Questions About Joining Edward Jones

or Register to post new content in the forum

74 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Sep 23, 2010 12:47 pm

I am 27 years old and am looking at making a career move into the financial advisor world.  I know of a few folks that work for Edward Jones and they seem to like it (I am aware of the hatred for EJ on this forum). 

My questions mostly are around the level of security needed before accepting a position.  I understand that there is a base salary in year one.  What is the average base salary?  Is it paid out over the course of 10 weeks, 4 months, spread out over the entire year, or some other term? 

Also, what is the average amount someone can expect to make in their first two years?  I would be leaving a job that is currently paying me $65k per year.  I could get by without any undo stress at $50k per year. 

If I need to be 'taking home' $1300 every two weeks then how much should I plan on having in an emergency fund before starting this career?  Can I get by without one?  Is $10k enough? 

Basically I want to make sure I have things in order so I don't put my family in a position that we could lose the house or something drastic if things hit a snag.  Obviously I will be going into this with expecting success, but I want to make sure I am also planning for the worst.

Thanks in advance for any help.  Also, thanks in advance for all the witty comments that I am sure will follow.

Sep 23, 2010 9:19 pm

4600 per month?  Buddy .. you better have alot more than 10k saved if you need that.

Sep 23, 2010 11:21 pm

you mean 2600? either way this dude needs about three years worth of living expenses just to be safe

Sep 23, 2010 11:40 pm

Yeah, my bad.  That's about 12k gross after taxes, health care, and daddy Jones takes it's 60%.

Doubtful he needs three years but 12 months for sure.  He'll get a milestone or two.  If you have have 30k you better get that wife to work.

Sep 24, 2010 7:35 pm

The three years includes the time it will take him to make it/quit/get fired locate another job and begin generating the necessary level of income while not depleting their cash reserve. So worse case scenario 3 years IMO.

Sep 24, 2010 12:37 am

I appreciate the responses.  Lets just say $2500 per month to make the numbers easy.  That is what I would need to take home....after taxes.  Health care is already taken care of because the wife does work. 

I know that Jones pays a base salary in the range of 22k-30k.  Between that base salary and any business I can generate would making enough to have $2500 left after taxes per month be realistic? 

In my current job I make about $4000 per month and pay roughly $900 in taxes and $200 in a 401k.  That leaves me with roughly $2900 of take home pay. 

I can live fine off of $2500 a month in take home pay.  So I guess that would be roughly $3500 before taxes.  I'm assuming that taxes are taken out equally in each job.  I'm not sure if I am taxed more heavily upfront when working in a commission based job. 

What are some suggestions for the amount I should have in an emergency fund?  Currently I can come up with about $10k within a few months.  Would you suggest having more than that?  If so, how much more?    If $10k is doable then I can start this career in January.  If everyone thinks I need $30k then I am going to have to put this off for another two years.  That would be painful since I don't enjoy my current job but I need some sound advice. 

I've heard the 'average' Jones rep makes $52k in year one and $58k in year two.    If this is accurate then I am confused why folks think I need $30k in savings given the amount of money I need to live on monthly.  However, you guys likely know better then I do....so I will take your suggestions seriously.

Sep 24, 2010 10:16 am

Just,

If you even do average (assuming you make it), you should exceed your income requirements.  However, you might want to button-down your expenses, stop contributing to the 401K, and see if you two can live on a little bit less.

Keep in mind, you're gonna want SOME savings.  You will need to buy some stuff for the office, pay for some marketing stuff, whatever. 

Sep 24, 2010 10:59 am

Thanks B24,

I enjoy all of your posts throughout the forum.  If you were in my shoes would you start with having the $10k?  The other option I have is to wait two years to finish my Finance degree while my current company pays for it.  I could then use that money to help build my savings to $25k-$30k.  The downside is that I would be doing something I don't like for another 2 years while pushing back the amount of time it will take to become financially successful at Edward Jones. 

Expenses can be trimmed slightly.  It will be difficult though because I get a lot of perks in that department with my current job.  I get cell phones for my wife and I for unlimited everything at only $20 a month each.  We also get $40 a month off of our directv bill.  However, the biggest expense that will increase is daycare.  Since I will be switching to a more M-F 8-5 type setting we will be going from part-time daycare (since I work nights and weekends currently) to full-time daycare. 

Sep 24, 2010 11:10 am

I did 13k last month and took home net 2800 and have a 16k avg.  After that salary runs out it's a grind man. Then daddy jones start charging you for staplers and toilet paper - it adds up, trust me. 

From what I have seen you are likely to do 13k avg. until you are at least two years in.  Some guys can't even get there then.  Try to get a goodnight and you're income requirements are much more attainable.  Good luck.

