Author Topic: So, maybe talk me into how this would work?  (Read 1040 times)

caracarn

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So, maybe talk me into how this would work?
« on: March 08, 2017, 09:01:57 AM »
OK, so I realize I may get no replies, but since this forum is now here, I will ask a side hustle question that I've been thinking about for a long time, but keep talking myself out of.  Basically seeing if anyone can see a way this makes sense and basically get me past what I see as an impassable roadblock.

So I've been good with money my hole life and have always bought in to the simple financial principles that MMM preaches, such as term life insurance and index funds as ways to simplify your financial life.

Based on that, and seeing the situation in the world today and how spendypants runs rampant and people feel they can't retire etc.  I have always felt I would be a common sense financial adviser.  The challenge I have however is how is this a sustainable business?  You see, as I see it, if  you get people to where I think they need to be, to understand that all they need is to spend less than they make, save that in three index funds and do not touch them, and look for the lowest cost term life policy and stay away from the rip off of whole life, you;ve basically given them all the financial advice they will ever need.  So you may have a lot of first time customers, but since I'm not going to tell them to have me buy stocks for them or pick active funds for them or all the other crap that financial advisers do to make repeat money and ongoing cash flow, I feel this is not a sustainable business so I've never bothered.  I'd never be comfortable peddling something other than the above products and they do not need to pay me an advisory fee to do this as they can do it themselves.  So anyone want to show me how to get past that roadblock, or is it legit and I believe it is, and this is therefore actually not a viable side hustle? 

bullcitybro

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Re: So, maybe talk me into how this would work?
« Reply #1 on: March 08, 2017, 09:28:38 AM »
Starting in April of this year, the fiduciary rule goes into effect, and there will be an entire subclass of financial advisers with an assumed 'obligation' to their clients' best interest (as opposed to their bottom line, or their referral structure).  I'm not an expert in this stuff, here's a link to some information: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/03/19/is-your-financial-advisor-a-fiduciary

Being a CFA is more than just being 'good with money' though.  It's mostly a sales job.  You need to constantly network, bring in clients, and somehow retain them when they blame you for their portfolio's failures (even when all you're doing is getting them market returns/losses).

The regulatory jungle of that whole industry is something that I'd just as soon stay away from.  You'd probably do better re-framing the concept as "how can I package my knowledge in a way that I can sell at a low cost" instead of going after individual client long-term relationships.  When the margin is low, volume is critical. 

JustGettingStarted1980

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Re: So, maybe talk me into how this would work?
« Reply #2 on: March 08, 2017, 10:03:03 AM »
Hi OP,

It sounds like you can offer services as a "Life Coach", or a "Financial Life Coach." It sounds like this can be a business with recurring customers only if your customers "don't get it" the first time and need more guidance, advice, counseling, reassurance for subsequent visits.

There's only one way to determine how viable a business this may turn out to be. And assuming you work out of your home, make house calls, or meet at coffee shops, all it would take is $50 in business cards, a fair hourly rate, and some hustle.

Try it out, tell us if it's worthwhile. It certainly has been worthwhile for MMM, White Coat Investor, etc....

JGS

JustGettingStarted1980

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Altons Bobs

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Re: So, maybe talk me into how this would work?
« Reply #4 on: March 08, 2017, 11:41:41 AM »
Most of the financial advisors I have met are Life Insurance agents in disguise. They don't really make much money selling any financial products, they make their money by selling Whole Life insurance or other permanent Life Insurance or annuities.

caracarn

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Re: So, maybe talk me into how this would work?
« Reply #5 on: March 09, 2017, 06:00:04 AM »
OK, so what I've gotten out of this is that my analysis was correct, this really isn't a viable option.  Significant competition with low barrier to entry and any products that I could make money on, I'm not comfortable recommending to people because all they do is pad the pocket of the seller.  If I gave proper advice, basically there is no money in it, which is what I figured, but wanted to see if anything came from someone else that I was missing.

Heroes821

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Re: So, maybe talk me into how this would work?
« Reply #6 on: March 09, 2017, 06:56:10 AM »
Well the Financial Life Coach thing could work out really well. And I'm sure some good companies do referrals.  I think that you could do it as a side hustle, that while maybe not highly profitable, could help a lot of people. Don't forget that part of MMM is "saving the world".



