out’’ when Goldman Sachs decided not to go public in 1998, meaning that he could not cash out his stock options: The only way he was affected recently [by the current downturn] was when Goldman was going to go public, and he was going to get a monster windfall, and so then he started spending money and bought this house out in East Hampton. And then Goldman didn’t go public, so he didn’t get the windfall, but then he
Liquid Lives 265 was made partner, so he will be fine. But he was actually crying poor at that time! I mean here is a partner at Goldman who makes millions a year who is crying poor because he didn’t make 30 million or 60 million or 100 million. Ann Harris, an investment banking associate at Morgan Stanley, is fairly new to the lifestyle that the bonus compensation structure helps to create. Having grown up in a working-class Irish-American household, Harris often commented to me how disconcerting it was to be making so much more money than her parents ever made. I asked her about how bonuses affected Wall Street bankers’ lifestyles, especially when the majority of one’s compensation is paid on one day. kh : I always hear stories about how so and so got paid this much, and they totally elevated their lifestyle beyond their means. And the next year they didn’t get a bonus as high as the previous year, and now they just don’t know what to do. Do people kind of get seduced by the pay and then feel that they don’t have any money because they have elevated their lifestyle to such an extent? ah : I think that there is. It’s really easy to see bonuses—and this is something that even one of my managers has told me at one point— you’ll soon get to see your bonus as part of your salary . And I don’t like thinking like that. I like to think of no bonus, and then if I get something it’s like, ‘‘Ooohh.’’ Because I think when you start planning your expenses and living a lifestyle based on the expectation, when things go badly, it’s such a back- fire. I think there are people who are seduced by the money. I mean you hear about people who win the lottery and buy two-million-dollar homes and can’t pay the property taxes on it after they get the money. Then they have to sell the house three years later. . . . Part of being in that elite club is having the things to show for it. I think people do stretch . . . and many

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