Let’s start by remember that young people are already rich. I’m not even that old, and I’d swap everything I have to be 18 again. If you’re young then you have energy, radiance, potential, and time. The world is yours for the taking.
We should also acknowledge the positives. Most young British people aren’t fighting in a war, though we shouldn’t forget those who are. For all the bad press, the UK has never been so tolerant if you’re young, black, gay, or a woman. Life expectancy for the bright middle-class I’m thinking of has never been higher. And you’ve probably been told you can have it all, which is always nice to hear.
Unfortunately, you can’t have it all – not without a fight. The generation that wrested control of the cultural agenda back in the 1960s has been systematically (albeit unthinkingly) transferring wealth to itself in three main ways:
- House price inflation
- Greater government debt and unfunded pensions
- Having fewer children, and not compensating for the consequences
I salute the declining birth rate, given that the world’s environment is coming off the rails (another way the young have been shafted, incidentally).
But the fact is ever fewer workers will need to pay for pensions that are now set to rise with earnings, in a country where demographics will work against a growing GDP and where it can easily cost ten times a would-be first-time buyer’s income to buy a house.
Optimists will tell you this wealth will trickle back to the young – that nobody, not even a baby boomer – lives forever. And it’s true much will be spent on health care as the wealthiest generation we’ve ever seen battles to the end with the clock.
Some will come back via inheritances, too, though that will reduce social mobility. Also, if house prices start to fall as the boomers pass away or sell-up, well, the younger generations may well consider that a mixed blessing. Just ask the Japanese.
Nobody knows what the future really holds, or whether the gloomiest predictions are true. But let’s assume for this post that they are.
What then should a bright young person do in such a climate – the type of person who’d have gone to University long before these modern times, when two Ds and an E cut it as acceptance grades?
Obviously I haven’t got definitive answers, but I do have 10 career tips for young people to think about. They play to the strengths of being a 21-year old today, rather than the game plan of those 65-year olds who had their chances.
1. Consider a hands-on vocation
It’s will be hard to outsource dentists, GP, vets, headmasters, or barristers overseas. Other professions from architecture and engineering to accountancy could potentially be bid down by overseas competition.
If you think you might like a job that requires you to be in a room with your hand up something’s bottom, it could pay to follow your heart.
2. Do a straight degree at a top university
The rest of our bright young things should certainly go to university, but move heaven and earth to go to one of the top dozen. Don’t be persuaded that a Second Best Choice has a great course in Byzantine history if you can do something vaguely similar at Oxford, Cambridge, Bristol, Edinburgh, Imperial, or the half a dozen others that count. There’s too many graduates now, and it’s too expensive to take chances.
And while we’re on the subject, don’t do Byzantine history unless you’re truly brilliant at it (and you love it, and you’re willing to suffer for it).
If you’re going to be mediocre or even just passable, I’d suggest you try to be passable in a subject in demand from an institution with good connections.
Try to choose a flexible career that puts a premium on new thinking over old knowledge. The world moves too fast. Relentlessly refocus before you’re forced to.
3. Chase money in The City
Even when I was a graduate two decades ago, banking, and so-called Magic Circle law and accountancy wasn’t the gravy train it was today. Perhaps financial regulation will crack down on the City moneymaker, but I doubt it.
I wouldn’t enter this world unless you’d already considered it, but if have and you’re mediocre yet determined, you can wildly outperform compared to any other realistic career choice.
Nobody told my generation this. Perhaps nobody knew.
4. Otherwise avoid London
If you don’t work in money, you’d do well to avoid getting addicted to London. It’s a great city, but it’s insanely, life-drainingly expensive. There are plenty of places in Europe – if not the UK – where you can live a more exciting and creative life on half the money.
And no, it wasn’t always thus. Martin Amis lived in Notting Hill as a young writer, and the Brit Art crowd rented cheap warehouse space in Hoxton Square near the center of London in the early 1990s. Not anymore.
The trouble is once you make friends here and get it into your blood, you’ll have to dig in and do the old moving to Zone 3 then moving out to the suburbs path to cling on. Across Europe you could still be living in the heart of things, yet doing something creative.
In fact, let’s cover that off: If you want to do anything creative or artistic, try and do it overseas. London will cripple you, and will try to trick you into working for years for peanuts, racking up debts. Move to Berlin, Belgrade, or if you’re really radical see what’s possible in Wellington, Rio, or Seoul.
I’m not equipped for that way of life, but if you are, go for it.
6. Do what recent immigrants do
If you do decide despite the odds to stay in the UK, then keep an eye on what recent immigrants are doing. I think they’ve a terrific nose for opportunity.
Immigrants lack two things – a predetermined script and inhibitions. Polish builders who’d baulk at sharing a flat in Warsaw live ten to a house in Brixton. A young Malaysian woman who’d be six months from a husband at home will start a company in London. Keep an eye on them, and be inspired.
Only this weekend I met a still-young-ish personal assistant from Eastern Europe who through risk taking, thrift and some help from her peers had managed to create a three-property buy-to-let portfolioa few years ago. That opportunity has passed, but I’ve also met newcomers setting up websites and coffee shops.
7. Live young
Don’t be in too much of a hurry to grow up. Life is long, touch wood; unless the world really turns rotten, you’ll likely live until 80 or more.
I see 23-year old couples on TV property shows desperate to become settled suburbanites when they’re still mired in student debt and have barely tasted the world. Even modest homes cost money to run, and to fill with furniture and stuff. Cars cost money. Going to good restaurants in fine clothes costs money.
Try to stay hungry, trendy and cheap for longer. Live with friends, and cling on to the things you’d do as a student. Spend a few years behind where your salary has put you. Travel, but on less.
(You’ll thank me for this later, even aside from the financial angle).
8. Save hard and take chances
While you’re living like a student, save as much as you can. Pay off any debts except student debts as fast as you can, create an emergency fund, and then try to start investing for future financial freedom. Early money is gold dust, thanks to compound interest.
You likely won’t be able to buy a house without stretching yourself to breaking point or taking your parent’s money, anyway. Instead, rent cheaply and put the savings into a tracker fund to load up on cheap UK stocks, and put some money in overseas equities, too.
There’s a good chance that a great opportunity to buy shares might be one of this generation’s lucky breaks; the oldies have pension funds that are being forced to buy bonds yielding barely 4%. Take a chance on shares, but remember you’ll need to have a long-term horizon (ten years-plus).
9. Create multiple income streams
Another opportunity that young people have is to create portfolio careers and multiple income streams right off the bat. The Internet has made it far easier for smart, ambitious people to set up side-projects that deliver money.
Beware of the easily started options that rarely perform (for instance, this blog is successful in UK terms, yet I’m still not making even 10% of my income from it after more than two years of commitment).
Selling something unique is more likely to deliver. The website My Wife Quit Her Job has a lot of good, practical advice on e-tailing.
10. Look out for yourself
I don’t mean you shouldn’t care about your family, friends, or even fellow citizens.
What I mean is don’t expect your employer or the Government to look out for you. Read up on financial matters (subscribe to Monevator – it’s free!) and take control of your future.
Remember you’re likely to be paying more tax than most UK citizens have for decades, for many years to come. You’ll be doing your bit for others, whether you want to or not. So make sure you also take care of yourself.
Image by Boris the Blade
Do you have any career tips or money advice for young people? Please do share!