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
- 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.
5. Emigrate
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!
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Another thought provoking article. Thanks for sharing – it’s appreciated 🙂
This is a great piece.
If I had to give advice, it would be to suggest that young people today choose career paths that are flexible, particularly in regards to migrating between countries. Choose a vocation that doesn’t tie you to a particular city or nation. A master’s degree opens doors to work visas that a regular degree doesn’t. Picking up another language (or even two) will have obvious benefits when shifting about. Apply for passports from other countries if you’re eligible for them (via ancestry, etc.)
In short, become a citizen of the world. Not only will you get to see some interesting places, work in exotic locations, and generally enjoy enriching experiences, your CV will look much more impressive and you’ll be able to escape any overly burdensome tax regimes as and when they appear.
Great blog. I agree with nearly all your points.
I have just returned home after living abroad for several years. I like your point about recent immigrants. I felt like an immigrant both when abroad and after returning home, and not living to a predetermined script is very liberating. I no longer feel obliged to own a home; my life priorities have changed. The urge to be suburbanite in your 20s is absurd.
I disagree about avoiding London though. There is a life here that is hard to match elsewhere in the UK and it doesn’t need to be life drainingly expensive.
Cheers
Another excellent piece of advice for us young people. I’ll be sure to link this to my peers; who no doubt would skim for 30 seconds before searching for GDP on wikipedia and finding another way to spend their £30-a-week EMA grant!
Although I understand the motivations behind the allowance the simple fact of the matter is that for many it means a new pair of trainers every fortnight. From day one of college we had ingrained in our minds that the only options for us were university or homelessness; that under any circumstances a place at ANY university was better than a hands-on vocation. Just last september a mutual friend gained a place on a computing course with two U’s and an E, a subject that arguably a graduate in Bangalore could undertake with a comparative advantage. Two Ds and an E is far too generous.
But i’d like to think there is hope for some of us (although the Byzantine history example was a little too close for comfort) many are aware of the importance of a place at a Russell Group university, with aspirations for a career in the City. Although, (for reasons still unknown to myself) having spent £200 on a jacket that i’ve worn twice in 6 months; the importance of having as little debt as possible apart from my student loan which I will receive in september and working as hard as possible this summer with the aim of putting some money in a tracker fund, are at the top of my agenda.
Despite all this and with a dose of naivety, the future’s bright. Whether this is the result of an excellent marketing campaign by a mobile phone provider or the inspiration instilled in me by a father who arrived here with nothing but a suitcase and a £10 note, only the future will tell.
Thank you for a very useful post. I’m in precisely the situation where this sort of advice is handy! (Unemployed graduate from top university…)
I think the point about staying away from London unless you’re working in the City is very wise – the price (cost of living) is not right. And there are places where you can lead a culturally interesting life for a lot less money – not just in Europe (Gothenburg in Sweden is somewhere I would recommend, especially if you’re into classical music) but also in Britain (Manchester, Birmingham and other “provincial” cities have a vibrant cultural life and cheaper housing).
Most of the ten points you make are thought-provoking and all are useful. Thanks very much 🙂
That’s a great summary, though I look at it in the rear-view mirror. Unlike you, though, I’d hate to be 18 again 😉
I think #7 is the key thing. Stressing about getting on the housing ladder in your 20’s, what’s up with that? Live – change jobs, travel, have fun. I would have seriously stiffed my career path if I had bought in my early/mid twenties, I needed to move around a few times.
#1 is pretty good, too – outsourcing is hollowing out many professional jobs. If I was 18 now I’d probably go for being an electrician than going into engineering, not because I regret the path I’ve taken but because I see a great sucking force drawing relocatable jobs from high-wage to low-wage regions. Working up close and personal with real things that can’t be moved is a way to fight back.
.-= ermine on: Does Money Buy You Happiness? =-.
With regard to what you said:
“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.”
You may remember that the previous government changed the rules regarding Inhertiance Tax allowing any unused nil rate band to be transferred (currently £325,000) to a spouse or civil partner.
Previously, this was done using a discretionary will trust on first death. This meant that not only did it use the allowance but it put it outside the estate and was therefore not assessable for care home fees.
