Major crossroads

3 replies [Last post]
Prime09's picture
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Joined: 2008-08-18

Some background: I've been in the business for 5 years, 20MM assets, T12 180K. Over 98% of these assets have been generated soley by myself through mostly networking. Business is about 80% fee-based.
The past few years have been a major grind for me. With a wife and kids at home, I am having a difficult time making ends meet. It seems like every month I am dipping into my savings and/or tapping my credit card just to stay afloat. I didn't come from a family of connections and started completely from zero.I put alot of money each year into several networking groups I belong to and have raised my prominence in those but the costs, along with client lunches, coffees, etc have added up. I know it's part of building a business but I feel like I've hit a wall. This has led me to lose the passion I once had for this business and each day now I feel trapped.
 
Regarding feeling trapped, it's funny but I really don't have a way out. The only way for my family to have the lifestyle I want for them is to be in this business because of the income potential. My former career didn't pay well and if I left the industry, I'd still be in sales somewhere (maybe with a salary and some commissions) but without the potential income I need. So each month I get through and end up tapping my savings, increasing my debt and feeling helpless that I can't get unstuck.
 
When I'm with my clients, prospects, networking events, etc., I'm energetic and truly care about the situation at hand. It's great landing a nice 500K+ account but at 1.25% and the fees coming to me monthly, the air gets out of the baloon quickly and I feel still the same. I know all of this takes time but I feel like the well is running dry. My wife can see it in my face many times without saying a word how this has affected me.
 
I know if I left, I would feel like I just threw it all away. Maybe I'm just lacking some belief and confidence in myself that I can do this. Over the years I've just seen so many brokers where either their spouse worked, they inherited a bunch of assets, are on a team or have some other wealthy background. I've never really seen anyone in my situation- one guy, wife at home for past 5 yrs, 100% responsible for all income. It just worries and stresses me out.
 
Wow, I know this is alot but I needed to vent and need some advice. I know you can't make the decision for me but I would appreciate any advice, motivation or direction, especially if any of you have been in this situation before. Thanks.
 
**Note to all you rookies out there: If you thought the 7 was tough and the first 2 years were tough, wait until you lose your salary. This is not being negative; just being realistic.
 
 

ednomore's picture
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Joined: 2007-08-29

I don't see how you can live on a fee based business with your AUM. You might consider transactional based until you have the assets to go to fee based business.

B24's picture
B24
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Joined: 2008-07-08

Prime,

I think you are probably experiencing (in varying degrees) what I see and hear a lot of in this industry. I am only in the business a few years, but here's what I can tell you I have been told by many 10+ yr. veterans...the first 3-5 years of this business suck. Many of them contemplated leaving (voluntarily or otherwise) because of how hard it was or how bad they were doing, But they have all said, without fail, that they are SOOOOO glad they did not quit. Now, there are lots of variables, and I have no idea your age, cost of living, etc. But it would be a shame to throw away 16mm worth of fee-based business and 5 years of effort. Is it possible (as previous post mentioned) to ad some mroe transactions or other types of business? (i.e. insurance, etc.). Are you being too particular with your choice of clients? It seems that if you are mostly fee-based, and have not gathered a ton of assets, that possibly you are trying to whale hunt? Could you take some smaller commission accounts to supplement your income? I am purely speculating.
Also, what type of firm? (wire, indy, insurance, etc.).
What's your payout?
Could you partner with someone?

I hate to see someone that seems to be doing things right, and trying to support a family, leave the biz because of the money.

Have you tried seminars?
Teaching at a local community college or continuing ed program? (less expensive than "dinner" seminars)

How much would you need in gross to be OK financially? I know the goal is not to just be OK, but what would you need to support your family? If the number is 225K gross, you are getting there. If the number is 350K, you might need to think about how long you can survive doing this.

Finally, are you increasing your asset capture volume each year? In other words, are you getting better each year, or are you pretty much bringing in the same each year?

noggin's picture
Offline
Joined: 2004-11-30

Prime09 wrote:
Some background: I've been in the business for 5 years, 20MM assets, T12 180K. Over 98% of these assets have been generated soley by myself through mostly networking. Business is about 80% fee-based.
The past few years have been a major grind for me. With a wife and kids at home, I am having a difficult time making ends meet. It seems like every month I am dipping into my savings and/or tapping my credit card just to stay afloat. I didn't come from a family of connections and started completely from zero.I put alot of money each year into several networking groups I belong to and have raised my prominence in those but the costs, along with client lunches, coffees, etc have added up. I know it's part of building a business but I feel like I've hit a wall. This has led me to lose the passion I once had for this business and each day now I feel trapped.
 
Regarding feeling trapped, it's funny but I really don't have a way out. The only way for my family to have the lifestyle I want for them is to be in this business because of the income potential. My former career didn't pay well and if I left the industry, I'd still be in sales somewhere (maybe with a salary and some commissions) but without the potential income I need. So each month I get through and end up tapping my savings, increasing my debt and feeling helpless that I can't get unstuck.
 
When I'm with my clients, prospects, networking events, etc., I'm energetic and truly care about the situation at hand. It's great landing a nice 500K+ account but at 1.25% and the fees coming to me monthly, the air gets out of the baloon quickly and I feel still the same. I know all of this takes time but I feel like the well is running dry. My wife can see it in my face many times without saying a word how this has affected me.
 
I know if I left, I would feel like I just threw it all away. Maybe I'm just lacking some belief and confidence in myself that I can do this. Over the years I've just seen so many brokers where either their spouse worked, they inherited a bunch of assets, are on a team or have some other wealthy background. I've never really seen anyone in my situation- one guy, wife at home for past 5 yrs, 100% responsible for all income. It just worries and stresses me out.
 
Wow, I know this is alot but I needed to vent and need some advice. I know you can't make the decision for me but I would appreciate any advice, motivation or direction, especially if any of you have been in this situation before. Thanks.
 
**Note to all you rookies out there: If you thought the 7 was tough and the first 2 years were tough, wait until you lose your salary. This is not being negative; just being realistic.
 
 
If I were you I would look for an opportunity to be independent but associated with a good size community bank. That would give you a steady stream of potential clients and from the sound of it that would help your situation. I am in your situation, i built from scratch I was at 5 years 25-27M, wife at home young child to raise.  I had 0% feebased when i made the switch. You can do this, you have already proved it.... You do need to add some transactional business in with the other and you will get past this sticking point. Fixed income business will help you....

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