How An MBA Prepared Me For My Career As A Financial Advisor

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July 20, 2018
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Over the course of hundreds of conversations with clients, I’ve found that quite a few them have wrestled with the idea of whether they should go back to school for an advanced degree. As their advisor, I am commonly asked if returning to school would be financially beneficial. The risk/return analysis is not always cut-and-dried in this situation. Investing X amount of dollars in a degree program does not always result in an equal or higher return in the future.

The True Value Of Education

Education is about more than just the money. After a recent conversation with a client, I had the realization that while I don’t need an MBA for my job as a financial advisor, the MBA experience itself shaped and molded me to become the advisor I am today. While I did take numerous finance classes to enhance my knowledge and quantitative skills, the greatest value I gained from earning an MBA came from improving qualitative skills, such as working with people, networking, effective communication, and time management. These are skills that I use daily in my current role.

Every experience we go through, especially those that push us out of our comfort zone and require plenty of work and time, leads to personal growth. Had I not gone through the MBA program at USC’s Marshall School of Business, I might not have developed the work ethic required to succeed as a financial advisor, and I could have ended up on a completely different career path altogether.

My Pre-MBA Self

Before entering the MBA program, I had a passion for the financial services industry, but like most college grads, I wasn’t sure how that would translate into a career. I didn’t have a clear direction for my future. I was interested in becoming an advisor but knew that it would be fairly tough to advise people on what to do with their finances when I hadn’t gone through many life experiences myself.

I had always loved the idea of making money and becoming more efficient with what I had, but I was young and dumb (and willing to admit that)! I fell into the cultural mindset of wanting to work typical business hours, earn a large salary, and enjoy life. In essence, I wanted the rewards but didn’t want to do the work involved to achieve those rewards. In my naive way of thinking, an MBA seemed to be the simplest path to achieve this end result. I can tell you that I was so wrong in this assumption!

What I Gained from My MBA

Networking Skills: USC is known for networking. Everything I heard about business school prior to attending was that the most important takeaway from the experience is to network, network, network. Unfortunately, my pre-MBA self was uncomfortable talking with people I didn’t know. I didn’t like to take the initiative to introduce myself and sometimes avoided conversing with people unless I was introduced first. As time went on and I experienced the pressure of competing against my peers and other highly qualified candidates for the same jobs, I was forced to rise to the challenge and become comfortable with being uncomfortable.

This skill alone has helped me immensely in my career when it comes to collaborating with a client’s other professionals, such as an estate attorney or CPA. In order to do a thorough job for a client, it’s often necessary to work with their other professionals to make sure we’re on the same page. In many cases, I’ve reached out to a client’s CPA to make sure they had my contact information so that if questions arise about the client’s investments, they call me rather than my client.

This skill has also helped me in reaching out to client referrals or prospective clients because I’ve found that people often want help with their financial planning, but they might not tell others or take the first step.

Effective Time And Task Management: During my time at USC, multitasking became the norm. If I wanted to effectively balance school, attend recruiting events, revise my resume, participate in mock job interviews, network for potential jobs, and somehow find time for a personal life, I had to become better with time management.

My job today is multi-faceted and includes juggling many tasks, such as answering client questions, servicing and monitoring their accounts, staying on top of changes in the industry, and dealing with changes life throws my clients’ way. Knowing that I was able to handle my heavy load in the past gives me confidence that I can prioritize my work today. Most importantly, I’ve come to realize that with all of these moving parts, it’s impossible to be rigid in only working business hours (again, something I aspired to when I was young and dumb), because not everyone is available from 8 am to 5 pm. Instead, I’ve become flexible with my schedule and instituted taking a day off during the week so that I can occasionally meet with clients on the weekend or do a phone call later in the evenings.

Is An Advanced Degree Right For You?

In my case, obtaining an advanced degree was one of my best decisions. It’s difficult to imagine doing anything else with my life and I am fortunate that I went down this path. If you or someone you know is trying to make this decision, I would love to give you some insight and help you look at the situation from an objective perspective. Or, if you would like to network and see if we could work together, call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com. I’d love to see you thriving in your life!

