Here's how much you should earn as an investment banker in your 20s

If you start a career in the investment banking division (IBD) of a bank and progress up the ranks slowly but surely, how much can you expect to earn in your 20s?

A new salary and bonus survey from London search firm Dartmouth Partners, purports to offer the answers. Assuming you start as an 'analyst one' aged 22, by the time you're 30 you ought to be a vice president (VP) 2 on £259k ($369k). During the intervening years, you should have earned £1.7m ($2.4m), gross.

Needless to say, there's also tax. And there are bonus deferrals. That £1.7m will turn into £1m after UK income tax.

The first chart below shows the evolution of total compensation in salary and bonus over your analyst, associate and VP years.

The second chart below shows the evolution of cash compensation and deferrals over these years. Deferrals begin when you're an associate 1 (aged approximately 26). By the time you're a vice president, Dartmouth says anything from 20% to 50% of your bonus will typically be deferred for three years. The deferrals shown on the chart below are based on the midpoint of this range. Although you might be earning a total of £259k as second year vice president, 'only' £221k of that will be cash.

The charts below tell the simple story of pay in investment banking. As we've mentioned before, investment banking career paths don't always progress as smoothly now as they used to. You might spend less time as analyst, but more time as an associate. You might get stuck at VP level. You might just decide to quit a few years in. If all goes smoothly, however, you can earn £1m after tax in banking before you're 30, and there aren't many other industries that will do that for you.