"Junior bankers in this generation have wasted their bonuses"
If you're one of the rare associates who got paid well in the last bonus round, let me share a few words of advice: don't spray your money up the wall.
Whether you stay in banking or you don't, the bonuses you receive during a banking career should never be taken for granted, particularly at the early stages. They're an opportunity to build wealth, and they should not be wasted on risky investments.
My generation were mindful of this. When I got into banking in the late 1990s, we were very conscious about investing our money to build wealth for the future. Many of us were very successful in this; banking transformed our financial positions as a result.
Personally, I saved my first few bonuses and then used them to buy property. The best investment I ever made was a one-bedroom flat in West London. I had no money from anyone else, and I used that property to lever up and to buy more. I didn't come from wealth, but those investments have given me the security that shapes my life today.
By comparison, I see a lot of young people now using their bonuses for risky investments. Last year it was all about crypto. This year, it's more about angel investing and start-ups. By definition, most of those investments will come to nothing. They are also illiquid. Trust me, you should not be making highly risk, highly illiquid investments early in your career.
The past few years have been fantastic ones for young people in banking, but this is an inherently volatile industry, and we are now coming off a 10-year bull market. Juniors bankers haven't had to fight for survival for a long time. They haven't had the massive culls that we had, but that may yet be coming.
Banks have spent the few years building a massive cost base. Juniors on massive salaries who don't generate revenues directly are a fixed cost. When this becomes apparent, then wasting last year's bonus will seem very foolish indeed.
Saamir al-Imam is a pseudonym
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