Hi Everyone
I've been toying with the idea of a career change for a while now and I wasn't really sure of the direction I wanted to take, but I believe I now know. I'm interested to hear everyone else's thoughts given that collectively you all have a lot of experience and are not shy of sharing your opinions.
I'll give a bit of a background on myself to help put things into perspective. I'm 29, a management accountant (qualified CPA) in a stable job earning $100k plus with kids and a wife. So stability of earnings is essential. Herein lies the potential / problem. My wife will be entering the work force again sometime next year so we'll be able to secure say $50k additional income which means I will be able to make a move to another profession which unfortunately / inevitably means I'll probably take a short term pay cut.
I'd like to eventually become a licenced Financial Planner and Mortgage Broker. I figured if I'm going to sell mortgages why not give advice as well? The two seem to go hand in hand and like everyone on here I find property very interesting and would love to talk to people, solve problems and give advice about it all day long.
How I intend to make this happen is to get a job as an FP for 12 months for the AFSL experience component (or is it 24 months – I've seen conflicting information), get the diploma to become RG146 compliant. Once I'm a licenced FP move to a mortgage broker for a couple of years and then if all goes well start my own brokerage. This is obviously a long term plan and I understand there are thousands of things that could change or get in the way of this being executed as planned, however if I don't make a plan to change then I'm just going to stagnate in my current job forever.
So the other queries aside from is this an achievable and in your opinion reasonable goal are: given where the world economy is going is this a good time to make this change? Can anyone give a timeframe for how long it takes a mortgage broker to get up to 6 figures as an employee and then self employed as well? I'd really like to hear from people who've made similar changes or who are presently performing all or some of the above discussed roles (Richard and Terry I'm looking at you guys
)Cheers,
Tom.
The ol' Gen Y career shift!
From personal experience, you would need to be crushing sales and earning good comm. to hit 6 figures as a payg mortgage broker. Self-employed would be a different story.
There are a few companies that offer financial planning internships (that have an AFSL) but you would be taking a 50% pay cut on your 6 figures. Most of them pay for your DFP and RG146 compliance.
That I know there is, AMP Horizons program , Macquarie's program for experienced applicants, Dixon's internship program and we take on 20 new recruits per Qtr with the Future Assist Focus program.
With all of these companies you would end up qualified and along the road you described, and all would give you significant mortgage experience, however that elusive 6 figures is going to be your problem I think. (and starting out in any new career).
I know a lot of people pass through grad programs (ours included) that just get their DFP/RG146 and move on to work for banks or even look at buying their own business/book. It would be a matter of whether or not you could afford to take the pay cut for 6 months while you study.
Good Luck!
Jimmy86 | Future Assist SMSF Specialists - Bris | Melb | Syd
http://www.futureassist.com.au/setupansmsf
Phone MeSelf-managed super specialist administrators and advisers
Tom, You can undertake the required qualifications to become a MB in a matter of weeks however that is only part of the equation.
You wont get a decent Aggregator take you on without 2 Years industry experience so might have to work for someone for a while.
Someone like Aussie might give you a decent training and a few free leads however are going to want a decent cut of the commission.
As to when you can earn 100K per annum i am not sure whether you are relating this to upfront or trail income.
If you assume you will say 0.6% of the loan amount upfront for ever $1m you write you will earn $6000.
Of course from this your Aggregator will take their cut which could be upto 20% and then of course you will have your ACL or Credit Rep costs.
As far as trail income is concerned this will build over time although regretfully remunerations have fallen considerably since the GFC with more than a few lenders not paying trail in Year 1 of the loan.
Factor in claw backs and the general costs of your operation i.e PI, MFAA & COSL fees etc and you get to keep the rest.
Course the more business you write the more you are going to earn.
As a FP as well as a Mortgage Broker i have too say the income level is probably 50/50.
Good luck in your decisions making.
Just remember you might struggle to get financing on any deal you personally want to buy for a couple of years if you end up as beiing self employed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Failure rate in these types of commission based occupations is fairly high. Less than 5% after 5 years on average.
If you look at lost earnings comparatively over that period you're looking at around $250k plus opportunity cost. Together that could amount to around $500k.
Business consultancy/advisory is far more lucrative and with lots of upside potential. FP/MB is a slow grind and growth is glacial by comparison. You can buy into business advisory consultancy types of businesses on a franchise basis. Do your DD as you would with anything though. You should be able to start at around $150k and work up to around $500kpa within 5 years. Depends on what level/size of business you work with.
Hi Tom
Any sales/commission based industry is difficult to crack. I know it's difficult not to focus on the dollars when going into self employment because we all have to live. However, being driven by money can set you up for failure. If you're passionate, genuinely enjoy what you do and you're good at it – then the money will follow.
If possible (and this isn't for everyone) – maybe consider getting a taste of it on a part-time basis whilst holding down your current job. Others will disagree with me, because ultimately you need to devote all your/time energy in making your business work but with a young family to support, I'd be taking a cautious approach (again that's just me – others will disagree).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Ugh…sounds way too hard with the odds stacked against me.
Better to focus on building a property portfolio with the aim of no longer working for the man at 40. Seems doable. My job is cushy as so I don't think I'll find anything that pays as well with the same work life balance. I hadn't even thought of the longer term impacts of lost income.
