Headsets and Mahogany Desks

The truth about life as a broker.

Many people think that obtaining a series 7 brokers license is a golden ticket to a life of Italian sports cars and dreamy vacations. The reality is that most people I've worked with, myself included, are living a life that is much different from what is shown in movies like "The Wolf of Wall Street". The truth is:

We never thought we'd be doing this:
Most of us have degrees in other fields ranging from fine arts to engineering. I've worked with a variety of folks from former military to refugees who are here building a new life. While many of us embrace our profession and learn to love it, others yearn for their true calling.

We're not wealthy:
While being in this business pretty much guarantees a salary above the national average, most of us are earning middle class wages. When the market crashed in 2008, we lost half of our investment savings too.

We give up a lot of personal freedoms and privacy:
Simply holding a Series 7 licenses places restrictions on our ability to own another business, volunteer, serve on a board or committee, speak publicly about our opinions on the market and contribute to political campaigns. Past transgressions like bankruptcy and arrests must also be publicly disclosed and posted on Broker Check.

We're highly regulated and liability is huge:
Simply wording something slightly the wrong way, using an outdated document, or not making certain that a client understands exactly what we're saying can lead not only to job loss, but also personal fines.

We work long and irregular hours:
Particularly in the call center world many brokers work overnights, holidays, weekends and lots of overtime to make sure they're available to answer the phone if someone has a question or concern about their portfolio.

We have to remember a lot of detailed information and be able to communicate it on demand:
The series 7 is a grueling exam, but that's only the beginning. When working in a fast paced trading environment brokers have to take care of clients while also paying attention to what is happening in the markets. There are dozens of processes and rules to remember in addition to the task of building client relations.

We don't do drugs all day and party all night:
Being a trader requires incredible energy and attention to detail. While there may be frequent consumption of coffee and energy drinks, you'd be hard pressed to find lines of cocaine and bottles of pills being passed around around the office. Brokerage firms also place a high importance on maintaining a pristine image. Those who push the limits and risk bad press don't last long.

Working in a trading environment can be both exciting and rewarding, but like anything there are trade offs. The financial industry is not some elite profession reserved for Harvard MBA's, nor is it occupied by a bunch of greedy back room thieves. In many ways banks and brokerage firms have become the modern day factory lines for the educated and tech savvy Gen Y and Millennials.

Be Well
- Nicole

Don't Take My Advice

Demystifying Gurus & Making Informed Choices

There are a lot of great motivational folks out there, especially in the financial field, and many of them offer fantastic advice. At the same time, however, it can often be noted that many of these gurus can come off as fanatical. They present their solutions as all or nothing and if we dare to consider a differing opinion then we're doomed to disaster. This is all part of being a media mogul and it's something we need to be aware of when we follow these sorts of advice giving celebrities.

Whether it's the FICO score obsessed, Suze Orman or the debt-phobic, Dave Ramsey, the use of fear and absolutes is a common tactic among such gurus who are out to sell you on their brand. The more they can convince us that they have the best and only real method of obtaining financial success the more they can get us to spend on their system. It's all sales and marketing so we need to be educated consumers when we take in information just as we should be when we make tangible purchases.

Now don't get me wrong, I think there are a lot of great ideas presented by the individuals mentioned above. I find Dave Ramsey's radio show to be incredibly motivating and I've recommended his book to many of my friends and family. But, do I think you're a loser if you lease a car? No. Do I think it's sometimes necessary to borrow money for college? Yes. Yet when it comes to tackling debt and building savings, I don't think you'll find a better system out there.

The point is when we allow ourselves to become enchanted by gurus of any kind we can often end up feeling let down. We spend money on books, products and seminars only to have the initial enthusiasm wear off and end up back where we started. When we take in this sort of guidance it should be to motivate us and help us make better choices and not to simply conform ourselves into someone else's ideal.

Be Well!
- Nicole

Wealth Shame

How do you feel about people with money? I'm not talking celebrities, but people that you know who are doing really well, drive nice cars, have nice houses, own the latest technology, etc. Do you feel like they're greedy? Do you figure that they must be workaholics and neglect their families?  Do you assume they must be taking advantage of people, or that they must be doing something unethical for them to have the lifestyle that they have? 

