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Why I gave up $422,322 (financial services industry EXPOSED) - YouTube
Channel: Wealth Hacker - Jeff Rose
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what's going on y'all welcome back to
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the channel so today we're gonna go back
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in time I'm gonna share a little bit
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about my journey of becoming a financial
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advisor and in that process expose and
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reveal how the financial service
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industry works now in most cases if you
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are working for an employer a company
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and that company is bought out you are
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fearful if you even have a job if your
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position exists but in the financial
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services industry it is completely
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different and I didn't know this until I
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found out firsthand and through this
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process I gave up four hundred and
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twenty two thousand three hundred and
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twenty-two dollars that was handed to me
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I gave that up I'm gonna share why I did
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that how I did that and more right now
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[Music]
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for those of you that are new to the
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channel and unfamiliar with my
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background of my history I was a
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financial planner for 16 years I began
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my career with a firm that was named AG
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Edwards I started this career right out
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of college I was an intern took a job as
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a junior broker and then became a
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financial consultant and was with them
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for five years now the only reason that
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I left is because that brokerage firm
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was bought out by another brokerage firm
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actually a bank it was named Wachovia
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Bank which no longer exists because they
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were absorbed by Wells Fargo I remember
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the morning that happened I got a text
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message from another financial advisor
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in the office that I worked with and
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then I turned on CNBC and there it was
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the news the AG Edward was selling the
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company that I started my career with
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was no longer going to be around like I
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was just in shock but that wasn't the
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biggest shock that I was going to
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experience it was until I got to the
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office talked to some of the other
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advisers and I learned how it works how
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the financial service industry works it
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would I learn was because one of the
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advisers said I wonder how much they're
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going to pay us to stay and I was like
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what do you mean pay us to stay pay us
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to stay like pay us to stay at our jobs
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I don't get it like I I have a job I'm
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working and they're gonna pay me to stay
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like I'm gonna help me understand this
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so I quickly learned in the process that
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when one firm is buying out another it's
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a state of chaos and uncertainty and for
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the financial advisors that are with the
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company that is being bought out it's a
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prime opportunity for them to explore
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other options other firms because they
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might not like the company that's
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acquiring them or there might be
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something better out there for them so
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in those cases the firm that is
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acquiring the other firm is going to
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want to pay those advisers some sort of
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retention bonus for staying for not
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leaving for not bolting to something new
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and the reason for this is because the
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financial advisor is the sales force for
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the broker
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ferm they're the backbone they're the
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reason they get all the revenues all the
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profits it's them so if they are your
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top talent you don't want them to leave
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it's just like an athlete entering in
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free agency you want to pay them
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sometimes overpay them just so they stay
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so that you don't lose their talent
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their skills and go to work for the
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competition so at the time that this is
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going down I'm 29 years old I'm married
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we have our first child on the way and
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I'm just trying to wrap my head around
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that
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the firm that I'm working for that I
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love working for that I've been here for
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the past five years they're going to pay
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me a bonus on top of what I'm already
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making just to stay like that is blowing
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my mind but my mind gets even more blown
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so it was taking some time for my firm
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to create the retention bonus all their
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calculations how much we were gonna get
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paid but I mean I'm excited I'm pumped
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to see what that amount is but in that
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process I started to be recruited by
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another firm Merrill Lynch which is one
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of the biggest brokerage firms and back
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in the day when this was all going down
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like they were the brokerage firm like
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they were the mack daddy they were
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big-time the Quinns mack daddy is in the
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how they started recruiting me and
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another advisor about opening our own
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branch office and let me tell you
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something when a firm like that is
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recruiting you like that makes you feel
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pretty dang good and in part of that
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process they flew us out to New York and
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at the time I had never been to New York
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so they put us up in the Ritz we had
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black car service we went to some of the
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finest restaurants in New York City I
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mean I am loving it I'm eating it up
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can't be free meals when I got back from
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New York I was so excited I was so
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jazzed
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I remember just talking to my wife how
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awesome the trip was and I just knew
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that that was the next chapter in my
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life like I knew that opening up a
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branch office a new office in our town
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of Merrill Lynch like that was the next
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thing and as I'm excited about this I'm
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loving
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and then I get the offer I get the
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package they were going to offer me
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three hundred and fifty nine thousand
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eight hundred and sixty-five dollars in
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total compensation some of that was
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upfront cash other of it was paid over a
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performance bonuses provide I hit
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certain levels but either way like it
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was a game changer for me like I said
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early remember at the time I'm 29 years
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old I have one kid on the way of that a
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hundred and thirty-eight thousand was
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going to be cash upfront the other fifty
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nine thousand was stock but I was making
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about sixty or eighty thousand dollars
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per year so to receive almost a hundred
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and forty thousand dollars up front on
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top of being able to make the same
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methods already making like that was
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almost tripling how much I was making at
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that time
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like that was huge for me let me give
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you a quick breakdown on what that
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looked like how much they were gonna pay
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me upfront how much of that was cash doc
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and the rest that was paid out as a
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performance bonus over a five-year
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period all right so here is the print
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off this is the this is what I received
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twelve years ago and first let me just
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show you the bottom there's the three
