2010 is starting off with a bang! In fact, January may be my best month since I started down this "road to independence" just under three years ago. Moreover, income now exceeds expenses with some left over. Why has it taken almost three years? When your business is "fee-only" it takes much longer to get your income to the point where you can earn a decent living. Although it's a slower, longer runway, once the plane leave the tarmac, the ride is great.
To digress a bit, it reminds me of a time back in mid-2001 when I left the brokerage firm where I worked and moved 1,651 miles away to run a bank subsidiary in the Northeast. This particular bank had 18 branches spread over two states and the subsidiary was established to provide financial planning and investment management services. As principal, my responsibilities ranged from managing personnel to growing the business to working with clients. I remember how long it took to get our income to the point where it covered our expenses. We did receive some commissions but most of our business was fee-based asset management. We also had an excellent referral network. Each branch had a monthly quota for referrals to the subsidiary. In fact, I remember a few months when we received as many as 80 referrals! We increased assets under management from $3.5 million to about $28 million in slightly less than two years. When I resigned, our recurring income was just about enough to cover expenses. Needless to say, I do not have such a referral network now and hence only receive about 8-12 referrals per year. Since my business model is "fewer clients with more wealth," that works just fine for me.