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By
Mike Loo, MBA
August 10, 2018

As someone who works directly with clients on helping them with their financial plans and investment decisions, it wouldn’t be too far off to think that I might not do too bad on my own personal investments. Well, truth be told, I have indeed made some high-return investments over the years. The funny thing about that is when I think about “the best investments I ever made”, they are not stocks, bonds, mutual funds, real estate, venture funds, or the like. The best investments that I have ever made came from investing in myself and/or my practice. The returns may be harder to quantify, but I would venture to guess that it has been exponential. Below are my top three “best investments I ever made”:

Going Back To School For An MBA

I’ve always been someone who wants to constantly improve, both as a person and as a professional. In an article that I had previously written, I discuss how an MBA prepared me for my career as a financial advisor. This was a both a huge gamble and a big-time winning investment for me, especially since I initially entered business school without a clear roadmap of where the advanced degree would take me. After going through the MBA program at USC’s Marshall School of Business, the greatest value I gained came from improving my qualitative skills, such as working with people, networking, effective communication, work ethic, and time management. While I already had these skills at a basic level, it wasn’t until after obtaining my MBA that I realized a deeper level of utilizing those qualitative skills in my career.

Hiring A Personal Trainer

Without our health, we will not be able to enjoy all of the great opportunities at our disposal today or in the future. Because of this fact, I strongly believe that hiring a personal trainer was one of my best investments. In this article, I draw several parallels between personal trainers and financial advisors, ultimately discussing the value that both can bring, respectively, to your health and finances.

Investing in my health by hiring a personal trainer is one of my best investments for several reasons:

Education

For most, it may not make sense to have a personal trainer for their entire life. However, the knowledge and education around the body, nutrition, exercises, etc. that you will gain from hiring a personal trainer will reap returns for the rest of your life. By being more aware and knowledgeable than you were before, you may miss out on potential future injuries or poor food choices that can lead to debilitating diseases.

Consistency

We are more likely to stick to certain regimens when we are simply told what to do. By being on a plan and schedule with my personal trainer, I did not have to worry about anything except for showing up and working hard. We were on a consistent regimen, and I saw results; in fact, I lost more than 15 pounds over the course of several months when I compared my heaviest to my lightest weight!

Decreased Future Medical Costs

By being consistently active and doing exercises that I would not normally do on my own, my personal trainer made sure that my comprehensive training program would benefit me in the realm of longevity. Because of that, I decrease my chances of needing to undergo major surgeries that someone who lives a sedentary life may have to undergo. This means less money spent on future medical needs and long-term care.

Spending Time To Imagine And Dream About The Future

Sometimes work, family, and social events take up all of our time. However, if we never stop and take time to plan, strategize, and dream, we will never accomplish our goals, let alone have something to work towards. While it may not seem like an investment, “spending time to imagine and dream about the future” may be the lowest-cost, highest-yielding investment there is.

In this article, I talk about planning ahead and setting financial goals. It is important to be proactive in planning for the future that you want. The key here is to write your goals down, break them into smaller goals, and find someone (or a community) that will hold you accountable. Your success lies heavily in setting “meaningful” goals. When you set goals that are meaningful, you will be much more likely to reach them.

For me personally, I’ve found that in those times that I dedicate to imagining and dreaming about the future, I’m able to create a reinvigorated excitement for what’s ahead. The return from spending time planning for your future should not be discounted. The yield is immeasurable, and all it costs is your time, creativity, and dedication.

The investments discussed above are not what you’d typically discuss with your financial advisor. However, I hope you were able to see how much of a return each of those items have provided me. With that said, if you are contemplating post-secondary education, different ways to invest in your health, how to map out your future goals, or anything else, please do not hesitate to get in touch. You can always call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com.

