#FASuccess Ep 409: Adding 1,400 New Clients In A Year As An Extension Of Doing (Profitable) Student Loan Consulting At Scale, With Travis Hornsby

Resources Featured In This Episode:

• Travis Hornsby: Website | LinkedIn
• "We're paying off $124,000 in student loans using this handy spreadsheet" – Business Insider
• Millennial Moola
• Typeform
• The Flywheel Effect
• Rob Bertman
• XYPN Benchmark Study
• Enough: True Measures of Money, Business, and Life by John Bogle

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Full Transcript:

Michael: Welcome, Travis Hornsby, to the "Financial Advisor Success" podcast.

Travis: It's great to be here, Michael.

Michael: I'm really excited to have you join us today and to get to talk about, I guess, not only student loan planning and trying to build a business around student loan planning, but I feel like that doesn't do justice to the conversation that's coming because a lot of advisors I've talked to over the years have said, "I want to build a business around student loan planning," or, "I give some advice and some consultations, and they pay me some dollars for it. I've got some of these people in my personal network, and it's a way to serve them. I think I can generate enough revenue to make this a viable business," and they go to and some have been very successful.

But you have built a multimillion-dollar business of planning around student loans and providing additional advice services to the clients that come for student loan planning. And so, to me, just you have done this at an order of magnitude, maybe 2 orders of magnitude, larger than virtually anybody else that I've seen in our space. So I'm really excited to talk probably not just about what it means to try to build a business providing student loan planning and advice, how that actually builds and scales into a sizable multimillion-dollar enterprise.

Travis: Yeah, with a whole bunch of stress.

Michael: Yeah, with a whole bunch of stress. You just like to give advice on the internet and people come, right? It's pretty straightforward.

How Travis Gained Expertise In The Student Loan Niche [04:48]

Travis: Exactly, yeah. Well, I think it would be helpful to kind of go back and explain how I got into this, right? So I went to work for a big money manager. I was a bond trader, and I got really good at Excel. And then I got super into the FIRE movement. So I was in my 20s, and I considered myself, once I hit a certain net worth amount, I was early retired. So I packed my bag, started traveling around Europe, and then met my...

Michael: Wait, literally, you hit your number, did bond trading for a few years, hit your net worth number, and that was that. And you're traveling across Europe.

Travis: Yeah, I would say LeanFI for those that are familiar with the FIRE movement, right, so not multimillions or anything like that but a number of that. As a single guy that did not have kids, I considered myself sort of naively financially independent, right? And so I quit my job. I kind of had the feeling of this very large money manager is going to be just fine without my skills. I just thought about, "Well, what if I'm the head of the group that I'm in one day? Is this success?" And I sort of felt like, "You know what, if I'm not here, somebody else really talented, probably more talented even, is going to be doing this, is going to be doing a bang-up job for clients."

And so I didn't feel like, when I sort of suddenly lost that, "Can I be extra impactful in this role?" that's kind of when I lost that desire to stay. And so I had this idea of, okay, well, let me try out this sort of financial independence movement and let me try out early retirement and see what that's like. And so I started planning my journey.

Michael: How old are you? How far into your bond trading career are you at this point?

Travis: So I did it in about 3 years. And for context, when I went to undergrad, my dad was a teacher, mom didn't work, and basically I had the idea of I need to have college fully paid for wherever I go. And so I was really intentional about applying only to places that had merit scholarships that would cover the whole thing. And so I, kind of in a weird sort of way, was able to stack some scholarships for undergrad where I kind of made what I would consider maybe like a TA-type of income or a grad student type of income, in addition to having tuition covered, because I went to a flagship state university and got scholarships that I was able to stack.

So I came out of undergrad in a pretty good spot with a maybe mid-5-figure net worth for my savings in college. So I was kind of starting kind of on first base in that regard. And then I just had a super aggressive savings rate. I saved almost everything I earned for those 3 years. I lived in some questionable situations. I lived in an unfinished basement once. I was in a different kind of sphere of life.

Michael: So you're making 6 figures, nice 6-figure income, and living in an unfinished basement.

Travis: Yeah. Or even high 5-figure some days. So it wasn't like I was making a killer income. It was just I was saving almost all of it. And then I think I did actually probably have some side hustles. So it's probably true, I did probably make 6 figures in some years because I was doing tutoring on the side, I would find opportunities to do that on Craigslist. So I did just have this very sort of energetic focus on hitting financial independence, right? That was my big goal. And so sort of you could say fate intervened.

And right as I bought...I don't know if anybody remembers WOW air, but they had some Facebook special $99 flights to Iceland, and that was just when I was just, "You know what, I'm just going to go for it. I'm going to buy my one-way ticket to Iceland, and I'm going to start making my plan." And then that's when I met the woman who I'm now married to, my wife, right as when I was leaving for this long extended trip that I was traveling around the world for. And so I considered myself very much fully retired. She was in medicine, is still in medicine, and she had all these student loans.

