The following is an excerpt from "The Millennial Money Fix" by Douglas A. Boneparth and Heather J. Boneparth (Career Press, 2017). The book publishes August 21. Mr. Boneparth is president of Bone Fide Wealth, a wealth management firm that focuses on millennials. Ms. Boneparth is an attorney now working in the insurance industry.
"Like generations before us, millennials have an entrepreneurial spirit. What separates us is our ability to harness technology to be more productive; to achieve more in the same time given.
Some millennials discovered their entrepreneurial identity when their advanced degrees didn't align with the demands of the job market. Unemployed or underemployed, they didn't have a choice but to set out on their own. Others found traditional corporate roles to be bureaucratic, archaic and infuriating. Even more felt like they were doing just fine, but weren't happy.
If millennials in the workforce are guilty of one thing, it's dreaming. It's believing that we can create or offer something that could impact someone else. We don't feel entitled to do something important. We just understand how much smaller technology has made our world. Making an impact is more possible than ever.
All this doesn't mean you should be your own boss. Not yet, at least.
There are serious tradeoffs in becoming an entrepreneur. Although you hope to achieve limitless success, you are making a huge gamble. Foregoing your salary welcomes the peril of instability at any time — at terrible times. So much so that it's deemed too impractical for most to consider ever doing. And not everyone is ready to go unmanaged. To flourish on your own, having patience and discipline is almost mandatory. You have no benchmarks for performance other than those you set for yourself.
Then how can a millennial with an idea or passion make an impact if he or she has too much at stake, too much student-loan debt to repay or too many mouths to feed?
By doing it on the side and hustling inches closer every day.
I don't have a better example to share than my own. I [Douglas] am a financial adviser who worked for other people before launching my own wealth management firm. The careful steps I took to establish my own brand, while earning a stable income elsewhere, are translatable to anyone's career path. Here's how it happened.
Before I even graduated college, expectations were set for me. My father opened a satellite office of his financial planning practice in Gainesville, Fla., where I worked during school and would continue providing service afterward. He wanted this to be his succession plan and the ticket to his retirement someday. I learned much of what I know from him, no doubt. But within that first year out of college, I knew our father-son team wasn't working out. As generous as his time and energy were, we disagreed about almost everything.
The day-to-day was growing too hard for our relationship to bear, and that wasn't even what kept me up at night. I was captivated by helping people with their finances, but I wanted more. I wasn't going to be happy with a lifetime of servicing my father's preexisting relationships. I wanted to help my own type of clients, on my own terms, and in my own firm. Oh, and I wanted to move to New York City to do it.
When I told him, honestly, I think he was heartbroken. But like the loving father that he is, he vowed he would not stand in the way of my dreams. He sent me up north with a hug and my two duffel bags, more uncertain than I about whether it would work out.
I was moving to one of the most expensive cities in the world. And no, my parents did not lend me a dime. I had a small cash reserve saved from living at home for a year (a decision I think there's no shame in making). Heather told me what it would cost to find a roommate in a decent apartment on Craigslist, and I used my cash flow analysis to understand how much I would need to earn to get by. I mean really, just get by — I made meals for a whole week from two pounds of ground beef chuck (and was proud of myself already)! Without being a master of cash flow, I never would have had the confidence to go all in.
After some interviews, I secured a position as an associate adviser in a Park Avenue practice. I wrote financial plans and performed administrative work to help my boss' business run smoothly. In addition to my base salary, I negotiated a subsidy for my continuing education — I wanted to become one of the youngest certified financial planners in the country. This would help legitimize me in a field where most successful professionals were much older. I worked like a dog servicing clients, studying and starting to figure out how I'd find clients of my own. The goal would be to phase out my base salary for client revenue. But it became clear very fast that this wasn't going to be achieved through cold calling. I needed to be patient, keep my head down and learn.
