How to join the rich list
Is money your main motivation? If so, the obvious place to make big bucks is in the City. You’ll have to sacrifice your work-life balance for a while but, if you like to work hard and play hard, the financial rewards will be worth it
Who hasn’t at some point reflected on the advantages of being seriously wealthy – the smart cars, designer clothes and a prestigious home in a wonderful location? As you holiday all over the world and dine at award-winning restaurants, you will bask in the prestige and respect that inevitably accompanies material success. So how do you make a stellar bank balance a reality? And what is the real price of wealth?
If you have a talent – football, music, writing fiction, for example – and fate enables it to be discovered, great. If you are destined to reach the top of your field, you are likely to earn big bucks eventually, even in notoriously badly paid industries such as the media.
But the odds of obtaining a salary of, say, three times the national average wage of about £30,000 a year shorten if you choose to enter money-generating worlds such as corporate law, strategic consultancy and the City.
According to the Association for Graduate Recruiters’ latest graduate vacancies and salaries survey, the highest salaries are to found in investment banking, consultancy, law, oil companies, retail and commercial banks, IT and fast-moving consumer goods companies.
“Eleven of the recruiters we surveyed paid their recruits a salary of at least £30,000,” says the AGR chief executive, Carl Gilleard.
“And while this represents fewer than 10% of total graduate vacancies, it means there are at least an extra 500 graduate jobs this year paying £30,000.”
The survey also shows that 1% of new graduates earned more than £35,000 with AGR employers in 2003. They received a premium of £7,500-15,000 on top of the median graduate salary of £24,000 for a graduate coming to work in London.
“These results are a good reminder that the choices graduates make about their first employment could have a profound effect on their future earnings,” Gilleard adds.
So what qualities do you need to secure a job and succeed in one of these minted professions? For Caroline Plumb, the managing director of research and recruitment firm FreshMinds, academic achievements “are a basic”.
“Employers offering the really high-flying jobs that pay top rates can initially screen graduates on exam results,” she says. “It’s almost a given that candidates will have great A-levels and a 2:1 or first-class degree.
“Numeracy is important but you don’t necessarily need a maths degree as long as you can demonstrate numeracy. Beyond that, they’re looking for aptitude and bias for action – they want someone that gets things done, can solve problems and think for themselves.”
Plumb, 25, who considered a career in strategic consultancy before founding FreshMinds in 2000, now facilitates graduate as well as “second jobber” and post-MBA temporary and permanent recruitment for blue-chip firms.
“Do your research and really work out who you want to apply to,” she advises.
“Having decided that you want to go into investment banking, you must appreciate that not all investment banks are the same: they have different cultures and approaches. The same goes for strategic consultancies.
“You’ll need to demonstrate that you know something about the firm when you get to interview or you’ll look really silly.
“Word of mouth is the best way to get a good picture. Try to get to speak to someone within the firm. Very often university career services will hold acontact details for alumni who work in the field and would be willing to talk to you.”
Peter Hawkins, who heads the Graduate into Employment Unit at the University of Liverpool, also recommends getting a personal view.
“If someone comes and tells me that they want to earn lots of money, my advice is always to seek an information interview with someone who inspires you,” he says.
“Find someone who has made a lot of money in a field of real interest and excitement to you and who uses the skills you have to create that money.
“The kind of person who makes a great investment banker is someone who’s quick witted and is always thinking ahead. It’s somebody who is committed heart and soul to their career, is self-reliant and has productivity management skills as well as technical expertise.
“They also need to be tough physically and mentally. Once upon a time you needed to be psychically tough to work on a production line. Now there are new high-flying ‘production line jobs’ that demand long hours and huge commitment.
“The problem with that is, if you’re mentally and physically tough in work, does that affect the rest of your life? Do you lose out in terms of friendship and support elsewhere?”
Plumb counters this. “I’d say you need confidence rather than toughness or arrogance. In the investment banks you can expect very long hours and they’re very demanding. But you could look at the retail banks.
“They also pay good salaries, have fantastically well respected recruitment programmes and don’t expect such long hours from their recruits. There’s not always disillusionment – although it is important to realise that some people can’t always continue to work with such intensity in the long term.”
Career coach Jenny Ungless knows from personal experience the pressures associated with earning an impressive salary. Before setting up City Life Coaching, Jenny, 34, had a high-flying career in the civil service and politics.
“In my previous job I was earning a six-figure salary. It was fantastic, except I was working all the hours God sent and a huge amount of that extra money was going on sustaining a lifestyle I needed because of the job I was in,” she says.
