Looking to join the business...

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River_King's picture
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Guys would like some advise here if you don't mind.
 
I'm 25 years old and have been in the car business for the last three years. (I spent a year in sales then got promoted to F and I for the last two.) I've got a great thing going at my store and I'm about to be promoted to a Sales Manager position. I currently make around 75 a year and when I get promoted again that should rise. I've been able to stock away a lot of money in a very short amount of time, for my age, but I'm starting to get burned out a bit.
 
I've got a two year old, and my second child is 6 weeks away. My wife has one more year of school left, so right now I'm 85% of our income and once our new born gets here she's going to stay at home and finish school.
 
The car business never changes...you will always work long hours. I love the money, and I'm not afraid to work (wouldn't of made it this far this fast otherwise.) But with two kids coming I don't want my entire life to be work, work, work.
 
I've applied at a brokerage firm and have an interview Tuesday. I don't think I'll have a problem getting the offer (excellent credit, proven in sales, great references, not affraid to bust my butt and put in the hours to be successful), but is this the time to jump in the business?
 
I've read several things about the very high turnover rate so that scares me a bit, but on the flip side I know how to sell. I have given my current Morgan Keegan broker several references and I'm hoping I could pull those guys over to me, plus bring some of my established car customers over.
 
The other thing I'm worried about is the sudden drop in income. We live well, and we live well below our means, but we are about to take on an added expense (new child), and an income drop (wife is about to quit working.)
 
How long did it take ya'll to grow your businesses to a stable level and any other adivse, insite ya'll have for me would be greatly appreciated. Thanks.

troll's picture
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There is no denying that there is a high turnover rate. This is a very difficult business to succeed in. But those who are focused and not afraid to work harder than hard make it.
And if you are concerned about working too many hours with two kids at home, then you should probably not be doing this right now, as Ice said in his post.
 
Beyond that, starting at a wirehouse will probably get you a salary of 50-70, with 70 being if you really really impress them and they feel they gotta have you. You will earn commission on top of that, so its not inconceivable that you could make 60-80-90 the first year, and second. The third year is when your salary drops off, and at that point, you better have 20-25 million in assets, if you are worried about making enough to pay the bills.
I've seen folks do that in 2 years and i;ve seen succesful FA;s who have taken 4 years to get there.

snaggletooth's picture
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I'd have to agree with Ice that it might not be the best time for you to get into this.  That being said, your family could provide the motivation needed for you to succeed.
If you did make the jump, your best bet would be to get into a wirehouse's training program.  Based on previous work experience, you may be able to get anywhere from $40k-60k depending on the manager.  The fact that you are new to the industry entirely suggests you'll probably be at the $40k mark for at least 2 years if you were to make it that long.
 
Don't count on your previous referrals to your advisor to come to you right out of the gate.  Why would I trust someone who is starting on Day 1? 
 
Also, you will be getting licensed and taking tests for the first 6 months, and if you fail one, depending on where you're at, you will be fired immediately.
 
Your network from the car industry will be something that you should leverage if you can. 
 
The hours you work when you begin a career in this industry will be just as long if not longer than the car business.  And by some accounts, you will need to do it for at least 5 years. 
 
It's up to you, but I'd keep saving and building your network at this time like Ice said.

River_King's picture
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pratoman wrote:There is no denying that there is a high turnover rate. This is a very difficult business to succeed in. But those who are focused and not afraid to work harder than hard make it.
And if you are concerned about working too many hours with two kids at home, then you should probably not be doing this right now, as Ice said in his post.
 
Beyond that, starting at a wirehouse will probably get you a salary of 50-70, with 70 being if you really really impress them and they feel they gotta have you. You will earn commission on top of that, so its not inconceivable that you could make 60-80-90 the first year, and second. The third year is when your salary drops off, and at that point, you better have 20-25 million in assets, if you are worried about making enough to pay the bills.
I've seen folks do that in 2 years and i;ve seen succesful FA;s who have taken 4 years to get there.
 
Thanks both of ya'll for your honest input.
 
The way I see it is I'm putting in 60-70 hours a week right now. In the car business I'll be putting in 60-70 hours a week 20 years from now. Weekends, holidays, you name it we work 'em. My son is too young for sports or hobbies right now so although I hate not being there all the time I've got a few years before I miss an event of his. At the point he starts getting to that, and his brother won't be far behind, I want to have control over when I'm working.
 
I've been putting 12% (before my company match) into my 401k, plus maxing out my Roth IRA, I've got a little in a mutual fund, some individual stocks, and some cash, so I could take a pay cut if need be for a couple of years. (I'm 25 and I came from a single parent family where we didn't have a dime so I'm OCD over saving and having assets for crunch times.)
 
