Financial Coach

[Mounds]

Started thinking... how would you become a financial coach? I'm thinking an amalgamation of two things: coaching courses and personal finance courses.
Do you think the world could use a thing like that? I'm pretty passionate about personal finances.

[SnerpGoodWord]

I suppose you hang out your shingle. I don't think it's a recognized profession per se with licencing requirements or anything like that.

As to how you get good at it, I have no clue. I find that in general giving financial advice is a thankless job.

[SatvikBeri]

There are some nonprofits devoted to increasing financial literacy, you could work with one of those.

The big problem is that "financial coach" is too vague-and really, very few people are interested in "financial literacy". I would probably aim to be a financial planner (if you're more interested in working with people) or an investment manager (if you're more interested in the investment side).

[iDreamCatcher]

Originally Posted by Mounds

Started thinking... how would you become a financial coach? I'm thinking an amalgamation of two things: coaching courses and personal finance courses.
Do you think the world could use a thing like that? I'm pretty passionate about personal finances.

Absolutely.
If you can prove your total personal success in financial world - lots of people would be ready to learn from you in whatever way you want to share your skills.

Gleb

[SnerpGoodWord]

Originally Posted by iDreamCatcher

Absolutely.
If you can prove your total personal success in financial world - lots of people would be ready to learn from you in whatever way you want to share your skills.

Gleb

This is key - if your source of succeess in the financial world is the financial coaching itself, you have nothing to offer.

[Mounds]

That's kinda what I figured, if you are financially successful yourself then others will want to learn from it.
I consider myself a financial success. I do have debt and it's going the right direction. When my debt is gone, I will build wealth. So on and so forth. It's actually incredibly easy when you figure it out.

[SnerpGoodWord]

So here's the thing - I don't wan to poo poo your interest in finance, but if you're in debt (which I take to mean a negative or near-zero net worth), then at most you're looking forward to future success.

I really don't feel that's a background conducive to being a coach.

In my opinion, a would-be coach would need to prove that, taking into account their starting assets and liabilities and initial income, they achieved a high rate of net worth growth while being able to enjoy a reasonable level of expenditure.

So for example if Bob started with a $50,000/year income and $10,000 in cash and $10,000 of equity in his $150,000 home, and in 5 years parlayed that into a million dollar balance sheet while still being able to provide for his family, that would be very interesting. Lots of people would want to know how he did it.

[Mounds]

Nah, I say what better way to learn! I have debt and yet I manage to invest, save, pay all my bills on time and buy a few luxuries. Nothing to it. And yet millions struggle.
Everyone pays attention when they hear that someone got rich overnight. They fantasize about that someone being themselves. Chances of it happening to you? Highly unlikely. Chances of you eliminating your own debt and creating wealth over time? Highly likely if you know how to do it. It's just that it doesn't make it to headline news.

So for example if Bob started with a $50,000/year income and $10,000 in cash and $10,000 of equity in his $150,000 home, and in 5 years parlayed that into a million dollar balance sheet while still being able to provide for his family, that would be very interesting. Lots of people would want to know how he did it.

That's awesome for Bob! How many of his followers will be able to pull that off? 1/1000? 1/10,000? No thanks

[SnerpGoodWord]

Originally Posted by Mounds

Nah, I say what better way to learn! I have debt and yet I manage to invest, save, pay all my bills on time and buy a few luxuries. Nothing to it. And yet millions struggle.
Everyone pays attention when they hear that someone got rich overnight. They fantasize about that someone being themselves. Chances of it happening to you? Highly unlikely. Chances of you eliminating your own debt and creating wealth over time? Highly likely if you know how to do it. It's just that it doesn't make it to headline news.



That's awesome for Bob! How many of his followers will be able to pull that off? 1/1000? 1/10,000? No thanks

Depends how he did it and how many people he tells.

But if you've got a zero or negative net worth, you apparently haven't done too well by yourself thus far. Why would someone want to emulate you?

[Mounds]

Same reason that people emulate JD from Get Rich Slowly - Personal Finance That Makes Cents. He managed to turn it around.
People don't care about how to stay out of debt. No one pays attention until, whoops, they're in debt. Then they care about how to get out. Personally, I'd rather talk to someone who has had the experience of escaping debt than someone who has never been there.
By the by, I've paid my debt down over $9000 this year so far.