“My partner and I ate out every night because I never got home before 10pm. All my clothes went to the dry cleaner because I didn’t have time to put on the washing machine. It was self-perpetuating madness.”
Up to 70% of Ungless’s clients are in their 20s and 30s, come from stellar corporate backgrounds – consultancy, the City, law or finance – and are looking for a change of direction.
“They’ll say: ‘Work is my life. Not only do I have to be there at 7am but at the end of the day I have to go out and entertain clients. I have to be prepared to give my all. It doesn’t matter whether I sink or swim, the company’s going to go on.’ They feel they’re just a cog in a wheel and don’t feel anyone cares about them individually.”
She points out that a large salary looks less impressive when you work out your actual hourly rate, factoring not only the many hours you’ll need to spend in the office but also time travelling and entertaining clients.
“I have clients who earn £60,000 and they’re 28 and 29 years old – good money. But they’re working 80 hours a week. They’re expected to go to America or Sweden at a moment’s notice and the company doesn’t care if that means they have to spend their weekends travelling. Their lives are not their own and, in terms of an hourly rate, they’re being paid less than temps.”
The amount of what blue-chip companies and City firms call “natural wastage” – the recruits that stick it out for a few years and then decide enough is enough – is on the rise.
Chartered accountancy is still seen as a “light” City option with reasonable hours, despite inflicting three years of exam hell on new recruits while they qualify.
Yet the “big four” firms still expect to lose almost 50% of recruits by the time they qualify. This is one of the reasons why they recruit in such numbers. The City seems to remain an area of work that relies on people who are prepared to give it a short, sharp burst and, according to Ungless, a City trader who is there beyond the age of 35 or 40 is rare.
“When I work with people on their careers, the first question I get them to ask themselves is: ‘What are my priorities and what do I want my whole life to look like?'” she says.
“You can only make a sensible career choice if you are fitting it into your life as a whole. If my clients say it’s important they have time for friends and family and they need to have a good work-life balance, but then say they’re thinking of working in the City, I tell them to stop right there.”
Hawkins is similarly reticent. “If you’re looking to make money, you’ve got to look at the other important ingredient – happiness,” he says. “Try to mix money with the skills you love using and are good at and the things you are really interested in.”
Ungless says: “In the long term the secret of making it work for you is understanding what kind of recognition you need to get from work.
“If it’s just money, that’s fine. But research shows that money is only a motivator if you are being paid at an unfair rate. If you are not being paid enough, money is a motivator because you need more money to make you feel happy.
“Conversely and interestingly, if you feel you are being paid too much for what you feel you’re contributing, that can be a demotivator because you feel anxious about it all the time.
“On the assumption that you’re being paid a fair rate for what you’re doing, money is not the motivator. The biggest motivator is people recognising your contribution.”
Of course, the other way to make money while managing your lifestyle is to be your own boss. As an entrepreneur, you must tackle responsibility and risk but by believing in your ideas and running your own company, you could become a Richard Branson or a James Dyson.
It is interesting to note that Ungless and Plumb, both young Oxbridge graduates with impressive professional track records, are now feeding off the corporate and City worlds rather than working as part of it.
As Hawkins points out: “Entrepreneurs are people who have a driving passion and motivation to build something, be known for something or have self-reliance and productivity. Most of them have a fire within and from a young age they start to think creatively about how they can make money.”
This is a personal profile favoured by corporate recruiters everywhere. But why not do it for yourself?
Success stories
Daniel, 27, is an associate in the litigation department of a US corporate law firm based in Canary Wharf. After graduating with a 2:1 in law from Bristol University in 1998, he took his bar vocational course at the Inns of Court Law School and completed a pupillage at a set of chambers that specialised in intellectual property law. Daniel lives in a two-bedroom flat in Maida Vale, west London, and drives an Audi TT.
“I never imagined I would end up being a corporate lawyer and always swore as a child that I would avoid the City.
“When I wasn’t taken on as a tenant in my chambers, I completed a third six [a further six months’ pupillage] in a chancery law set and applied for tenancies elsewhere.
“I was badly messed around by one set of chambers, which made me go through endless tests and interviews before informing me it had decided only to take on one tenant – their own pupil. I decided I was better than that and resolved to forget the Bar and go into litigation.
“Before joining my present firm, I spent two years with another where I worked for two partners and effectively did a day shift and night shift.
“I’d work with one partner from early in the morning but the other one didn’t generally get in until 2pm. I’d then have to work with him, often until the early hours.