I don't mind putting in two or three years of similar hours to what I'm doing now I just want to see from you guys if there's:
A. Good job satisfaction (not much in my line of work, but pay and benefits are great)
B. Time it took to get to similar income to what I've got now
C. At what point to the hours break off to a more reasonable 40-50 hours with holidays off, that type of thing.
 
Most salesmen don't make it 6 months in the car business, it's tough and no one is going to do you any favors you 'make it or break it' on your own. After reading this bored and others I feel like it's the same way in this business.

River_King's picture
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snaggletooth wrote:
It's up to you, but I'd keep saving and building your network at this time like Ice said.
That's probably what I'll end up doing.

troll's picture
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Ice -
Very well put!

River_King's picture
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iceco1d wrote:River,
 
The only apprehension I would have about recommending you go to a wire is this:  Job Security.
 
In the meantime, you will be screwed as far as getting your old job back.
 
Same situation for Edward Jones, except slightly lower hurdles, but about half the salary.
 
You could also consider going with an insurance company B/D - perhaps other members could chime in about those pros/cons, as I'm most lacking in my knowledge for this business model...but only because I'm most lacking in my interest in this business model as well.
 
As far as your A, B, C questions:
 
a)  Job satisfaction is probably just about unmatched in this profession, ONCE you've "made it."  In the meantime, you will be overworked (actually, you will overwork yourself, no one is going to babysit you) and underpaid.  I would say you will stop sweating so much somewhere between years 3 - 5.  I'm guessing you will feel like you've "arrived" between years 5 - 10. 
 
b)  There is no answer to your income question.  If you opt for a wire you could easily make $75K in your first year...if you are good at your job.  Then again, if you opt to to affiliate with a local Indy office, get no salary, and build your business primarily on fees...you could be in year 2 before you are even out of the red, let alone MAKE any money. 
 
 
Job security and the inability to 'jump' back into my current job are my two biggies. It's not that I dislike my job, it's just not rewarding. The other situation is right now I'm putting my self in a very strong position for later in my life. If I jump right now and don't make it I've put myself right back in the rat race to retirement.
 
I truely feel like I would enjoy helping people with their financial well being. Everything from estate planning, to insurance, investing, credit, to real estate, and vehicle purchases.

snaggletooth's picture
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River_King wrote:
 
Job security and the inability to 'jump' back into my current job are my two biggies. It's not that I dislike my job, it's just not rewarding. The other situation is right now I'm putting my self in a very strong position for later in my life. If I jump right now and don't make it I've put myself right back in the rat race to retirement.
 
I truely feel like I would enjoy helping people with their financial well being. Everything from estate planning, to insurance, investing, credit, to real estate, and vehicle purchases.
 
If you do decide to get into this business, you might not want to help people with everything.  Most advisors are far more successful because they specialize in something or a few things.
 
Whether you make a move at 25 or 28, either way you're still young.  Make sure you get your family squared away first.  I know a lot of advisors have begun their careers while just starting their family and some of them have become successful.  It's the ones that didn't become successful that I generally don't hear about.  I don't have a family yet, so I can't really say for sure, but I don't think I would've wanted to start with a second baby on the way and a wife that wasn't working.

new_indy's picture
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I agree with Ice.  Aside from the life timing, this is a tough market to get started in.  I started during the last bear market, and if I wasn't so dang stubborn (or maybe stupid) I probably would have gotten discouraged.  Look at how many financial firms are laying off right now.  Waiting a few years won't hurt you at all, but jumping in now may cause you to give up and never come back.

River_King's picture
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iceco1d wrote:Well put Snags & new_indy...that's actually something to think about River:  Age 25 vs 28?  Not really relevant in the "grand scheme" of things.  You'll still be waaaay young enough to enjoy a loooong career as an advisor, but think of how much more stability you'll have in 3 years (wife working again maybe, kids starting school/pre-school, another 3 years of big time savings on your part, a promotion, etc.). 
 
However, if this is a career you are very seriously interested in, start learning NOW in your spare time.  Learn a bit about investments, but do NOT just focus on that.  Learn a bit about retirement income planning, estate planning, insurance, etc. AND be sure to maintain and build your network NOW.  And for heaven's sake, start learning about prospecting NOW.  The more you learn now in your spare time, the less you need to learn when you enter the biz.  The more contacts you have now, the better quality of contacts you have now, the bigger/better your "warm" prospects are going to be in 3 years. 
 