[SnerpGoodWord]

Originally Posted by Mounds

Same reason that people emulate JD from Get Rich Slowly - Personal Finance That Makes Cents. He managed to turn it around.
People don't care about how to stay out of debt. No one pays attention until, whoops, they're in debt. Then they care about how to get out. Personally, I'd rather talk to someone who has had the experience of escaping debt than someone who has never been there.
By the by, I've paid my debt down over $9000 this year so far.

Looking at that blog, I guess it targets the extreme basics - interest rates, spend less than you earn, stuff like that. Is that what you intend to coach, as opposed to more sophisticated finance?

[Mounds]

Originally Posted by SnerpGoodWord

Looking at that blog, I guess it targets the extreme basics - interest rates, spend less than you earn, stuff like that. Is that what you intend to coach, as opposed to more sophisticated finance?

Yer damn rights that's what I'm going to coach them on. That's exactly what people need. You have to grasp the basics to move on to the more sophisticated finance. By the way, what are you thinking with more sophisticated finance?

-Tim

[luckyJTF7s]

in the quit smoking field, Allan Carr is a GURU slash GOD. ("Easy Way To Quit Smoking", and yes thanku, I'm coming up on 2 months May 21! WOO!)...

... his credentials are, he quit after a lifetime smoking and was cracking 100 a day when he did it. he knows the psychology cold. because he has traversed the territory, his info is much more on point than any I found in the Quit Smoking For Dummies! book (lots of MDs and psych dudes there, little of help. whole lotta scare statistics and "wow yer a moran!" fear festivals tho...

- another example is David Allen of GTD. (time management guru - very large following - very successful - very together - very white collar etc). he once had an entirely chaotic life and a heroin addiction. long in the past and now irrelevant.

------------
Anyway above 2 egs my way of saying: I am amenable to the argument that a financial planner who had turned his life around from a financial mess would be a very worthwhile guy to talk to.

- In the meantime, pre-financial total awesomeness: you can get professional credentials... here in Ontario, they wd be CSC, RR, FP, CFA probably some I am unaware of. People like dealing with an expert with certified training and purdy initials, I think... It would also road test your interest and commitment to the field.

- Also, in the meantime you cd volunteer? or work PT? counselling people at a debt consolidation free advice type place for hi credit debt people?

- I also had a friend who ran a *ghost portfolio* (imaginary money, decisions vetted and timestamped by disinterested 3rd party, all friction eg commissions etc taken into proper account) and parlayed his success with that into an entry level job doing the real thing at a buy side firm (pension + mutual fund management). No reason you can't *act as if* you had 500K to allocate and practice as if that was a real client or develop equity investment chops or whathave you, with play money, if that is treated seriously.

[SnerpGoodWord]

Originally Posted by Mounds

Yer damn rights that's what I'm going to coach them on. That's exactly what people need. You have to grasp the basics to move on to the more sophisticated finance. By the way, what are you thinking with more sophisticated finance?

-Tim

I'm a little unsure how it's possible that someone could be so bad at arithmetic as to not understand inflow/outflow at a minimum. It seems likely to me that their problem is not a lack of understanding, but rather no desire to act on that understanding. But if you can find people who want to be coached on that point, rock on I guess.

Looking at that blog, I would say the next concept it doesn't cover is that interest rates are relative to inflation/deflation, and specifically relative to the change in price on goods you intend to consume in the future. So if you put your savings in the bank at 1.5% APR interest and the costs of the goods you eventually consume goes up by 3% APR, you lost. Not exactly sophisticated finance, but I guess it would be the next idea.

[CoolBee]

Mounds - when you say 'financial coaching' are you seeking to 'give advice' which would be mentoring not coaching and in the financial field may require that you have specific qualifications or membership of specific organisations.

In the UK we have to be 100% Clear and Distinct about the difference between coaching (no advice given, no suggestions made - everything the client does is brought out from the client by questioning and exercises) and giving advice (or mentoring) where you would come under all manner of regulations FSA and so on.

Most of the answers in this thread seem to think that 'coaching' would include giving advice/suggestions - that could land you in serious hot water in the UK particularly in financial, medical, legal, therapy and counselling areas.

Define exactly what service it is that you wish to offer and then check out your country's / state's regulations on the matter are!