Sep 24, 2010 11:14 am

Just - It sounds like you live w/in your means and $2500/mo is  not too difficult to hit.  As a matter of fact that is the very number I used and still use as my break-even every month.  I'm in year 4.  Everything I make over that number is gravey.  I have steadily increased 401k and HSA deferrals as my income has gone up.  And my lifestyle is geting better.  I had a $10k emergency fund when I started and it has proven to be enough.  You just have to hit it hard and stay living within your means for a couple years.  Do yourself a favor and ask about available GK plans or open offices in your region.  I know the firm has an initiative for no scratch starts, so one of these situations is likely to present itself if you ask for it.  These will greatly increase your chances of survival and success.

Sep 24, 2010 12:39 pm

This is probably a a really stupid question but how do you 'do 13k' in a month and only take home $2800?  What does that 13k represent?  Is that how much you brought in on commission?  Sorry I am not familiar with the compensation model entirely.

Kaner, when you are using $2500 as your break-even point are you talking about $2500 after taxes?  If so, then your post is very encouraging. 

Superman, you bring up a great point about business expenses.  That is something that I have not factored in.  How much a month should I plan on spending on business related expenses?

Also, what are the hours like the first few years?  What does a typical day look like for a start and end time?  Do you guys all work Monday thru Saturday?  I know that a ton of hours need to be put in the first few years, but I'm just curious as to what that looks like. 

Sep 24, 2010 1:28 pm

Just - $13k is likely someone talking in gross production.  Your net production is is 39-40% of that.  Then you take taxes and other deductions from that number.  Yes, $2500 cleared and in my bank acct. is what I am referring to.  If I do that, the kids are fed and clothed and the house payment is made.   Everything I make above that is discretionary in my mind - to save, spend or invest as I choose.  Obviously, I have developed a dialed-down lifestyle.  I have only mortgage debt and that's it.  The cars are paid for and there are no credit cards.  Stay away from debt and you will increase your odds of making it.   Hope that helps.

Sep 24, 2010 2:00 pm

[quote=justincredible]

Thanks B24,

I enjoy all of your posts throughout the forum.  If you were in my shoes would you start with having the $10k?  The other option I have is to wait two years to finish my Finance degree while my current company pays for it.  I could then use that money to help build my savings to $25k-$30k.  The downside is that I would be doing something I don't like for another 2 years while pushing back the amount of time it will take to become financially successful at Edward Jones. 

Expenses can be trimmed slightly.  It will be difficult though because I get a lot of perks in that department with my current job.  I get cell phones for my wife and I for unlimited everything at only $20 a month each.  We also get $40 a month off of our directv bill.  However, the biggest expense that will increase is daycare.  Since I will be switching to a more M-F 8-5 type setting we will be going from part-time daycare (since I work nights and weekends currently) to full-time daycare. 

[/quote]

You sound like you have a pretty good deal where you are.  I assume you work for AT&T?

Anyway, it's a toss-up.  This business is by no-means a no-brainer.  It is not really so much about you making enough.  It will be more about you making it, period.  Consider that it is quite possible that you could last 3-6 months and get canned for lack of production.  I have seen very good people fail out very quickly.  A couple of months early on when you don't know what you're doing, and you're done.  So think about that.  What would you do if you didn't make it?  Just something to consider.  I think on the income side you will probably be fine (but again, that's assuming you make it).

Sep 24, 2010 3:00 pm

Typical Jones paycheck has three numbers: gross, net, and what some of us call net/net.   Basic idea is that you invest $100K into mutual funds and the client get's charged 3.5% in commissions.  You get to keep $3000, generally speaking.  That $3000 is your gross.  That's the number Jones uses to track your success or failure.  As far as your paycheck is concerned, that's where net comes in.  All of our companies keep a portion of the gross to pay for stuff like computers, buildings, secretaries, and home office employees.  At Jones it's roughly 60% that they keep.  So, you net 40%.  Kaner is right that  it is usually slightly less than that for various reasons, but 40% makes the math easier.  So, out of that $3000, you keep $1200.  Out of your net comes taxes, insurance (possibly), and some typically small stuff like the long distance part of your phone bill, office supplies, postage for stuff you mail directly from the office, or marketing literature you order from Jones.  Mine was $400 last month and that included extra postage and invitations for a seminar I did.  You can certainly control those expenses if you work at it.  That number that is left over is what we call net/net.  

If  you're not paying for Jones benefits (expensive), or contributing to your 401k initially getting to $2500 a month shouldn't be a problem.  If you're the only bread winner in the family and have to pay for all of that stuff out of your one paycheck, it gets more difficult.   

I started in my office with a small book and a smaller bank account than you and I've been fine.  It's certainly been tight from time to time, but overall I wouldn't have waited for another couple of years to make a move, just to pad my bank account.  I think the need to make money has been a motivating factor more than one time. 

Sep 24, 2010 7:47 pm

From personal experience having just left Jones a few months ago, forget the production numbers.  All that is completely irrelevant if you do not have 1. sales experience or are introverted, 2. do not know anyone with money, 3.  are not good with being your own boss, best part is the freedom and the worst part is the freedom. 

