Get the perfect gift for the wine lover in your life at WineEnthusiast.com Personalized wine openers? WineEnthusiast.com Cheese boards? Mmm. WineEnthusiast.com Glassware? WineEnthusiast.com A 500-bottle wine fridge? Yep. Wine Enthu- you get the picture. Find the best prices on the perfect wine gift for you- I mean, for someone special this year.

At Wine Enthusiast, we bring wine to life. Interested in what it's actually like to start your own fee-only financial planning practice? Today I've invited Katie Brewer on the show, and I'm going to do my best in today's interview to get her to open up and share what it's actually like, so you can get a little bit of insight into the joys and the challenges of establishing your own independent financial planning firm.

Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets, and I'm your host. Thank you for being with me today. This is a show where each and every day I work hard to try to give you some ideas, some information, some inspiration, and some insight into how you can establish and pursue your own path to financial independence.

I know many of you are interested in financial planning as a profession, so today I'm trying to give you a behind-the-scenes tour of what it's actually like. Financial planning profession is a wonderful profession for a small percentage of the population. Many of you, it might be perfect for. But one of the challenges of the financial planning profession is that it's very difficult to actually understand what it's like until you're in it.

Once you get into it, you'll actually get it a little bit better. And this is one of the challenges that I faced when I was becoming a financial planner, is it's hard to get inside information. What happens is when you trot around, you'll meet with the recruiters, you'll meet with all kinds of people, but all the people that you meet with are trying to get you into the business.

And it's very difficult to get an accurate assessment of what the business is actually like. And so one of my little pet goals with Radical Personal Finance is to try to interview financial planners and have them share what the business is actually like. I've noticed that in the online – well, I guess I shouldn't even just say online.

Many times in the media space, there's a distance of communication between financial planners and the general public. There's a distrust on many people's parts because oftentimes they don't understand what the financial planning business is like. There's also a press that's happening right now, and I'm very encouraged by it.

There's a press of young financial advisors who are establishing their own firms. In fact, as this interview goes live, the moment I planned it to go live on Tuesday, September 15, 2015, this is the first day of the XYPN 2015 conference. I am speaking at the XYPN 15 conference.

I'm actually speaking on Thursday morning. But the conference begins on Tuesday, September 15. And the XYPN organization – in the past, I've had the co-founders on the show at different times, Michael Kitsis and Alan Moore. I've interviewed both of them. But the XYPN organization supports financial advisors who are establishing their own independent fee-only practices.

And this is a market move that I am thrilled about. I think it's definitely a niche that has a tremendous amount of opportunity and it can work very, very well. But it's also in many ways fairly new and it's untested in a lot of ways. And it doesn't quite have the track record that many of the larger established firms have where they can look back and say, "Oh, look.

Here, we've launched thousands of financial advisors' careers." So I'm doing my little part to try to support this community being involved in XYPN. I'm doing my part to try to bring some of these advisors. It helps people like Katie. It helps some of the past advisors to have a little bit of exposure for their firms.

And also, I think it's useful for many of you to hear what the actual business is like. So for those reasons, I've invited Katie Brewer on the show. Katie is a wonderful lady. Her business is based in Dallas, Texas. And we recorded this interview in Fort Worth, Texas at the Podcast Movement 2015 conference.

So with that, here we go. Katie, welcome to Radical Personal Finance. Hi. I'm so glad to be here. So I don't invite many financial planners on the show. So you should feel honored. I know. You're the expert and you're like, "Hey, I'm the expert and I'm going to ask the expert about expert-y things." Well, it's part of one of my goals with Radical Personal Finance is to demystify the world of financial planning.

And when I was an active practitioner, what always frustrated me was the fact that financial planners didn't seem to be very good at articulating and getting things across to the general public. So there was like personal finance and then there was financial planner lingo, but there's nobody crossing it.

Oh yeah, there's like two different universes. Right, exactly. What do normal people understand and then what do financial planners communicate? There's this weird gray space in the middle. Exactly. No one crosses the gray space. So I determined, I said, "With Radical Personal Finance, I'm going to cross the gray space." And so what I love to do, basically what I want to do is tear the curtain down from in front of everything in financial planning.

And so people often are arguing against lies in the sense that the things they're against, they don't actually have the facts. They don't know how the firms work. They don't know how the business works. They don't know how the planners work. They don't know how the jobs go. And so you get uncomfortable client-planner relationships often because they just don't understand what's going on on the other side.

So my goal is that, among other things, to provide a bit of a platform for financial advisors to be able to share with other people what's actually going on. So your story with regard to financial planning, how did you wind up in this business? Well, I decided I wanted to get into financial planning when I was in college, but I did not have a business degree.