JustGettingStarted1980

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Re: So, maybe talk me into how this would work?
« Reply #7 on: March 09, 2017, 10:57:28 AM »
I'd charge $300 or the initial 1 hour session, $100/hour thereafter, and $150 for a yearly review.

Let's be honest, this is peanuts to charge when lots of people pay $5000/year for "a wealth manager" to skim off the top. And the clients will realize this, and start referring you around. I think it would take a while to get going, but once you have a referral base, this could increase quite a bit.

Just saying...

Heroes821

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Re: So, maybe talk me into how this would work?
« Reply #8 on: March 09, 2017, 01:20:51 PM »
Oh I totally forgot to ask, is your name a wheel of time reference?

marty998

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Re: So, maybe talk me into how this would work?
« Reply #9 on: March 10, 2017, 02:11:42 AM »
I always wanted to be a "common sense" financial adviser. The problem is that it would be illegal for me to charge for services without a licence and completing all applicable training etc.

I would need to get clients to "donate" a contribution in lieu of being invoiced, but then it would not be tax deductible to them and I would run into income tax problems as well.


mustachepungoeshere

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Re: So, maybe talk me into how this would work?
« Reply #10 on: March 10, 2017, 01:28:53 PM »
I always wanted to be a "common sense" financial adviser. The problem is that it would be illegal for me to charge for services without a licence...

This is why I pay you in port and Smarties. ;)

ChpBstrd

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Re: So, maybe talk me into how this would work?
« Reply #11 on: March 11, 2017, 11:33:25 AM »
Here are your paths:
1) Counseling / coaching
2) CPA/tax minimizer
3) Media producer like MMM

You'll never get rich on option 1, if done in the conventional sense. Option 2 pays well, but requires some training. Honestly, the market for MMM-like media services may have been tapped by MMM himself and the many copycats (e.g. what would be the value add of having yet another blog?).

If you really want to be an investment/personal finance coach, I recommend fulfilling the following promise to your clients:

"For every dollar I save you, I charge only five cents."

That is, you start at a well-measured baseline (require financial and credit card statements, tax forms) and the client agrees to pay 5% of the savings from any change you recommend and they implement. This could also lead to roles negotiating big purchases on behalf of your clients. Trust is always an issue - clients could take your advice and claim they didn't - but that might not be as big a problem as it sounds if you're good at establishing trust.

This could be quite lucrative considering the boneheaded moves people make, like paying credit card fees, not shopping for insurance every year, or not negotiating well at the car dealership. 50 clients who see you once or twice a year might cover it.

bigfoot11

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Re: So, maybe talk me into how this would work?
« Reply #12 on: March 13, 2017, 11:03:46 AM »
Here are your paths:
1) Counseling / coaching
2) CPA/tax minimizer
3) Media producer like MMM

You'll never get rich on option 1, if done in the conventional sense. Option 2 pays well, but requires some training. Honestly, the market for MMM-like media services may have been tapped by MMM himself and the many copycats (e.g. what would be the value add of having yet another blog?).

If you really want to be an investment/personal finance coach, I recommend fulfilling the following promise to your clients:

"For every dollar I save you, I charge only five cents."

That is, you start at a well-measured baseline (require financial and credit card statements, tax forms) and the client agrees to pay 5% of the savings from any change you recommend and they implement. This could also lead to roles negotiating big purchases on behalf of your clients. Trust is always an issue - clients could take your advice and claim they didn't - but that might not be as big a problem as it sounds if you're good at establishing trust.

This could be quite lucrative considering the boneheaded moves people make, like paying credit card fees, not shopping for insurance every year, or not negotiating well at the car dealership. 50 clients who see you once or twice a year might cover it.

Pretty much this.

I have been thinking about doing the same thing as what you mentioned "Common Sense Financial Advisor" except also incorporating credit repair / monitoring and income tax further on down the road. Whatever you do, just give it a shot and see what happens. The worst that can happen is it doesn't work out and get onto the next side hustle!

Good luck!

caracarn

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Re: So, maybe talk me into how this would work?
« Reply #13 on: March 13, 2017, 12:07:00 PM »
Oh I totally forgot to ask, is your name a wheel of time reference?
It is.

caracarn

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Re: So, maybe talk me into how this would work?
« Reply #14 on: March 13, 2017, 12:09:46 PM »
Lots of interesting advice in the last few posts.  Definitely several things to think about.