Some might call this jealousy, but I see it more as a feeling of shame. There are several possible sources of this. This seems to happen a lot to those of us who grew up in more low to middle income, blue collar families. There is a part of us that might feel we are snubbing how we grew up if we desire a different lifestyle. Maybe your parents were laid off frequently or unfairly denied bonuses or promotions. Perhaps someone you care about got caught up in a scam or was taken advantage of in some monetary way. Or, maybe your grandparents lost a sizable portion of their retirement savings in the stock market. 

If these types of experiences are what we're familiar with, people with money will often feel to us like predators. We may also find that even if we are able to overcome these feelings and events, that our loved ones may not be. They may accuse us of being materialistic or workaholics when we strive for or obtain more wealth. 

It's important that we then understand that if our loved ones do struggle with this, it is not about us. They have likely been hurt or feel discouraged with their own circumstances. In these cases when these conversations come up, it's best if we try to be sympathetic and not argumentative. We should try to avoid defending ourselves and instead redirect the conversation in a positive light. 

For example, if we mention to someone that we're going on a vacation or buying something nice and they make a comment along the lines of "must be nice" a good response would be to acknowledge what went into earning that vacation. We could reply with something like "yes, I've been saving for months" and then try to change the subject. It communicates that we're not ashamed of our success and that it wasn't handed to us. 

We should also be mindful to gauge our audience and to consider if we might be doing too much bragging. We deserve to freely celebrate our accomplishments, but if we're always rubbing our awesomeness in the faces of others (especially those who are in unfortunate circumstances) our behavior can come off as conceited rather than joyful. It's all about finding that balance between embracing our success while also remembering that there are those who are not so fortunate.

Another situation we might find is that if we tend to be empathetic, we may have a difficult time enjoying our success if we know others are suffering. We end up seeing wealth as a shameful thing because we view prosperity through the lens of "someone had to lose out for me to gain". We're constantly hearing horrible stories of poor working conditions, child labor, industrial accidents, famine and drought. It's understandable that we have these feelings when we consider all the ways in which people are exploited for others to have monetary gain.

First and foremost we have to have a reasonable acceptance for the things we can not control. Whether or not an individual purchases a particular item is not going to change a society or a company. This doesn't mean we should disregard our ideals, just that we need to keep perspective about our role and impact in the larger economy. 

With that in mind we should consider how being in a more financially secure position can allow us to advocate for the causes that interest us the most. The most important votes we make are often those which we cast with our dollar. The economy works on the basic principal of supply and demand. The more individuals demand ethically produced goods, the more they will be produced. However, the goods which are the most ethically made are often times some of the most expensive. Being in a better financial position allows us to support the companies with the best practices. 

Also consider how it would feel the next time a friend is in a bind, a natural disaster occurs or your favorite charity is looking for a donation. Instead of sighing and having to turn away, wouldn't it be great to make that gift or donation? Being in a good financial position can be very empowering in this way when we understand the positive impact we can have on other people's lives and that having wealth is not all about taking. 

Overall, when we find ourselves making judgments about those who are wealthy it becomes very difficult for us to allow ourselves to be prosperous. When there is this part of us that disapproves there will also be a part of us that's always going to resist obtaining wealth, because we see it as a negative character trait. We don't believe that we can ever have with those people have because we assume that they're doing something negative to obtain what they have. We throw our money away on the presumption that you can never have what they have because we would never do whatever horrible thing it is that we presume they've done to obtain their wealth.

This may also be reflected in our career. We might keep our standards low because we think that being an executive or entrepreneur is not a realistic goal for people "like us." We might stay in jobs we don't like for too long because we think we should learn to just be happy with where we're at. We hold ourselves back unnecessarily when we limit our vision for ourselves. 

The bottom line is we have to remember we are not abandoning our friends and loved ones simply because we desire or obtain wealth. It's a fact of life that some people do well financially and others do not. As long as we are humble and generous there is no reason for shame.

Be Well! 
- Nicole

Practical Stuff - Quarterly Propserity Check

With the first three months of the year behind us, now is a great time to take a look at how we're doing managing our money thus far. Why now? Most businesses review financial data quarterly. It's a cycle that works well as it is not so frequent as to become tedious, but is often enough to keep us on track.

The first items I recommend looking at are reoccurring expenses. These are things like housing costs, utilities, car payments, child care costs, etc. Really take some time to make sure your list is complete. Everything that you are regularly billed for that has a due date should be on this list. For examples, see the quarterly budget review tab on the home page.

The next step is to take this total and compare it to your net monthly income. This is the amount that you actually receive after any deductions like taxes, health insurance and 401(k). How is it looking? Do you have a lot of money left over and you're scratching your head, wondering where it's going? Or, do you have more bills then you thoughts and are running a deficit? 