I actually decided to get a biology degree and then go into financial planning. So that's serving me really, really well in the world of financial planning. I could tell you all kinds of things about different processes of the body. Actually, probably at this point I can't. It's been way too long.

Why did you actually study that? If you knew that you wanted to do a business-y type of thing, why did you finish the degree? I didn't know I wanted to do a business-y type of thing until my senior year. And the only reason that I actually took a finance class was because I was scared to death that I had no idea what I was doing.

And I looked at my parents and I said, "Well, they kind of have an idea of what they're doing, but not really." And not enough to be able to teach me anything, rather than, "Hey, don't do what we're doing." And I'm like, "Well, I don't even know what you're doing." So I took a personal finance class that was really just for me personally.

And it was a semester long. I don't even think I got credit for it, because I was a biology major and I had probably used all of my electives at that point. But I decided to take it because I wanted to have my own personal... I wanted financial freedom.

I wanted to know what the heck I was doing. So it was a four to five month long class and I loved it so much that I was like, "Well, now that I'm almost done with my degree, I think I want to go into financial planning and teach other people about all of these amazing things that I just learned." Was the course geared toward the students or was the course geared towards becoming a practitioner?

It was actually geared towards both. It was a certified financial planner that taught the course. And so it would probably be the very first course of the CFP study if they were to do it in that manner. And was it just fairly mainstream? Just kind of mainstream advice? Yeah, I mean a lot of it was, "How does the stock market work?" Okay, well we're going to teach you, but then you're going to actually open up a sample portfolio and you're going to track a stock over a couple of months.

And then we learned all about insurance. We learned about how to actually budget. And I mean, these were things that I feel like every high schooler should really be learning. And at least every college student. But it's amazing how many people get out of all of those structured educational environments and still don't have the base level knowledge of their finances.

It's really remarkable because if you total up the amount of time we spend studying biology in high school and college... And geography! Because that came in handy. So if you total that up and you consider that, and then you total up the amount of time that you're taught about personal finance, and then you fast forward to "real life," and you think about how much you actually spend using personal finance knowledge versus biology, it's a little out of whack in my opinion.

It is. I'm a big proponent of actually having some sort of structured classes. I live in Texas, and in Texas they're finally starting to move towards this. I had a friend that's a teacher who told me that her middle school math class is actually learning personal finance as part of their math class.

And it made me so happy. I was like, "Yes! Finally somebody's actually teaching about real life along with math." Right. That's fantastic. So after that, you graduated with a biology degree. Where then? So I had decided at that point that I was just going to stick my foot in the door somewhere.

That I really wanted to be in this industry. I didn't know anything about the industry. And I didn't know anybody in the industry. Both of my parents have worked for the state of Texas for their entire working career. So I stuck my foot in the door at a firm that likes to set up in strip malls and sell mutual funds to people.

I won't tell you which one it is, but I bet you could probably guess which one it is. It was really interesting because I didn't do very much advising at all. I did a whole lot of wandering around neighborhoods and knocking on people's doors so that I could ask them if they had any old 401ks that they wanted to put with me.

I would imagine you learned something. I learned that it is really, really interesting to try to get random strangers to trust you and give your investments. Now the thing about this model, and this company is known for this model, they claim it still works. And that's why it's taught.

And it's an effective form of prospecting. So you went in that model and then did you quit or what happened? I was there actually for about two years. And when you come in and you have this idea of what you want to be doing for people. Like I want to be able to help them with questions that they have.

But then you're only getting paid off of stuff that you sell. And so very quickly that was a problem for me. So I was like I want to be able to try to go somewhere else where I can actually be able to sit on the same side as the client.

And if they have questions I want to be able to answer them and not have to do it for free hoping that they will buy something from me. What then? After that? I've been a couple of different places. That's what I'm interested in is to bring out the career trajectory.

Because when I was looking at getting into the financial planning world, it's a very opaque industry. And the problem is that the primary path of information is speaking with a recruiter. And most people aren't aware of the different models, the different perspectives. And so you start meeting with recruiters.

And that's excellent. They can be an excellent source of information. But how many are you going to meet with? Two, three, four? Maybe? And do they have your best interest in mind? And that's always the challenge. And so that's what I'm interested in is actually your model, your path through it.

So after that, then what? So I went from the strip mall financial advisor firm. I joined a different firm that did do financial planning. So that part of it was great. But they only wanted us to focus on wealthy business owners. Which, rewind back, I said both of my parents worked for the state of Texas.

We don't really fall into the wealthy business owner environment. And by then you would have been, what, 24? Yeah, I think I was like 25. At 25, I'm supposed to be cold calling people worth millions of dollars and being like, "You don't know me. And I don't know you.

