Not too long ago, I ended up at an industry conference of sorts.
There were about a hundred of us spread around the room. Diversity-wise, it was a good mix.
To begin with, not everyone was in finance. Encouragingly, there were quite a few women and a solid representation of visible minorities. A number spoke with a discernible accent.
And while many participants were on the older side, there was a good sprinkling of folks in the 30-something zip code.
But as I chatted with various people over the course of the event, it quickly dawned on me that there was a unifying characteristic that united pretty much everyone in the room.
They were all making $1m+ a year.
Some were clearly at that level for years. Others have evidently achieved that level not too long ago.
Some others may have been in and out of the “club” at times, depending on the year.
But when you put together their professions, titles, and employers, you could tell – at some point, these folks have crossed the rarefied threshold of making seven figures a year.
As a group, that added to well north of $100m of “revenue” a year. If they were a tech start-up (and tech start-ups still traded on revenue multiples) they could well be a unicorn.
Later that week, I was catching up with my nephew, an energetic teenager who is just starting to figure out what to do with his life.
Unlike his uncle back in the day, the boy is clearly thinking ahead. And while making boatloads of money isn’t at the very top of his agenda (the benefits of not being a first-generation immigrant!), it does rank pretty highly.
You can’t blame a young man for wanting a nice car, a big house, and all the, ahem, social benefits that those things bring to the table.
So what exactly does it take to reach that level? As we chatted that day, we took a stab at reverse-engineering the components of a career that pays well into six-figures – with the potential to cross the $1m mark.
This is what we came up with.
#1: The Right Country
This is by far the most important point – and one most people in the western world take for granted.
I am sure you can find high earners around the world. But if you want to make the big bucks, there’s a handful of countries where you’ve got a much higher chance of “making it”.
The US is at the very top of that list, and far ahead of all other countries on it.
The UK would probably be my number two, notwithstanding Brexit, BoJo, and all the other misfortunes that beset us over the years. But unlike the US, you probably need to be in London to be making the big bucks in the UK.
Then there are countries like France, Germany, Spain, Italy, Canada, and Australia. Japan and Singapore are also on the list. Am sure there are a few others I am missing.
But out of 150+ countries in the world, there are probably 10 or so where you have a much better shot than anywhere else.
If you are living in one of those places, consider yourself fortunate. If not, a change of location might make your journey to seven-figure comp much easier.
#2: The Right Industry
This is the other critical point.
Think of it as a base rate of sorts – and in case you are not familiar with base rates and how they determine career success, read this excellent piece by Nick Maggiulli.
In some sectors, you’ve pretty much got to be at the very top of your game to make seven-figure comp. Face it – not everyone is made out to be a CEO of a large publicly-traded company.
And then there are some other industries where you will find a relatively higher percentage of people making the kind of money you are aspiring to. Finance, tech, consulting, law, and medicine are all in that bucket.
Will you still have to work your butt off? Sure. Do you still have to do a knockout job? Of course.
But controlling for all other variables, picking the right sector significantly amplifies your chances of making the big bucks.
#3: Revenue-Generating Roles
There are two kinds of employees – those who make money for the firm and everyone else.
To use a finance term, the ones who generate revenues are very easy to “value”. Someone who brings in $3m of cash through the door every year will have a much easier time negotiating a raise than someone who is sitting in a cost center.
In most cases, that means you want to be in a client-facing role. That being said, there are many non-client-facing roles that can move the dial on a company’s P&L.
Quant traders at hedge funds. Marketing professionals at CPG firms. Product managers at tech firms.
As you think about your career path, try to maneuver yourself into a role where you can really move the “revenue dial” for your employer.
#4: Technical Skills
It’s an aspect that becomes less important as you progress in your career – but it sure is critical in the early days.
To break into M&A, you better know your accounting and finance. On the trading side, you need advanced math and statistics knowledge.
In consulting, you’ve got to know your way around your chosen sector (unless you are a strategy consultant, in which case even I struggle to pinpoint the right skill set!)
If you want to land a great tech job, you probably want to major in computer science.
And you definitely won’t get a job in law or medicine without specialized training in those areas as well.
Soft skills is what will make you truly successful in the long run. But they are nearly useless without a proper technical foundation to fall back on.
Speaking of soft skills…
#5: Communication Skills
It’s tough to define a great communicator, but you certainly know one when you see one.
Good communicators are as concise as possible, dispersing just enough information to get their point across without being redundant.
But the ones who take it to the next level are the ones who can gauge just how much information is needed in the first place, which usually takes a combination of planning and reading the audience.
Finally, how you say things is just as important as what you say.
Some folks just speak. Others simply instill confidence, giving you comfort that their advice is the right one. That’s what you are solving for.
#6: Conflict Tolerance
I’ve recently written about this specific topic so I won’t double up here.
The short summary is that everyone wants to make the big bucks. At some point, you will get in someone’s way – and if you are not ready to stand up for yourself, will likely get elbowed out.
Prepare yourself – and act accordingly.
There are many other factors that will pave your way to a well-paid career.
Intelligence, energy, ambition, hard work, and persistence will all play an important role. But they are probably useless unless you possess the key qualities above.
There are a couple of reasons I spend so much time writing about increasing earnings on this blog.
The obvious one is that cutting expenses, while important, only goes so far.
After a certain threshold, it becomes a game of whack-a-mole. By the time you renegotiate one set of bills, a bunch of others slap you with an increase, taking you back to ground zero.
It’s also a game where the upside is capped by definition. If you spend $60k a year, you probably won’t be able to shave off more than $20k of your cost base.
You can achieve the same end result by growing your income by $25k (assuming a 20% tax rate) – especially in a family with two earners. Everything else is icing on the cake.
But the biggest reason by far is that by and large, really well-paid jobs are still the domain of the privileged.
When I was growing up, I didn’t know any bankers, consultants, or private equity professionals. The most successful person I knew was making forty bucks an hour in a tech job.
It’s hard to solve for a well-paid career if you don’t know what you are solving for in the first place. I had no chance competing with people whose relatives were in high finance pretty much since the days of the Mayflower.
The internet is slowly changing that.
The infamous Mergers and Inquisitions website was a massive help in helping me “break” into investment banking. It was almost as good as having a friendly uncle in the industry!
Along the way, I probably displaced a “hereditary” banker – and that’s okay.
Chances are, my kids might get “displaced” by a hungrier, harder-working immigrant – and that’s also okay.
This is how we build a more productive, egalitarian society. One where social mobility is not a mirage.
So if you ever thought growing your earnings well into six figures (or possibly seven) is impossible, think again.
Depending on your upbringing and background, you might not feel entitled to it – but you are certainly capable of it. Because when I look at the list of qualities above, there’s no secret sauce here.
You simply have to know what you are solving for.
As always, thank you for reading – and good luck!
About Banker On Fire
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Banker On FIRE is an M&A (mergers and acquisitions) investment banker. I am passionate about capital markets, behavioural economics, financial independence, and living the best life possible.
Find out more about me and this blog here.
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