And so I, over time, during the course of our relationship, sort of had taken my Excel knowledge, sort of plugged that into a model to figure out, "Oh, you don't just pay off your loans." That's certainly what I thought, not having had any myself from undergrad. I just thought, "Well, you just pay off your loans, right? You just get rid of them." And then I realized, "Wait a second, there's PSLF [Public Service Loan Forgiveness], there's forgiveness outside of PSLF. You can file your taxes certain ways to make your payments lower or higher. And it's way more complicated than I thought.

And so we made some...looking at the way she had gotten advice on her loans, she made all these mistakes with managing her loans that cost her 6 figures, which I thought was, "Oh, my gosh, I'm fighting tooth and nail with these super smart counterparties on Wall Street to get an extra 10 basis points of returns and bond funds. And meanwhile, there's advice that's not being given out to my wife that costs her 6 figures when she's a resident making 5 figures." And this is after-tax dollars. So if you think about physicians having a high tax rate, easily, mid-6-figure mistakes happening on the regular. And I thought, "Oh, my gosh, this is a thing that is desperately needed. People desperately need this help.

And the problem, I think, always with student loans is you're kind of building a business on quicksand in the sense of student loans are constantly changing. Things are constantly happening. It's really just difficult to stay up to date on all the different things that happen. And I think that's probably why the opportunity exists, right? Because if it's this big, stable thing, you have big corporations that would want to get involved, big entities that would want to jump in and provide the easy software solution for, "This is how you should manage student loans always," right? And so I'm self-aware that I'm not Fidelity or Schwab or something like that, where this opportunity existed because it's constantly changing and it's just pure chaos. And that's a big turnoff to companies that like big, consistent, growing streams of revenue.

And so I kind of got a little lucky I had the skill set where I could help people with a very clear problem, and I just had the space where I didn't need the money to just work on it without any expectation of when it was going to pay off. And my wife said, "Hey, maybe you should talk to our friend who goes to vet school at Penn Vet School, has $400,000 of student loans, and maybe you should charge her $100 bucks to talk to her about her loans." And I thought, "Oh, that's great. That sounds silly." But then I did it, and she was so grateful. She's like, "This is amazing." And then she told all her friends. And so I maybe did maybe a couple dozen consults, and then I took the spreadsheet that I was using and put it out there on Business Insider. And that's kind of when it got 1/2 million views. That's when things really kind of took off.

Michael: How did you get it on Business Insider?

Travis: I just basically pitched the person. I just said, "Hey, I saw this similar article with the spreadsheet kind of thing that somebody wrote about and shared, and it got a million views. And this is something on student loans. You never had anything like this before, and I think it might do really well. Would you want to include it?" And the person got back to me and was like, "Yeah." Now, just to be clear so people know this wasn't an overnight success, I aimlessly blogged. It's called Millennial Moola. It's a super embarrassing website.

I blogged for a year and a half, kind of during this early retirement sort of period, totally aimlessly. I didn't have a niche. My niche was all millennials. I got maybe 5,000 visitors a month at most. I made almost nothing on this blog. So I literally did that kind of while I was traveling around the world to different places in Europe and Latin America, basically just to have fun. I wrote about all kinds of weird stuff. I wrote about pension insolvency. I wrote about just personal stuff. I wrote about just financial independence. I was all over the place, right? And so I think that the thing is I was not necessarily doing this with a clear plan. It was just sort of, "Oh, this is an interesting problem. Oh, my skill set kind of matches this. Let me see if I can provide some value." And then somebody else pushed me to, "Hey, try to make money for this because this is valuable."

And so that's kind of where the consult kind of idea came from, where I can talk through somebody's student loans and give them some actionable things that can save them money in a 1-hour consult. And I'm kind of a person that is sort of an anxious, impatient person. It's one of my opportunity areas, you could say. And so I just didn't have the desire to make it longer than an hour of conversation, I guess. And so that's kind of where that hour conversation length happened. And it just felt like I was packing in a ton of value just into a short conversation, and that value per hour spent was just kind of an addictive combination.

Michael: So just help me understand, you get Business Insider to write an article about this student loan analysis spreadsheet while you're blogging on Millennial Moola. So, what happened when Business Insider picked it up? Because they're a sizable publication. They have a lot of reach.

Travis: Yeah. Well, I wrote the article for them. So I was just sort of, "Here you go. Here's a free article if you want to use it. If you don't, you can ignore me." And it's funny to even mention Millennial Moola because it's a dormant website that just sat around for years. So anybody who wants to feel good about their website, just go look at my first one, right? And so the point there is I wasn't prepared, right? I didn't necessarily have a business plan. I wasn't prepared for the traffic that came in either. And what I said at the bottom was just literally I was like, "If you want to reach out, you can at this email. And I have a part-time occasional consulting side gig where I sometimes help people with their student loans." It was very almost not saying that I helped people, and people just found me anyway. And people were just that desperate for clear advice and help on their student loans, they weren't getting elsewhere, that they were finding me even though I made it very difficult because I wasn't trying to take those contacts, if that makes sense.