And I'm really young, but you should meet with me." And they were like, "What? No. Stop calling me." So it was also a very sales-heavy model, which was not really ideal. But when you come into this industry and you don't have any experience, sometimes that's where you kind of have to get your feet wet, unfortunately.

And I never really thought I was all that great at sales. Because if I don't believe in something, it is very hard for me to convince anybody. I am just very cut and dry. It's very hard for me to say, "Oh, you should do this," if I don't 100% believe in it.

So that was interesting. Not all that fruitful. The sales trainers talk about sales as a transfer of belief. And I don't think anybody should ever sell anything. Number one, they don't believe in it. And number two, they don't believe it's the right fit for the client at this point in time.

It's just completely ineffective. Because you can't transfer that belief. I was talking yesterday with somebody, and we were talking about sales, about hard selling versus soft selling. I was saying, "I have no problem in the world hard selling, if I'm selling in the right place." Because what I mean by hard selling is vigorously representing that, "I believe your life will be improved by this.

And if I believe your life will be improved by this, I'm going to tell you strongly and vigorously with as much enthusiasm and persuasion as possible, I think your life will be improved." But on the flip side, if I don't think your life is going to be better, that's it.

I'm going to tell you, I don't think your life is going to be better. It's the only way to effectively do sales. I'm a big fan of hard selling budgeting these days. And hard selling savings and investing. And that's where it's funny because, I don't know about you, and we'll talk a little bit about your financial planning process, but one thing I learned working with clients was, I learned where to be persuasive and where not to be persuasive.

So one of the mistakes I made early in my career is I was very persuasive about a financial product. And so I would, whether it's a life insurance policy or a mutual fund, I could sell you like crazy on putting $480 a month, whatever the number is, into your mutual funds.

It was only this much of your income. And I can run a financial calculator like magic and I can say, "Look, if you put $5,000 a year in your Roth IRA and you do this over time, look, you're going to be a millionaire." And what I learned was that I was excited about that.

That's what always got me excited, reading personal finance books and saying, "Well, Joshua, if you just fund a Roth IRA for 40 years, you'll be a multimillionaire." That got me excited. So I took that lens of personal finance to professional finance and I sold clients on mutual funds. And then two and a half months later, "Joshua, I can't do $5,000 anymore.

We've got to drop this down to $100 a month." And I learned over time that I made the mistake of being too persuasive on the wrong thing. But when I learned to be persuasive over the concept of planning in general, budgeting in general, having a plan, having goals, having vision, then the client didn't face buyer's remorse of saying, "Oh, I wish I hadn't put $480 a month there because now I'm broke and I can't go out to eat and I hate Joshua Sheets." Rather, it's, "No, Joshua encouraged me to budget." And I was able to build that emotion but not build the emotion around the thing that potentially was going to be too much.

Yeah. I think there's a big difference between selling a financial product and selling a financial process. Because I feel like with my clients, if I'm selling anything, it's kind of selling that they need to address maybe an issue that's a little bit uncomfortable or one where they've been putting it off for a long period of time.

But once we get to that and I can help them through it with guidance, they can get back onto the path to financial freedom. And so I don't really feel like I have to say, "You have to do A or B." I mean, there's a lot more figuring out what's important to people and then saying, "Okay, well, right now you're doing A, B, C, and D, but really you can't afford to do all these things.

So let's really pick what's important and let's focus on that and then check it off the list and then we'll move to the next thing." And that's what I love, and we'll get quickly to your practice model that you're pursuing now, but that's what I love about selling financial planning itself as a product.

Because you can vigorously sell the benefits of the process, and then once the client has bought the benefits of the process, they've stroked the check or they've established the first withdrawal or they've made the commitment to, "Okay, we're going to do this process." Then you never have to worry about pressing on those things, and it's purely a coaching consultant model.

And that changes things, because you do have to, I think, vigorously sell the process as being valuable, but there's no potential conflict of interest. I'm convinced that I can't imagine how somebody couldn't reap multiple, multiple times the value of the monthly fee so that you can sell and feel really good about it.

So how many more firms until you ended up doing what you're doing now? That's a really good question, but I think it was like one per year until I finally decided that I had tried out all of the different models in financial planning. None of them actually addressed younger people in a way that aligned the advisor with the client, in my mind.

And so I eventually decided that I was going to open my own firm last year. And now it's done. And now I'm celebrating my one-year firm anniversary. You survived. Now you've just got to survive two more. Yeah, just two more. Then four more to get to the five years, and then you're pretty much there.