[Mounds]

Originally Posted by SnerpGoodWord

I'm a little unsure how it's possible that someone could be so bad at arithmetic as to not understand inflow/outflow at a minimum. It seems likely to me that their problem is not a lack of understanding, but rather no desire to act on that understanding. But if you can find people who want to be coached on that point, rock on I guess.

Gonna make a wild assumption and say you've never been in debt before.
Here's the thing with debt (which parallel's with weight gain): it creeps up on you. I've had problems with debt since I was 18. When I was 24, my parents stopped bailing me out and I still managed to rack up $24k over the course of a year and a half. When you wake up one day and realize that you've maxed your loans, that's a pretty dismal feeling. At that point, I started paying for education (mainly books), the very education I want to offer to others. Those books, combined with my own drive, are my best investment. I figured, combine the knowledge of the books with a helping hand and a dose of motivation. Help people set up a financial infrastructure with lots of passive barriers to get them out and keep them out of trouble.

Looking at that blog, I would say the next concept it doesn't cover is that interest rates are relative to inflation/deflation, and specifically relative to the change in price on goods you intend to consume in the future. So if you put your savings in the bank at 1.5% APR interest and the costs of the goods you eventually consume goes up by 3% APR, you lost. Not exactly sophisticated finance, but I guess it would be the next idea.

I'm sure JD has gone into this, if not on his blog then he has in his book. That's another thing that few people take into account.

[iDreamCatcher]

Originally Posted by Mounds

... Personally, I'd rather talk to someone who has had the experience of escaping debt than someone who has never been there.
....

That's exactly right.
The one who got himself in financial misery and than successfully overcome it can coach/mentor in 2 fields at the same time: self-help and finances.

Gleb

[InterfaceLeader]

The only thing I would say is that there are a lot of good, well-known resources out there. JD's blog, obviously, Dave Ramsey is the other one. A lot of books etc.

The kind of people you would be targeting with 'get out of debt' advice probably wouldn't/shouldn't be paying 'coaching' fees, but just buying a $5 paperback book and getting on with it.

The higher-priced advisory stuff is when you start getting into the more complex stuff like balancing stock portfolios and what have you.

Not that there isn't money to be made in the 'get out of debt' industry, I just don't think one-to-one coaching is it.

[iDreamCatcher]

Originally Posted by InterfaceLeader

The kind of people you would be targeting with 'get out of debt' advice probably wouldn't/shouldn't be paying 'coaching' fees, but just buying a $5 paperback book and getting on with it.

I just helped to build a paid membership site for successful client who charges people between $200-$1000 for information and advice on what to do when you cannot afford paying mortgage.
My initial feeling was "well... if people cannot pay mortgage would they pay $1K to join membership site?".
Apparently - people are paying these fees!

That actually helped to shift my belief system that when people are saying "I cannot afford" they actually mean "I don't want to afford". When people "really want" - they will find resources to get what they want.

So if value of coaching advice is properly presented - people will pay and will buy it regardless of price and regardless of their own claimed affordability level.

Gleb

[InterfaceLeader]

That's kind of amazing actually.

I suppose it would depend on what kind of mortgage you weren't affording to some extent. i.e. if you have a £10k a month mortgage payment, paying a grand would be comparatively worth it. Whereas if you had a £300 a month mortgage payment, paying a grand would be better spent on paying the mortgage for the next three months.

hmmmm.

I suppose that could apply to debt too. I wasn't going to spend £2k on clearing my £2k debt (even I can do that maths!). But if someone had £200k in debt, paying £2k to get the advice might be worth it

[SnerpGoodWord]

Originally Posted by iDreamCatcher

I just helped to build a paid membership site for successful client who charges people between $200-$1000 for information and advice on what to do when you cannot afford paying mortgage.
My initial feeling was "well... if people cannot pay mortgage would they pay $1K to join membership site?".
Apparently - people are paying these fees!

That actually helped to shift my belief system that when people are saying "I cannot afford" they actually mean "I don't want to afford". When people "really want" - they will find resources to get what they want.

So if value of coaching advice is properly presented - people will pay and will buy it regardless of price and regardless of their own claimed affordability level.

Gleb

To be clear, I'm not arguing that people will or won't pay. I'm arguing that the service is not of sufficient value and that Mounds is not qualified to provide it.

