My Uncle's Emails

He's an Aquarian named Brad. He lives in Boston with my Aunt Mary and their two daughters they adopted from Ethiopia -Hana and Meron. He has recently wanted to know more about WFG. It's amusing.

Uncle Brad:

What's new?  Are you working?  What's ahead for 2012?

I noticed yesterday that I'm being charged $1 per month by USANA.  Is that for my membership?  I haven't ordered anything since my original order.  I'm happy to let it drop, or to order fish oil and a multivitamin if it'd help you.

love,

Uncle Brad

ME:

The $1 a month is a donation to the Children's Hunger Fund. Usana as supported that cause for over 20 years now.

I'm focused on World Financial Group right now. I'll pick up on Usana again when I become more successful in WFG. I officially got appointed with all the companies I sent requests to and I'm going to start trying to build a list of clients.

How are things goin in Boston?

~Jessica

Uncle Brad:

Thanks for your news.  I looked into World Financial Group.  I presume you've researched them online too.  Here's a typical review I found:

This review is about as objective as I can make it.  Firstly, let me state that I absolutely do not work for WFG.  I work for one of the six largest financial institutions in the USA and it would be a conflict of interest for me to work for WFG.

That being said, WFG is not a pyramid or ponzi scheme because the Federal Trade Commission would have shut it down.  What it IS is multi-level marketing.   It is a business opportunity for those who are self driven to succeed in the same manner as anyone joining an insurance firm like All State, State Farm, New York Life.  Granted you make a meager income working at one of those "legitimate" companies for a short period of time, usually six months. The objective being to get an insurance license and start selling insurance policies and earn a residual income.  After the probationary period, no one makes a dime at any these legitimate firms unless you can sell their insurance policies and annuities.  If you can't sell, its out the door for you, YOUR FIRED!  At WFG, you either sell or you don't, no one gets fired, you either make money through your own sales efforts or you just don't make any money, PERIOD.

The business model is different at WFG vs other insurance companies.  Major difference is that no one at WFG will pay for your licensing, it comes out of your own pocket(book).  You have to be driven to sell at WFG just as you would at the name brand insurance companies but without the "goodwill" of the name brand.  You have to market yourself to sell WFG products and replicate your efforts through new recruits.  So, leverage advertising or leverage people, its your choice.  Product mix for WFG is extensive, Pacific Life Insurance, TransAmerica Funds, Hartford, ING, Prudential and more.  Compare that to single brand insurance company's product lines to ensure fair product comparisons.

So, it boils down to a few points.  Do you want a job or do you want to run your own business.  Do you want to leverage advertising or leverage people.  Do you want limited product lines or a variety of products.  Either way, your success is entirely up to you. 

There's lots more at  http://www.yelp.com/biz/world-financial-group-san-jose-6 which is in San Jose, so I believe they're describing the group you must have talked to, but it's from 2009.  Do you like the pyramid marketing?  It sounds scary to me.  If I were you, I'd rather focus my attention on my art and seeing if I could make a self-employed business out of it.

I'll wait to hear from you on USANA.

I've attached a recent family photo, in case I didn't send it to you already.

love,

Uncle Brad

ME:

I like how the article says it is not a pyramid scheme and yet you still refer to it as "pyramid marketing". In my opinion the system is better. You do start off slowly and are not guaranteed to make money because it is all on you to get paid for the amount of work you decide to put in. You also have the choice to become successful when You decide. Like people in this business say, "There are no rich employees in traditional structured companies. And no employee can choose at any time to make the choice to become CEO." Here they can. You have to work as hard as a CEO to do it though, which takes time. You have to build up clients and bring in new associates to build a team. I'm focusing on clients right now.

It is a great choice of business right now. Both the structure -network marketing or "mulit-level marketing"- and the industry -financial advisors- are flourishing at this time. People are starting to realize their 401Ks and IRAs are losing money and will be heavily taxed. They don't gain much interest% on them and they will not have enough money to retire on.

Most families don't have financial advisors to tell them where they should be investing their money and how to gain the most interest at the lowest rick of loss. The firms that are well known for giving financial advisement are raising the price more and more. Meryl Lynch and others like it will not do business with anyone who has less than $100,000 to invest. This leaves most families out in the cold with no one to help them. Our company prides itself on helping people who are 25 years and up, married, with kids, in a home. Average families. Those are our preferred clients.

I like this company and the people in it. The only thing about it I can say that's frightening is trying to meet with people to share our companies information because omst people I find are closed-minded to it. But this company gives people the opportunity to be leaders, and since that isn't a strength of mine, I'm striving to make it one. I want to be successful and I want to help people. I also get the chance to schedule my own appointments with people, which is better than 9-5 work.

Usana is structured the same way, but it is more challenging to show people how to do more for their health than it is to show them how to do more for their money. Especially in a recession.

~Jessica

Uncle Brad:

Thanks for the additional background on your motivations.

I'm surprised that you're interested in working in sales, but it's a great skill to have, and I applaud your willingness to work at it.  How does this fit into your overall career game plan?  I presume you're still interested in art?  Will you do this to pay the bills, and do art on the side, or will this converge in some way with art in the future?

And I'm also surprised that you've chosen sales of financial services.  I agree that selling financial services may be easier than selling dietary supplements and vitamins for health.  Are financial products something you enjoy working on?  Do you like insurance and investing?  Are you comfortable being a financial adviser?  Did you study this stuff in college?  How will you educate yourself?  Did you consider doing similar kinds of sales for other products or services?

The comments I read said that it's not a scam, but whether you call it "multi-level marketing" or "pyramid marketing" or "network marketing", those sound like the same thing to me?

love,

Uncle Brad

ME responding to Brad who then reposnded back in RED:

Great dialog!  Thanks!  I'll go with more comments embedded below...