So tell me about your process and essentially what you're focusing on as an advisor. So I tend to focus on working professionals. I really like working with the 20-, 30-, 40-year-olds that are in a job right now. And so a lot of them have actually pretty good financial knowledge.

They're usually well-educated. And what's funny is that whenever we start talking, a lot of them are actually embarrassed that they're so well-educated, but that they don't feel like they know enough about their own finances. I even have some people who went to school for finance, but when you go to school for finance, you learn a whole lot about corporate finance.

You learn very little about personal finance, unless you're going to a program that's a personal financial planning program. So I find that a lot of them are actually feeling like they haven't addressed it as much as they should, or they haven't put it as a priority as much as they should.

And sometimes they're embarrassed that they don't know what they don't know. But I always encourage them that really this is the best step that they could possibly be taking, is to identify that they don't know what they don't know, and to go get help with it. So what are some of the unique attributes of this demographic that make it different than other financial planning scenarios?

I find a lot of financial planners that are my peers within the financial planning industry tend to focus on retirement planning as a really big goal. Really important A1, before we talk about anything else, let's talk about when you're going to retire. Of course it is. What else is there?

What else is there? It's crazy. Either you talk about insurance, you talk about retirement, you talk about investment. What I find is that my working professional demographic, they always come to me with a lot of different things that they're trying to accomplish. And so it's more of a juggling act with them.

It's not necessarily, "I'm five years away from retirement, and I want to know if I can retire." It's, "I'm trying to balance the fact that I've got this lifestyle that I'm trying to uphold, but I'm also trying to be a good steward of our family money, and I want to make sure that my kids are going to be well taken care of.

I want to make sure maybe someday I can retire." But actually, that's number six or seven on the list of all of the other things that I want to talk about. In your experience working in this professional demographic, is retirement even, as far as the concept of retirement, in the way that other generations have talked about it, retirement at 65 with a pension, is that even, when you actually dig down into it, is that even a goal on anybody's list?

For some people it is. I tend to work less with business owners and more with people that are still in a traditional workforce. But it is a little bit different, and then a lot of them are trying to balance that future enjoyment of life with the current enjoyment of life.

Sometimes I'll run across people that they might make a really good income, and they might have a fancy job, and they might hate it. Part of our financial plan is actually how to build up enough financial independence so that they can leave that job if they decide that they don't want to do it anymore.

Maybe even just leave that entire field and start something completely different. I find this is what's missing from most of the financial planning world. You look through the CFP board curriculum, it's got all kinds of things to say about asset allocation and figuring out what's the sharp ratio of a portfolio.

Realistically, though, the things that people are majoring on, are they important? I guess, but in the right context. But in terms of the actual quality of life for most people, the fact that you work a job that you like is very different, has a much bigger impact on your lifestyle and your enjoyment of life than is your portfolio perfectly optimized for the lowest possible standard deviation.

This was something I figured out in my career, I would say three or four years in, when I was starting to make a transition. I realized all this formal financial planning stuff, yeah, I got to know it, but it's kind of irrelevant to the client. They don't need to know it.

I remember when I first started presenting investment portfolio selections and I would drag people through all of the Morningstar analysis and I would go through every bullet point. When you first start, you're so excited, you're like, "Please let me tell you everything that I know." By the end of the appointment, these people are looking at you like you just hit them with a train.

You're just like, "So is this exciting?" They're like, "I have no idea what just went on in the last hour." I see a lot of pretty pictures, but I don't understand any of those terms. I learned to quit doing that and focus on lifestyle goals, stuff that was very tangible.

All of a sudden, it completely transformed it. In my mind, that's what we as financial planners... It's almost like, "Okay, you got to pass the CFP as your basis of entry. Great. Now, go spend a couple years studying life coaching." Because in reality, the most effective financial planner is a life coach.

I absolutely agree with you. It's been really interesting, especially with this demographic, that some of the things in the CFP curriculum, there's actually nothing in there that talks about student loans, the different types of student loans, the different payment plans, federal student loans versus private student loans. These are all things that I had to essentially self-educate when I started working with this demographic, because they have questions that are very relevant to that.

I feel like as the interpreter of difficult financial information, that I needed to have a background in that as well. In starting your firm, talk to us a little bit about... How's it been? Honestly, how's it been over the last year? It's been really, really good. I've had a lot of people...

I feel like I have a cheering section, which is really amazing, both within the industry and outside of the industry. It has been really interesting, because I actually have had some conversations with people that were interested in my services. I talked to them, and they said, "Well, it's not really a good fit for me right now, but I'm going to be back.

But in the meantime, I just wanted to tell you that I think it's really amazing what you're doing, and that there's really nobody else out there. I've been looking for this for 10 years, and I just wanted to say thank you." I'm like, "Well, you're welcome." But you can also write a check.

