The $100m Club

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.

Reverse Engineering

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.

Choose wisely.

#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.

Bigger Picture

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!

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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.

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25 thoughts on “The $100m Club”

    1. Banker On FIRE

      Glad you enjoyed it!

      Agree – choosing the right “table” is probably one of the most important decisions one needs to make.

  1. I’ve worked with a lot of those seven figure earners, I topped out at slightly less than half that much and refused a seven figure offer to stay in the game when I retired. My reason was that almost everyone of those seven figure earners I knew had terrible family lives, no meaningful active hobbies and few real solid personal friends. I got as high on the ladder as I wanted to, maybe as high as possible without giving up my personal and family life. It’s simply not worth it to join the $100M club when you count the true cost. Retiring slightly early with a few million, to me that’s a much better path. Granted I had a small sample size in only one industry sector so my views are necessarily biased.

    1. Banker On FIRE

      Don’t disagree with you at all.

      Reality is anything over 200k puts you in a great place, especially when sustained over 15+ years.

      Thing is, it’s much easier to make 200k when you aim for 400k. And reaching 500k becomes more doable when you aim for 1m

      So all about reframing one’s thinking, especially those who didn’t grow up in an environment where people make that much money.

  2. What if you don’t want to be a banker, Lawyer, doctor or accountant etc?
    What if you don’t want to work 120 hours a week hating your job, being “owned” by the firm?
    Surely doing something you love should be at the top of the list if as a youngster you are smart enough to design your future life.
    I recently bumped in to an old friend and her daughter. The daughter was a lawyer, fancy corporate firm. Apparently, they even had bed rooms in the office as regularly, staff were expected to do “all nighters”
    Pro rata that doesn’t sound much better than being an immigrant worker on a Qatarie building site.

    1. Banker On FIRE

      All valid observations. Being a lawyer is particularly hard – I can’t imagine doing that job.

      That being said, everyone finds their own place on the spectrum of time vs money vs overall balance in life.

      The post was obviously intended to help people who prioritise money but it’s also a helpful reference point for those who want to move the dial up slightly on their earnings, by switching into a front office role for example.

      I happen to quite like banking but my ideal place on the spectrum is a $200k job that gives you solid work life balance and you can do well into your 60s.

        1. So referring to corporate law specifically:

          – Really long hours (that don’t get better with seniority)
          – Hard to scale (get paid by the hour not as % of deal size)
          – Unpredictable (your hours are typically determined by clients and other advisors)
          – A useful but very specialised skill set that doesn’t easily translate to other jobs

          1. Thanks that makes sense. So compared to banking, I guess you’re missing that scalability factor that you get in banking when get more senior as still tied to the billable hour. I’d presume both careers are very long hours at the junior level though.

          2. Yes. And senior investment bankers can also work long weeks, just not as often as lawyers do!

    2. You definitely don’t need 120 hours a week – that’s another myth that, while it might be true in some industries/positions, it is not a defining trait of a £200k+/year career.

      The 6 points that Damian mentions in this post are way more important. There are, of course, some nuances – for example, in some companies moving to a front-office “revenue generating role” is quite hard; in others simply having an acceptable level of technical knowledge to pass the interviews is… complicated. But 120 hours a week (or even 50) are not necessary anymore.

      1. Banker On FIRE

        I think it holds true in jobs that don’t scale.

        Lawyers just have to bill a certain amount of hours, even at the partner level. In many other careers you can work your way to a place where you’ve got proper leverage and teams below you, so you certainly don’t need to work 100+ hours a week.

        I reckon successful senior bankers typically do 60 hours + client entertainment

    3. If you’re looking for alternatives, setting up your own business – if it’s the right business, has a decent chance of putting you in the 1m/year bracket.

      I had one person business which cleared £100K (pre-tax) in a year – and it was possible to see a route to 10x that. But (among other reasons) I didn’t like the look of what it would do to me, so I pulled back. It wouldn’t have involved a ton of extra hours, but it would have required a mindset shift I wasn’t prepared to do.

      1. Banker On FIRE

        Yes very fair – the above advice is specifically focused on the career side of things.

        Not everyone is made out to be an entrepreneur, but you can do some amazing things with business ownership. Maximizing income is one, but finding the optimal work-life balance is also much easier when you are your own boss.

  3. Pingback: Weekend reading: The average investor is apparently awful - Monevator

  4. Out of interest, what would you say motivates you to grow your net worth beyond a certain point? Where would you say diminishing returns start to kick in net worth wise?

    1. Banker On FIRE

      Think important to differentiate income and net worth here.

      Let’s say you make $1m. 30% of that is deferred and then you are taxed at 50%. All of a sudden, you’re at $350k.

      Even at a healthy savings rate, it’s not the kind of setup that allows you to retire after one or two years. Yes, you will end up in a great place, but it takes a sustained performance in a pretty intense job.

  5. Good piece.

    One point I always think is key to highlight here is that contrary to my expectations in my 20s, peak earnings happens in 40s and many people then see a decline – especially investment bankers I know! Conversely, a lot more people find themselves a high earner at some point, than are high earners now. So getting into $1m a year camp is one thing but staying in it persistently is very rare.

    Another point – re industry choice – Growth is good. And while Moore’s law continues in any form, Tech will be a growth industry. And growth industries have opportunities and money. So I’d encourage your nephew to consider the Tech industry.

    1. Agree with this – comment on the site that has hit me hardest is that an average employee at Amazon would have always done better than an amazing employee at General Motors. So important to pick an industry with great prospects in the long term!

    2. Banker On FIRE

      Agree with that. I think investment bankers take a pay cut 99% of the time when they leave the sector – which usually happens in their 40s. Can only play the game for so long before you get bored / tired.

      As far as tech, I think that’s got to be the #1 choice for anyone looking to maximize their career trajectory and earnings. In addition, it’s a sector where the young are disproportionately rewarded as opposed to punished for their age…

  6. This is perhaps one of the most useful articles on here for me (21F, 2nd year university). As I’m on a 4 year course, this Autumn/Winter is the start of internship applications to get to the “best” jobs that’ll hopefully be interesting and well paid. Earning bucket-loads is definitely on my radar too 🙂

    I’m sure I’ll keep coming back to this advice – but the other fantastic piece I received recently is as follows:

    It is far cheaper to not hire the right candidate, than it is to get rid of the wrong one.

    I think that’ll be at the forefront of my mind during job applications…

    1. Banker On FIRE

      Congrats on being at an amazing stage in your life – and far more foresightful than I was at your age!

      Agree with your addition to the list. Have hired many people over the years and sadly had to rectify mistakes on a couple of occasions…. never fun.

      Best of luck with your journey!

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