“My work soured friendships because I didn’t take time to see people and dating was next to impossible. I stayed because I was – am – insanely ambitious. But I was very tired. I haven’t taken a two-week holiday since Christmas 2002.
“I joined my present firm six months ago and still work hard. As a litigator, I deal with client disputes and remedy their problems. I might investigate how a client can break a contract, for example, if that contract is no longer profitable for them. A lot of my job involves research, correspondence and paperwork.
“It’s very strategic, like chess, and I’m using my brain all day. But I love it. I’ll stop doing it, however, the day I stop enjoying it.
“The working time directive doesn’t apply in practice in a profession like this. My contract states I will work from 9am to 5.30pm and ‘any further hours as my job demands’.
“The firm expects us to bill 1,800 hours a year but they pay us well for the time spent. They’ve given me a Blackberry [remote email device] so they can email me wherever I am. They also think it’s reasonable to call me when I take a day off. I don’t complain. I just deal with the query as quickly as I can.
“I’m up at 6am and in the gym by 7am every morning and use a trainer twice a week. It gives me the adrenaline to get through the day. I have a housekeeper who comes in twice a week to do the cleaning, put on the washing, do the ironing and load the dishwasher – not that I cook very often. Recently my fridge conked out and it was two-and-a-half weeks before I noticed.
“I make a point of not working at weekends and I like going out for dinner with friends and trying out new restaurants but I don’t have a enough opportunities to meet new people. The other commitment that takes up a lot of my time is my work as a Westminster city councillor.
“Whereas in my firm I’m a pretty junior, as a councillor I have constituents to answer to and council officers to manage. It gives me additional maturity that helps me in the workplace.
“I’m paid well and I enjoy the trappings my salary affords me – but it’s not about the money. I feel appreciated by the head of department and am treated well by the firm. We have drinks after work on Fridays, for example, and they are sending us all to Miami in June for a ‘retreat’.
“I don’t think I’m very good at being employed. I’d be a better employer. I’m a problem solver, an administrator and I’m told I think like a partner. I’d like to go into a company and sort it out – be a sort of John Harvey Jones character – but I need the training before I do that. I’d like to run a business, ideally my own. But in the long term I’d like to go into politics.”
· Ten years after joining the graduate trainee scheme at investment bank Lazard, Nicholas, 31, is now a director working in corporate finance. He graduated from Warwick University with a 2:1 in economics. He lives in a two-bedroom warehouse conversion in Shad Thames, south London, and is trading in his Lotus Elise for an Audi A6. He also drives a moped and races a Radical sports car at weekends.
“Starting salaries at most investment banks are over £30,000, although after two or three years much of your income will come from performance-related bonuses and can vary hugely from year to year and between individual bankers. Salaries for those at the top of the profession are in the millions.
“But it’s not enough to go into investment banking simply because it’s well paid; you need to be prepared to work very hard.
“My average working day lasts from 8am to 8pm, although it can be quite a lot longer when you first start. More importantly, you have to find the work fun and intellectually stimulating.
“Lazard is different from most investment banks in that our role is purely advisory, that is, it no longer involves lending or borrowing money. We are paid fees to provide ideas, analysis, advice and to execute deals, mainly for large corporations and venture capitalists in connection with mergers and acquisitions, restructures and capital raisings. We work alongside brokers, lawyers and financial PRs.
“My job involves managing a team of 11 people, who specialise in different sectors of the economy such as retail, consumer goods or property.
“As a junior at Lazard you tend to spend most of your time at your desk producing analysis, some of which can be very technical. But as you get more senior, the job involves a lot of client contact and other meetings.
“Most of my clients tend to be based in London so I don’t travel much – although the company recently chartered a private jet to take a group of us to a big meeting in Latvia. Generally I find travel quite frustrating whereas our oil and gas specialists spend a large part of their time abroad.
“Our office isn’t actually in the City – we’re based in Mayfair, which is infinitely more attractive and a world away in terms of atmosphere.
“There are plenty of other upsides to my job, not least the fact that every day I come into contact with a lot of high-quality people, which is a great privilege in life.
“There are financial rewards, of course – you can do very well out of investment banking – but you should also be aware that this may involve quite a sacrifice, especially at the beginning.
“Some people can’t handle this and leave after six months. Personally, the hard work is not something I’ve ever thought of as a problem.
“That said, on one occasion I remember staying up two nights on the trot to work on an announcement. Afterwards I went for an early breakfast in Smithfield market and fell asleep on a plate of baked beans.”