My finance approval is due tomorrow for my ppor; come on the first step!
Thanks all.
First year as an MB broke even, second year made a small profit, third year cracked almost a 100k and fourth year in will surpass 100k and may be able to start borrowing OPM again if the missus stops getting pregnant.
Not an easy road by any means but I reckon I will be earning 200k+ in the near future (barring another GFC type event) with a trail income building up each year. I need to get a personal assistant to take it to the next level which will mean a pay cut but would likely be able to double my turnover. The average broker earns 70k/annum.
Not for the feint hearted and a lot to learn but as Jamie says if you have the passion, do the right thing, have good mentors and are good with people the money will follow.
I say go for it!
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
You definitely got some great advise across the board from the group. You've got a great job which is going to be tough to replicate in the current economic climate. Take a look at your life goals and what you are trying to accomplish while you are here. It's all over in the blink of an eye. Money is important but so is enjoying your life. I am blessed to do what I like to do but took a huge cut in income to leaves corporate america nearly 14 years ago. Real estate investing is fun and profitable if done with the right approach and the right team on the ground wherever you end up doing it. Again, you can come back to this group for advise in your area. have fun and happy investing! Once your wife is working again, you'll have more flexibility and hopefully the two of you can come up with a plan together. A long term approach to investing will make the most sense.
Thanks everyone.
I’ve definitely git a lot to think about before making any decision but I think short term I’d prefer to focus on maintaining my lending eligibility which will go out of the window if I become self employed.
I may revisit this idea in 12-18 months.
tommytucker wrote:Ugh…sounds way too hard with the odds stacked against me.Now I feel bad. I didn't mean to sound discouraging – anything is possible. Just be aware of the pros/cons of self employment and the impact it can have in the short to medium term.
For what it's worth – becoming self employed is one of the best things I've ever done.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Must admit i can't actually remember ever being employed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jamie M wrote:Hi TomAny sales/commission based industry is difficult to crack. I know it's difficult not to focus on the dollars when going into self employment because we all have to live. However, being driven by money can set you up for failure. If you're passionate, genuinely enjoy what you do and you're good at it – then the money will follow.
If possible (and this isn't for everyone) – maybe consider getting a taste of it on a part-time basis whilst holding down your current job. Others will disagree with me, because ultimately you need to devote all your/time energy in making your business work but with a young family to support, I'd be taking a cautious approach (again that's just me – others will disagree).
Cheers
Jamie
I am 100% with Jamie! Get a part time job doing something similar and see if you like it before you bet the house on your new career choice.
I can't remember who it was but when people came to this business advisor saying "I am going to open a cafe" he told them to go and work at Starbucks first.
First see if you even like making and serving coffee and dealing with the general public on someone else's dime before you invest your life savings into a business only to discover you hate the business.
I worked online in my spare time for 8 year before I left my job to do it full time.
Ryan McLean | On Property
http://onproperty.com.au
Email MeI was a mortgage broker for several years and then started studying law and became a lawyer. It was a lot of work and took about 5 years but now I wish I had done it sooner. Given your tax background you may even get some exemptions too – and you can still give similar advice to what you are doing now, but get paid double! So why not become a lawyer? A tax lawyer?
I am also a mortgage broker still – I gave it up for a while, but got back in because it is easy work and it ties in with the legal advice. I've qualified as a financial planner and decided not to get licenced myself but have a licenced adviser in my office. This seems to be the most difficult of law, tax and mortgage broking. It is a lot of work and hard to find people willing to pay the fees which justify the work. There is a lot of compliance work involved.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Law is something that has always interested me however the study period is what scares me away. I studied 3 years part time post grad dip and that was bad enough, imagine having to complete a juris doctor part time?!
I’m chasing a 6 month secondment atm into a contracts specialist position so we’ll see how that pans out before I make any rash decisions.
Thanks for everyone’s input.
Terry / Richard,
With all the experience and learning lessons you both had, have you considered writing a book or better still, coming up with a online education course thingy? We freshies (new investors) can learn from you.
ChristineNurse wrote:Terry / Richard,With all the experience and learning lessons you both had, have you considered writing a book or better still, coming up with a online education course thingy? We freshies (new investors) can learn from you.
That's what this forums for
Plenty of content from both of the guys is online here.Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
ChristineNurse wrote:Terry / Richard,With all the experience and learning lessons you both had, have you considered writing a book or better still, coming up with a online education course thingy? We freshies (new investors) can learn from you.
Hi Christine
I am in the process of writing several books.
One on tax
one on trusts
one on the tax aspects of interest
one of asset protection
one on succession
still got a long way to go, but hope to have the tax one done in the next few months.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes i am also on the verge of completing an investment book on 0-40 properties in a decade as well as one on Superannuation.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Business consultancy/advisory is far more lucrative and with lots of upside potential. FP/MB is a slow grind and growth is glacial by comparison. You can buy into business advisory consultancy types of businesses on a franchise basis. Do your DD as you would with anything though. You should be able to start at around $150k and work up to around $500kpa within 5 years. Depends on what level/size of business you work with.
What sort of consultancy are you talking about here Freckle?
)
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