But you can also go ahead and sign up if you wanted to. It's really been great in that I've had other financial planners that have kind of the same thoughts. They're like, "What you're doing is really brave. We have no idea, Katie, how you're going to make money." Which I laugh.

I'm like, "That's what a business plan is for, FYI." The business plan is not just work with rich people and manage their assets. It works great. But even some of those financial planners, they're really big advocates of what I'm doing. That's really great, because a lot of times they will run across people that don't necessarily fit their business model, but they know that they fit my business model.

I've actually had quite a few other financial planners that refer people to me. They're like, "Hey, I talked to this person briefly. I think you would be a really good fit for what they're looking for, and I wanted to connect the two of you." What's been the biggest objection?

As you transitioned from selling products, which all have their own unique objections, to selling process, what's been the biggest objection as far as why prospective clients don't sign the client agreement? What's been really interesting is that it's actually pretty difficult to explain to people that they will save money by paying you.

Right. Because until you really dive into their information, it's not like you can start just randomly making suggestions and being like, "Well, if you did this, then that would save you $200 per month." So it's really hard to put it into a tangible thing that you're like, "If you invest this money to put your financial plan in place, you will see this type of return out of it." Right.

So that has been a little bit challenging, because sometimes people really know that they need help, but they're just not quite ready to pay how much it costs to work with a fee-only financial planner. So that has been a little bit interesting, because they're like, "Well, the reason that I'm talking to you is because I make a really good income, but I'm still struggling with my monthly budget." Right.

So it seems counterintuitive to them to pay somebody for anything. Right. Much less pay somebody to help them with finances when they're struggling with their finances. Right. How much are your fees, and what are they based on? Are they flat? What's your fee structure? I do an upfront fee, and that has a pretty big range.

How much? So it's between $750,000 to $3,000. So that covers the financial roadmap. I call it a financial roadmap, because if you do a financial plan for a 35-year-old in four months, probably, it will be completely irrelevant, because they found out that they were pregnant with a second kid, or one of them got a promotion, or they decided to move all the way across the country.

So we do a financial roadmap, and that kind of gives us a really good idea of where we are right now and then where we're trying to go to. But then we also do ongoing adjustments to that. So I'll do an upfront fee, which kind of covers the "We're here, and we're going to go over here." And then I do an ongoing monthly fee, which also has a range.

It's between $75,000 to $300,000 for that ongoing adjustment of the financial plan, as well as check-in meetings and accountability. And then people have access to me to be able to ask questions whenever. So anything that normally they would say their benefits changed, or there was something added at work, normally they would look at it and be like, "I have no idea what this means, and so I'm actually just not going to deal with it." It might be something that was really valuable to them, but because they didn't have time, and it was something that was stressful, and they don't really understand it, maybe they passed on it.

So people that are working with me can essentially say, "Hey, Katie, I've got this thing at work, and they're adding on this new benefit. Could you look it over for me?" They just shoot off an email to me, or we use our secure client vault to share that information.

I'll look it over for them, and then as the interpreter of complex financial information-- I like that. Good branding. That's good. I will come back to them and say, in very simple, plain language, "This is what this is. Either you need it or you don't need it, and I would suggest that you do this." In my mind, you're right about it's hard to articulate what you're going to do.

I was talking with somebody about tax planning recently, and they wanted to hire me to do tax planning. I've done almost no hiring out. I'm not licensed. I don't have an RIA, so I can't do anything with investments or insurance. But I was like, "Okay, I could do a little bit of consulting on some tax planning." We're talking about what can you do, and we were talking it through.

I was just struck by how we're trained, I think, in our culture. We're trained to look for the one thing, the one solution. That magic bullet that, "Oh, there's a secret." It's like the secret of success, the secret of becoming a millionaire, the secret of money that you haven't been taught.

There is no secret. There is no secret. There is no secret. There's just the same old boring principles that you have been taught, but that you haven't done. Then there's the proper application of those things in your specific situation. There's no one thing. There's many things. That second one is actually really important, because I find a lot of my clients actually come to me and say, "I've read this.

I've read this. I've read this. I've read this. Then I saw this on TV." There's five different ways that they could go. They're like, "I have all this knowledge, and I have no idea which direction I'm actually supposed to go in, because I have no idea how that actually applies to my situation." That's one thing that I find, especially working with the younger professionals, working professionals, is that a lot of times they'll have the knowledge.

It's not like they're hiring me to be the first person that ever teaches them about whatever. They're hiring me to help them cut through all the clutter and figure out exactly what they need to be doing, what are the steps that they need to do, and then how do we keep accountable with that.

