Can you really help people who can not manage MONEY?

Discussion in 'Money Management & Banking' started by MTR, 14th Jan, 2016.

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  1. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    It can be. I'm working with a couple at the moment who have no shortage of funds, but zero money. For people like them, paying someone to set everything up in a way that automates payments, ensures bill payment/debt payment/saving happen first, and provide them with spending money to blow as they wish can make all the difference. Paying a fee of what - maybe $3k to be on par with My Budget - in this instance can save them multiples of that.

    If left to their own devices they'll end the year with nothing to show except a bigger deficit.

    I agree regarding My Budget though, ideally you'd teach them to fish. But that would also have a cost involved and require a hands on commitment and ongoing accountability from the client. I'm actually looking at incorporating this into my business at the moment, so am very interested to hear if it's something you think people would pay for.

    I anticipate most people here wouldn't because they're already doing well, but if you earned reasonable money and had no idea (and knew you had no idea) how to manage it, maybe then?
     
  2. neK

    neK Well-Known Member

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    In my opinion, the budgeting piece is something done for free with the view securing them as a long term client in the future. But everyone these days is after something for nothing and have no issues with use and abuse model.

    Perhaps if their goal is to buy a home, a model where they pay $x per year. Upon taking up a loan, the annual fee to help with budgeting continues. However any amount they've paid to date is rebated back to them (from the loan commissions).
     
  3. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    Jess - I am in a similar work environment to what you described. Working as a personal/executive assistant is a small/unique job area. But, the opportunities are there.

    I am paid well because I feel that I deserve it. Like you, I automated many of their bills and placed cost cutting and time saving measures wherever I could.

    As for developing a profitable business from this kind of service - not sure it is possible. It works well in the current arrangement because the service is personal. You become integral to their daily lives. Being able to deliver the same level of service across many similar couples, would probably dilute the service you currently provide.
     
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  4. Mombius Hibachi

    Mombius Hibachi Well-Known Member

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    Ken, this doesn't make any sense to me. Are you suggesting that professionals should give away their knowledge and expertise to people who are in self-imposed financial troubles? I don't get it, man.
     
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  5. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    To say it should be done for free is suggesting it adds no value to the client, where I can't think of much that would add more value to those clients that need it.

    It's kind of like saying Lulu Lemon should provide free personal training to the obese in the hope the client might one day buy some yoga gear. :confused:
     
  6. Mombius Hibachi

    Mombius Hibachi Well-Known Member

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    I would also suggest that providing services for free is a sign that the service provider doesn't value their time or their services.
     
  7. neK

    neK Well-Known Member

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    Long term approach. Teaching a particular person how to budget / save during the period no one is interested in helping them because they aren't ready. I believe in investing in people.

    But i definitely agree that people don't value anything that is free. But at the same time, people don't value budgeting at all! Which is why i suggested charging and rebating later when they are ready to take out a loan.
     
    Last edited: 14th Jan, 2016
  8. neK

    neK Well-Known Member

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    Getting people to understand they need it is the bulk of the battle. I guess I am passionate about budgeting which is probably why I see it differently. That said, it would drive me nuts and if they did call me up daily asking me what to do.

    Given I would have already spent time talking to them about why it's important to budget, to set up a plan that takes me a few minutes isn't going to impact me much more.
     
    Last edited: 14th Jan, 2016
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  9. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    We are living in an ageing society. There is a baby boomer group of people, with complex investments, who need help managing what they created in younger years.

    The couple I work with are in their early 70s and can't do it on their own any more.

    This isn't a debate about free financial advice........it is about some people need more help than others to manage their complex affairs on a day to day basis.......because they are elderly and can't do it by themselves anymore.
     
  10. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Yes it is, and that's what I'm talking about. It's an ongoing commitment from both parties.
     
  11. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    That's different again - I think we're talking more about people who struggle to save and are irresponsible spenders more than people who are no longer capable.