And so when I saw that sort of demand from people that were not friends or friends of friends, then I was like, "Okay, this is something that I need to pay attention to." And so then I just sort of decided to write more about what I was doing. So the first article I think I did was because I was talking to a lot of veterinarians at the time I wrote this article. Veterinarians are treated horribly under student loan rules. And the point of it was just physicians have fairly easy access to public service loan forgiveness and have the same debt generally as veterinarians do, but veterinarians have a very difficult path to public service loan forgiveness. And so that kind of...

Michael: Because there's lots of nonprofit jobs for doctors to get PSLF but not so much for vets.

Travis: And the real reason for that is the AMA [American Medical Association] is very powerful, and AVMA [American Veterinary Medical Association] is not. And so when the PSLF laws were being drafted, basically, the nonprofit hospitals kind of got pushed into the law that was written in 2007 as qualifying employers. And so, effectively, people don't realize student loans, obviously, is just very political process. It's very subject to who has lobbying power and who doesn't in terms of how the laws are written. And so, essentially, it was just an article that was...

Michael: So the nonprofit hospitals got pushed in, but the nonprofit animal hospitals did not. So the doctors can, but the vets cannot, that kind of thing.

Travis: Well, yeah. Well, it's more so just the way the profession of veterinary medicine or even dentistry is structured, is that you don't really have those not-for-profit hospitals, right? That's just not how that profession is structured.

But the point of the article was there was a little click-baity headline, right, and it was kind of, "Hey, veterinarians, you're not treated well." But then it gave a solution, and the solution was, "Hey, did you know that you can still get forgiveness? You just have to do it over a 20- or 25-year time frame, in most cases, instead of the 10-year time frame like PSLF." And I proved it with math. I showed how people could keep their payments low. I shared some screenshots. And that article actually went nuts. So that was another article. And again, keep in mind, I was writing aimlessly for a year and a half. So this is not like the first time he did it, it was successful. This was a trying lots of different things and just continually keeping at it for a long period of time. And then, finally, I got lucky, and I got lucky because something I enjoyed happened to match a need that I had stumbled upon due to something that happened in my personal life, which I think is probably the case for a lot of people in how they get started with their niches or their RIAs.

And so, anyways, the thing that was fun about 2016 when I started it was this was pre-election scandal with Facebook, and so Facebook Ads were just like the Wild West. So I promoted this with 100 bucks of Facebook Ads or something, and it reached 30,000 or 40,000 page views or something crazy. It was just nuts. And so I said, "Well, this worked great for veterinarians, and dentists have a similar occupation profile. So I'm going to try this for dentists."

Michael: Did you go right out like, "Dentists are treated horribly under the student loan rules," and just replicated the article and subbed out vets for dentists?

Travis: Exactly. You're spot on, Michael. So I did that. And then, funny enough, then the election happened, and then Facebook just cracked down on everything. And because I had student loans in my content, it was constantly flagging me as horrific content or whatever. All my stuff was, "Facebook doesn't allow racist, misogynistic, homophobic, or evil content," or something like that. I'm like, "What? I have student loan in my name. Why are you saying I'm doing these things that have nothing to do with that? That's terrible." So I would appeal it. And then I'm small potatoes, right, because I'm spending $100 on an ad campaign. I just kept getting rejected.

But what I found was all these people that really needed the help. And so while that was shut down, what I did is I had all these people from those ad campaigns that had come in, and I had a little bit of money to spend. And my article success showed that at least some of my content hits. And so then I just decided, real creative here, "Let's just do all the profession. So let's just look up everybody that's got a professional degree, that's got a lot of debt, and I'm going to try to learn about that profession as much as I can so I can write an article that is somewhat unique to the profession where I'm not saying the same thing over and over again." So physicians, I would talk about physicians have more options just PSLF, right? And so I would write all these things.

And so just because it was niche enough that the big companies didn't care about it because it's sort of, like I said, quicksand, right, student loan is chaos, right? It's what people think about. So all that content on the blog was getting traffic, and then people were coming in. And my pricing was really low, and the value was really high. And it got to the point where I was doing maybe 12 to 16 hours a day of consults myself. And yeah, so it was a lot.

Michael: What were consults to this point? What were you charging? What were you doing?

Travis: I think I started probably at $99 or $149. It was something like that. So it was just that for an hour. And what I would do is, initially, I would just ask them to send me anything about their student loans, right? It was very disorganized. But then I realized, "Okay, I should have them give me information ahead of time," because if I have an hour to make these calls happen, I got to get them to give me some of the information. And so then I started using a thing called Typeform. We use something a little different now. But I just figured out, "Oh, this cool thing called Typeform, you can ask them questions, and they literally fill it out. And then I have some information coming into the call instead of just going in there blind." And the other thing is I was kind of really concerned about compliance and rules and regulations. Those things always kind of scare me. And so that's one of the reasons I didn't start an RIA for many years, because I was really intimidated by that.

