The Route City wealth club is delighted to announce the results of its “Top Wealth Generating Careers – Report 2008” to coincide with the finalisation of the introduction of its unique Membership concept.
This report reveals that high earners in the top 10 most lucrative careers in the City take home an average of £534,400 per year with their bonus making up almost 50% of their annual income.
On average, Traders (£1,449,000) earned the most from their occupation followed by those who worked in General Finance (£1,027,800) and in the Law (£572,800).
At the other end of the scale, those in the more creative entrepreneurial careers such as Media (£170,200) and Property Investment (£312,700) earned considerably less.
Performance related bonuses were a significant percentage of annual income for the top three highest paid careers with them accounting for 82% (Traders), 70% (General Finance) and 37% (Legal) respectively.
However, the intense pressure to perform causes many of these High Net Worth (HNW) individuals to have relatively short careers with many seeking to retire early or start a “second career” at 50 – if not earlier.
Mark Worrall, Managing Director, The Route, comments: “Many of our members work in intensely pressurised careers that have a relatively short life span with only 20 ‘peak earning years’ and are very focused on performance related bonuses.
“So while they have the opportunity to earn more than half a million a year, this part of their working life generally doesn’t last very long. Most are facing “Retirement” at 45 – 50, thus it is vital that they manage the income from their hard work well.”
As the majority of high income generating careers are cyclical with earnings peaking in a person’s forties, the second career aspiration is an understandable goal that many HNW individuals devote a significant amount of time to achieving.
With the majority of the earnings for the HNW consumers peaking in their forties, this is an ideal time for them to consider thinking about another career.
Of the high earners, the Medical profession is the only career where earnings peak in the 50’s, a time when you would traditionally expect a person’s salary to be at its highest.
The desire to have a second career that The Route has seen across all the industries listed is certainly attainable for many of these HNW individuals who can expect to see their 20-year prime earning years earn them an average of £8,870,400.
While this is a significant sum, many of these HNW individuals had not made the following basic financial planning steps prior to speaking to their advisor:
- Maximising tax allowances such as ISA investment and pensions as well as using tax efficient vehicles such as Venture Capital Trusts and Enterprise Investment Scheme to reduce their tax burden
- Robust asset allocation across sectors to spread risk i.e. if a client works in property, they should consider investing in other sectors to balance their portfolio
- Setting achievable financial goals that will in turn help the client to achieve their overall life goals – be it retiring at 50 or retraining as a teacher
- Updating their financial goals as their lives develop and change with events such as marriage, children, divorce or death of a parent
- Taking steps to guard against the impact of redundancy, such as paying off debt and making sure some capital is kept in an easy to access account.
Mark Worrall, Managing Director of The Route, comments: “As a business, we were set up to help high net worth consumers make the most of their relatively short but high earning careers and avoid some of the most common financial planning pitfalls.
“Just because a person earns a high salary doesn’t mean that they necessarily have the knowledge or –indeed – time to take the best possible care of their own finances.”