My Investment Banker Friend Asked Me if £100k a Year Was Enough to Live In London

I wasn’t sure if he was joking or not

I nearly choked on my falafel.

We were sitting in a Leon — a fast-food chain where a full meal would cost around £10. The place was pretty much empty when we arrived. There were a handful of other diners in a place that could have seated maybe 70.

It was uncomfortably quiet.

I was conscious of others passively listening to our conversation. They probably felt the same about us. I don’t think it’s rude, but unfortunately, it’s just unavoidable.

My friend had an opportunity.

He worked for a well-known investment bank, and he was based in his home country of India. The company offered him the opportunity to work in London, something he had originally wanted when we graduated. They would give him a relocation allowance and a bump in salary to match.

That was the reason he was in town. He came to meet with the London team before he made his decision. It seemed promising, but he wasn’t sure if he wanted to make the move.

My friend looked exhausted. He held a constant squint as if he was continuously staring into the sun. The guy had bigger eyebags than eyeballs. He also spoke a little slower than I remembered. He was a few years older when we first met, but he seemed to age twice as fast.

We started off talking about the last time we saw each other, we talked about our mutual friends, the few we still kept in touch with, and some we forgot existed. I’m sure most of them forgot about us too. We relived some nice memories and quickly caught up on what we have been doing over the last 6 or 7 years.

And then we got into it; he wanted to know what sort of life he could have in London, what the city had to offer and where he might consider living. We discussed these at length.

Eventually, after a pregnant pause, he asked loud enough for the rest of the room to hear, “Is £100k enough to live in London?”.

A slight smirk formed in the corner of his lips as he asked, so I suspected he already knew the answer. But there was a keenness in his eyes that needed the reassurance. Knowing that the average salary in London is around £30k, I started laughing at the ridiculousness of his question.

“Only £100k?” I said.

His demeanor changed.

“I guess you could live a pretty modest life with that,” I joked.

Only he didn’t know I was joking. The smirk faded faster than it came, and his eyes sunk into desperate disappointment. He was deflated. Seeing the concern in his eyes, I assured him £100k was more than enough to live in London. Particularly for a single guy like him with no kids or other dependents. I told him what the average salary was for a Londoner, an amount his bonus would likely eclipse on its own.

Still, he didn’t seem convinced.

He was concerned about a reduction in quality of life and standard of living. And here I was thinking everyone would love to live in London. With a six-figure base salary, there was no doubt in my head that he could afford to live very comfortably.

We differed in opinion because my thinking came from inside of the London ecosystem and he thought from outside.

The reality was that he was super happy in India. He loved the lifestyle he had, and where he lived. He could see himself living there for the rest of his life. He was a short distance from family and close friends. And despite his ridiculously long work hours (which he was a little too proud of), he also had an active social life.

London would’ve been more of a novelty to him, something he would have enjoyed for a couple of years in his 20s rather than his mid-30s. He couldn’t see himself being here longer-term.

Being ahead of average means very little if the average isn’t exactly doing well. The average Londoner is paying around 50% of their salary on accommodation. Then there are other bills, commuting costs, food, and basics to consider. Not ideal.

Despite a difference in salary of tens of thousands per year, the lifestyle experienced by people within a wide salary band doesn’t differ too much. After taxes, the difference is even less distinguishable. Most people still need to work until retirement age and many may end up working beyond that. The difference in net pay would only translate into a little more savings each year, a slightly bigger place to live, nicer food, or more entertainment.

My friend’s thinking was this, if he wasn’t doing exceptionally better than average, then it wouldn’t be worth the move. Although I would argue the six-figure base salary would be exceptionally better than average, his current salary in India was ahead of average on a much larger scale.

Given the circumstances and the routine he had grown accustomed to, he could see himself sustaining the 100+ hour work weeks in India. But to do the same hours in a less familiar location with more uncertainty, being further away from friends and family, he wasn’t sure if he could adapt. Or if he even wanted to.

In the end, he didn’t take the job. Living in London just didn’t fit his vision for his plans for the future — it only seemed to get in the way of it. I remember being a little surprised at the time but far too often, we view the financial decisions of others through the myopic lens of our own reality.

Knowing my friend is an incredibly smart guy, I’m sure he thought about his decision from every possible angle.

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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.