And I felt safe in the student loan world, just not having it being an RIA. And so that allowed me to have a little bit more fun and to be a little bit less kind of burdened by those things early on, which was really helpful because it just allowed me to just kind of try out a lot more stuff. So I'll give you an example. When I was charging for people, I didn't want to charge them upfront because 1 state, I think of at least 1 that has some sort of rule about, "Don't charge upfront for any debt settlement services." And so that was after my experience with getting punched in the face in Facebook Ads. I was terrified that, "Okay, is somebody going to come and say I'm a criminal or something because I'm charging upfront for my consult services?"

And so I figured out a way to bill after the fact where people pay me 98%, 99% of the time. And the test was I found that people that didn't fill out their forms ahead of time almost always never paid because they just didn't value the service. And so then I found another thing where I used to have to guess with people. When did you first take out your loans, right? I had to ask them some sort of open-ended questions that I couldn't get from the form that they would fill out, and then I realized, "Oh, I have to have a second step of this process where I have to have them give me their student loan TXT file."

So that took me a couple of years to figure out. And then I realized, if I get both of these things, almost always, it's a great consult. We get the information, we give them their options, we show them how to save money or confirm that they're doing okay. And after the fact, at the time, it was a couple of hundred dollars. And we experiment with a lot of different pricing things, but it's worked up to more like $600 roughly now. And so that was kind of the journey of figuring out what the consult was, but obviously, the big inflection was when I added somebody besides myself.

Transitioning From A Solo Practice To A Full-Fledged Business [21:32]

Michael: So you're blogging. The blog gives people an opportunity to actually engage in a student loan consult. Eventually, you're doing 12+ hourly consult a day. People are just filling your calendar, 8 a.m. to 8 p.m. kind of thing. And you're sending out your $100, $150 invoices after each, and suddenly having thousand-dollar consult days. Long, intense, thousand-dollar consult days. But you're having thousand-dollar consult days.

Travis: Yeah. Some days, I would make $2,000 or $3,000. It was pretty exciting, to be honest, because it was just me and mostly profit, no expenses. So yeah, that was fun.

Michael: So, how far into the blogging time? You had a year or 2 doing Millennial Moola before you got into the student loan and did the Business Insider article, which led to the vets article, which got adapted to the dentist article. You started doing that profession-based theme. So then, how far were you going down that road before you were actually at the point of "I'm getting 10+ consults a day and filling my calendar?"

Travis: It was fairly quick. So I guess I started it in September 2016. The first few months of business, I was making something like $5,00 –$10,000/month of revenue, and that was mostly all from consults. So I think, probably, if you divide it by 200, that's probably something like, oh, gosh, math, 50 consults a month. So that was fairly slow. In 2018 is when I started doing kind of low to mid 5 figures a month in revenue.

And so that's when I raised my prices a little bit, and I was making one of those 3,000 consult days. And that was just like people...really it was kind of a combination of more and more and more content, kind of having the Jim Collins flywheel approach, right? I do think that's a really effective way to think about business. It's, do a fantastic job on the consult and provide consumer surplus, right? So I did statistics and economics in undergrad. And so people refer business because they feel like they got way more out of it than it costs. That's really, I think, the real reason people refer things, right? They feel like they got a steal of a deal.

And so my thought process was, okay, if I go out here charging what I think the service is worth, I'm not going to build my reputation, I'm not going to build up my reviews, I'm not going to have that viral effect. And so my thinking about growing my business was I want to give way, way more than what I think it's worth, and then that's going to generate all these reviews. It's going to generate reputation. It's going to generate all that sort of positive net promoter score. And then I can take the earnings and reinvest it in more content, like the stuff that I wrote that happened to work. And so that was really my formula for the first couple of years, was just keep pumping out more and more content. And I hit a point where I could only do so much. You can only write so many blog posts yourself. You can only do so many consults.

Michael: I was going to say, when you have these big consult days but they only come because of the content, so you have to make the content when you don't get the consult days. How did you balance between the 2? Did you have writing days and consult days and then alternate back and forth between them?

Travis: Yeah. I decided pretty early on I needed help, and I got extremely lucky. Rob Bertman, who's, I think, a colleague of yours at Buckingham right now. But he was my first hire ever, and that was an absolute just the best thing that could have happened, because I was in this sort of coworking space in St. Louis, the kind of story which I've shared, which might be kind of interesting. So my wife is Asian American. Where I grew up in the south, you always ask for the father's permission for you get married, right?

So the little side story to this is I was kind of treating the business more like a hobby a little bit, making money but not worrying too much about the growth or something like that, right? And then I asked for permission from my future father-in-law to give permission to marry his daughter. When I got to that point, this is maybe around the time my business was sort of 6 or 7 months in, right, and he said, "No, I'm not giving you my blessing." And he basically said, "This early retirement thing, what is this? This is a bunch of baloney." He said, "Where I grew up in Asia, we have a saying for men that sit at home while the wives work, it's called an eater of soft white rice." And I was like, "Oh, my gosh, I don't know what that is, but that sounds terrible." And so he said, "Well, you need to prove that you can get an income and have an income to have my blessing."