I'd also stick around this forum permanently if I were you...read every thread ever posted.  Ask questions.  As long as you are asking intelligent questions, and accept the responses as help, not criticism, you are going to learn a TON from vets on this forum (no, I'm not one of them, but I help where I can!). 
 
Best of luck man. 
 
Thanks.
I planned on becoming a financial advisor when I got out of college. However some untimely events in my life turned me to selling cars before I was even done with school. (I needed a job with benefits.)  I knew going into that job that turnover was high and I was entering into a declining car market. I made it, not because I'm the best there is, but because I was in the right place at the right time, worked hard, played my cards right and moved up. I've been lurking on this site for a long time, but just recently posted because Edward Jones started advertising needing a rep in our area. (I never had anything to contribute to a conversation before since I'm not in the industry.) This is the first time in a couple of years I can recall them hiring a rep in my area. I've read all the EDJ bashing in this forum so I probably wouldn't want to stay there past my 3 year commitment, however I don't think many in this forum would argue about their training.
 
As far as learning the business goes I don't know much, or claim to. However I pick my FA's mind every chance I get and read this forum. I work with bank reps and loan officers and I like to pluck them for information about the happenings in their world as well.
 
Prospecting
I live in a town of about 55,000. I was an 'A' student in school at the local high school and played football for the local college. While in school I managed the local youth sports program at our Parks and Recreation department. I've got my Outlook programed to tell me when to send out birthday cards and follow up letters to my customers. I've been involved in just under 1,000 car deals now so that's a major undertaking. I've got lots of repeat and referral business and my wife jokes that I can't go out in public during the day because a simple trip to Wal Mart takes me two hours by the time I get done with saying 'hi' to everyone.
 
Part of me says "I know I'm going to make it for the reasons I've listed in this thread," and the other part me says "don't give up the next egg you've started to build for yourself making a career move at the wrong time in your life into a career that most people don't make it."

snaggletooth's picture
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River_King wrote:
 
Thanks.
I planned on becoming a financial advisor when I got out of college. However some untimely events in my life turned me to selling cars before I was even done with school. (I needed a job with benefits.)  I knew going into that job that turnover was high and I was entering into a declining car market. I made it, not because I'm the best there is, but because I was in the right place at the right time, worked hard, played my cards right and moved up. I've been lurking on this site for a long time, but just recently posted because Edward Jones started advertising needing a rep in our area. (I never had anything to contribute to a conversation before since I'm not in the industry.) This is the first time in a couple of years I can recall them hiring a rep in my area. I've read all the EDJ bashing in this forum so I probably wouldn't want to stay there past my 3 year commitment, however I don't think many in this forum would argue about their training.
 
As far as learning the business goes I don't know much, or claim to. However I pick my FA's mind every chance I get and read this forum. I work with bank reps and loan officers and I like to pluck them for information about the happenings in their world as well.
 
Prospecting
I live in a town of about 55,000. I was an 'A' student in school at the local high school and played football for the local college. While in school I managed the local youth sports program at our Parks and Recreation department. I've got my Outlook programed to tell me when to send out birthday cards and follow up letters to my customers. I've been involved in just under 1,000 car deals now so that's a major undertaking. I've got lots of repeat and referral business and my wife jokes that I can't go out in public during the day because a simple trip to Wal Mart takes me two hours by the time I get done with saying 'hi' to everyone.
 
Part of me says "I know I'm going to make it for the reasons I've listed in this thread," and the other part me says "don't give up the next egg you've started to build for yourself making a career move at the wrong time in your life into a career that most people don't make it."
 
That's interesting.  I would think EDJ and car sales might actually go hand in hand.  The "friendly neighborhood" approach might work somewhat well with your town of 55,000.  Besides referrals, what have been the best prospecting methods for you in the car industry?

Broker24's picture
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[quote=River_KingI've been lurking on this site for a long time, but just recently posted because Edward Jones started advertising needing a rep in our area. (I never had anything to contribute to a conversation before since I'm not in the industry.) This is the first time in a couple of years I can recall them hiring a rep in my area. I've read all the EDJ bashing in this forum so I probably wouldn't want to stay there past my 3 year commitment, however I don't think many in this forum would argue about their training.
 
 
Don't make any assumptions about who you would want to stay with or leave before you even start.  Some of the opinions on this site can be a bit 'slanted'.
 
And FYI, if EDJ is looking to fill an existing office, you should certainly inquire.  You never know how big it is.

