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There’s an unfortunate perception in London that you can only make real money and have a real ‘London life’ if you work in the city.
That just couldn’t be further from the truth. Although undoubtedly the city makes a lot of people rich by normal standards, the reality is that 99% of everyone you see walking around the city earns at maximum a couple of hundred thousand pounds a year – and most of them a mere fraction of that.
Sure there are the Bob Diamonds, Michael Sherwoods, Greg Coffeys et al, but the reality is that the 5% at the top of the food chain take at least 95% of the cash.
This begs the question, is the city really the be-all and end-all? And are there really other ways to become wealthy, and maybe even have some fun along the way?
Option 1: Start a business
There are few things more satisfying in life than starting a business, seeing it grow, and hopefully achieve success. But a common misperception is that it has to be something ingenius and something out of the ordinary to make serious cash. That couldn’t be further from the truth. Ask Julian Metcalfe, founder of Pret a Manger.
Sandwiches aren’t exactly revolutionary. Or what about Julian Dunkerton, founder of Super Group (Superdry clothing) – which spawned from selling clothes on a market stall. Both of these guys are worth more than the aforementioned ‘Masters of the Universe’ at the top of the page, if the latest Sunday Times Rich List is to be believed.
Although good examples of the simplest product making serious amounts of money, it misses the point of how a small and simple business can blow away a ‘normal’ city salary. A better way to explain it is this: my local corner shop owner found out what I did for a living a few years ago, and took great pride in telling me that he probably made more money than I did, despite what the average man on the street
would think.
And the sad thing (for me at least) was that, at the time, he was absolutely right – he showed me his annual accounts and he was taking over 300k a year. From one single (admittedly horribly overpriced) corner shop! Unbelievable, but true.
Option 2: Become an agent
We’ve all seen the TV series Entourage, and if we’re all honest we do secretly envy the life of ‘Super agent’ Ari Gold. There was a lot of chatter in 2008 and 2009 that a host of MBA grads who would otherwise have been destined for Wall Street or London in better times were making their way to LA to hit the world of showbiz. And I bet this is the best move most of them will ever make. 10% minimum commission on anyone you look after, a life full of interesting people and experiences, and a hell-of-a-lot more glamour?
Suddenly the 10 basis points you brokers make on each trade, or the 50k you IB analysts make working 18hour days doesn’t sound quite so appealing… Again, I’m
not talking about the top 5% who control 95% of the business – you don’t need to steal Brad Pitt or David Beckham as clients – a friend of mine manages a small bunch of people, none of whom I’ve ever heard of or probably ever will. But I somehow doubt this keeps him awake at night in his Chelsea penthouse, after a night out with true models and bottles….
Option 3: Just do something, anything, which you enjoy
At the end of the day, there are just too many people in London who wake up every morning and head into the city to do something they hate. Take a look around you on the tube in the morning, and try and find more than one single, contented, happy face.
I had the displeasure of knowing a banker a couple of years ago, who was making
a mountain of money each year and on first glance there was probably a lot to envy. But after seeing Match.com on his screen every night for a month, I started to see that all was not as it seemed. After a beer or five one evening, I asked him “If you could do this all again, go back to being 15 years old, and you could make whatever choices you wanted, what would you do?”.
His answer? “I’d do every single thing differently. I’d probably forget uni, get a job as a window cleaner or a bar man, actually have some mates and maybe have a chance of getting laid this side of being 50. This job has made my life suck”.
Maybe the most important point in here is that being rich and being wealthy are two very different things entirely…..
The author is an anonymous, and comparatively senior, derivatives banker.
I wish it was that simple, I would like to open a business and do what I would like to do, but without the capital and maybe even the partners in today’s tough world, this would be a bit difficult. After all the people you were talking about did start in relatively easier times. I do however appreciate that you wrote this article, secretly i think most of the people in the banking world have these kind of thoughts a little bit too often !!
Option 2 is nonsense.
The key risk of Option 1 is that you end up wasting years trying to get a struggling business off the ground and never make more than a pedestrian salary. You should only take this option if a) you have a burning entrepreneurial desire or b) you have a top-notch idea AND a top-notch execution team/capability.
Option 3 assumes everyone in banking or related careers is miserable. Not so. Furthermore, ask the average British double-glazing salesman or IT worker whether they ‘love’ their job. Your job is a trade: your time and skills for money. Asking to ‘love’ the job is a little too much. It’s sufficient to enjoy it (which most bankers do).
The City (capital C, nota bene) remains the best place to make excellent money on a risk-adjusted basis, and is an interesting place to work into the bargain.
Bottom-line: half the world’s people are starving or dying of malaria. Stop complaining that you have to work hard to take home a princely salary.
Well said Banker, my thoughts exactly.. No point in whining
Funny and not unreasonable, if a bit quirky. I agree that the city is one of the best risk-adjusted payouts (long a call option with positive theta). That being said barriers to entry (studies) are fairly high, hence if one happens to already be in the game then it may be a good idea to stay long in it to build some capital before making a switch to something more entrepreuneurial. That is unless the job makes you really miserable, in which case you’d better make a lot of money or you’re better off making the switch before you’re human capital is too erroded…
This idea that people should love their jobs came cropping up in the ’80s and ’90s. “Love what you do and you will never work a day in your life.” Blah. blah…. I think this advice is simplistic and almost irresponsible – based on a dream world instead of reality. There is a whole generation of people (talking about the US here) who studied what they loved (i.e., liberal arts stuff) and then graduated with no ability to find a specific job. I was one of them. Spent the next ten years building a marketable skill set – slowly – that I could turn into an actual career which ended up having nothing to do with my “passion.” But, I’m perfectly happy – I just don’t define myself by my job. It’s simply a trade (as the above poster said). Pursuing your “passion” can be a major risk unless you are trust funded or your passion just happens to be a marketable trade like dentistry or something.