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hundred and fifty nine thousand 865 that
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I could have made and how that broke
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down so we had the upfront bonus which
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seven percent cash we had a hundred and
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thirty eight thousand that we had
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Maryland stock fifty nine thousand and
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then from there it was all based off
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hitting certain production so production
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basically is your total total revenue
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generated your sales your commissions
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fees generated and through with that you
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had the potential to make and this is
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all based off where I was like whenever
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whenever the whole the merger took place
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so they're just basing off currently
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where you are and then so that year
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there was that bonus and then there was
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this bonus and this bonus and this bonus
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now none of those bonuses were
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guaranteed that would have had that was
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based on me actually hitting certain
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numbers so there definitely is a
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potential that I wouldn't have received
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any of that the only thing that was
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guaranteed
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was that amount there that a hundred and
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thirty-eight thousand in cash and
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fifty-nine thousand in Maryland stock so
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this point time I pretty much drooling
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over this money even though I haven't
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received yet it's not my bank account
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but it felt like I already had it but I
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also realized that Wachovia still hadn't
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made their offer how much were they
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going to pay me just to stay so the
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offer that they made that Wachovia made
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was nearly not as much as Merrill Lynch
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in fact they only offered sixty two
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thousand four hundred and fifty seven
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dollars I know I said only sixty two
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thousand four fifty seven I know I heard
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it I heard it only but once again this
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is sixty two thousand dollars just to
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stay and do what I was already doing
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because the one thing I really haven't
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mentioned yet is if I was going to open
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a Merrill Lynch office like that is a
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lot of work obviously you gotta build
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the office and you got to try to
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convince all your clients to transfer
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with you and that may or may not happen
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like there is a lot of risk involved but
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as someone that loves challenges like I
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was just enamored with the idea of
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opening up an office hitting all these
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numbers because I knew that I was going
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to get all of these performance bonuses
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like I just knew it but then a crazy
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thing happened you see God had something
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different in store for me now I wish I
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could say that I made the choice of
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turning down the $359,000 I can't say
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that I turned down the sixty-two
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thousand but in fact the three hundred
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fifty nine thousand that is something
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that God knew that I could not make that
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choice for myself so the other advisor
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that was being recruited with me decided
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that he didn't want to go and it was
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pretty much a package deal they wanted
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both of us at the time I was still
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younger still hadn't really proven
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myself I kind of proved myself but he
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was definitely a much larger producer a
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much bigger have much bigger book of
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business than I had so they wanted us
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both and without him they didn't want me
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so he said no which means basically my
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deal was off the table and I wish I
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could sit here and tell you that I took
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that in stride that I went home and felt
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really good about the whole thing I'm
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lying don't leave don't believe me I'm
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lying I'm so lying if I'm being honest
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the day that I found out that I was not
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going to get all this cash upfront that
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I was not going to Merrill Lynch because
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the other guy said no I went home I went
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home early that day I remember I went
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home and crawled into my bed still
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wearing my tie my shirt and tie I think
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you still have my leather coat on I was
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so depressed I was so sad but through
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that process I clearly discovered that
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Wachovia was not where I was supposed to
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be they did not align with what I was
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building the way that I managed my
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clients the way that I did my investment
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strategy my financial planning it just
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wasn't a good fit so I knew that there
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was something better something else out
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there for me and through that process I
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ended up talking to three other advisors
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in my office and we went on to form our
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own independent financial planning firm
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and that's where Alliance investment
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planning group came to play and from
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there my other firm Alliance wealth
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management which I sold this year so
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it's crazy to think that I gave up four
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hundred and twenty two thousand three
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hundred and twenty two dollars three
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fifty nine from Merrill Lynch sixty-two
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thousand from Wachovia to go start an
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independent financial planning firm
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where I didn't get any upfront bonus in
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fact I had cost to set up the business
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that I wouldn't have had with either one
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of the two other options but I knew
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there was something out there and it all
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started with starting that firm and then
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launching my blog good financial sense
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which I would have never been able to do
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had I started with Merrill Lynch there
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was no way they would allow me to do
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anything like that so while I can look
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back and calculate and see that I had
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four hundred and twenty-two thousand
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that I gave up the reality is like I
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didn't lose that I didn't give it up I
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ended up making that and so much more
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because I went out and did something
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that was even more beyond my comfort
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zone
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that wouldn't allowed me to start my
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online business and explore other
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business opportunities it is a blessing
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that over $400,000 was on the table and
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I was able to say no or had some help in
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being able to say no that was over 12
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years ago and not a day goes by that I
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regret turning down four hundred and
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twenty-two thousand dollars but it's
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still crazy right it's crazy that that's
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how the financial service industry works
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that you can either get paid just to
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stay or get paid a whole lot more to
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take on something new is this new to you
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did you know this is how it works
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I'm curious let me know in the comments
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below what you think could you have said
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no was your heart racing when you heard
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that I was turning down that amount of
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money I'm just kind of curious what you
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felt what you could relate to in that
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experience Marchal until next time this
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is Jeff rose reminding you that it's
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your money it's your life and all you
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can make it awesome peace
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[Music]
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