Looking to join the business
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This is a tough business and I think you are going in with a few strikes off the the bat. Just because someone will buy a car from you doesn’t mean they will give you 100k to invest. The wealthy and the elderly like experience and stability, so your youth will be working against you. You have stated that you only want to stay with Jones for your 3 years then move on. That attitude won’t play well at Jones at all. In fairness, even though I can’t stand Jones, that isn’t fair to them. I planned on staying when I started and then had my eyes openned. In the long run, your plan to leave will torpedoe your efforts.
Finally your current income has built a particular lifestyle that won't be supported at Jones for a decade. (That is probably an exaggeration, but it will take longer than 3 years even if you work really hard.) Currently you are used to people coming to you asking to buy something, or at least looking, that isn't the way this industry works. The conversion from selling hard goods to selling services (especially when you have to find the clients first) is difficult in the best of environments. This market, at this time, has investors nervous and unless you have something to offer that makes them feel comfortable enough to outweigh your age and inexperience you will have a difficult time at best.It's not hard work 24/7 that I'm talking about. The work is hard, but that is not what I mean. I'm talking about doing the things that need to be done on a daily basis. I don't know what kind of money that he can make initially at a wire, a regional, or Eddie Jones right away, but he can certainly be 60-70K+ his first year with an insurance company and 100K in year 2....but he must have the ability to do what needs to be done on a daily basis.
If he has doubts, he should wait, but he may be waiting forever. The difference between now and 2 years from now is that with a growing family, it will be harder to make a change and not easier. A 4 year old and a 2 year old is much more expensive than a 2 year old and newborn. It's much harder to work late when you have these little ones who want Daddy to come home and play. Don't forget about Baby #3 that will be here at that point. We get lots of 25 year old kids on this board. Heck, I was a kid until my mid-30's. River_King is no kid. He's a man. He's married. He has two kids. He supports his family. He works hard. This is the type of person that will make it in the industry. A 25 year old kid will fail. A 25 year old man will succeed and have a huge future.He is already making 75+ K a year. What exactly is the upside of struggling for 3 to 5 years when he can consolidate, learn, and hit the ground running in a better environment. Seems to me like a 30k loss in year 1 possible break even year in the third. By being patient, he might be able to cut that timeframe in half.
Tough time to get in the business? Just as huge money is made at market lows, less at market highs, The same applies to getting business. Lots of people are in the negative column lately and are more willing to listen to new ideas than when every things fine and the market is hitting new highs everyday.
StokStok--- That is true when you have a track record. Not so true for someone brand new. As I posted earlier, I got in during the last bear market and it was brutal. If I didn't have a huge personal cash position to live off of, I probably would have gotten burned out. You and I (I don't know how long you've been around, but I'm guessing awhile) may be able to get referrals left and right from our clients, but someone that is unproven is going to fight an uphill battle.
As for insurance sales, it may be a good time to get into that with all those annuity sales. I have my license, but not my focus. I can't say one way or another since I try to stay away from investments I don't like.
[quote=new_indy]
Stok--- That is true when you have a track record. Not so true for someone brand new. As I posted earlier, I got in during the last bear market and it was brutal. If I didn't have a huge personal cash position to live off of, I probably would have gotten burned out. You and I (I don't know how long you've been around, but I'm guessing awhile) may be able to get referrals left and right from our clients, but someone that is unproven is going to fight an uphill battle.
As for insurance sales, it may be a good time to get into that with all those annuity sales. I have my license, but not my focus. I can't say one way or another since I try to stay away from investments I don't like.
[/quote] Sometimes I wonder if you folks know what your talking about. Maybe you should let others take this question, and you set this one out? What do you say?Stok, exactly right. My take is the market doesn’t matter. Making it in this biz is all about mind set. That said, human nature being what it is, hard times opens doors that might otherwise be shut. As you said if all is well there is no reason to change.
