EDJ and warchest?

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Nov 23, 2008 8:50 pm

Approximately how much should I have saved up if/when preparing for a start with EDJ? 6 months living expenses... 3 years? 

Nov 23, 2008 9:07 pm

Something doesn't pass the smell test here. If you have a job offer as a broker trainee, you would have already negotiated a package including temporary salary while you train, get licensed and incrementally weening you off as your production is expected to grow (from nothing). That being said, your question implies that you plan to fail, so, how long will that take?

Nov 23, 2008 9:13 pm

I would say in this business, 5 years, minus the minimum amount you can make to keep your job (because you will get salary, bonus, commissions - but you need to be netting a certain amount to keep your job). You will have tough months for the first 5 years. After 5 years, you should really be able to support yourself. But you will never have a zero net month, so you would only need a PORTION of each months expenses covered with savings.



I would actually back into it from the other direction. Decide how much you need to live on. Inlclude annual payments (RE taxes, etc.), sporadic expenses, etc. So you have your monthly budget, now determine what gross production number you need to do to hit that net paycheck (don't forget taxes, insurance, etc.). If it's only a few thousand in expenses (like when you're young and single), you're in great shape. If you got a family, mortgage, cars, debt, etc. and your monthly expenses are like $6-8K or more, then you better have a real plan (or re-think this business), cuz that's a big NET nut to hit in the early years.

Nov 23, 2008 9:13 pm

1 year at least, and that means not spending any of that during the "salary" year..

Nov 23, 2008 9:47 pm

Yes, I clearly plan to fail. I mean, if I fail, Mr. Paulson and the "people" will pay me, right?

No, not in production but I am a registered rep with a B/D.

Nov 23, 2008 9:49 pm
B24:

I would actually back into it from the other direction. Decide how much you need to live on. Inlclude annual payments (RE taxes, etc.), sporadic expenses, etc. So you have your monthly budget, now determine what gross production number you need to do to hit that net paycheck (don't forget taxes, insurance, etc.). If it's only a few thousand in expenses (like when you're young and single), you're in great shape. If you got a family, mortgage, cars, debt, etc. and your monthly expenses are like $6-8K or more, then you better have a real plan (or re-think this business), cuz that's a big NET nut to hit in the early years.



That's about what I was thinking of doing, backing into it. Push everything into savings and they pay myself a salary (living expenses) out of that.

Nov 24, 2008 9:46 am

He means that because we are W-2 employees it is illegal for  us to have a month where we don't make any money.  They are required to pay us minimum wage.  So, there isn't a month where we don't make any money at all, like you might if you were indy and had a really terrible month or were paid quarterly on your fee based biz. 

Nov 24, 2008 9:50 am

Good point.  However, at Jones, most things pay you monthly (including SMA's and advisory accounts).  Although I do get some annuity and non-preferred fund trails quarterly.

 
Also, Jones pays you a minimum monthly stipend (I think if your net is below like $1500 for the month).  It's a zero-interest loan (draw), so you do pay it back in good months, but no zero months, nonetheless.