And so it was kind of, well, I'm in St. Louis because my wife took a job there after training in medicine. And so it's, okay, well, I'm doing this student loan thing. It's between this and working at Monsanto or Budweiser, or something like that, right? So it's, I better get really serious about this. So it kind of lit a fire under me a little bit to really work hard at the business. So that was actually, frankly, another thing that was really important early on in the growth of the business is just having the motivation. And I think for other people, it could be a lot of things, right? It could be the desire to provide for your family. It could be the desire to have more time with your kids, right, to make more so you can afford to have that time off. So I think that that was another key ingredient of the success that I should mention is kind of helpful, kind of being almost backed into a corner a little bit where you got to do your best work.

So, anyways, so that was what kind of motivated me to put in those really long days when I was thinking, "I'm really retired. I can do anything I want. I can do whatever I want." I just got really motivated after that experience. And so that's kind of what led me to hiring that first person. I was working my tail off, growing the business, but I didn't have many hours in the day. And I just met Rob at this coworking space that we were at, and he was building sort of a similar service but with helping people that were overspending spend less money. And he was trying to grow that and experiencing kind of that long J-curve, right, that people are familiar with, when you invest a lot and eventually it pays off. And I was like, "Would you be available for 10 to 20 hours a week of student loan consults? I can show you the process that I use. You don't have to do any business development. It lands in your calendar. I'll pay you $X amount per consult. What do you think?" And he was like, "Yeah, let's try it." And that just worked out amazingly well.

So effectively, I had a great experience with my first contractor hire because it was just completely up to him about what schedule he set and things like that. And what I discovered was a great model where, as I got busier and more and more consults came in, I was able to create kind of really part-time contractor roles for mostly people that had left a stable employment that were trying to start their own firms that needed a way to supplement that while they built it.

Michael: So I'm fascinated by this. So when you started this, I guess, with Rob first, how did you split the consult fee? How did you math that out between what he gets for doing the work and what you keep for having given him the opportunity to have the consult in the first place?

Travis: That's a great question. I think I can't remember exactly. I think roughly a percent is how I initially structured it, 33% to 50% or something, depending on how experienced somebody was. And then I switched it more to a flat amount per consult so that it would be transparent as to what people would make for each consult, because we were experimenting with all kinds of different pricing models where we would charge different amounts based off of if you were married or single. We tried different amounts based off of how much debt you had. And so that's kind of when we transitioned to a simple amount that people knew they were making every consult they did.

Michael: Okay. So it started out with you get half the consult fee and I get half the consult fee, but your consult fee is going to be all over the place, depending on all these pricing models we're experimenting with. And what you got down to eventually was just you get paid $200 to do the hourly consult.

Travis: Exactly, something like that.

Michael: And do you recall? Is that the kind of level that it was? I think you said you started at $100 for an hour, which obviously doesn't let you pay folks very much. Now, you're at $600 an hour. So I'm wondering, do you recall, what were you setting the dollars at? What did you have to put them at to get talent, to get people who could do this?

Travis: Well, I think, consumer products, people know a lot more about human psychology than financial advisors do, right? So it's like, why do people put 99 after the end of every price? It's because it works. And I've certainly seen that. So I've tried it with a lot of different types of pricing models, and something with a 95 at the end or a 99 at the end has always worked really well for us. And so what I would do to kind of incentivize demand is I would always sort of announce price increase and then sort of say, "You can get it until X date at the original price." And so that would bring in a bunch of additional volume, and then that would allow me to take that extra money and then invest in more content.

And then, finally, it might be quiet for a month or 2 after I raised that fee, but eventually, people would continually keep booking at that higher fee just because the value is there. And so that was kind of the thought process that I did. So that's why I said, if I was an advisor just starting out, if you picked a niche you're passionate about, you like serving, right, I would really kind of say build that reputation at a lower price point where your clients are going to get a lot of consumer surplus, which is a lot of more value they feel like than they're paying for. They're going to tell all their friends. They're going to be super excited. You'll have a lot less friction when you raise the price. And if you want to kind of think about it from a marketing perspective, if you announce some sort of price increase, you can say, "Hey, I'm about to double my fee, but you can still get it at this rate for 1 year at a minimum if you book before X day." So that kind of was really helpful for me early on growing the business.

Michael: I find a lot of firms in the advisory context seem to have much more challenge raising the fees, I guess, than where you seem to be, just comfortable to say, "And now the price is here." I don't know if you're someone that's comfortable with it and some other advisors aren't. I feel like maybe there's a different context when you have a business where a new person who comes in with the new fee doesn't necessarily know what the old fee was. They can look it up and find out. But if I've got this with an ongoing advisory client, I have to go to an existing relationship and tell them, "You pay me X, but now you have to pay me Y to keep working with me going forward." I don't know if that's really a meaningful distinction or not.