For every successful actor there are a million Starbucks barristas.
Hillarious!
Enjoyed the article and suggestions, I’m enjoying what I do but I know other non-City folk who seem to have a better quality of life. For me I’ll stick with it.
I might add there is no need to be on the tube if you don’t want to be, Milan, Paris and HK both have financial roles and you can walk to work too.
As for the entrepreneur plan, I’m probably more a fan of little investments that I can control (a sandwich shop here, a corner shop there) and residual income than striking it big with a new widget…
I tend to agree with Derivatives sales. Working in the City is like a long call option, with the additional benefit that the (financial) cost is negative (your salary). On that basis, it has to offer the best risk-adjusted return. (If the jobs market in the City was remotely efficient, the return would be much lower, but that’s a different matter.)
I only work in finance for less than 50% of the year, just for the cash really, because after all isnt that what finance is all about? .. The rest of the year I spend doing things I actually enjoy, and hopefully these things can earn me enough one day so that I can do finance for none of the year!
The options are available at anytime. People are starting their business and doing something new everyday. If you wanted it hard enough, you would find the way.
Stop complaining. Life is hard and it is the same for everyone. I have no symphathy for those who only moan about their lives but take no action to change it.
You deserve to be miserable for the rest of your life if you chose to be so.
Before working in the City I was a long time IT contractor so I am well qualified to comment on running a business. It certainly has some benefits, back in the day lunches were a taxable expense so I used to lunch every day, but nothing quite has the ring as “hedge fund quantitative analyst” , a status which I currently enjoy.
Hilarious. Enjoy yourself, sure. Become an agent, yeah, that’s much more practical than making 2 or 3 hundred grand as a banker, right?
Or start a business, of course! Stupid me! I nerver thought of that! All I have to do is to become the next Dragon.Truth is, people get bored, or weary, in ALL jobs after a while. It’s the daily grind, no the job itself. So if you’re making a “lousy” 100 to 200k per year, rest assured that 85% of the world population is bored to death while making 20K a year.
Jol – I bet the ladies go weak at the knees when you tell them what you do for a living…
So what sort of businesses would you all start if you did want to get out of the City?
I enjoyed all, the article and the comments. It is in human nature to desire what we don’t have, that doesn’t neccessarily mean that we discard what we do have and embark on the next adventure that springs to mind. Life is a trade, and either way, no one ever gets it all.
IThe guy in Option 3 is obviously not a banker. Once you become an banker you automatically start drowning in pussy.
Simple:
The time you spend doing something boring, stressful, or opposed to your real values or to your usual behavior outside of work is just a pity: you don’t know when you’ll die so ask yourself if your time is really tradable for money (which you can spend in pleasurable times feeling empty or fulfilled depending on your personality and values but which you cannot take into your grave so accumulating it without spending it would be a big mistake and a enormous misunderstanding of life).
If you rent your time for money doing something you don’t like, you’d better more than enjoy your time spending it to create value in your life.
If it is not the case, you are strongly encouraged to start something that fulfills you all along the way and where money is just a commodity to live comfortably.
Do you like money and spending it or do you prefer living new stuff and have an adventurous life?
Insert your comment here (under 1200 characters)…I think this is pretty good advice tbh. And no.2 is certainly not “nonsense”. There are people who are sports and talent agents. At one time in these peoples’ lives, they were *not* sports or talent agents. Therefore, it is possible to become a sports or talent agent. Especially if you’re a lawyer like me hee hee
I always thought the point of the City was to make lots of money quickly and then leave after 10 years (just before you burn out) and go and do something that you love that you always wanted to do as a kid.
However i really like my City job; its interesting and challenging and i feel incredibly lucky to earn my City wage doing a job i enjoy.
A lot of people aren’t as lucky as us! we should be grateful.
So sad but so true… Bavo!
Would you rather be a Doctor, or work as a quant in the City?
My situation is that I am now presented wih this choice.
Comments please.
Simon, what do you do?
JSargent, depends on your temperament etc. Do you faint at the sight of blood etc.? if not then what sort of Doctor? only you can decide but I’d suggest trying the Dr route, far lower risk and you can always move to the city later (which may be in the process of contracting substantially if we get global double dip) or you may find you enjoy the GP lifestyle if thats the route you choose. Becoming a doctor later may be harder however as I believe the barrier to entry is actually harder than the city. Also must consider what the city role on offer is although most grad schemes don’t present a clear path?
re: Scott…..brilliant!!
..Jols back- Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
JOL IS A BORE
The point you make about unhappy faces on the Tube is very valid, but it also applies to faces on buses and trains and in no way relates to just Bankers or City workers. As the Roman author from the 1st century BC wrote: “No man is happy who does not think himself so”. Money doesn’t make you happy per se or doing something different, some of the poorest people in this world are happier than most Londoners …
Banking (especially IB) is the best job in the world
do you know another job that pay 100k+ to prepare an excel spreadsheet with fake numbers or meaningless presentations?
working as a recruiter is nearly as rewarding, 100k+ a year after placements is good enough for me and probably for most people, and at the same time you work farrrrrrrrrrrr less hours than a banker :)
hence the reason so many bankers are become recruiters ;)
I think it all depends about priorities.. If money is your number one, then you could pay a higher price to get it then someone who would have something else in number one. I never thought money should be number one in one’s life but that’s me! Everything is a trade off and our choices depend on what we want to get the most and what we are ready to give in return..