Add to that that many advisors get phone reluctance in poor performing markets. It gets tough explaining a down portfolio. Especially for newer reps who may not understand the dynamics that are causing the poor performance. This leads to a communication gap and that leads to client dissatisfaction. That dissatisfaction is spelled O-P-PO-R-T-U-N-I-T-Y! Regardless, up market, down market, the best day to start is always the same;TODAY![quote=iceco1d]
Just for clarity, would you care to chime in here River? Anymore kids on the way, or are you done after this one is born? Is your wife ever going back to work? If so, when? When you talk about "significant savings," suppose you both stopped working, how long would those savings last you? What if you took a 50% pay cut, then how long would your savings last?[/quote]
Guys I'm really enjoying the debate, clarity, and knowledge ya'll are passing to me. 1. I didn't quote whoever said this but they are right. You don't do a lot of cold calling in the car business (I haven't in two and a half years.) You do some prospecting but mostly by word of mouth. However, I was selling depreciating assets to people. "Hey buddy this shine piece of metal will never be worth as much as I'm charging you for it now." Now I'm selling insurance on depreciating assets. I've got to figure saying "let's grow your assets together" has got to be somewhat of an easier sell once you've got a prospect. [Getting prospects is another game though.] 2. My wife is about to have her RN, she would of already had it, but took some time off to have this baby. She will be going back to work in about 16 months. 3. As far as income and life style goes... Three years ago I was working for $8.00 an hour with less than a year to finish college. My mother passed away very suddenly and two months later my fiancee and I learned our first son was comming. I quit college (I was in the honor program) because I needed a job with benefits quickly and selling cars was the ticket. I had planned on being a FA up until that point. I took part of the money I got from the estate and put 20% down on my house and invested the rest. After a year selling (making about $36) I got promoted (to about $50), with the promotion came the 401k. I started putting 12% in getting a two percent match. About nine months ago I got the raise that put me to where I'm at now. (about $75) As soon as we get done building our new location (July or August) I've been told I'll be the Sales manager of that store (about $100). I grew up in a single parent family, mom was a night shift police officer so we never had money. I became interested in investing because we grew up so poor. Now I've got about $30,000 combined in my 401k and mutual funds, $2000 in stock, plus about $3000 in cash. My house payment is $583 (I've been paying double, but about to quit since the new one is comming.) Our two car payments combine to be less than $300 a month, and I typically double up on those, but am about to quit. The wife has some student loans, most of those we just pay intrest on right now because she can get them forgiven if she works in her field long enough. We live well, we just live well within our means. 4. The thing is I work 60-70 hours per week and there will be no end to those hours in the car business. I would like to jump into the FA field at some point as that was what I wanted to do as far back as high school. Right now there could be an oppurtunity for me if all goes as planned and I'm looking at the risk/reward of taking the chance. Factoring in my wife is about to quit working for a year, we are adding another child, and most likely I would be taking a pay cut, and with the advise I'm getting from you guys and some of my support group, it's a tough decision. I have no doubt I could jump back into the car business at any point, but to stay around here (not a must) I'd probably have to go back to selling and work my way back up.Go Ice!!! I guess I can scratch you off the list of possible Jones recruiters…
As a side question, how do you have a $583 house payment? Interest only? Some other unique and questionable loan??[quote=iceco1d]So let me get this straight…You have roughly $1,000/mo in loan payments (house, car, and student). This doesn’t count anything for bills. You have all of $3,000 in cash to fall back on? So, you have essentially 30 - 45 days of breathing room to service your debt, if you stopped making money NOW (without tapping your retirement accounts, of course).
You are making $75K a year, and in a few months, you'll be making $100K. You get great benefits. You are good at your job. You have your second...and last...baby on the way. Your wife will be entering a career in 1.5 years where she will likely start at a minimum of $50K. So in recap...if you enter the business now, and go to a firm that is straight commission, you will likely be broke before you get licensed. If you go to a wirehouse and fail a test, or miss a single production target and get canned, you will likely be broke immediately. Same for EDJ. So the RISK of going in now, is basically going into debt if you hit any number of possible "bumps in the road." In exchange, the reward is starting your journey in this career at age 25. Now...if you wait for your wife to start work as an RN: Your RISKS are a) at a commission only firm, you will be on a budget for awhile and basically be a single income family, b) at a wirehouse or EDJ, your combined income will be higher than it is now with just you working @ $75K - same risk of failure, but worst case scenario if you get canned, you just go on a tighter budget at home, and start at another firm that will take you, but c) you have to wait to enter the biz at the ripe old age of 27; 35 - 40+ years in the biz is HARDLY enough time to reap the rewards of this profession [insert sarcasm here]. I don't see what the decision is here? You should be taking a few weeks/months to do your due dilligence on the firms you are considering anyway. Then you have to interview. You are really only putting this career move on the "back burner" for 12-15 months in reality in exchange for knowing with all surety that you aren't going to throw your last 3 years of hard work in the toilet. Someone please explain what I am missing.[/quote] You're spot on, and that's the debate I'm struggling with. The EDJ job came up and it's the first time I can remember them hiring in the last couple of years in my town. I'm going to be putting $1000 or so a month into my money market account instead of doubling up on my payments now. (From what I understand EDJ takes 6-8 weeks to complete the hiring process so probably will have about 5-6 cash on hand if I make the move.) I also have a decent amount of home equity to tap and was planning on doing that before making a career change to keep me a float. If need be we are well in equity in both of our cars and I could move them quickly for paid for vehicles and cash if need be. If I new I would make 45+ my first year at EDJ I'd make the jump w/o thinking twice because I know I would build back up from there.[quote=new_indy]Go Ice!!! I guess I can scratch you off the list of possible Jones recruiters…
As a side question, how do you have a $583 house payment? Interest only? Some other unique and questionable loan??[/quote] I live in a farming community. I paid $116,000 for my 3 bed 2 and 1/2 bath 1600 square foot house. Only financed $90,000.Are you including property tax and insurance in with that figure? Are you realizing that you will have some healthy medical insurance premiums to deal with? Children aren’t cheap either (I have 3, so I know). It sounds like you have your head screwed on right, but I still fail to see the upside to your change at this point. I truly think you should take Ice’s advice and be patient. Jones will hire just about anyone with a pulse and a clean criminal record since it helps their P&L in some mysterious way. I don’t think you are missing out on anything special.
