Category Archives: Financial Advisor

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What Is A Trade School? The Affordable Alternative To 4-Year Degrees

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You might have heard Mike Rowe, host of popular television show Dirty Jobs, talk about how
important and valuable trade jobs are, how much money you can make, and how trade schools
are an affordable alternative to a four-year degree! But, what is a trade job and what is a trade
school? I wanted to learn more about trade schools and find out what they entail, and if they
were worthwhile alternatives to going to college--or if people are better off with a four-year
degree. I did the research; here’s what I found out.

What Is A Trade School?

A trade school is an affordable alternative to a four-year degree. It’s usually a one or two year program that focuses heavily on real-world applications and apprenticeships so that students are certified and qualified to work as welders, electricians, HVAC repair techs, and so forth when they graduate.

How Do Trade Schools Work?

Countries across the world rely heavily on trade schools, but in the United States, they act as career alternatives to traditional four-year degrees (most notably, a bachelor’s degree). In the US there are two main types of trade schools: vocational colleges and career colleges. Vocational college is a term typically used to indicate a government-run or supported organization.

Usually, vocational college takes two years to complete and can often result in an associate’s degree or the transfer of credits to a four-year university. Sometimes, vocational colleges can partner with magnet schools or charter school to serve as a student’s final two years of high school. In those cases, completion will also include a high school diploma or a GED.

How Is A Vocational College Different Than A Career College?

The other kind of trade school popular in the US is a career college. Career colleges are typically for-profit institutions, and while they’ve popped up with increasing frequency in the last decade (even while vocational colleges have decreased in number), career colleges have been criticized for over-marketing to students and wasting student’s money. Not all schools over-promise, of course, but it’s very important that individuals consider these schools and their claims very carefully. Typically, career colleges take less than a year to complete, and they rarely provide credits that can be transferred to an academic institution.


What Is A Trade School Degree?

As I’ve explained, your trade school degree depends on what kind of school you go to--it also depends on what kind of trade you want to go into. If you go to a vocational college, you might end up with credits you can later transfer to complete a bachelor’s degree; if you go to a career college, your future options will be significantly limited--but you’ll also probably be out in the real world making money much faster.

Trade schools prepare students for the following types of jobs:

  • Auto mechanic
  •  Welder
  • Construction supervisor
  •  Pile-drive operator
  • Plumber
  • Commercial driver
  •  Wind turbine technician
  • Beauty technician or hair stylist

These jobs vary widely and are just the tip of the iceberg. And, each industry has its standard certifications and requirements. Some trade jobs also don’t require trade school--in fact, you’re better off learning on the job.


Do Your Research

Because of this, it’s very important to do your research. Look into different industries that interest you and look for trade schools in your area to find out what they specialize in. If possible, talk to people in your field of interest. How long have they worked there? What do they love about it? What do they hate about it? What do they wish they had done differently?

You can research potential employers, as well; many have apprenticeship or training programs or have work programs that allow you to start working with them while you’re getting your certification. In short, trade school is much less expensive than college--one source estimates that trade school graduates complete schools with a whopping 70% less debt than their college graduating counterparts.

What Is The Difference Between A Trade School And A College?

There’s such a huge array of different trade schools and colleges that it can be difficult to succinctly narrow down the differences. Typically, however, a college is a degree-granting institution. Usually, it lasts four years (though sometimes two) and requires a full-time commitment. Students can work while they’re in college, but most find it difficult, if not impossible, to work full time while in college full time. There are, however, students who choose to take advantage of night classes and weekend programs to complete their college degree so that they can work-- this means, however, that it takes much longer to complete college.


Trade Schools Are Shorter And Less Expensive

Trade schools, however, as I’ve explained, are shorter. You typically won’t receive a degree from a trade school, but your course of training will likely be much more hands-on and narrowly focused on the type of career you’re planning to pursue. You won’t, for example, take history or art classes--but you will likely have the type of certification you need upon graduation to begin work immediately. Trade schools are also usually much, much less expensive than college. While prices can differ hugely depending on your region and the type of trade school you want to attend, tuition typically starts around $3,500 per year and can go all the way up to close to $15,000 per year (source). Since trade school lasts for two years, you can expect to pay less than $10,000 or more than $30,000.


