Survival: How to maintain a financial career when the market changes

Roy Cohen has seen a few cycles. As a vice president on Wall Street, he was there during the market crash of 1987. He was there for LTCM and the Asian crisis. And he was a career coach at Goldman Sachs in New York City in 2008. If he wants to survive what may or may not happen in the fourth quarter of 2022, Cohen is in a good position to offer advice.

His key to survival? Prepare the ground. “If it’s the end of the year and you’re just thinking about how to keep your job and how to get promoted, then good luck,” says Cohen. “You need to build your reputation and your network over time.”

If banks cut back after Labor Day like Ken Moelis predicts, Cohen suggests that you act now to establish the factors that could put a target on your back. Don’t go to Human Resources for these, he tells him: they won’t be frank. Go to colleagues and managers, to the people who work with you and for you. “You have to come out with this message,” Cohen says, “I really love what I do, I’m committed to success, and I want to stay in this role. Do you have any recommendations on what I can do to improve?”

Like us noted earlier, Senior people in banking don’t hold back when it comes to amplifying their own achievements. Historically, Goldman Sachs managing directors have had no problem describing themselves using superlatives. If others refer to themselves as “extraordinary,” do you want to be known as simply “good”? Lay the groundwork now.

The other adjustment that must be made in advance refers to personal expenses. A financial adviser who spent a decade working as a trader for US and European investment banks says it’s critical to monitor his personal spending. “The biggest mistake people make in banking is assuming their income will grow exponentially,” he tells us. “They start out earning £100,000, grow to £1m in ten years and increase their personal expenses accordingly. Then they find themselves in an enormously difficult position when their role becomes redundant.”

Do not get used to high expenses. “Once you get used to traveling in business class and staying in five-star hotels, it becomes extremely difficult to change category,” says the trader. “You get stuck in high spending habits and don’t save or invest enough for the future.”

If you have savings, you will have a wider range of career options when the market changes. When Shahzad Younas He worked as a portfolio trader for Morgan Stanley, saved as much as he could. “I never spent much,” Younas said. While his colleagues spent money on private schools and big houses, Younas said he lived modestly and paid off his debts: “I saved because I wasn’t sure when he would have an income again.” Those savings allowed him to leave Morgan Stanley and create Muzz, a Y Combinator-backed Muslim dating website, which he aspires to turn into a unicorn.

Keeping your financial services job may mean making sensible changes to prosperous jobs at that point in the cycle (for example, from trade with digital markets retrade). If you move for instinctive financial reasons, you’ll be less able to select roles that offer longevity of both earnings and potential. “If you don’t have savings and the fixed costs are very high, you will have to accept the first thing that comes your way,” says the former trader. “I can only be a financial advisor now because I have financial freedom,” he says. “For me this is a passion, and it pays, but I also have investments that take care of my cost of living.”

This is the true measure of career success, he says: “You want to be able to do what you want to do, when you want to do it.” Planning is needed.

Photo by tim king in unsplash

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