Fresh out of university and deciding to join a consulting firm? What do you do with your new salary?
For many young graduates joining consulting firms, it can seem like a building a long term financial future is unclear. However there are ways to save and invest for the future:
Paying off high interest debt
If you have loans such as student loans, personal loans, etc with high interest rates, you might want to consider paying these off. Being debt free early in your career can help build your net worth instead of being dragged down later on.
Pension fund
Many consulting firms offer a pension fund, typically with a employee contribution portion. Consider maximizing your contribution as an employee to invest for retirement and also reap the tax benefits.
Starter home
Consider buying a starter home. The Netherlands offers a NHG mortgage guarantee program and a starter home tax exemption. Although homes that can be afforded with a typical new consultant salary can be smaller and older, they offer a way to build equity in an asset instead of paying rent. Mortgage interest is also tax deductable.
Index funds
Index funds offer a way to passively invest in the entirety of the stock market instead picking individual stocks. They can offer a good amount of diversification from downturns in specific industry sectors.
High yield savings accounts
Typical bank savings rates can be quite low in comparison to inflation. Consider looking around for other banks that offer higher rates in safe jurisdictions.
While things like starting a family and retirement might seem long away, taking simple steps early on to invest for the future is a good way to start in a career as a consultant. Building up a solid base of assets also gives you flexibility to change careers, travel, or relocate later on based on your preferences.
Note: This article is only for informational and discussion purposes only. Consult with a qualified financial or tax professional for your specific situation.
About PrepareConsult:
PrepareConsult is a platform to practice the consulting case interview with AI and peers. Hazaosha is founded by Milad Mohammadi and Sahhas Nathella.
Milad Mohammadi – 7+ years of experience in consulting and professional services with experience across North America and Europe.
Sahhas Nathella – 5+ years of experience in consulting and professional services with strong experience in complex digital transformations.
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