- 07
- Sep
There is nothing more frustrating than attending university for three to five years, accumulating thousands of pounds of debt, paying a student loan off for five and ten years, only to learn that there is no chance of earning the promised wages.
The ceiling is solid in most industries. It is not created by lack of education, but by lack of opportunity. As a career professional moves up the ladder, the opportunities dissolve quickly.
This can be devastating for someone who applied for a mortgage, or is paying off student loans, with the expectation that they could rise up the corporate ladder within ten years and earn a respectable wage.
That is why many people are venturing into the self-employment world to start their own businesses, or supplement their income. Unfortunately, this can backfire, especially for people who plan to buy a home.
Many banks and financial institutions will not include the income generated from a personal business when they calculate a mortgage or personal loan, even if that amount is substantial.
It is a fact that a factory worker earning £30,000 a year can qualify for a mortgage easier, and borrow more money, than a self employed professional who earns £50,000 a year – or more. This is because of the risk level involved.
Smart people take their profits and turn them into investments. This gives them leverage, making it easier to apply for a mortgage. The important element to remember is that the investment must not be high-risk. When using this strategy to overcome the career ceiling, the professional should focus more on building fixed assets and capital, than earning interest and dividends.