Travis: No, I think it is. I have tons of self-doubt about raising fees, and a lot of my self-doubt comes from kind of the thought process I thought through with the pricing is, like you said, I don't have enough money to pay people. So my thought process was whatever we do, I want it to be excellent, right? And if I don't charge enough, I can't hire people that are going to be excellent. So I kind of have an obligation to charge enough money where I'm able to attract really talented people, because, frankly, I don't want to have to go be redoing a bunch of people's consults. So that was kind of one of my ideas behind how much I was wanting to charge over time for the consult. I got up to the point where I just felt like I did not want to raise the fee anymore because then I would start serving a lot fewer people. And the goal of the business has always been kind of to have a huge impact, right? So I'm just a big believer.

Just kind of to share another kind of personal experience, I kind of probably almost died in a car accident when I was 20. So I was driving home from college and was to the left of a semi-truck, and it was raining really bad, in a very poorly lit kind of part of the interstate. I was going 75, speed limit was 70, but too fast for the conditions. And kind of with all the water coming off the semi, I was trying to just kind of pass them going 5 over on the left, and all this water kind of blinded me. I hit this huge puddle in the interstate because it was just really monsooning. And it caused me to hydroplane off of the interstate, and I hit a tree, going 75 miles/hour, head-on. And I had my best buddy in the car sitting next to me. And the car flipped, and my buddy sitting there passed out, blood all over both of us. And I thought I killed him. And it's kind of interesting to talk about this in a podcast so casually. But I was 20 years old, right? It had an absolutely profound impact on me in the sense of it just made me feel like I had to try to justify the fact that I lived and I couldn't just work a good job and make 6 figures. And that couldn't be it. That was just kind of my thought process.

Sort of that's kind of why I felt like I got to retire early, because this thing that I'm doing with corporate America isn't fulfilling me, and I'm meant to do something different. So, how can I do something else that helps people? And then so the student loan consult thing, it was sort of, "Well, I got to raise my prices because I want to be able to help more people." I don't have the energy to help a ton of people by myself. I can't do it physically. So then, how do I bring on more people that can do a great job? And what I found is this price point that I was charging of, for a while, I think it was $300 to $500 was kind of a price point that I was out for a while. At that price point, I could hire advisors on a 1099 part-time contractor basis who are starting their own firms, who are absolutely excellent. They killed it. Once they got the spreadsheet that we use and the process and stuff, they did a great job.

And I felt great about we're helping a lot of people. And we can't help everybody because the thing about financial planning, it serves the top 2% to 3% income earners, generally speaking, maybe the top 5% if you're really stretching things. And so I was kind of looking for a way to serve the top third because I can't solve everything in the world, but maybe I can be an additive thing to the solution of more people getting help. And I always love the idea of maybe doing financial planning one day or having a financial planning firm, but I just gravitated towards the student loan space for so long just because the compliance, to be frank, just scared the heck out of me.

I didn't like stress and worry in my life, because, also to be vulnerable, I've struggled throughout my life with anxiety disorder and things like that. And so it's probably why I'm so impatient, I've just got to do something immediately, just my personality. And so, yeah, I just feel very grateful that I have this opportunity to help people, and that's kind of the point. And I'm just very blessed to not necessarily need the cash. And because I think I'm in that point, a lot of things have just sort of worked out.

Michael: So, what were you paying advisors at the point that you were getting good talent? Are you paying them $100 an hour, $200 an hour? Just what did you find it took?

Travis: I think, yeah, probably right around $100. And what I would do is kind of structure it where the first X number of calls, you get $100 maybe, and then the second 200 calls, you get $125, right? The next 100 calls, you get $150. And then, once somebody has done a bunch of calls and they're really experienced, then you give them this higher permanent rate that they get per consult. And so that was kind of trying to adjust for the fact that I had to train a lot of people. It wasn't a published process somewhere that I could just go borrow, right, somebody's really great financial planning system that's already been proven. I had to kind of teach them that process.

And then so you get somebody earning a decent amount of money. And the cool thing is just because of the going rate for financial planners, I think a lot of people were getting offers of, I don't know, $30–$50 an hour for a paraplanner or just service advisor type of work at the time. And so the fact that somebody could just come in and set their own schedule and make $100–$200 for just mostly an hour's work was just really compelling. And so we were able to attract really talented people. We would get 15 to 20 applications per spot, and then we were able to just be super choosy because of that. And that just led to great client service, great client outcomes, and just kept spinning that flywheel of client referrals.

Michael: If I'm an advisor that's ultimately trying to build my own practice, I may, in the long run, charge more than this. But if, right now, I have a lot of time and not very many clients, I get client experience, I get my reps in, I'm making a decent wage per hour, as you noted, I'm making better than paraplanner work, and I'm getting real client experience. I totally get it. This seems really appealing for someone who's in their first year or 2 of launching their advisory firm on their own and just need some volume and activity and cash flow.