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Broker24 wrote:[quote=River_KingI've been lurking on this site for a long time, but just recently posted because Edward Jones started advertising needing a rep in our area. (I never had anything to contribute to a conversation before since I'm not in the industry.) This is the first time in a couple of years I can recall them hiring a rep in my area. I've read all the EDJ bashing in this forum so I probably wouldn't want to stay there past my 3 year commitment, however I don't think many in this forum would argue about their training.
 
 
Don't make any assumptions about who you would want to stay with or leave before you even start.  Some of the opinions on this site can be a bit 'slanted'.
 
And FYI, if EDJ is looking to fill an existing office, you should certainly inquire.  You never know how big it is.
Point well taken.

new_indy's picture
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If it is an existing office and a competitive situation, most of the real money in the office will be gone before you even get licensed.  I wouldn't use that as a deciding factor.

BondGuy's picture
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River, some thoughts:
You thinking regarding timing, family wise, is exactly right. Right now is the time to pound out the long hours. Working hard while the kid are still babies is the best time to get it done.
 
Your assetment regarding the future work hours in the car biz, also spot on. That will never change. The car biz is a tough gig. Most on this board couldn't do what you've already done. That you are successful bodes well for you future, regardless of the path you pick.
 
I don't see the risk in leaving your job? If you've been there for three years then obviously it's a good store. That is, good management, not the A holes one sees running many dealerships. If that is the case and you handle it professionally they will be sorry to see you go. Because of turnover in the car biz they will be happy to welcome you back if you decide to return. You are a proven performer. You might have to start once again in sales and work your way back up, but, at least you are in. You are, at this point, one step up from sales. It's not as if you're stepping out of the Pilot's seniority line at American Airlines. And then there is the competition, other dealerships? Good car dealers love good sales people. You are proven and there's no reason you couldn't land an F & I position elsewhere.
 
Starting in this biz now? Why not? It doesn't matter when you start. How hard you work is all that matters. In fact, down markets or uncertain markets are good times to start. Seems that many advisors don't do a good job of contacting their cleints in down markets. That creates opportunity.
 
Start now or wait? There is no wrong answer. As long as you continue to well in your current career the door will be open.
 
Wire or regional? Before you sign up with Jones get yourself interviews with all the wirehouses in town or nearby. They have the best training and offer the best training salary/beni  package. Dress conservatively, good luck!

River_King's picture
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snaggletooth wrote: 
That's interesting.  I would think EDJ and car sales might actually go hand in hand.  The "friendly neighborhood" approach might work somewhat well with your town of 55,000.  Besides referrals, what have been the best prospecting methods for you in the car industry?
When I first got hired I sold cars to all my college buddies. That helped, but really what did it was every person I sold to I could find that common ground. Either they went where I went for high school/college, or I know some one that works where they work, goes to church where they go to church, whatever. Same goes for me now in F and I, if I can establish a link between me and you I open the door and my penetration rate goes through the roof.
 
People around here don't really want to be sold anything. They want to purchase products from friends. If you present your product as a friend, stay a step ahead of the conversation (lead them where you want them to go) you'll close the deal in the car business and make good money doing so.

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River_King wrote:
 
When I first got hired I sold cars to all my college buddies. That helped, but really what did it was every person I sold to I could find that common ground. Either they went where I went for high school/college, or I know some one that works where they work, goes to church where they go to church, whatever. Same goes for me now in F and I, if I can establish a link between me and you I open the door and my penetration rate goes through the roof.
 
People around here don't really want to be sold anything. They want to purchase products from friends. If you present your product as a friend, stay a step ahead of the conversation (lead them where you want them to go) you'll close the deal in the car business and make good money doing so.
 
That's interesting, thanks for sharing.  You have got some great experience behind you at 25.  This is a people business with an emphasis on relationships.  Some people don't get that.  But I think with your experience dealing with people and forging relationships and getting referrals, you've learned a lot.
 
The truth of the matter is that you will take a pay cut, maybe by half of what you're making now.  If your family can handle that and knows it going in, then give it a shot if you want.
 
If you find a wirehouse and get a small salary to begin and meet your hurdles, you can be successful with hard work.
 
I don't have a good grasp on what it's like to work in a town of 55,000 people.  I'm assuming you'd have to go outside of your town to prospect.  I'm in an area of 4 million, so I'd be interested to know how some of you guys in small areas work.

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Hi,
 I agree with snagglepuss, you have some great experience behind you. Just one thing wrong...no door knocking experience! Do as I did, get that experience from selling vacs door to door. It's not as hard as you might think, but without it you would be a setting duck in a business that requires door knocking. Dont start out with just any vac company, work for a good one, after 3 or 4 years and you think you still would like this business, then you would have the necessary skills to make it.

