by Bankruptcy Advice
A career in banking doesn't exactly scream 'poverty'. In 2013 the starting salaries for investment bankers with a bachelor`s degree are typically between $100,000 and $150,000. Further bonuses can exceed 100% of the base salary.
For many junior bankers, this means they can afford a lavish lifestyle. However, earning good money isn't the end of the story and a lavish lifestyle can soon overtake actual income. Sometimes bankers, along with other professionals, fall into the trap of trying to "keep up with the Joneses" instead of accumulating assets. Earning money is all very well, but if you don't have any assets to show for it, you're not securing your future. Spending it as soon as you get it will soon leave you `asset poor.`
Assets are Golden
One of the most obvious examples of an asset is property. You'll have heard the old adage, "put your money into bricks and mortar." Life insurance policies, pension plans and high interest savings accounts are other safe options that can be converted to cash if needed.
Splashing out on the latest high-tech gadgets may be more exciting than all the above, but gadgets go out of fashion and become as wanted as a chocolate fireguard when the next craze comes along. Buying an expensive car will feel good, but unless it is a collectible classic, it will lose its value the minute you leave the showroom.
Bankers have the opportunity to invest money in order to try to accumulate more, but not all investments are safe. Purchasing high risk stocks is tempting and sometimes pays off, but it is not wise to invest all of your money in shares; it's a gamble, after all. It is better to have a healthy mix of investments, spread out between stocks, bonds and cash savings in order to protect your assets.
Because the position carries a lot of prestige, many bankers feel they should live up to expectations and spend money on status symbols. Designer clothing and watches have no resale value of any worth and trying to compete with colleagues or impress the boss is a fool's mission.
Young people coming into the profession feel the pressure to 'look the part.' They're expected to socialize too and that can turn into a champagne lifestyle beyond their means. Skiing vacations, trendy nightclubs and exclusive golf club memberships will hemorrhage money pretty quickly.
A banker who is used to a certain lifestyle and spending more than they earn may face a financial crisis sooner than expected. For someone working in the financial sector, it`s particularly embarrassing for them to admit to having money troubles. Bankers are often too proud to go for bankruptcyadvice.co.uk, but they must swallow their pride and face their problem head on.
Getting advice on acquiring and protecting assets, limiting expenses, resisting temptations one cannot afford and planning for a sound financial future is a wise course of action. No matter what our profession, being asset poor goes against common sense.
I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Heather Katsonga-Woodward: On Business, Life & Everything In-Between