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How I Started a Financial Services Brokerage For Less Than $500 – Then Made Millions

The first time I was ever introduced to the finance world was when I watched The Thomas Crown Affair.

If you’ve never seen it, it’s a story about a “finance geek” who had built an empire worth hundreds of millions of dollars, and was so bored from getting his way all the time that he decided to steal an expensive painting.

Definitely worth a watch.

I immediately fell in love with the lavish lifestyle that he lived in that movie. He had the gorgeous mansion in Manhattan, he owned a massive skyscraper, personal driver/butler… the works.

And I knew immediately at that moment that I wanted to be a “finance geek”. I didn’t know what they did, and quite frankly, I didn’t care. I just knew that I wanted that lifestyle.

And for me – a balding, Persian Jew – there was very little hope of succeeding in sports or entertainment. So, naturally I took the business & finance route.

I never thought it would be this easy, though.

When I originally started looking into what is required to become a broker, I learned from many different sources that first, you needed to go to school for either business, finance, or economics.

Then you were supposed to come out of school and either work your way up the ladder at some bank or scrape for scraps as an intern for some big name brokerage with the hope that you’ll make the right connections to move up.

And I did just that.

I went to school for business & marketing. Then came out, and with my fancy degrees, got a job at the bottom of the food chain at a bank.

Fast forward 7 years and $35 million in clients… and I wasn’t anywhere near Thomas Crown. I had barely gotten a 10% raise.

And, then…

I met my mentor. Per his request, I cannot disclose his name, but I can tell you what he told me.

He had gotten involved in financial services about 10 years before me. And he was a millionaire – multiple times over.

He gave me some very simple advice that ended up drastically changing my life for the better. And ever since then, anyone to whom I’ve given this advice has had similar success.

The advice was simple…

“You don’t need a fancy degree or a position at a fancy firm. To make money as a broker, you need to first get licensed with the state… become a broker instead of an employee… then get more clients than the next guy. Anyone could do that. I could teach a high school dropout to do that.”

And that was it.

That message played in my head over and over.

“… get licensed with the state… become a broker… then find more clients than the next guy… “

It was so simple, but it made sense.

So I got the necessary license to become a broker in California, quit my crappy job at the bank, and started hustling.

It definitely took some hard work, long days and long months… but fast forward a few short years, and the net income from my brokerage is over 7-figures now.

And the awesome thing is… the timing in the market has never been as sweet as it is now to get into finance.

10,000 members of the baby boomer generation are hitting retirement age every day, and they need someone to help them manage their retirement assets so they don’t lose it all to market risk and taxes.

And that’s where you come in.

Starting late 2006 – early 2007 – an estimated transfer of $45 TRILLION started. This is money that is being transferred from risky retirement accounts to fixed and safe retirement accounts.

The average baby boomer lost at least 37% during the crash of 2008 and so they don’t want to risk their money anymore.

The only people that can transfer their funds for them from these risky accounts to the safe ones are the people who are licensed with their state to do so.

And for the 76 million baby boomers, there are less than 30,000 licensed agents available.

The timing of the market is impeccable.

We’re planning on working even harder during the next 5-10 years so we can get as much of that transfer as possible.

How about you?

Collateral Management With the Help of Financial Services Software

Collateral management allows lenders to employ less risk than they would have previously, by any number of unsecured financial transactions. Collateral has been an effective means for collecting unpaid debts for hundreds of years, so how does it work today? In today’s industry, it typically is considered bilateral insurance. Although in the last twenty years, collateral has taken many other forms: collateral outsourcing, collateral tax treatment, cross border collateralization, arbitrage, and several others.

Every transaction contains an element of risk, especially on transactions whereby cash is not the method of exchange. Some additional risk-free transactions are in the shape of stock and bond purchases, whereas transactions with a lot of risk include derivative deals, credit default swaps, business loans such as money market transactions and term loans. In the aforementioned transactions, financial institutions will typically demand some type of collateral in the following ways: cash, government bonds, notes, stocks, real estate, art, etc. The requirement for collateral is nearly required in transactions between counterparties including hedge-funds, lenders, brokers, and banks. Typically, collateral can be used in smaller loan situations, but they are of course vital for the larger transactions.

A lot of people are turning towards financial services software for the best advice with regard to collateral, even larger entities including banks are benefiting from software’s effortless functionality. A reputable collateral software program shares insights, methodologies, and strategies for making the right decisions. With predetermined, analytical data, the user is informed of the best decisions for his or her business. This is certainly an option for some.

Here are some useful terms to help understand some specifics regarding collateralization: a credit enhancement allows a borrower to receive the best rates possible. A credit risk mitigation opportunity is for private transactions that diminish risks, which the counterparty may default on entirely or partially. Moreover, a trade facilitation tool allows parties to diminish holds (limits, credit holds), so that parties can trade with one another instead of reaching an impasse. Lastly, an arbitrage opportunity uses tri-party transactions that require collateral.

There are far too many facets of collateralization to focus on entirely, so it may be wise to focus on OTC (over-the-counter) transactions because they are quite common. In these situations collateral is mandatory between two parties whether they are large or small. Despite the size of the financial institution, collateral is a must. For any business transaction risk management procedures must be in place, but often time’s accurate assessments border on the impossible. The best way to design a contract that benefits both parties is to steer away from jargon that confuses instead of clarifies. A contract that clarifies counterparty risks and settles bilaterally is the preferred method, instead of allowing clearing houses to negotiate the terms. For both parties to agree, supervisory guidance is the only option. Moreover, collateral authorities need to make sure that there are no illegal actions underlying the OTC agreement in place.