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snaggletooth wrote:I don't have a good grasp on what it's like to work in a town of 55,000 people.  I'm assuming you'd have to go outside of your town to prospect.  I'm in an area of 4 million, so I'd be interested to know how some of you guys in small areas work.
Ofcourse I can only speculate about the FA part right now I would think it would require me to hit several smaller communities around my town. Our dealership pulls people from a range of about 45 miles in every direction. So I would expect to pull from a similar maybe slightly smaller region.

anonymous's picture
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Joined: 2005-09-29

River_King, if you are willing to put in the work EVERY DAY, you will succeed.  There is absolutely no reason to wait. 

new_indy's picture
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This is a tough business and I think you are going in with a few strikes off the the bat.  Just because someone will buy a car from you doesn't mean they will give you 100k to invest.  The wealthy and the elderly like experience and stability, so your youth will be working against you.  You have stated that you only want to stay with Jones for your 3 years then move on.  That attitude won't play well at Jones at all.  In fairness, even though I can't stand Jones, that isn't fair to them.  I planned on staying when I started and then had my eyes openned.  In the long run, your plan to leave will torpedoe your efforts. 
 
Finally your current income has built a particular lifestyle that won't be supported at Jones for a decade.  (That is probably an exaggeration, but it will take longer than 3 years even if you work really hard.)  Currently you are used to people coming to you asking to buy something, or at least looking, that isn't the way this industry works.  The conversion from selling hard goods to selling services (especially when you have to find the clients first) is difficult in the best of environments.  This market, at this time, has investors nervous and unless you have something to offer that makes them feel comfortable enough to outweigh your age and inexperience you will have a difficult time at best.

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It's not hard work 24/7 that I'm talking about.  The work is hard, but that is not what I mean.  I'm talking about doing the things that need to be done on a daily basis.   I don't know what kind of money that he can make initially at a wire, a regional, or Eddie Jones right away, but he can certainly be 60-70K+ his first year with an insurance company and 100K in year 2....but he must have the ability to do what needs to be done on a daily basis.
If he has doubts, he should wait, but he may be waiting forever.  The difference between now and 2 years from now is that with a growing family, it will be harder to make a change and not easier.   A 4 year old and a 2 year old is much more expensive than a 2 year old and newborn.   It's much harder to work late when you have these little ones who want Daddy to come home and play.    Don't forget about Baby #3 that will be here at that point.
 
We get lots of 25 year old kids on this board.  Heck, I was a kid until my mid-30's.  River_King is no kid.  He's a man.  He's married.  He has two kids.  He supports his family.  He works hard.  This is the type of person that will make it in the industry.   A 25 year old kid will fail.  A 25 year old man will succeed and have a huge future.

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He is already making 75+ K a year.  What exactly is the upside of struggling for 3 to 5 years when he can consolidate, learn, and hit the ground running in a better environment.  Seems to me like a 30k loss in year 1 possible break even year in the third.  By being patient, he might be able to cut that timeframe in half.

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This all assumes that he is a 25 year old man and not a 25 year old kid.  I'm just repeating myself here:
1) I disagree with your premise of losing 30K the first year and it taking 3 years to break even.  I can tell you that the guys who I bring in to the business typically make 75K in their first year.
2) I disagree that 3-5 years, it will be a better environment.  I don't know if you are talking about the economic environment, his personal family situation environment, or his life experience environment.
Economic: Makes little to know difference.  Tough times makes it easier to get people to switch and makes it easy to sell insurance products.
Family Situation: His family situation will make it much harder to start.   Young children are much harder than babies in terms of being able to get work done.  He won't want to work long hours.  If his wife has a 9-5 job, he may get stuck with family obligations.  If there is another child, or if his wife isn't working, it may make it impossible to make a move in the future.
Life experience: All that waiting will do is allow him to make a few more contacts.  The bottom line is that this will mean that he will run out of warm leads in 2 months instead of one month.
 
If he has the maturity, I only see an upside to making a change.  No matter what, his first year in the business will be the toughest.  Speaking as a parent, it will be MUCH easier to make the change now.

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Tough time to get in the business? Just as huge money is made at market lows, less at market highs, The same applies to getting  business. Lots of people are in the negative column lately and are more willing to listen to new ideas than when every things fine and the market is hitting new highs everyday.
 