You ask a lot of questions ;)

How does this fit into your overall career game plan?  I'm going to focus on WFG for the next 5 years, slowly starting to sell Usana prodcuts again on the side. Hopefully in the next 5-10 years I can retire from the business.

That's a serious commitment!  In my career I rarely thought that far ahead, though I was at my consulting firm for 17 years.  I've heard that people in your generations expect to have multiple jobs, whereas my father was at IBM with a lifetime career model, and Mary's father spent his whole career at one architectural firm.  Ted has had 3 jobs and will probably change again in another year or two. 

I presume you're still interested in art?  Art is something I carry within me. It's a passion and a talent and always will be. I can't not do art. I'll always be drawing or involved in numerous simultanious art projects as I always have been. Sometimes I will focus more intensely on a specific project here and there, but for the most part, I'll just do art as I go.

I've always felt that in an ideal world, your passion can be part of your profession.  I've been unusually lucky and had that.  Ted and Elly have that too.  Most people don't.  My friend John McLeod loves photography, and we often talked about what he had to do to earn money vs. his passion for photography, which he did on the side. 

Will you do this to pay the bills, and do art on the side, or will this converge in some way with art in the future? I don't know how WFG would converge with my art, other than maybe me decorating my office :) But WFG isn't for my art, it's to help me build confidence and interact with people more.

As I said, it's great that you're pushing yourself to interact with people.  Are you acquainted with the Myers-Briggs personality assessment?  They have four dimensions, of which one puts you on a scale from introvert to extrovert.  I'm right on the fence.  I've found that I can push myself to be more of an extrovert even though it's not natural for me, and I like myself better when I do it.  People in sales are generally extroverts, but even they push themselves to be more outgoing.

Are financial products something you enjoy working on? I enjoy learning about financial information -not always the technical side of it which can be a little boring, but the fact that it's all really new to me makes it something interesting that I was not aware of before.

Did you know you have a family history of providing financial advice? My mother's mother ("Grammy") managed all of her investments.  She read the Wall Street Journal daily and Barrons.  Her husband, Fred Hanssen Sr., was an investor and wrote for Financial World, an investment magazine.  Their son Uncle Fred followed in that tradition and invested for his family.  His son, my cousin Andy teaches economics and his daughter, my cousin Jean works at a financial investment company.  Uncle Charles Kaerwer, Grammy's brother, sold insurance.

Do you like insurance and investing?  I'm nervous about "stocks" and "variable poducts", but I will learn about those later down the road when I become a full broker. For now I'm mostly just focusing on indexed annuities and indexed universal life insurance.

I've invested a lot in Index funds.  They give you diversification and low administrative costs.  Actively managed funds have underperformed index funds as a whole historically.  I don't believe in annuities or universal life insurance.  I believe you should separate the insurance and investment portions and make each stand on their own, and that's the conventional investment wisdom.  The investment parts of blended investment and insurance products generally underperform their pure investment equivalents.  I view stocks as highly volatile.  You have to be prepared to lose a lot, but you can also gain a lot.  My investment in Microsoft for Elly and Ted in the early 1990s paid for their college.

Are you comfortable being a financial adviser?  Yes, if I wasn't in this company I would have never found out about retirement planning, financial planningor investingor insurance... and I like the concept that I can teach other people about what I've learned.

What do you think about someone like Suze Orman?  There are a lot of sources for financial advice if people are willing to look. 

Did you study this stuff in college?  That's the thing. They don't teach about this stuff in college. Nothing i have learned in WFG has ever been taught to me. And most of the people I meet have no idea about investing or planning for retirement.

At Stanford I took a fun class in investing.  And as part of my MBA I took some advanced classes in finance and investing.  You aren't so gung ho that you'd consider getting an MBA in this sometime in the future, are you? 

How will you educate yourself?  We have to stay up-to-date on our companies, but when they introduce something new everyone in our office discusses it in the weekly meetings we have there. For instance, they just announced that the securities side of WFG was merging with TransAmerica.

By your companies, I presume you mean your client companies. Have you looked at YouTube?  There are so many great educational resources there.  And as I mentioned, someone like Suze Orman?  You might also want to consider reading stuff by Warren Buffett.

Did you consider doing similar kinds of sales for other products or services? I don't like "variable" very much or term insurance. I'm also nervous about stocks. Those things just done seem to be very reliable places to invest. And with stocks you would have to monitor them frequently. I will ge the licensing required to sell those sorts of products, but I'm probably not going to focus very much on them even when I do.

To me, term insurance isn't complicated at all.  It's less complicated than universal life.  As I mentioned, stocks are risky.  But you don't have to monitor them necessarily.  If you have a solid portfolio, you can invest for the long term, and mostly leave them alone.  I check my stocks every 3 to 6 months to see if the reason I bought them has changed, or to rebalance.  For example, when I was managing Gramjean's portfolio, she had had a big runup in Exxon, so it was a good idea to sell some of it to diversify.

Whether you call it "multi-level marketing" or "pyramid marketing" or "network marketing", those sound like the same thing to me? I don't know why people don't just call it "marketing" to be honest. Everything has the pyramid structure in it -from Cisco to banks to salons... there's always a leader or person in charge at the top and more workers or employees at the bottom until they reach the top.

What's different is behavior when people are on salary vs. on commission.  People on commission can tend to optimize for the short term sale; people on salary will tend to optimize with a longer time horizon.  People who are incented to grow their pyramid will push to grow.  In sales, there is often a commission structure, and people will tend to game the system. 

Hope you're having a great New Year :)

You also.  I'll be happy to keep talking, hear how it goes, and help if you'd like. 

~Jessica