"And now, to give the graduate address, Dr. Martin Lewis." How strange to hear that prefix to my name. Yesterday I was chuffed (and when I first heard, shocked) to receive an honorary doctorate, in Business Administration, from my hometown university of Chester. As part of it, I addressed the graduates to give them my take on life, career and money – so I thought it worth jotting down here too.
I was asked to give ‘inspiring’ tips. I addressed them to fresh graduates entering the working world for the first time (though I’m aware some were mature students or career changers). As normal, I speak by simply writing five or six words on a piece of paper beforehand and freewheeling, so this is far from an accurate copy of what I said. I’ve just bashed it out quickly on the train back, but I hope it gives a flavour.
PS. Very obviously I don’t intend to use the Dr. title in the real world, but it was fun to hear it once.
1. It’s about the skills you gain more than the jobs you’ve done.
When I was lost without a clue of what to do, as my year as General Secretary of the LSE student’s union was ending, I went to speak to the school’s then Director (what LSE calls its Vice-Chancellor) for advice. What on earth should I do when I left? His advice was quite simple: it doesn’t matter too much right now, get the best job you can and focus on acquiring skills and making the best of it.
Looking back, he was right. While that help doesn’t work for those going into law or medicine, for many others it does. This portfolio approach to work is becoming a modern norm, so you have to think differently about how it works.
When I look back at all the jobs I’ve done, each has taught me something. From selling caravan awnings at 18, which greatly improved my communication skills and taught me techniques I’ve since reversed to help consumers; to working in financial PR when I graduated, which boosted my writing, my understanding of the media, the corporate world, and finance.
Each element gives you something more, a new skill; collect them, take them with you. Everything adds up.
2. If you’re self-employed, a third of what you earn isn’t yours.
Everyone should be taught this. While those who work for companies get paid by the payroll with the tax automatically taken off – thus everything that goes into your bank account is your money – the self-employed and freelance usually get paid before tax.
So for every £100 you earn, put £30ish straight into a separate bank account (preferably a top savings account) and never consider it your cash. See more on this in my ‘A warning to freelancers and the self-employed everywhere’ blog.
3. Don’t be afraid to change path.
In work years, I’m now 18 years old – coming of age. After university you’re a new-born in the world of work. Until you’re really in a career, you can’t really understand what makes you tick.
So hopefully it’ll go well, you’ll be happy and content with your choice. After a couple of years, you’ll have a real feel about whether its right for you. If not, don’t feel locked in. Make a plan, and if you forgive the phrase, ditch and switch.
I left City PR at the age of 25. It was a good job but it wasn’t right for me. So I decided to leave before I was paid too much and felt trapped. My family couldn’t believe it and didn’t approve that I was giving up a job I was succeeding in to go back to study (a postgrad in broadcast journalism); yet I knew it was the best thing for me and thankfully it worked out.
So even in your choice of work, be prepared to try before you buy.
4. A bank’s job is to sell to you.
Let me hypnotise you for a second. When you walk into a bank and see the word ‘advisor’, in your head, replace it with ‘salesperson’. Banks sell.
When they offer you a product, it definitely means it’s good for them, it doesn’t automatically mean it’s good for you. Just look at the PPI scandal – £18 billion paid back of money wrongly taken from people by lies and mis-selling.
So while it’s good to communicate with your bank, take its ‘advice’ with a pinch of salt and do your own reading, research and make your own decision.
5. Don’t repay student loans quicker than you need to.
Current graduates who started in 2010 are only charged 1.5% interest on their loans. This is less than the rate of inflation, so in real terms the debt is shrinking.
More importantly though, is that many of you will need mortgages or even car loans in the next few years. They are far more expensive than the student loan – and unlike student loans they still need repaying if you lose your income – so paying it off with spare cash now only to borrow it back later at a much higher rate is a bad move.
For more info and for graduates from other times, see Should I Repay My Student Loan?
6. Be proud. Many people knock higher education, or will say these days a degree isn’t worth it. Yet be proud, the bigger picture is you’ve worked hard to be members of a special club. You’re a university graduate. Congratulations. Even I’d suggest you can go out and have a little celebration tonight.
Not only that, but while we often have a dim view of the UK, in relative terms this is still one of the world’s richest and most tolerant societies.
Take a step back and count your blessings – you have an opportunity many in the country and elsewhere in the world are denied.
Yet with this privilege there comes a responsibility – to yourself, your society, your community, country and the wider world. So do what you can to improve the lot of you and yours, but think wider too.
7. Beware borrowing, but ignore "neither a borrower nor a lender be".
In our modern world you will usually need to borrow. Most of you already will have what we call a loan because of getting your degree, and to own a home at some stage you’ll likely get a mortgage. Thus the grandparental wisdom of "neither a borrower nor a lender be" is outdated.
More important is to understand when and how to borrow. If it’s planned-for and budgeted-for expenditure on something that builds your assets (a car, a home, even a kitchen) then it can be rational. If it’s willy-nilly, borrowing to continually fill the gaps in your income, that’s a problem.
While the economy is hopefully recovering, there is still a lag on personal incomes. It will be tempting to use credit to fill this gap – try to avoid it at all costs. If you can’t ensure you do it the right way, beware payday loans, and high cost credit.
And finally, if you don’t know how you’ll repay borrowing, you can’t afford it – no matter how much you feel you need it.
For more, play the Good Debt, Bad Debt game.
8. Make ’em fight for your business.
We live in a competitive consumer economy. Your business is valuable to companies, don’t let them take you for granted.
Whether it’s haggling to make your mobile phone provider or Sky TV give you a better deal at renewal (see Call Centre Haggling), comparing prices for the best energy tariff or train ticket, or even choice of where you regularly go for your pint or a sandwich.
Ensure your custom is valued. If not, tell them, ask for better, or go elsewhere.
Those were the eight tips I gave in the time I had, but I had to make it up to 10, so here’s a couple more I’m throwing in (see, that haggling is paying off already).
9. You don’t have a right to take goods back if they’re not faulty.
Don’t assume goods are returnable when you buy them.
Legally you only have a right to return faulty goods, so if you buy the wrong size, colour or it doesn’t fit when you thought it would – sorry, you’ve no rights. Some stores will allow you to return items, but they don’t have to unless they’ve a published returns policy stating it.
The exception is goods bought online, in catalogues or on the phone. Then you have a seven-day, no-fault right of return. Download the Consumer Rights Wallet Factsheet to be fully tooled up.
10. Accept uncertainty – there’s not always a right answer.
It’s very easy when you’ve been through school, college and university to assume everything must have an answer. Yet there isn’t. We all need to learn to embrace uncertainty.
This is something many people struggle with both logically and emotionally (including me). It’s a great cause of anxiety.
Whether the question is…
- Should I marry him/her?
- Should I change my job?
- Should I get that car loan?
- Should I go for a fixed or discount mortgage?
- Should I save for a bigger deposit to get a better mortgage deal to buy a house?
Without a crystal ball, there is no right answer. All you can do is weigh the upside against the downside. Plan for the worst, hope for the best.
And remember, if it does go against you, that doesn’t mean you made the wrong decision. You did what you could with the knowledge you had – don’t beat yourself up about it – understand it’s just part of life.
Congratulations to all those going through graduation ceremonies across the country.