new_indy, if there's not an upside to changing now, why would there be an upside in 3 years from now? In three years from now, if he is like the vast majority of people, his expenses will be significantly higher. He sure as heck isn't going to want to be working all the time when he has a 5 year old and 3 year old waiting for Daddy to come home.
Every year that he waits to make the move and he gets more used to having a decent salary, makes this move harder and harder.
By the way, that was a great post by Ice. Let me compromise on my position because I don't think that he should make a change yet. He also shouldn't wait any predetermined time. I'd say make the jump ASAP. ASAP means when there is more money in the bank. I'd stop with the extra house payments and stop with the 401(k) contributions and start shoveling everything into the bank.
Also, keep in mind that my talk of making 75K is with an insurance company B/D and not Eddie Jones. All that one has to do is "see the people" and do lots of joint work.
No I didn't include property tax and insurance in that figure. I pay my property tax annually (about $850) out of my money market. About $2,700 a year covers insurance on both of our cars and the house. My health insurance is free from my company however I have to pay for the family plan. It runs $93.48 biweekly for accident/health, short term disability, dental. The company also pays for a $50,000 family life insurance policy, and I have another individual $100,000 life policy that my grandmother pays for annually as a birthday present from her. (I've had it since birth.)Are you including property tax and insurance in with that figure? Are you realizing that you will have some healthy medical insurance premiums to deal with? Children aren’t cheap either (I have 3, so I know). It sounds like you have your head screwed on right, but I still fail to see the upside to your change at this point. I truly think you should take Ice’s advice and be patient. Jones will hire just about anyone with a pulse and a clean criminal record since it helps their P&L in some mysterious way. I don’t think you are missing out on anything special.
You sound like you are in pretty good shape for a young guy. You should be proud of yourself. But here is a real life example at the green machine. I went from a 100k job, won all the contests (including the famed pacesetters award), started with 30k in the bank, kept my costs low, and burned through most of the savings within the first 2 years. If you want to advertise, you pay for it, if you want something for your office, you pay for it. Medical insurance was very expensive, etc…
I am not saying those things are bad. I went independent because I decided that if I was going to pay for it, I might as well get a larger piece of the benefit. (there were lots of other reasons too, but cost certainly figured in at some lower level). Anonymous may be right about the insurance industry, I don't know. I never really liked selling insurance unless there was a specific need. I don't think I could do it as my main product, but that is just me. Anyway, you need to make the decision for yourself. Good luck with the new baby!Ok… I think I’ve made up my mind how I’m going to play my cards and I’ll see how this works. I just took a job as a Reverse Mortgage loan officer, since I already have the license and training my state requires I can start Monday. There’s no need for me to quit my current job since this is a completely self employed situation. I’m going run an ad in the paper over a couple of Sundays, and pick out 50 or so prospects from the customer information I already have and see if I can figure out how to close some loans and see what happens. If all goes well that will give me the extra cash needed to continue to pursue the career change and the boost of confidence to make the jump into the financial advisor roll.
[quote=River_King]
Ok… I think I’ve made up my mind how I’m going to play my cards and I’ll see how this works. I just took a job as a Reverse Mortgage loan officer, since I already have the license and training my state requires I can start Monday. There’s no need for me to quit my current job since this is a completely self employed situation. I’m going run an ad in the paper over a couple of Sundays, and pick out 50 or so prospects from the customer information I already have and see if I can figure out how to close some loans and see what happens. If all goes well that will give me the extra cash needed to continue to pursue the career change and the boost of confidence to make the jump into the financial advisor roll.
[/quote] That was straight out of left field. I'm more in the camp of putting 100% into something. Doesn't seem you'll be able to do that as a loan officer, so I hope you don't have the highest expectations going into this.I see his point…the after hours job means some extra bucks in the war chest and the ability to see what his sales skills look like before taking the plunge. That sounds completely rational to me.