Higher College Tuition Costs

College tuition rates, however, are much higher. You can expect to pay roughly $10,000 per year at a state college or more than $34,000 per year for a private college (source). For a four- year degree, then, you’d pay more than $40,000--and that doesn’t include room and board, a substantial part of the college experience for most people. These numbers don’t account for living costs, and since most people who attend trade schools opt to live at home, living expenses for trade schools are usually significantly less than living expenses in dorms.


Are Trade Schools Better Than College?

In his book, Digital Minimalism, productivity expert Cal Newport explains that in our era of increasingly fast technology, the people who succeed are the people who learn how to adapt quickly to new technologies. It’s no longer about getting the right training or certification that will set you up for life; it’s about being willing and able to learn quickly. Similarly, Mike Rowe, the celebrity I mentioned earlier, has become a huge proponent of trade schools and trades as vocations. He explains that while past generations looked down their noses at trades and saw four-year degrees as opportunities for advancement, millennials are rightfully becoming drawn to the pride of doing a job with your own two hands. Plus, four-degrees are becoming exorbitantly expensive--and people with a skill like plumbing or welding are becoming more and more in demand. Frankly, trade jobs simply make a lot of sense for a lot of people--and are worth exploring.


Should I Go To Trade School?

If you’ve read all the way to the end of an article titled, “what is a trade school?” your real question is likely, “should I go to a trade school?” And the answer is: it depends. Reports show that, on average, college graduates make more per year and over their earnings lifetime than high school graduates. However, those are averages. If you’re not going to be in a high-paying career like neuroscience or engineering, it’s hard to know if those earning potentials will pan out for you over the long- haul. Plus, the extremely high (and rising) cost of college tuition places many college graduates at a severe disadvantage when they graduate. Finally, some people just aren’t suited to four years of sitting in a classroom and would prefer to not spend their lifetimes in office jobs. In these cases, trade schools seem like a no-brainer.

My Final Thoughts

What is a trade school? The bottom line is that a trade school is a terrific opportunity and a great alternative to a four-year degree--for the right person. Particularly if you’re somebody who is a self-starter and a go-getter, I don’t think you need to be worried about the potential income limitations of trade schools. There’s always room for a smart, entrepreneurial type of person to make much more than a modest living if his or her services are in need. If you like working with your hands and don’t feel the need for a four-year degree, all my research indicates that you’d be a great candidate. And you’d probably have a lot less debt, too....

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What Does a Normal Financial Advisor Salary Look Like?

When people say that they’re a financial advisor they could be describing a number of different roles and responsibilities. “Financial advisor” is a very broad term and, therefore, a financial advisor salary can cover a very broad range.

If you are thinking of becoming a financial advisor then you are probably wondering what you should set your salary expectations to and what factors could affect the type of salary you earn. In this article, we will answer some of the common questions aspiring financial advisors have about the role.

In addition, we will also explain the various factors that are put into consideration when setting the salary for a financial advisor. After reading this article you should have a better idea of what financial advisors earn for their work and how you can prepare yourself to earn the salary you have been dreaming of.

The Different Types of Financial Advisors

As mentioned, a financial advisor could take on a number of different roles and responsibilities. There are so many different areas of finance with detailed rules and regulations that financial advisors usually specialize in certain areas rather than being a Jack of all trades.

The most common type of financial advisor is a personal financial advisor. In this role, advisors tend to focus on individuals and their immediate family like their spouse and children. In this role, the main goal of financial advisors is to provide personalized advice to help clients meet their immediate and long term goals.

Personal financial advisors will do everything from helping families set household budgets to retirement planning to college planning for children. Typically, these financial advisors work for a bank or investment company.

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The next common type of financial advisor you will find is often referred to as a stock broker. Of course, when you hear the term “stock broker” you might think of high powered securities traders in New York - much like Leonardo DiCaprio in The Wolf of Wall Street.

The truth is that stock brokers tend to take a much more broad view of their client’s needs to develop customized investment plans to help people meet their own unique goals.

In this role, a financial advisor must take time to understand their client’s life situation and specific goals to build a portfolio of securities that will match those goals. For example, a young person saving for retirement may be able to endure more volatility with the goal of securing greater gains while individuals closer to retirement will be seeking more conservative investments to reduce volatility as retirement draws closer.

There are a number of other roles that can also fall under the financial advisor role that are less common than the roles mentioned above. Some financial advisors mainly deal with insurance while others may be in a corporate role helping advise companies about business finances.