Travis: And before we had an RIA, they were also getting clients. I let people...we didn't get any money. We didn't ask for them to pay us any money for people that they found from those consults that wanted to work with them for their firms. But I just said, "Hey, if you find a good fit, just tell them that you're a financial planner that has your own firm. Just don't be salesy about it. Just make it kind of a reactive opportunity," right? But some people grew – not crazy numbers of clients but 20 to 40 clients, I think, just from that kind of an opportunity.

And that's my kind of my philosophy kind of from just the experience of focus of trying to get to financial independence where I could do anything and not have to do stuff to pay the mortgage. Plus, kind of surviving this near-death experience just sort of made me think, for myself, life's too short to just focus on what's my margin. I want to make sure that we're having an impact. So that's kind of what I've always tried to do to varying degrees of success sometimes.

Increasing Fees To Match The Value Being Provided [39:05]

Michael: So, how do you get comfortable with just you having advisors, having other advisors take over these consults that you were doing with your expertise? I just find, for almost any of us that are in an expertise-based business, you were doing with student loan planning, we might be doing with financial planning, I know the level that I serve my clients, it's scary to have anybody else in there representing me and my company and my brand. And I hope they serve my clients at the same level that I'm serving them, but not always clear. How did you...I guess, just how do you think about training quality control? Was that a thing for you? How are you navigating this introduction of other folks and trying to make sure they really were delivering the advice at the level that you've been delivering the advice?

Travis: Early on, I think I got extremely lucky, right? Early on, I think quality control was non-existent in terms of having a formal process for it. I think, early on, I literally got to sit in the room with Rob during those first series of consults to help bail him out when he didn't know what to say when a client had some sort of follow-up question. So that was lucky that I was able to just sit there for future ones. Kind of what I would do is I would have people watch 10 of my consults, and then we would kind of debrief and talk through them. And I would have them sit in and do 10 of their own where I would sit in and watch them.

And so kind of what I found is once somebody had done 20 of these, they had enough down to kind of mostly figure it out. And that was part of the reason for paying less initially, is because sometimes people might need to have 30 that they would have kind of reviewed, right, and some people would be able to do fewer. But I think the strength that we had was a lot of advisors who do student loan planning as a service, they will do some sort of 3-hour package, right, or some sort of multi-meeting kind of thing. And sort of possibly because of just the fact that I'm an impatient person, I just want to get results quickly, and that's sort of my personality, I was just sort of, "I want this to be the highest impact, the shortest, the quickest, the most valuable conversation they have this year." That was just kind of my thinking with it. And that kind of worked out, at least for me.

And we brought people in that did do student loan planning sometimes already, they were super talented, but they just hadn't had the reps. And that's what I would really call it, is if you're selling Starbucks coffee or something, you need scale. You need efficiencies, right, in your process. And I think that's what happens to a lot of advisors that try to do something, and it couldn't just be student loan planning, it could be any kind of one-off service they don't do a ton of, right? I think that that's kind of the way I would think about it, is if you want to do something like this one-off sort of service, you have to have scale to get efficiencies.

Michael: Well, one other thing that strikes me about this, I've seen a lot of advisors spend time over the years trying to figure out, how do I expand my reach beyond, as you know, the top 5% to 10% that a lot of us tend to serve in the advisory business, and the idea often comes back to things like what you said, "Okay, well, I've come up with a 3-hour student loan package, and I'm trying to bring it down market," except 3 hours is still a lot of time. I need to have this add up to something. So I'm going to at least try to charge $500 or $600 because I need to get that from the client, but it takes me 3 hours. So I'm really only getting $200 an hour. And then, if I'm trying to pay people on top of that, you run out of dollars very quickly.

The distinction, to me, that strikes me so much in what you're talking about is you built this and scaled this, because you billed up to $500 or $600/hour. The hours weren't cheap. You just got so much darn value into the hour that people didn't have to buy multiple hours, which are expensive to deliver and expensive to buy. You charge the full hourly rate. You just got as much stuff into the hour. And that's what let you scale it.

Travis: Yeah. I think, ultimately, people just want to see value, and that's sometimes hard to show, right, especially in financial planning, right? It's tough. Value, I think, is just whatever the client's expectations are and try to figure out, can you afford to exceed them? And if somebody can only pay $100 for financial planning and they want 20 hours of meetings, you can't afford to exceed those expectations, right? So kind of the way I think about it is if you're a financial planner, maybe you're not reaching down to the top 50% of income, and that's fine. If you reach down to the top 10% of income earners, that's progress. That's positive. That's a difference. That's good.

So that's the way I would think about it is not to make people...and I've done this in the past where you put too much burden on yourself as a business owner where you feel like, "I have to be everything to everybody," or, "I have to scale to whatever. I have to hit a certain amount of revenue." And it's okay to give yourself some grace. It's okay to say, "If I can be any part of the solution at all, that is successful. I should be proud of that." And I don't know, I wish somebody told me that when I was younger.