If you have over £23,000 in capital you’ll be assessed as being able to meet the full cost of your care. And now there’s the potential for an additional £325,000 in the pot to assess.
The Revenue have played a long game as they know where the risk lies is with an aging population.
I suppose in some way the young should be relieved that in many cases they shouldn’t have to foot the bill!
Excellent post, which is relevant for readers in the US and elsewhere as well!
I like #10. Look out for yourself, stay LOYAL to yourself! The company has no problem letting you go in down times.
Great list. Thanks for this.
Can you talk about #10 more, perhaps in a post with examples of your own life, or that of others? Would be a great read. I need some inspiration for change.
.-= Financial Samurai on: Is Becoming A Millionaire The Rule Rather Than The Exception? =-.
Monevator:
I love the opening line—definitely a lot of wisom there, and a great hook to the piece.
As for moving abroad to escape high expenses (and taxes!) I can vouch for how amazing it can be. My wife and I live in Singapore, we travel like crazy, and we can invest our money without paying capital gains taxes, legally. Oh, and our income tax bracket is very very low.
I’d recommend any adventurous, travel bitten Brit looking to pad their finances to give it a whirl if they ever get (or can make!) the opportunity.
.-= Andrew Hallam on: Money Managers Who Make Sense =-.
I’m going through this article with my daughter this weekend; 23 and about to do her final year at Uni in London studying English and hoping to live there afterwards…!!!
.-= laura@move to portugal on: A {Frugal} Challenge =-.
Fabulous feedback guys, glad this one hit the spot! 🙂
@Laura – Well, if somebody has their heart set on London than as others have said it is a wonderful place to live when you’re young. Just make sure she realizes the huge and likely long-term financial consequences. 🙁
@Darius – You’ve very inspiring footsteps to follow in!
@Ben – Thanks for that.
@Corey – Agreed… I sometimes wonder whether we’re at the tail end of the great mobility, or if it’s only just beginning. Personally I’d like to become completely untethered from a workplace or country, except by choice. Like many I see the Internet as playing a big role here.
@Niklas – Cheers. Did you see I linked to your Uni Debt video a few weeks ago in Weekend Reading, btw. I thought it was very impactful – go students!
@ermine – I did spend some time yesterday reflecting on how different the world must look regarding house prices in just a generation or two. I remember reading articles in the mid-1990s saying that because of the yearn to remain footloose and travel that you describe, how prices would remain low forever. I wonder how much we are shaped by reality, rather than shaping it?
@Thomas – Handy insights, thanks. Yes, the Inland Revenue is playing the long game. That said, the OAPs are playing the votes. Young people would do well to start voting more, as ever.
@FS – Hmm, I’ll have a think. To be honest I’ve become completely decoupled from employers for the past few years – staying loyal in ways that aren’t written into contracts, but are really professional ethics and commercial considerations, but otherwise roaming as I see fit. I’ll have a think about a wider post on this. Can’t imagine you *ever* being short of inspiration though! 😉
@Andrew – Sounds ideal. Unfortunately I’ve never had a partner who wanted to go the same places as me, and it feels a bit existentially bleak right now to live the single ex-pat life in perpetuity. Maybe tomorrow. 🙂
Awesome post…. I grew up in London. Love the city but you could not be more right!!! It’s a living breathing Vampire. It’s alluring and it sucks all your blood out at night (and replaces it with Guinness and Tequila shots).
I live in Cairo, Egypt right now and have been building my income online so I am not tied down to one place. Sadly most of my cash comes from USA so I am ties to their economy in a small way…. But I am getting there.
.-= Forest on: Is Minimalism a worthwhile form of activism? =-.
Hi love the article. I have 4 children spanning over 38 years. The first is 38 with law degree two homes. The second is 27 married ans separated with 3 kids. Rents a home no degree but studying. has lupus. just got in the house market. that is the difference od just 10 years. The 18 year old is doing a skill before a degree. looking for apprenticeship. But has the benefit of living in two countries. Listens to his mum. I was talking to him about much the same things you’ve mentioned. Of course you have added much more and i really appreciate your clarity and frankness. The 16 year old wants to be a dentist. Make your money while you are young. Keep as young as possible. You are so right. What a wise head on young shoulders. keep writing because I’ll keep reading.