You can go online and learn all about your disease. Or you can have a doctor say, "We're going to do these tests, and if they're good, they're going to diagnose it properly." There's a time at which going online is the best thing to do, and then there's a time at which going to the doctor is the best thing to do, and you've got to differentiate between those things.

As I've considered it, in my mind, this is the biggest disease that we have in our culture, is looking for the one thing, and looking for the secret, and looking for the magic thing. It doesn't exist. It doesn't exist in tax planning. Tax planning is hundreds of little things in specific situations.

It doesn't exist in financial planning. You can't possibly know what you're going to tell someone until you go through a comprehensive fact-finding process. It's not just filling out a questionnaire. It's pushing back on the questionnaire and saying, "Okay, you've got these questions. You've got these goals, but now, are these really your goals?" Then 45 minutes later, "No, those actually aren't my goals.

I just thought I wanted to retire because that was what society says, but in reality, I want to open a hair salon." Okay, well, that's a very different scenario of doing it. There are a lot of people who've gotten rich at hair salons, and there are a lot of people who have made a little bit of money on hair salons, and there's some people who've gotten broke.

Now our financial planning is going to be a little bit of a different scenario. That's also why we do the financial roadmap that is always subject to change. Right. I don't want people to feel like just because they decided one time that this is the direction that they're headed, that they're locked into that because that's what they decided with their financial planner.

So I always tell them, "This is our loose structure for figuring out what we need to be doing going forward." But at any point in time, we can always change this. That's the value of working with a financial planner on an ongoing basis. What is the most frustrating personal finance that you see taught out in the personal finance space that just-- What's the phrase?

Gets your wagon. What's the thing that just really upsets you of the personal finance advice? Are you talking about personal finance advice that's given to the masses? Yeah. I would say-- What's funny is that I actually-- Some of the big talking heads of finance, I think they're actually pretty straight on.

I don't disagree with a lot of what they say. What aggravates me a little bit is that they don't have a good disclaimer to say just because I'm telling you this doesn't mean that it's specific to your exact situation. Sometimes I do see people that are trying to do the right thing, but because they're trying to utilize some out-of-the-box or they read a book or whatever, and they're trying to implement that even though it's completely irrelevant to their personal situation.

I think that's the biggest thing where it's like, "Okay, well, sometimes you have to take it with a grain of salt that just because it worked for other people, that it would exactly work that way for you." I wish every book, every article, every magazine came with the "It depends" disclaimers up front, not on the end.

The disclaimers that I would like to see is, "If this, if this, if this, if this, then this advice is applicable to you. If you're in this manner, this manner, this manner, you should really ignore this advice." Unfortunately, whether it's just that doesn't work or what, but I almost never read an article that's written like that.

What I've experienced, you have to consume a whole bunch of information until you start to actually be able to see through and articulate the certain things. How much did it cost you to start your financial planning firm yourself? Any idea? Yeah, I do have an idea because I know exactly how much it was to the dollar.

I assume, but I was trying to give you some out in case you were behind on your bookkeeping like I get sometimes. Nope, I stay up on my bookkeeping. Sure you do. I started off with an investment of $10,000. My husband and I, a long time ago, fully funded our emergency savings fund.

Then whenever I decided that I was going to start a business at some point, I started overfunding my emergency savings fund so that I would have some money to go ahead and get started. What was funny was with all of that, apparently I didn't think about, "I would like to have a cushion in my business bank account so that it doesn't go down to $0 every couple of months." Whenever I started with everything, implementing my business plan, I found out pretty quickly that $10,000 wasn't too far off, but I really wanted $5,000 in my bank account at all times.

In the business bank account, not in my personal bank account. I don't want to be sitting here transferring back and forth. So I decided to make another $5,000 investment into the business. So it's $15,000 total has been invested into the business. The reason I'm asking this is, number one, one of the areas of transparency that I don't think we as financial planners do a good enough job at is talking about how much it costs to actually run a firm.

Because the perception that many people have is, "Well, just why do you charge me so much money? Why don't you just see me for this?" You can go back through and say, "Well, let me tell you about the hours I spent studying. Let me tell you about the cost of the exams.

Let me tell you about all this." But even just straight up running a firm is not cheap. That's why I don't do it right now is because the software fees, all those things. If it were just no cost, and it was like, "Oh, I'll just keep my licenses around and every now and then I'll work an hour here, work an hour there, and make a few hundred bucks." Well, anyone would do that, but it's not that way.

So how much would you guess as far as on a monthly basis to support your infrastructure, software, and all that? How much does it cost you to run a firm? I think it's between $600 to $700 to cover all of my membership to the Financial Planning Association, my insurance that I have to have to be an investment advisory representative, and then the technology that I need to be able to actually run the firm is between about $600 to $700.

