Learning from the pro

Interview with Michael Gawley, Partner at Eisneramper.
  • list where usually spend money
    • schedule it out based on necessity or padding
  • create budget
    • look at historical (6 months – 1 year)
    • understand how to spend in the future
    • find impulse buys
  • what to cut (how to cut)
student transition (reliant on parents -> independent)
  • happens when get a job (easier for parents to cut cord)
  • period of adjustment: when gets paid, when need to pay (rent)
  • need tough love
    • parents cut credit cards
fiscal management: 3 groups
  • don’t care, can’t change
  • income and spending close: can be helped
  • already disciplined in financial management
for tough group
  • need credit counseling
    • figure out how spend money (lifestyle)
  • impulse purchases
  • only use cash ($40 for week, no more, one credit card for emergency)
  • debt relief
    • fuck up credit score, ruin a lot of things in life (rent big items, buy anything, loans)
  • no penalty until card declined
  • lack of financial discipline
    • behavior issues
learning financial management
  • have a spreadsheet
    • 52 weeks
    • when money comes in
    • list out expenses in order of most important
    • find what is not needed (optional spending)
    • decide level of discipline
how to save
  • budget: look at historical
    • find patterns: spend more in summer, fitness lifestyle
  • find where impulse spend
  • identify and analysis (from recent credit card data)
    • do you really need this
    • highlight issues
    • do you need a second job
  • need an “adult” who is responsible
  • if mess up, no second chance (from investors, banks, etc)
  • investors (analogous to parents in this situation)
freelancer issues
  • getting paid
    • try to avoid assuming risk of client (paid when get paid problem)
  • get money upfront
  • stop work if don’t pay on time
  • choosing clients
    • what is the chance of not getting paid
      • reference from other freelancers
      • check on business bureau for complaints
      • credit search (Standard and Poor)
  • separate business from personal
    • if audited: won’t open up everything in personal accounts
multiple partners
  • create legal entity: everything should go through business
  • all liable is something goes wrong
  • who binds the partnership
    • who is the adult?
Financial advisors perspective
  • (software) model spending habits (from last 12 months – 2 yrs)
  • help to understand where money is coming in and going out
  • best to talk to FA before college
    • college is first time can spend freely
    • learn to be responsible
  • provide independent advise outside family structure (not mom and data)
    • different scenarios in non-confrontational way
  • build trust
    • need to have respect and confidence in the person
    • need to get along with the person
    • comfort zone and immediate rapport
    • empathy
    • connect (same generation and language)
  • help to understand what to do if things go wrong (protect)
  • most tedious
    • paperwork
    • value in work: seeing as commodity
      • gatekeepers to regulatory side
      • not incentivized to provide improve experience (when viewed as commodity)
    • getting paid (20% of customers
Existing wealth management
  • family net worth 2MM+
  • FA start engaging around 11-12 yrs
    • incentivized so will stay with firm
  • provide webinars or workshops with other kids to talk wealth
  • estate planning
Financial ed
  • would be great to have in high school
  • 8-10 hrs a semester
  • different concepts
    • emotional vs practical
    • different types of people: what type is this?
  • department of ed: build pilot program in a school district
advice for us
  • use existing models (decision trees)
  • use other software to plug and play
    • negotiate license fee (by user #)
  • coaching side is more important
  • like weight watchers (call up coaching)
    • “you are better person for this”
  • partner with counseling center
    • pro bono credit crisis counseling: charity and church
    • paid services (bankruptcy crisis): need to pay upfront

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