his annual expenses are probably lower than even that. You can put almost everything you do as a biz expense. Part of your car payment, cell phone, gas, food, taking the wife out (assuming she has an account with you)
I only know the exp number on my taxes, I am not sure what they are if I strip all that stuff out.
point is, once you are not marketing and just managing money you can run a very cheap business. Heck if you cold call and email drip your marketing cost can be very low too.
I agree. He’s probably paying taxes on 75K in income. I love that business model. It may quite possibly be the best professional business model there is. There is no other profession (CPA, lawyer, doctor, insurance agent, etc.) that allows you to make so much money with so little work, and STILL do very well for your clients.
Thats correct B - It depends on how you run your business. A large part of my book are in fee based discretionary accounts that allow for no ticket charges on the first 50 trades per year, so i just am careful how much i trade. The ticket charges dont add up to much. Its more the program fees, or haircuts or whatever they call it, which run about 20-30 bps. So if i gross 1.5 i net 1.2 to 1.3. But then i have MF trails that pay 90% and the B/D consolidates all the trails each week from each fund family into one ticket, so i net more on that piece. My clients all came with me from a wire, they are not used to ticket charges. As i bring new clients on, they will pay the ticket charges and i will put them in a different program that just takes 20 bps and gives me 100% payout.
So 70% is really not “net”. In other words, if I did 150K gross, and had 25K in ticket charges, haircuts, etc. you would call it 125K gross? From what I hear, ticket charges can add up depending on your investment style.
I hadn't noticed that, but I probably will add a second network printer for B&W only.
Indy do you use the Brother as your only printer? I have always heard that color lasers waste color ink even if printing with just black.
[quote=Indyone] I’m in the process of moving out of an accounting firm and into my own office (owned, not rented!). Being that it is fresh in my mind, here are a few ideas that might be helpful…
I bought a Brother MFC9840-CDW as my main all-in-one. No, it’s not commercial press grade, but for a typical office, I think it will do very well. It’s a color laser that is network-ready. It auto-duplexes and even handles legal-size paper. For $600, it looks like a fantastic machine. IMO, the print quality I pulled out of the demo was beautiful.
I’m putting in a Buffalo network drive for all my imaged files (we image everything and keep on paper only original signature documents). It’s redundant (auto backup to a second partition) and you can even access the drive remote over the web with password protection, so I can see my files at home. The 250GB version is about $250 and it also plugs right into the network so everyone in the office can access it without a server.
My conference room will have it’s own Dell with a 40" 1080p flat screen on the wall that will be plugged into the computer via a 25-foot VGA cable ran through the wall (it’s also connected to my Dish satellite system if I want to run Fox Business, Bloomberg or CNBC in there).
My phone system is an NEC DSX 6-phone system. Its’ all programmable over the web and is more than I need at the moment. I intend to grow into that one, but for $1,500 installed, I’m satisfied. We will carry 2 traditional lines with a 3rd line through, oddly enough, Magic Jack. My tech guy says that is far the cheapest way to do long distance if you have high-speed internet (which I do).
Incoming faxes are through Packetel, which for $3.95/month, send all incoming faxes to my and my assistant’s email as PDF files. That keeps my traditional lines free from incoming faxes.
There’s lots more I could share if I weren’t so busy with this move (and making money while I’m making the move). As an aside that won’t matter to most of you, I should be into my building at about $150K. That includes about 1500 square feet on the main level and about 900 SF in the basement. For now, that’s a lot of space for me and my assistant, but we are actively seeking another advisor and may ultimately have as many as 3 advisors and two assistants comfortably in that space. The building looks great thus far and is on the second busiest street in town, IMO. You can just flat-out do it cheaper in the good old midwest.[/quote]
Hey indy your inbox is full… Packetel doesn’t seem to offer the service anymore, they now use MYFAX, is that what you are using now?
Sorry about the inbox…I did a complete purge, so I should be good for awhile. As far as Packetel goes, I signed up in the summer before the merger and prepaid two years for ninety-some bucks. I assume that when that runs out, I’ll be under the new plan you are looking at, and it looks like my cost will go to $10/month.
This may already be over but maybe you could add other professionals, insurance cpa instead of just advisors. Just a thought.
FYI, adding others to your office, outside business activity, creates some compliance and regulatory issues. We asked about that recently, sounds like a big headache. Control of keys, copiers, fax machine, confidentiality, finra referral policies...
This is an interesting thread, glad to see it bumped up.
The one expense that is easy to forget, is Uncle Sam's taxes.
I'm amazed and impressed at how being indy is so affordable and doable these days. The hurdles overcome in that area compared to when I started in 1992 are significant. This just wasn't possible back then.
Big, what kind of practice do you run? RIA or Indy? Most fee based or transactional?
I'm Indy, all transactional. Work with MNW and HNW retirees. Munis, stocks, funds, toss in some other stuff for diversification. We're old school.
Use Packet8.com for the phones; under $120 per month with msgs sent to an email (which goes to an Iphone in my case). Efax is good for incoming faxes $17 a month. A Dell all in one computer is about $1000 and allows you to watch TV.
Pay someone to help you transition and or do data entry if there is any. If not, leave and then figure out what you need before hiring someone.
I spent $50k of which $30k was office renovations making my move. Plan to spend more than you think but try to save money where possible. Do not skimp on computers or communications as this is the backbone of running your business.