Stok

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Stok--- That is true when you have a track record.  Not so true for someone brand new.  As I posted earlier, I got in during the last bear market and it was brutal.  If I didn't have a huge personal cash position to live off of, I probably would have gotten burned out.  You and I (I don't know how long you've been around, but I'm guessing awhile) may be able to get referrals left and right from our clients, but someone that is unproven is going to fight an uphill battle. 
As for insurance sales, it may be a good time to get into that with all those annuity sales.  I have my license, but not my focus.  I can't say one way or another since I try to stay away from investments I don't like.

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new_indy wrote:
Stok--- That is true when you have a track record.  Not so true for someone brand new.  As I posted earlier, I got in during the last bear market and it was brutal.  If I didn't have a huge personal cash position to live off of, I probably would have gotten burned out.  You and I (I don't know how long you've been around, but I'm guessing awhile) may be able to get referrals left and right from our clients, but someone that is unproven is going to fight an uphill battle. 
As for insurance sales, it may be a good time to get into that with all those annuity sales.  I have my license, but not my focus.  I can't say one way or another since I try to stay away from investments I don't like.
 
Sometimes I wonder if you folks know what your talking about. Maybe you should let others take this question, and you set this one out? What do you say?

BondGuy's picture
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Stok, exactly right. My take is the market doesn't matter. Making it in this biz is all about mind set. That said, human nature being what it is, hard times opens doors that might otherwise be shut. As you said if all is well there is no reason to change.
 
Add to that that many advisors get phone reluctance in poor performing markets. It gets tough explaining a down portfolio. Especially for newer reps who may not understand the dynamics that are causing the poor performance. This leads to a communication gap and that leads to client dissatisfaction. That dissatisfaction is spelled O-P-PO-R-T-U-N-I-T-Y!
 
Regardless, up market, down market, the best day to start is always the same;TODAY!

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iceco1d wrote:
 Just for clarity, would you care to chime in here River?  Anymore kids on the way, or are you done after this one is born?  Is your wife ever going back to work?  If so, when?  When you talk about "significant savings," suppose you both stopped working, how long would those savings last you?  What if you took a 50% pay cut, then how long would your savings last?

Guys I'm really enjoying the debate, clarity, and knowledge ya'll are passing to me.
1. I didn't quote whoever said this but they are right. You don't do a lot of cold calling in the car business (I haven't in two and a half years.) You do some prospecting but mostly by word of mouth. However, I was selling depreciating assets to people. "Hey buddy this shine piece of metal will never be worth as much as I'm charging you for it now." Now I'm selling insurance on depreciating assets. I've got to figure saying "let's grow your assets together" has got to be somewhat of an easier sell once you've got a prospect. [Getting prospects is another game though.]
 
2. My wife is about to have her RN, she would of already had it, but took some time off to have this baby. She will be going back to work in about 16 months.
 
3. As far as income and life style goes... Three years ago I was working for $8.00 an hour with less than a year to finish college. My mother passed away very suddenly and two months later my fiancee and I learned our first son was comming. I quit college (I was in the honor program) because I needed a job with benefits quickly and selling cars was the ticket. I had planned on being a FA up until that point. I took part of the money I got from the estate and put 20% down on my house and invested the rest. After a year selling (making about $36) I got promoted (to about $50), with the promotion came the 401k. I started putting 12% in getting a two percent match. About nine months ago I got the raise that put me to where I'm at now. (about $75) As soon as we get done building our new location (July or August) I've been told I'll be the Sales manager of that store (about $100).
 
I grew up in a single parent family, mom was a night shift police officer so we never had money.  I became interested in investing because we grew up so poor. Now I've got about $30,000 combined in my 401k and mutual funds, $2000 in stock, plus about $3000 in cash. My house payment is $583 (I've been paying double, but about to quit since the new one is comming.) Our two car payments combine to be less than $300 a month, and I typically double up on those, but am about to quit. The wife has some student loans, most of those we just pay intrest on right now because she can get them forgiven if she works in her field long enough. We live well, we just live well within our means.
 
4. The thing is I work 60-70 hours per week and there will be no end to those hours in the car business. I would like to jump into the FA field at some point as that was what I wanted to do as far back as high school. Right now there could be an oppurtunity for me if all goes as planned and I'm looking at the risk/reward of taking the chance. Factoring in my wife is about to quit working for a year, we are adding another child, and most likely I would be taking a pay cut, and with the advise I'm getting from you guys and some of my support group, it's a tough decision.
 
I have no doubt I could jump back into the car business at any point, but to stay around here (not a must) I'd probably have to go back to selling and work my way back up.

new_indy's picture
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Go Ice!!!  I guess I can scratch you off the list of possible Jones recruiters....
 