If you find that you have a deficit: First and foremost, don't give up! Many of us have been there. The first thing you'll want to do is go line by line and see what can be eliminated or negotiated. Are you paying for a land line and a cell phone? Have you shopped your insurance recently? Are you mindful of utility usage? Are you driving a vehicle that is beyond your means? Are you overpaying taxes? 

A lot of bills can be negotiated, such as insurance, cable and credit cards. If you rent, you may want to shop for a new apartment or look for a roommate. If you talk honestly with your friends, you might even find someone who's ready to take this journey with you. If you have a mortgage, talk to your mortgage company about options that may be available if you're struggling, but want to stay in your home. Or, depending on your level of equity, consider if continuing to live in your home still makes sense.

If you’re at a point where you’ve cut everything you can and you’re still struggling to meet basic necessities like food and housing, there is no shame is seeking out assistance if you really need it. In this situation it may be best to contact your local social services office to see if you are eligible for any benefits that will help you get back on your feet.

If you find you have money left over: You may be surprised that you have more expendable income then you realized. This goes back to mindful spending. You might not even think of yourself as a big spender, but a few nights out, buying lunch every day or a latte addiction can really eat away at your bank account. Or maybe you are a big spender who has that next big ticket item all picked out as soon as payday comes. Either way, we're going to need to dig into the day to day spending to determine where that money is going. It's not that this spending is bad necessarily, but it needs to be understood.

There are a few ways you can do this. If you're like most people and use a debit card. You can use a software program like Quicken or web/app based programs like Mint or Mvelopes which will quickly pull data from your accounts and categorize it so you can get a nice visual snapshot of where your money is going. Another option would be to go through your bank statements and manually sort out your spending. Some online banking systems offer sorting options to help make this task easier. If you don't want to deal with learning new software, or if you don't use a debit card, you can make up spreadsheet to estimate and list out your more variable expenses.

Once you have all of your financial data laid out some obvious patterns and waste will likely emerge. From here we want to enter a four part action plan.

1.    Reflect - Think back on the topics we have discussed and reflect on what areas most reflect your spending behavior.

2.    Budget - You can make a budget using a number of different methods, electronic or otherwise. Whatever system works best for you is fine.

3.    Track - I also recommend a checklist for your bills where you can easily keep track of what has been paid and what is outstanding to help avoid overdue payments and nasty late fees. For day to day spending, I recommend Mint and Mvelopes, but even a simple notebook that you can keep with you is fine.

4.    Automate - Lastly, look at what payments can be automated. For most of us coming up with money for items like taxes and health insurance are a non-issue because the money is taken out of our paychecks before we even see it. The best way to start is with smaller bills and those which provide a discount for automated payments. You may want to consider opening a separate checking account where the amount needed to cover these items is segregates from our other money to avoid overdrawing your account.

Let’s talk more about checking accounts. I actually recommend having two to three checking accounts; one for bills (two if you maintain separate funds for automated payments) and one for daily spending. In fact, it’s best if we don’t even keep a debit card for the account set up for bills. By separating out the amount we have allotted for daily spending we are less likely to dip into those funds.

If you're ready to start a savings plan it's best it’s best to open a savings account at a place other than where we keep our checking account. At the least we should avoid having our savings and checking accounts linked together to prevent us from making transfers on a whim. This may all seen a bit overwhelming, but it can also be very empowering. By taking ownership of our current financial situation we control our money instead of allowing it to control us. When we document our bills and spending we can stop walking around with financial stress rattling around in our heads all of the time. Did I pay this? Do I have enough money for that? By writing it all out we know exactly where we're at. Even if our financial situation is not great, I promise that just getting rid of those nagging thoughts will be a relief.

For further reading I recommend "Financial Peace" and "The Total Money Makeover" by Dave Ramsey. His radio show is fantastic as well and very motivating. His blunt style can take some getting used to, but his advice is simple, practical and solid. Also, "The Automatic Millionaire" by David Bach. This book dives more into the benefits of automating our finances as much as possible. The These books have been out for a while so they're readily available through libraries or as second hand copies.

I will be setting up a page specific to budget work as a reference to help you get started. The more budget work you do will help determine what systems work best for you. The most important thing though is to be honest with yourself and follow through. At the same time, even if you find you don't stick to the plan you set up, keep trying. Just having quarterly check-ups can help us from spinning out of control.

Be Well!
-Nicole