Also, if you have no knowledge of the market then I would forget the idea totally.  You can not answer questions on the market if you have no clue what is going on, but i'll give you the benefit of the doubt and say you have an idea.  Going back to the money thing, you need to have a bit saved up no matter what, simply because you will not know how much you are going to make on a month to month basis, and you only get paid once a month.  Making it through the first year is crucial, the numbers are always different wherever you read them, but understand going into this, that there is at least a 75% failure rate, if not higher.

If you know people that you could go to in a few months after passing the exams that would give you their money, at least 100k, and you could realistically see yourself knocking on people's doors and starting conversation, then you will probably be fine.

Bottom line, if you are extroverted and have no problem asking strangers for their money, this job is for you, and though most on here won't say great things about Jones, not many of them can't say it isn't a good place to start.

Sep 24, 2010 7:51 pm

I am going to repeat what I said earlier.

[quote=N.D.]The three years includes the time it will take him to make it/quit/get fired locate another job and begin generating the necessary level of income while not depleting their cash reserve. So worse case scenario 3 years IMO.[/quote]

9 out of 10 will fail so unless you do not mind starting off every month wondering where you will get your house payment, I recommend 3 years cash reserve as a worse case scenario. The average FA fails because they run out of money so be prepared if you are average. If you are above average the reserve can be proportionately less but only you know your potential.

Sep 24, 2010 11:44 pm

I appreciate all the comments.  I think you are right Spiff in the fact that needing money is a great motivator.  If I had 3 years worth of living expenses just sitting in a bank account I think it would be human nature to have less motivation then if you NEEDED money. 

Also, does anybody else think that N.D. is being way too cautious with the advice?  Don't get me wrong ND because I love hearing both sides, but who realistically needs 3 years worth of living expenses?  Even if I struggle drastically and have to dip into my savings every month I can't imagine earning no money every month for 3 years.  Lets say that I really suck at the job and need to dip into my savings every month because I'm $1000 short of what I need.  Well, that would make my 3 years of saved expenses last about 8 years.  So I'd say about 6 years before I am out of money I'd be fired for underperformance.  At least I'd have some money saved up, but even in a down economy I think I could land another job within 6 years. 

I think I am starting to feel comfortable that $10k may be enough, but maybe I'll save up to $15k just to be safe.  Now I just need to decide if I should finish my Finance degree now while my current job will pay for it. 

Let me ask you guys this:  Lets say that for whatever reason things don't work out with Edward Jones in year 2 or 3.  How difficult would it be to land another FA spot at another firm without having a bachelors degree?  If the chances are slim then it would probably be wise for me to get the degree so I have a better shot at a back-up plan if things don't work out at EJ.  Trust me, I get that I shouldn't have that attitude going in and I am completely confident in my abilities, but I also want options in case feces hits the fan.  Mostly because I have more than myself that I am supporting. 

As much as I don't want to wait to get started I think it may be wise to get the degree first.  Thoughts?  Also, if I go that route than do you guys have any advice on things I can do now to help set myself up for success when I do decide to get into the business?  Books to read, things to get involved in, people to meet, tasks to complete, or anything?

Once again thanks to everyone for taking time to help me work through the thought process!

Sep 25, 2010 8:47 am

Only stop pursuing your degree if your plan is to STAY in this industry, no matter what.  If you don't have a degree, good luck getting a finance job doing ANYTHING else other than selling.  IOW, you better be damn sure this is gonna work, because if you fail in two years, you will be broke, have no degree, and have no job prospects.

Sep 25, 2010 8:48 am

While three years savings is a lot, do you honestly want to live looking at your banking account? I think some people fail to realize the psychological toll finances have on a young couple at any rate.

If you haven't got a degree, I'm going to be shocked if Jones actually extends an offer ... thus making the thread moot. 

Sep 25, 2010 9:41 am

LockEDJ,

I have talked to a few folks in the region that work with Edward Jones.  There are currently 3 FA's recommending me and I have been told that it is on me at this point.  I've also been told by all three that the degree isn't going to matter given my work experience and the way I present myself.  I'm being recruited to not finish my degree.

Now ultimately you may be right and an offer won't come.  That seems unlikely with the people I've spoken with.  Either way I am not going to find out until I make a decision.  The last thing I want to do is be presented an offer and turn it down only to try again in a year or two.  That would remove any chance of getting a position.

I'm honestly starting to think that the smartest thing to do is to finish my degree to help hedge the risk.  I'll wait to hear back from the University to see how long that is going to take. 

So let me ask you guys this:  If you could start all over knowing that you were going to become a financial advisor within two years....what would you be doing upfront knowing what you know now?  I want to put myself in the best position not only for the job offer, but ultimately to hit the ground running.  I'd love to know some resources to learn more about the products, financial advising, and the market.  What are some tools that you guys have used or are using?  I'd also love to be able to start prospecting now but realize that may be all but impossible.   

Any advice?