By
Mike Loo, MBA
August 30, 2018

Whether we attribute it to a decline in marriage rates, poor job prospects, student loan debt, technological improvements, or generational shifts, times have certainly changed for young adults. One major topic which my clients bring up centers around their adult children moving back home. While this was not a common conversation ten years ago, I come across this topic more often nowadays. I’ve heard statistics such as “a third of young people, or 24 million of those aged 18 to 34, lived under their parents’ roof in 2015”, and look at it as my job as an advisor to provide advice on how to best navigate through this new landscape.(1)

Within this topic, a common question that I try to help my clients answer is this: Should I charge my adult children rent if they move back home? What I’ve found is that every situation is different, so what may work for one family, may not work for another. However, in this article, I hope to provide a framework to consider when trying to answer the question.

Setting Expectations

Depending on your own experiences and values as parents, as well as the specific circumstance of your adult child, you may insist that they live at home rent-free. For example, if your adult child is being responsible by saving a good share of his/her paycheck for a house down payment and you want to reward that responsible behavior by letting him/her live at home rent-free, there’s absolutely nothing wrong with that. For other parents, such an assistance for an adult child does not make sense, and no matter what the circumstances, would believe it only right to charge for rent if living at home.

No matter where you fall on this spectrum, it is important to set expectations with your adult child. For instance, if you decide that it is out of your comfort zone to charge your child rent for living at home, then what other mechanisms can you put into place to make sure he/she does not get too comfortable? In my experience, I’ve seen parents create timelines and goals, as well as make it crystal clear that the adult child must still pitch in, in other ways such as chores or errands. While it may be a tough conversation initially, imagine the alternative. What if your child gets too comfortable living at home and would rather stay at your “hotel” rather than spread their wings in the real world!

Whether rent is being paid or not, the adult child will have a particular reason as to why they want to or need to live back at home. If they are simply being lazy and are not making an effort towards adulthood, it is crucially important to provide clear expectations. As parents, you want to always help and support, but you never want to enable. Therefore, in this example of being lazy, a parent could set expectations of applying for X number of jobs per week, or something similar.

How Much To Charge For Rent

If you do decide that it makes sense to charge your adult child rent, how much should you charge? In my experience, parents usually charge well below market rates. As parents, you want to help your child out, but you also want to build up their personal finance awareness. How much you charge will also be highly correlated to what your daughter or son can afford, and could change over their time living with you. By having an open conversation and being clear about why you will be charging them, it should not be hard to fall on a number that makes sense for your family.

Alternatives

There are also other ways in which your adult child could pitch in that could be alternatives to paying rent. Such alternatives could be household chores or errands, cooking meals, or even helping parents with their own work. In addition, it could make more sense to have your adult child pay for other household expenses (instead of rent), such as internet, tv, or groceries.

Another alternative could be to make their stay at your home contingent on them depositing money into their own retirement account. This way, you are teaching them how to save and plan for the future.

Finally, if you want to help them grow personally, you can make their stay at your home contingent on community service or volunteering. This is a win-win as well!

Budgeting

This experience can also be thought of as a great teaching moment for your child. Specifically, parents in this situation are in a unique position to extol the virtues of budgeting and personal finance when their child needs it most. If the adult child in your household has to pay you rent and decide how to allocate their small-to-no income, they will quickly learn how to budget. As a parent, you may decide to get creative and instead of using the rent money for expenses, stash it (and maybe even match it) into a savings account for your child. They will be happily surprised with a small nest egg to leave home with!

Other Considerations

Other considerations that I make sure clients consider is their own budget and retirement goals. If your adult child is going to come back home and live there, you’ll want to make sure that adding another adult to the household does not negatively affect your own goals. Because you’d anticipate that household expenses will go up, you must make sure you budget for them, based on your expectations and timeline with your adult child. Again, by having an open conversation with your adult child, I am confident that a reasonable game plan can be implemented with success.

Having this conversation is not always an easy one, but I hope that the considerations above help provide better ways to think about it. If you’d like to discuss your situation further, call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com.

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