    That sounds like a great job, though!
     
  12. neK

    neK Well-Known Member

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    @Jess Peletier just to clarify, I would have two models, one for people learning how to budget to save for their deposit and another for those already established and would pay an ongoing fee for a regular review of loans and their budget.

    I would happily talk to those about budgeting at no cost (no different than sussing out a potential client), and charge a minimal fee to those who actually want to go ahead ($50 per month). The bulk of the cost would be subsidized by the model where the established clients pay.
     
  13. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    It is actually the same thing. It doesn't matter if you are rich or poor, young or old.......there is a market for your services.

    In the US, a huge new market evolved after the 2008 housing collapse. Lending practices changed and it has become more difficult to borrow money without a solid credit score.

    There is now a plethora of businesses and services and financial instruments aimed at building or rebuilding credit scores. Securing a mortgage or even a credit card is all about your credit score.

    If you are currently looking at building at business model on how to help irresponsible spenders/savers in Australia, I would suggest you look at what is and has been happening in the US for the last 10 or so years.

    I don't think Australia is currently in the same space in terms of stricter lending practices as the US.

    And because I don't think lending practices in Australia are in the same space, if you want to build a business model.......you need to think about the ageing population. Because without stricter financial policies and regulations, those who spend and are irresponsible about their spending habits, will always find a way to find another institution to fund their life style.
     
  14. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    @neK I'll PM later so we don't derail the thread :)
     
  15. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    @Ozzie in Texas
    I see your point, and I agree - there's no age limit that's for sure. I'm not sure how difficult it is to get finance in the US but things have tightened up considerably here over the last 6 months.
     
  16. Fullysickbro

    Fullysickbro Well-Known Member

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    I believe genetics has a major influence. I'm not sure if it's intelligence. These people that are in debt, and they know they are, and are aware it continually increases, which means they have an understanding.
    I think its something deeper and very hard to help these people. Almost like drug addicts.
     
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  17. Foxy Moron

    Foxy Moron Well-Known Member

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    Tom Waterhouse, and the companies that came after, also have a lot to answer for. Funny how they banned ads for cigarettes in the 70's but this lot can bombard the TV with life-destroying propaganda, then take the high moral ground with a condescending "Gamble Responsibly" tacked onto the end.
    I love the horse game as much as anyone, but hate wagering being glamorised in this way. My opinion only.
     
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  18. Adele

    Adele Well-Known Member

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    Believe it or not, this has been an ongoing topic in my household.

    I am still stuck in my belief that in most cases you cannot help a person who is bad at managing their money until they have had an "Aha!" moment. It is because more often than not, they do not see the problem. How can people fix something they do not see as broken? Sure they may vent about money, payments etc and ask for help. Unfortunately in a lot of cases I have experienced, the help they are asking is for the 'fish' and 'not how to fish'.
     
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  19. Ted Varrick

    Ted Varrick Well-Known Member

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    This thread is like a double edged sword.

    On one hand I sort of feel empathy for not only the self inflicted financial distress that some people find themselves in through fiscal squanderance, but really for the friends and/or family that are dragged into the seeming whirlpool of obligation.

    On the other hand, it might be a defining example of financial darwinism.

    Either way, the word "No" should be front and centre.
     
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  20. moridog

    moridog Well-Known Member

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    I agree with what Ozzie said last page. Can you teach someone? After earning fair money in my 20's and p......g it all up, I found myself in my 30's with one tiny income and a kid. You don't forget, ever. You don't forget the fridge being propped shut with a broom, shopping at the charity places for food, that being poor makes you poorer in a myriad of ways. You pretty quickly think, this is not for me. Oddly enough, though I work with people with pots of money I inwardly cringe at expenditure and thank god that being poor and single helped me enormously, because, there was no pressure, no one had any expectations that you would have anything and that is easy to live up to! :)
    I don't think you can teach someone, you have to "get it"
     
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