But lately I've been kind of playing around with outsourcing stuff. And so I kind of do that on a "How much do I have coming in?" And at this point, I try to reinvest that back into the business. So if I have some extra money, I'll say, "Okay, well, then I'm going to take this other thing that's on my list of things that are not really all that important to my clients, but I would really like for it to continue to be done, and I'm going to try out using somebody else." And it's usually like marketing type of stuff or like operations, accounting, that type of stuff.

The fun stuff. The fun stuff. Yeah, exactly. I made a list of what is fun and what is not fun. And I said, "All right, I'm going to take the stuff that is really not fun, and hopefully I can outsource that to somebody else as soon as possible." What do you miss about being part of a larger firm?

I do miss the camaraderie sometimes. So I am part of a network called the XY Planning Network. I think that's really good because I have a study group that I meet with on a regular basis. I can kind of bounce questions off of people. And those are all things that I used to have within a larger firm where it was a lot easier.

Like you walk down the hall and you ask the advisor who's been in business for 35 years, "Hey, I've run across this particular client issue. What do you think about it?" Or, "I've run across this particular business issue. What do you think about it?" So now I kind of have to create that camaraderie and that peer network because I don't have a big firm.

At this point it's me and a couple of people that I'm outsourcing stuff to and an intern. Right. Do you think that you could have started this firm directly out of college without any experience in the industry? I think I would have thought that I could have. And I think I might have made it about this long.

And then I would probably be grossly running out of money at this point and trying to figure it all out along the way. So I was really glad that I had the experiences that I have had to be able to take that and be able to give that to my clients.

Because it's not just book knowledge. It's being able to say, "I've worked with people in this exact situation and I know what we need to do." It's a challenging question because even in the course of the last 30 minutes we've joked about some of the problems of the financial planning industry.

But you can't be something with nothing. You can't say, "Well, just because you have problems, it's easy to find fault." That's one of the biggest things I've learned over the last year about doing radical personal finance. It's easy to find fault with other people. It's easy to find fault with other financial broadcasters.

It's much more difficult to find fault and have a solution that works because there's a reason why a lot of the things exist. The reason why, statistically, most people prefer to compensate a financial advisor through the commissions paid on the sale of a product. That's what the research says.

They may or may not prefer. They don't know that they're paying it. That's a good point. I'm with you. But the studies indicate when people are asked, a majority-- at least I can't cite the exact figure, but I have a memory of reading some of the studies-- where it says, "Majorities say, 'I would rather just my advisor gets paid in this way.'" And so whether they should or not, that's something that you've got to talk about.

And so when you're going against it, that's where we've got to-- if we're going to develop new models of financial planning, if you're going against that model, you've got to come up with something that's more compelling. And so always the question that I have is, I do not believe--I couldn't have come in and started a financial planning firm without the experience.

And so I have no idea how to negotiate these challenges between learning in firms, where there are a lot of things that are great and some things that you wish you had changed, and then just saying, "Well, it's not fair. Those businesses will eventually fail," if people are just going in and using them to learn and then moving on their way.

So it's kind of the eternal question of, "Is it possible to start just on your own?" Maybe somebody has been able to do it, but it's not an easy road. I would say there's probably a lot more networks that support people that are starting their own firm than there used to be.

There didn't used to be places where you could say, "Okay, I want to start my own firm, but I really don't know how to do that. And so maybe I'll actually pay somebody else to set up all the compliance documents for my firm." And I think that those are becoming more prevalent than they used to be.

It used to be that the only way to start your own business was either you affiliated with the strip mall advisor firm, or you went to an insurance company. And that was kind of the two options that you had. But then you were kind of stuck selling whatever products it was that they told you that you needed to sell.

So I do think that it's becoming probably easier to start a firm. But I mean, it goes back to the advice I give clients. Just because you can doesn't mean that you should. Just because you qualify for a $500,000 house does not mean that you should buy a $500,000 house.

Just because they will sell you a $40,000 vehicle does not mean that you should buy a $40,000 vehicle. I think it's the exact same thing with financial planners. Just because you can start a firm doesn't mean necessarily that you should start a firm. You should have a really good, deep, introspective look at what are your strengths.

What do you have as far as support for your cash flow for your family? Are you going to have to be covering the bills for the firm and also covering the bills for you personally? Because that's harder than if you are somebody who's married and your spouse is covering the bills for the family.

And you're just having to cover the bills for the firm. So I always encourage people to really take a good look at all of that stuff before they jump in. Because otherwise, you don't want to... It's kind of like a race against time. If you are trying to get into a race against time and you think, "Okay, I'm going to make it at one year.

