[quote=vagabond]IMO, it sounds as though you are pretty good at what you do ($100K and 20% increases). Think long and hard about changing careers. There is a LOT of risk and once you have left your field for a few years it will be very hard to get back in. The plain fact is that MOST people don't make it in this career for a variety of reasons. It doesn't mean that they aren't smart, hard working, good people. I've seen a lot of good people leave the business and a lot of idiots be fast starters. Its just the way it is. Is it "cool" to be your own boss, yes but unless you are a true independent then you do still have to answer to others, even if you have flexibility. Bottom line, I wouldn't recommend this career to anyone who is making good money somewhere else unless you're already financially set and this is a second career. I do recommend it for people who have no other good options. If you do decide to do it, make sure you have spent a lot of time with several new brokers to see what they do day in and day out. You may find its not as glamorous or interesting as you think. [/quote]
Well said. I too think Johnson is better suited to stay where he is, although I still believe it is pretty naive to assume that 20% increases will be sustained throughout one's career. I would even label this field (as promising as it is once you are established) as one where it is difficult to sustain such growth (law of large numbers, etc.) If endless 20% increases were the case, he would be nuts to leave unless he hated the job. Certainly this is a high-risk field at the outset, but very rewarding if you get over the hump.
Where is he going to get 20% raises annually? I think he is nuts. he is probably basing it on his own last few years. Yeah, when I was in my 20’s I was cranking up the ladder, getting bonuses on top of promotions on top of raises, so, yeah maybe I did 20% a year for a few years. But at around 125K that just fizzled out to about 3% plus bonuses each year. Unless you are on a high-end Exec path, or a top-notch salesman, I don’t know how you explain that trajectory past a few years.
You're right, all that corporate cranking is what would provide the motivation to "own your own book", anyway. It has a lot more to do with the ideal work, lifestyle, control, sacrifice to get there - than it does projecting throwing 20% on top of 20%, compounded. That sort of sounds like doing financial planning or even portfolio withdrawal projections at the end of the 90s.
What did we learn? Preserve principal (balance work and the rest of your life), assume conservative growth and hold less stocks (work in a satisfying and sustainable situation where you control your destiny), and keep portfolio withdrawal rates at or below 4% (take a lower income now while you build your book).
The problem with people that have never made real good money, or just recently started making good money (and haven’t saved any of it), is that they cannot see through the trees for the forest. Planr - you made a real good point. You need a good long term plan and not focus on what you can make today or tomorrow, or what it will take to “match” your old “corporate” job. It is your own business. You have to think about it that way.
From what I've heard, bing a top producer in financial services is the best real job there is (outside of prof athlete, porn star ect)
My net worth is 175k and I'm 28. I have no idea how that compares, but think if times got tough in the begining I could tap into some of that.
Being your own boss, having freedom and making alot of money are HUGE advantages to this profession that make it unique.
You need a good long term plan and not focus on what you can make today or tomorrow, or what it will take to "match" your old "corporate" job. It is your own business. You have to think about it that way.
Are you hearing Broker24, Johnson?
Here is what you said: From what I've heard, bing a top producer in financial services is the best real job there is (outside of prof athlete, porn star ect)
Being that you mentioned porn stars and FAs in the same breath ...
While it is true, there are some hot shot FAs, and they get their money by being hot shots (lets say, type A, burning the candle at both ends and running down rich clients and all...)
Also, there are some very well paid FAs who just settled in low key but keep doing the right thing for the client, getting referrals ... that's why what 24 says is really important - and cool in my book. With the right plan, the right foundation, you'll just show up to your practice - consistently and conscientiously - and money will attract money. Yep, no lie. Now that is stone a**ed cool. Today, a retired client called me up and wants to know if it would be okay to have his friend call me up to discuss placing a 200k rollover. I wish that happened every day. But, I have a high payout rate, and my expenses are paid. I don't market, my expenses are low, my payout is high. I did not get to start this way, but you might consider working this vision into your marketing plan and long term vision (versus being a high paid athlete, porn star rock star, thoroughbred type advisor). Anyone who has picked up their kids PS2 air guitar game, Guitar Hero,knows what I am talking about. After the agents and all the other people you have to pay get the cut, making a ton of money is less important than getting a higher cut.
That's why I kinda gotta laugh when some of the "low brow" Ed Jones advisors get picked on here. For the right personality, they get a lot of security and payout, many inherit books of money to manage. The bottom line is everything, and you need to learn as much as you can, and start with the end in mind, if you are serious about owning your own business for, say a few decades.
For your information, if I manage 40 million dollars, and net three hundred thousand, my business is worth about six hundred thousand if I sell it. When you are talking about building net worth through business ownership, salary is just part of the planning. Control, conditions, personal growth, freedom, meaningful work, a country full of baby boomers who desperately need your help. Choose wisely.
Either way is it far fetched to be making 100 after 2 years?
Yes...if you plan on working at banc of America
Heheh. So true.
PLANROACH, thanks for the info, also I thought you’d have to have more assets than 40 million to make 300k net
[quote=johnson]PLANROACH, thanks for the info, also I thought you’d have to have more assets than 40 million to make 300k net[/quote] I think planr is speaking as an independent. I seriously doubt you’ll take home $300K on $40 mil workin’ for the man…
Bring on the bug spray - or just a good old fashioned ice storm freeze.
The nice thing about being independent is, once your fixed costs are paid, every new dollar is profit.