If you can't pay your mortgage, step 1 is to stop spending money on $1000 internet coaches and use that money to either pay your mortgage, or as a cushion while you default or enter bankruptcy.

[Mounds]

Originally Posted by SnerpGoodWord

To be clear, I'm not arguing that people will or won't pay. I'm arguing that the service is not of sufficient value and that Mounds is not qualified to provide it.

If you can't pay your mortgage, step 1 is to stop spending money on $1000 internet coaches and use that money to either pay your mortgage, or as a cushion while you default or enter bankruptcy.

Lol, if you keep pitching I'll keep swinging there Snerp. Am I right or wrong when I determine that you have no use for this service?
If you look at all the people who are in debt and have money problems, do you think that maybe some of them could benefit from financial education?
Also, how come I'm not qualified?

-Tim

[James81]

Originally Posted by Mounds

Personally, I'd rather talk to someone who has had the experience of escaping debt than someone who has never been there.

Agreed.

As soon as you get out of debt and build yourself up into a positive net worth, then go after your financial coaching business with both barrels.

[James81]

Originally Posted by Mounds

Also, how come I'm not qualified?

-Tim

You're not qualified because you haven't actually gotten out of debt yet. Your path may very well lead you towards being debt free (and I hope it does), but until then you are not qualified to teach someone else how to get out of debt. You don't know what sort of pitfalls are going to come along the way to getting out of debt. And you don't know that you are going to remain debt free once you get there. Until you get to that point, then you are only qualified to teach people how to manage their finances to the point at which you are at.

[SnerpGoodWord]

Originally Posted by Mounds

Lol, if you keep pitching I'll keep swinging there Snerp. Am I right or wrong when I determine that you have no use for this service?
If you look at all the people who are in debt and have money problems, do you think that maybe some of them could benefit from financial education?
Also, how come I'm not qualified?

-Tim

1) You are correct I have no use for your service. I know far more about finance than most people, although my expertise is really not focused on personal finance - I'm an expert in the futures markets, and know enough about bonds, equities, and interbank FX to be dangerous.
2) Yes, but not from you - at least not yet.
3) Because you haven't yet done what you're claiming to do for them. When you've gotten out of debt and have say a six figure net worth (which is a modest, attainable goal for anyone in the first world) then you can explain to other people in debt how you did it.

[Mounds]

Truth is, I'm at a positive net worth. I have quite a bit invested (between double and triple my debt value). Don't want to pull the investments to pay off my debt because I'll probably end up losing money in the end.
Of course, I'm going to wait with financial coaching until my debt is paid off completely, the old fashioned way. I renegotiated my APR to a low rate (2.75%) so it's not costing a whole lot to carry a balance. By the time I get a few personal finance courses done, debt will be clear.

-Tim

[Mounds]

Originally Posted by SnerpGoodWord

2) Yes, but not from you - at least not yet.
3) Because you haven't yet done what you're claiming to do for them. When you've gotten out of debt and have say a six figure net worth (which is a modest, attainable goal for anyone in the first world) then you can explain to other people in debt how you did it.

I agree with the second point but not the third point. It is quite achievable to get to a six figure net worth but not necessary. There's plenty of people who can tell you how to get rich in a hurry. I'm only interested in helping people get out of the mess they've gotten themselves into. I quite enjoy it!

[Mounds]

Sorry about triple post...

Do you guys think this would work better as a seminar or in a one-on-one setting? I like public speaking but not sure how effective a seminar would be.

[SnerpGoodWord]

The reason that I said 6 figure net worth is that that's enough to prove that whatever you're doing more or less works - that whatever investment scheme/income stream/whatever you've cooked up is actually giving you decent returns.

Also, have you thought about the concept of leverage as it applies to personal finance? Maintaining debt (whether secured or no) so you can invest more is a method of increasing your leverage. It's analogous to investing on margin, although since your creditor(s) and investment counter-parties may not be the same people, they may respond more slowly than a typical margin situation.

Is that what you intended to do with your personal finances?

[SnerpGoodWord]

Originally Posted by Mounds

Sorry about triple post...

Do you guys think this would work better as a seminar or in a one-on-one setting? I like public speaking but not sure how effective a seminar would be.

Gotta be 1:1. I can't imagine what anyone would say in front of a room of broke people that would help them.