As a side question, how do you have a $583 house payment?  Interest only? Some other unique and questionable loan??

River_King's picture
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iceco1d wrote:So let me get this straight...You have roughly $1,000/mo in loan payments (house, car, and student).   This doesn't count anything for bills.  You have all of $3,000 in cash to fall back on?  So, you have essentially 30 - 45 days of breathing room to service your debt, if you stopped making money NOW (without tapping your retirement accounts, of course).
 
You are making $75K a year, and in a few months, you'll be making $100K.  You get great benefits.  You are good at your job.  You have your second...and last...baby on the way.  Your wife will be entering a career in 1.5 years where she will likely start at a minimum of $50K. 
 
So in recap...if you enter the business now, and go to a firm that is straight commission, you will likely be broke before you get licensed.  If you go to a wirehouse and fail a test, or miss a single production target and get canned, you will likely be broke immediately.  Same for EDJ.  So the RISK of going in now, is basically going into debt if you hit any number of possible "bumps in the road."  In exchange, the reward is starting your journey in this career at age 25.
 
Now...if you wait for your wife to start work as an RN:  Your RISKS are a) at a commission only firm, you will be on a budget for awhile and basically be a single income family, b) at a wirehouse or EDJ, your combined income will be higher than it is now with just you working @ $75K - same risk of failure, but worst case scenario if you get canned, you just go on a tighter budget at home, and start at another firm that will take you, but c) you have to wait to enter the biz at the ripe old age of 27; 35 - 40+ years in the biz is HARDLY enough time to reap the rewards of this profession [insert sarcasm here]. 
 
I don't see what the decision is here?  You should be taking a few weeks/months to do your due dilligence on the firms you are considering anyway.  Then you have to interview.  You are really only putting this career move on the "back burner" for 12-15 months in reality in exchange for knowing with all surety that you aren't going to throw your last 3 years of hard work in the toilet. 
 
Someone please explain what I am missing.
 
You're spot on, and that's the debate I'm struggling with. The EDJ job came up and it's the first time I can remember them hiring in the last couple of years in my town. I'm going to be putting $1000 or so a month into my money market account instead of doubling up on my payments now. (From what I understand EDJ takes 6-8 weeks to complete the hiring process so probably will have about 5-6 cash on hand if I make the move.) I also have a decent amount of home equity to tap and was planning on doing that before making a career change to keep me a float. If need be we are well in equity in both of our cars and I could move them quickly for paid for vehicles and cash if need be. If I new I would make 45+ my first year at EDJ I'd make the jump w/o thinking twice because I know I would build back up from there.
 
 

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new_indy wrote:Go Ice!!!  I guess I can scratch you off the list of possible Jones recruiters....
 
As a side question, how do you have a $583 house payment?  Interest only? Some other unique and questionable loan??
I live in a farming community. I paid $116,000 for my 3 bed 2 and 1/2 bath 1600 square foot house. Only financed $90,000.

new_indy's picture
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Are you including property tax and insurance in with that figure?  Are you realizing that you will have some healthy medical insurance premiums to deal with?  Children aren't cheap either (I have 3, so I know).  It sounds like you have your head screwed on right, but I still fail to see the upside to your change at this point.  I truly think you should take Ice's advice and be patient.  Jones will hire just about anyone with a pulse and a clean criminal record since it helps their P&L in some mysterious way.  I don't think you are missing out on anything special.

anonymous's picture
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Joined: 2005-09-29

new_indy, if there's not an upside to changing now, why would there be an upside in 3 years from now?  In three years from now, if he is like the vast majority of people, his expenses will be significantly higher.  He sure as heck isn't going to want to be working all the time when he has a 5 year old and 3 year old waiting for Daddy to come home. 
Every year that he waits to make the move and he gets more used to having a decent salary, makes this move harder and harder.

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By the way, that was a great post by Ice.   Let me compromise on my position because I don't think that he should make a change yet.  He also shouldn't wait any predetermined time.  I'd say make the jump ASAP.  ASAP means when there is more money in the bank.  I'd stop with the extra house payments and stop with the 401(k) contributions and start shoveling everything into the bank. 
Also, keep in mind that my talk of making 75K is with an insurance company B/D and not Eddie Jones.  All that one has to do is "see the people" and do lots of joint work.