As you can see, “financial advisor” means a lot of things. Narrowing down your focus to what type of financial advisor you hope to become is a major part of determining your financial advisor salary.

Factors that Determine Financial Advisor Salary

As we discussed above, there are a number of different roles that fall under the broad umbrella of “financial advisor.” In addition, there are a number of contributing factors that determine what type of salary financial advisors earn.

Education and Certification

One of the major contributing factors is education and certification. Many financial advisor roles require a certain level of certification in order to be able to advise people on their finances.

In the United States, FINRA (Financial Industry Regulatory Authority) provides oversight and licensing for financial advisors. There are a number of different types of security licenses available and each one gives advisors the education and authorization to complete different types of transactions on behalf of their clients and employers.

financial reports

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Financial advisors working in a bank or investment company setting at the customer-facing level will typically have their Series 6 certification. This certification allows advisors to sell basic types of investments like mutual funds that are pre-packaged and designed to meet certain goals. For example, a financial advisor within a bank may sell 6 different types of mutual funds each with their own risk levels and expected returns.

For financial advisors with Series 6 certification, understanding how to properly listen to clients and advise them based on their needs is most important. As the pre-packaged investments are already designed, there is little research or development required on the part of the financial advisor and, in that sense, this very much an advice type of role rather than an active investing role.

Series 7 is another common type of license that financial advisors will attain. This license opens up a number of different investment opportunities including stocks, bonds, fixed income investments, and more. In fact, the only major investments not included in the Series 7 license are real estate, life insurance, and commodities futures.

A financial advisor role that requires a Series 7 license is likely a role where advisors are helping build customized investment portfolios for their clients and trading on behalf of their clients. Since these investments are not pre-packaged like mutual funds, advisors must do more research to stay up to date on investment news, stock performance, and volatility.

In order to conduct business, advisors with a Series 6 or Series 7 license must also have a Series 63 license. For advisors who plan on charging an hourly fee for their services, a Series 65 license is also needed but many opt for the Series 66 license which essentially combines the Series 63 and Series 65 into one.

As you can see, there are a number of difference licenses available and each one opens up a different path of opportunity for financial advisors.

What Do Financial Advisors Actually Earn?

As you may have guessed, a financial advisor salary can vary wildly based on the type of role the financial advisor takes on. Consulting a salary aggregator like Glassdoor will reveal a range anywhere from $25,000 per year to more than $90,000 per year.

One thing that complicates nailing down a specific financial advisor salary is the types of pay an advisor can earn. This can vary based on role and the type of company the advisor is working for. Some advisors are paid based on a fixed salary while other advisors may be paid 100% commission and other advisors earn a mixture of salary and commission.

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Salary Basis

Advisors at banks or investment companies often earn a salary with the opportunity to earn a bonus or commission based on sales or size of their client base. When considering a job with this type of compensation, job seekers should ask themselves if the threshold to earn a commission or bonus is realistically achievable before factoring that amount into their compensation.

Commission Basis

Active traders that build portfolios on behalf of their clients are almost always paid on a commission basis. This is determined as a percentage of their client base and is built into the management fee attached to their services.

For example, an investment company may collect an annual management fee of 3% from the total balance of a client’s investments. A portion of that will be paid to the advisor who holds the client’s book of business.

Flat Rate Fee

Finally, another way that financial advisors are paid is by a flat rate fee. This is much less common than the above examples but not entirely unheard of. For financial advisors who offer their services independent of a larger organization, this is a great way to market themselves compared to other advisors on the market.

Usually, a flat fee is based on an hourly commitment from the advisor which would, obviously, require the advisor to have their Series 65 license. For some investors who dislike high management fees, working with a flat rate financial advisor may be an appealing alternative.

Build a Career Path and Follow It

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The median financial advisor salary, according to Glassdoor, is just under $50,000 per year. Of course, as you have learned, there are a number of factors that could make this salary higher or lower.

For people who are aspiring to become financial advisors, determining a career path first is most important. Since licensing is needed to become a financial advisor in most cases, some time, effort, and investment is needed in yourself before you can begin actively working with clients.

Do you hope to work with families to help them plot a path toward retirement or are you interested in researching individual stocks, building customized portfolios, and earning a percentage of the business you are able to secure?

Top financial advisors have almost no limit to how much they can earn. Finding a path you are passionate about can help you secure the compensation you deserve.