And I'm going to make exactly the same amount that I used to make at a firm," you might be really sorely disappointed. Because sometimes, just because you're really, really excited about it doesn't mean that all of your clients are immediately going to be as excited as you and bust out their credit card or debit card to pay you immediately.

Some of those people might be really great clients, but it might take them a good six months to decide that they actually want to move forward with this. Finally, do you have any favorite tools that you love to recommend to clients to help with personal budgeting, personal tracking? What are some of the favorite tools that you love to recommend?

I really like... Well, it's funny because some people do really, really well with financial spending apps. And some people really hate them. I don't know why, but I feel like the people that are probably more analytically oriented love financial apps. How could anybody hate data? They love financial apps.

What's wrong with those people? I mean, they're like, "Woohoo!" And then there are some people who... It's like, if I ever set them up with a mint.com or something like that, they'd be like, "This is way too much information. Can we put something in place where it's just like, 'This is the bottom line and that's what I'm tracking towards.'" Right.

So I do recommend some financial apps. They're really, really helpful for getting organized. And that's always the first step anyways. If you're trying to look and say, "Okay, this is what I have left over every month," or, "This is what I can actually commit to putting towards my goals," it's really hard to do that if you don't know where the money is going right now.

And you would be shocked how many people just have no idea where the money is going right now. They're like, "I used to have a handle on it, and then I started making more, and then I think my expenses went up, and I'm not really sure," because at this point, who knows?

It just goes out the door. But anything where it helps people to get organized I think is always really beneficial. So anywhere where they can save documents to one central place or anything where they can connect accounts and have a dashboard and be able to see everything in one place is actually really helpful with that getting organized aspect.

Firm name, website, where do people go if they want to connect with you? My firm is Your Richest Life. The website is yourrichestlifeplanning.com. And then you can find me on Twitter. I'm @KatyYrl. Nice. Katy, thanks so much for coming on. All right. Thanks for having me. Hope you enjoyed that interview with Katy.

She's a wonderful lady, and I just really enjoy spending time with her. And even as you're listening to this, I'm sure that I am, even though I've prerecorded this interview, I'm sure that I'm going to be able to get a lot of things done with her. And I'm sure that I am, even though I've prerecorded this intro and outro, I'm sure I'm spending time with her right now in Charlotte, North Carolina, her and dozens and dozens of other financial advisors who are all building continual practices.

I hope some of you will go and check out Katy's work. Go and check out her website. Maybe some of you might find her to be a good fit for you, your personality, and your goals with regard to your own financial planning needs. I personally believe that all of us need a world-class financial advisor.

That financial advisor will look a little bit different depending on what stage you are. But one of the things that I'm convinced of is you can avoid a lot of mistakes if you just get good advice. If you look at people who are very wealthy, if they're wealthy and they stay wealthy, they're going to have a team of advisors.

And here's the question. Did they assemble that team after they were wealthy, or did they assemble that team along the way? I can't prove one way or the other, but my guess is that if we were to do a survey, some of them assembled it after the fact. But many of them assembled that team along the way, and that was what helped them to avoid many of the major mistakes.

For that reason, I think we all need a good financial advisor, a team of financial advisors, coaches. Now, it's different at different stages. If you're just out of college and just getting started, you don't need a high-priced attorney. You need very simple stuff. But if you've got millions of dollars, you better get some good advice.

So go and check out Katy's work. Also, as I mentioned--I think I mentioned on a recent show-- when I return from the conferences this week, I will be launching a personal coaching program, a financial coaching program as well, myself personally, as a way for me to establish some new-- I'm establishing some new things with regard to ongoing products and coaching products, and I need to test those with--establishing some coaching sessions.

So if you're interested in that, shoot me an email, joshua@radicalpersonalfinance.com, for details. To be clear, I am not going to be taking asset management, any of those types of things like I would be as a financial advisor. This is strictly a coaching program, but it will include a little bit of financial perspective.

So thank you all so much for listening. If you benefit at all from the content of Radical Personal Finance, please consider becoming a patron of the show. Thank you to the over 220 of you who are supporting the show. The goal is to get to 250 by the end of September.

I would be so grateful if some of you who are listening who haven't signed up yet would please go to radicalpersonalfinance.com/patron. Support the show for as little as a buck a month or as much as $25 or $200 a month. The group coaching is sold out at this point, but I'll be adding in more of that in the future.

So radicalpersonalfinance.com/patron. See you all soon. Los Angeles Ballet's The Nutcracker is a Los Angeles holiday season tradition. December 1st through the 26th at four LA area theaters, including Christmas Eve at Dolby Theater in Hollywood. Get tickets today at losangelesballet.org.