If you are fortunate enough to work in the industry you'd like to spin off in, that's great. Even under the thumb of someone else, you are gaining on-the-job training that applies to your craft. You might be in for a long game, but again, you need to be patient. This is the most practical way to fulfill your financial obligations while getting closer to your goal. You can see what works and what doesn't — and it's not your butt on the line. Witnessing someone else's business decisions (even when they're wrong) can teach you valuable lessons you will have forever.
Within days of my arrival to the Big Apple, the bottom fell out. The last person you wanted to be was a financial professional, as I fielded no less than a dozen hysterical phone calls per week from my boss' clients claiming the sky was falling. But dealing with them was the easier part of my day.
Through the following years, I watched Heather and our peers struggle, terrified that the decisions they made were the wrong ones, not knowing how they'd ever start their careers or have the chance to do what they knew they were capable of. Heather was (and is) an incredibly strong woman and she felt like a victim. That was what killed me. No one so strong should feel incapable of improving her situation, no matter how bleak.
I realized that my real goal wasn't just to be my own boss, but to educate and empower millennials.
Older financial advisers were dismissing my generation as the entitled children of their clients. They had no idea how to assist with the new challenges we faced breaking into the workforce, or how to answer our unique financial questions regarding student-loan-debt repayment. More importantly, there were no wealth management firms run by millennials for millennials. With retirements of their own to worry about, older advisers weren't willing to invest in people just starting their careers with challenges they couldn't relate to. I could relate to them because I was one of them. There was a crack in my industry and I hoped to be one of the first to fix it.
As the economy recovered, I switched firms and recouped some time to start brainstorming my plan of action. Although I had made some friends living in the city, I knew I would need a bigger network to grow a business, as mine wasn't large enough to form a meaningful pipeline for new clients. Attending a renowned business school program would expand my network and enhance my credentials; two gains for the price of, uh, a vacation condominium?
Before deciding to enroll, I carefully considered what would need to occur to make a return on my investment. Indeed, the cost was exorbitant, and I just watched Heather learn the hard way about making uninformed financial decisions with her student loans. I decided that the only way it would make sense to pursue my MBA would be in a night program, so that I could borrow less money and continue to make money during the day.
There will come a time when you need to make an initial investment in your business venture. It could be additional training, a piece of equipment or straight up cash. But be a little cavalier about the unknown. Every entrepreneur should possess a bit of bravery. It's why we are drawn to set out this way in the first place.
In pursuing my MBA, I formed relationships and even learned a thing or two about business. My expanding network of young professionals translated to new clients and referrals, many of whom were also friends. It felt so wonderful to root for them as they did for me. My investment was starting to pay off.
TAKING THE PLUNGE
Right before I walked across the graduation stage at Radio City Music Hall, I took the plunge: I eliminated my base salary and started relying on only my clients to generate income. Heather and I had gotten married, and her job provided us with the financial security and medical benefits we would need to leave my salaried days behind. Her stability made it possible for me to get closer to my goal. The ebb and flow of our relationship allowed this to be my time.
From then, I went all in, setting out to prove that financial advice for millennials wasn't a "niche" — it was the future. I sought the attention of national news organizations to become an authority on the subject and build a constant stream of press. Social media and technology helped me distribute educational content to the right people. I established relationships with nonprofit organizations and took leadership positions to affect the industry. Most importantly, I committed myself to providing outstanding service to my clients of all ages.
By December 2016, I was ready to go all in for real. I left my former organization to build my own firm, Bone Fide Wealth.
It took eight years from the day I hugged my dad goodbye in South Florida to make it happen. Eight years of training, education, patience, hustle, negotiation, compromise, success and failure. And this is only the beginning. I'll say it again: Nothing worth doing is easy. I keep this in mind with every challenge I face.
Millennials are doers, and we are doing more than ever. Our hunger to have an impact, create, innovate and disrupt the status quo makes us natural entrepreneurs. Pair this spirit with a solid foundation in personal finance, and you can achieve this great thing in life. You can be unstoppable.