Makeda
I would add don’t get married (if you are a man), and absolutely, definitely don’t get divorced! 😉
.-= Tony on: 7 Useful Simplifying Techniques =-.
Thanks so much for the link! I’d missed that I’m afraid (I blame exams…). It would explain why the video has had a few hundred extra views since I last checked 🙂
P.S. Although we all helped in getting pictures for the video, the actual mixing was done by the excellent Joe Rinaldi Johnson. (Credit where it’s due.)
@Tony – Indeed, it has become a significant risk if you’re a high earning man over the past two decades. The law of unintended consequences comes to the fore once more. 🙁
You’re welcome Niklas. It’s relevant to this thread, so for anyone interested, here’s the link to the Cambridge students in debt video again. In my view it’s ludicrous we’re spending money funding tens of thousands of pointless degrees across the UK, while genuinely bright young people are running up big debts (or worse, avoiding University because they feel they can’t afford it).
@Makeda – Thanks very much for sharing your views, and congratulations and good luck with your four sons.
Great article! It has completely confirmed all the decisions I have made over the past several years. I am so happy to find comments from others that share your point of view.
I am one of the ‘recent immigrants’ you have written about previously but I had originally intended only to spend a summer in London going to festivals and making the most of the vibrant music scene here.
Six years later I have managed an amazing career that is based here in London and has taken me to all the four corners of the globe. I was lucky enough to not be burdened by student debt as I was on a gap year when in London. But this hasn’t held me back in anyway (IT tends to lean more towards experience than qualifications).
I also kept my feet firmly on the ground; at twenty one I had a £50k a year job (apparently nobody else in the UK wanted the job or they couldn’t find the skills) but I pretended to only earn a third of that. Not having any Jones’s to keep up with sure helped.
Now on the cusp of purchasing my first pad with a huge deposit in a great London location, and these ideas definitely helped me in getting to where I am today.
Excellent advice there, everyone should be focusing more on their career when the recession puts such strains on the labour market. Start with the bottom up I say, you can’t command respect from others until you have respect from yourself, that sort of motto. Do you know your cv well? career development is all about retrospective learning and self awareness.
http://www.tobiasbishop.blogspot.com for my upcoming career blog.
I’ve recently discovered your blog and I’m so excited about the advice you have to give – not always because i’m able to follow it right now but because I feel more positive about my earning potential and, as you intend, I feel motivated! Not being too old myself yet, this article in particular has been very inspirational. I came back from teaching in Japan two years ago and I found I was falling into the trap of wanting to get in the property ladder and settle down sooner rather than later. Now my feet are itching once more and I’m off to look for job opportunities in Singapore (where I was born incidentally).
@Al – Glad you’re enjoying the blog. Thanks for sharing, and good luck with your dreams and achieving your potential!
Just make sure you’re climbing up the right mountain before you set off… 😉
I’ve been going through all your posts over the last few days and I think this has to be one of the best, if slightly off-topic.
I’m now 34 and I am very much in agreement with your advice.
I went to Uni and left without a degree but still had the debt. And the fun.
My heart has always lain in a particular subject, and through making the most of available opportunities I am now in a particular field where I have a huge career path open to me, there’s much less competition and most importantly, I am doing what I have always wanted to do. The job has other responsibilities with it, but my point is if there’s something you love doing that appears to be academic only, there are often other routes in that don’t involve getting a degree. Experience and enthusiasm count for a lot and are a lot cheaper than a degree. Interview technique is also crucial – most places would rather hire someone willing to learn that’s easy to get on with than the aloof know-it-all. I had never done my current job before and was up against someone with many years experience – I think two crucial points that gave me the edge was that I said I knew I didn’t know it all and wouldn’t be too proud to ask for help when I was unsure, and just trying to be friendly. Can’t complain at a 50% wage rise!
It’s never too late to start living your life for you.
Thank you for a most interesting blog.
@DW — Thanks for sharing your thoughts and glad you’re enjoying the blog! I’d like to get back to doing a few more generalized articles like this.
Your career path sounds a bit like mine. So be warned I’m ten years or so further down the line than you and on a *third* iteration! 🙂