River_King's picture
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new_indy wrote:Are you including property tax and insurance in with that figure?  Are you realizing that you will have some healthy medical insurance premiums to deal with?  Children aren't cheap either (I have 3, so I know).  It sounds like you have your head screwed on right, but I still fail to see the upside to your change at this point.  I truly think you should take Ice's advice and be patient.  Jones will hire just about anyone with a pulse and a clean criminal record since it helps their P&L in some mysterious way.  I don't think you are missing out on anything special.
No I didn't include property tax and insurance in that figure. I pay my property tax annually (about $850) out of my money market. About $2,700 a year covers insurance on both of our cars and the house. My health insurance is free from my company however I have to pay for the family plan. It runs $93.48 biweekly for accident/health, short term disability, dental. The company also pays for a $50,000 family life insurance policy, and I have another individual $100,000 life policy that my grandmother pays for annually as a birthday present from her. (I've had it since birth.)

new_indy's picture
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You sound like you are in pretty good shape for a young guy.  You should be proud of yourself.  But here is a real life example at the green machine.  I went from a 100k job, won all the contests (including the famed pacesetters award), started with 30k in the bank, kept my costs low, and burned through most of the savings within the first 2 years.  If you want to advertise, you pay for it, if you want something for your office, you pay for it.  Medical insurance was very expensive, etc....
 
I am not saying those things are bad.  I went independent because I decided that if I was going to pay for it, I might as well get a larger piece of the benefit.  (there were lots of other reasons too, but cost certainly figured in at some lower level). 
 
Anonymous may be right about the insurance industry, I don't know.  I never really liked selling insurance unless there was a specific need.  I don't think I could do it as my main product, but that is just me.
 
Anyway, you need to make the decision for yourself.  Good luck with the new baby!

River_King's picture
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Joined: 2008-05-26

Ok… I think I’ve made up my mind how I’m going to play my cards and I’ll see how this works. I just took a job as a Reverse Mortgage loan officer, since I already have the license and training my state requires I can start Monday. There’s no need for me to quit my current job since this is a completely self employed situation. I’m going run an ad in the paper over a couple of Sundays,  and pick out 50 or so prospects from the customer information I already have and see if I can figure out how to close some loans and see what happens. If all goes well that will give me the extra cash needed to continue to pursue the career change and the boost of confidence to make the jump into the financial advisor roll.

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River_King wrote:
Ok… I think I’ve made up my mind how I’m going to play my cards and I’ll see how this works. I just took a job as a Reverse Mortgage loan officer, since I already have the license and training my state requires I can start Monday. There’s no need for me to quit my current job since this is a completely self employed situation. I’m going run an ad in the paper over a couple of Sundays,  and pick out 50 or so prospects from the customer information I already have and see if I can figure out how to close some loans and see what happens. If all goes well that will give me the extra cash needed to continue to pursue the career change and the boost of confidence to make the jump into the financial advisor roll.
 
That was straight out of left field.  I'm more in the camp of putting 100% into something.  Doesn't seem you'll be able to do that as a loan officer, so I hope you don't have the highest expectations going into this.

Indyone's picture
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Joined: 2005-05-31

I see his point...the after hours job means some extra bucks in the war chest and the ability to see what his sales skills look like before taking the plunge.  That sounds completely rational to me.

River_King's picture
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Joined: 2008-05-26

It wasn't out of left field, just not an option I've discussed on this forum. I've been recruited heavily by a friend of mine in a different market to give this a try for awhile now. He knows going in that I'm not planning on making this a long term thing and I'm not going to put my name in any of the ads. I'm going to test the water a bit without leaving my current job, and without turning down any offers from any firms and see if I can make it with some prospecting, and self marketing.  The people I'm going to prospect are going to be a different group then the people I would prospect with a FA job. Assuming I can land one a week for two months it would give me about $8,000-10,000 extra cash after expenses on top of the extra money I'll be putting in the bank from not doubling up on all my istallment payments. I shouldn't take too big of a tax hit on that either.

Indyone's picture
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River_King wrote:new_indy wrote:Go Ice!!!  I guess I can scratch you off the list of possible Jones recruiters....
 
As a side question, how do you have a $583 house payment?  Interest only? Some other unique and questionable loan??
I live in a farming community. I paid $116,000 for my 3 bed 2 and 1/2 bath 1600 square foot house. Only financed $90,000.
 
My house payment is $433/month.  I should just pay it off, but my after-tax effective interest rate is less than 4%...

anonymous's picture
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Joined: 2005-09-29

River_King,
 
Immediately, go buy life insurance and long term disability insurance.  You have a wife, a kid, and another one on the way.  You have big dreams for them and you've made promises for them to have a certain lifestyle.  If something happens to you, they are financially screwed.

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