Michael: And you got there with high dollar value, compressed time, just, "We're going to cram as much value in a short period of time as we possibly can."

Travis: Exactly. And when you have a price, too, people love discounts, right? So there are some times where we might do a discount or we might have an affiliate deal with somebody where we give $100 off or something like that. And so there's ways to kind of play around with that top-line price if you need to incentivize demand. But I think that the thing is, getting back to how I started the business, finding that my wife made the 6-figure student loan mistake, if you can say 90% of the time, "I'm going to save somebody $50,000 to $300,000," which is really kind of our average savings is right around $200,000 projected over the lifetime of someone's loans, if you can have that kind of savings to say, "Hey, we charge a 1-time few-hundred-dollar fee," that's not a contingency fee. It's just a transparent flat fee charged after the fact, and, "Oh, you're nervous. Here's our reviews. Read our reviews," that's kind of, I think, where the success metric is.

And so I think that if somebody else was trying to do something not student loan-related, if you can show, "My fee is multiples of," or, "You're going to probably save," you can't guarantee it, of course, but probably say multiples of my fee with X, Y, Z advice or services that I have over time, then I think people get really excited about that. And if you want to charge a really high fee, I think you just have to have that reputation, right? You just have to have the reviews page. Luckily, the compliance people changed some of those rules around where you all are allowed to actually let clients talk about positive experiences we have, which is how everybody on Earth does things. But yeah, that's kind of the way I think about it, is reputation is how you have a high price for something, and you just have to focus on building that reputation over time just however you get there.

Michael: So, thus, your conscious decision to charge lower early on as you are building the reputation, the referrals, the SEO, the traffic, the reviews, but also with an intentional mindset of this is going to be more expensive later. And then, when you got to needing other people to deliver it, you said, "Oh, I really have to make it more expensive now because that's the only way I'm going to hire, I'm going to be able to afford the people that actually deliver the quality that I want to continue the flywheel moving forward."

Travis: And I think a lot of it a little bit is also, frankly, stress levels. So if you're somebody that kind of struggle sometimes with anxiety, as I have during my life, you want to have enough margin where you're not feeling like you're just pulling your hair out every month. And that's important, right? You have to be able to sustain your business and stay in the game long enough to continue serving people, and I think that's really important. Nobody does any favors that they burn themselves out, and they're out of the business, and then they're not serving anybody. And so I think that just a transparent, honest conversation whenever you're raising fees on somebody, I think, is valid, right?

Literally, if I'm keeping you as a client, that is X number of years per year that I'm not spending with my kids. Obviously, I have to put a roof over my kids' head, so I do have to bring in income, right? And so I'm raising my fee because, ultimately, I have a limited amount of hours on Earth, and to me, this is a fair trade. And I think everybody has just got to figure out how much of that time you want to work versus not work and what's the fair price for that and how much you need to be paid to do that. And that's different for everybody, and I think that's a healthy thing. I think that if you charge more per hour, right, you're going to have to work with people that can afford to pay it. And luckily, at least in my experience, there's a lot of people that can afford to pay a few hundred dollars, right? I kind of think of it like, how many people have a lawyer on retainer where they have a need for that on an ongoing basis? A lot fewer than people that go through a business transaction or a divorce or a child custody arrangement or something or a will, right, where it's sort of a defined thing.

I think you talk about it kind of like people that want the guidance, right, versus the, "I'm going to fully take the reins for you and have this ongoing planning relationship." So I think that's kind of what we tapped into, was sort of the lawyer service model of, "I'm going to give you the will and charge you $200, and it's very transparent as to what it is."

Navigating Changing Student Loan Regulations And Their Impact On Company Revenue [48:27]

Michael: So, what came next on this journey? The traffic is just continuing to grow as you put out the content, and so you're just kind of in this circular flow of more traffic means more consults, means hire more advisors, means have more successes. So you get more word of mouth and more people come and check out the site, and it just compounds?

Travis: Yeah. I think there's such a thing as diminishing marginal returns, right? So marginal utility, right, it gets less and less and less. There's that study that I'm sure you've probably seen, sort of, no matter what your net worth is, what's the number that make you feel wealthy – it's double. So it's, all of us kind of want more growth, right? And I think that it's helpful to have some self-awareness that, at some point, you never know when that point is, you're going to kind of hit that, "Okay, I'm probably as big as I'm going to be if I don't take venture capital, if I don't do a ton of ads on Facebook or Google." And even if you do that, kind of I've found diminishing marginal returns there where you spend, maybe it's different for everybody. Maybe you spend $500 a week or $1,000 a week or $2,000 a week.

Michael: So, are you feeling like you're at one of those diminishing marginal return thresholds? Is that kicking in?

Travis: Oh, yeah. You can only talk about student loans so much when, since 2016, if you think about what's happened, right, you've had the pandemic and you had student loans frozen for 3.5 years. That was extremely hard to survive. And even now, as we record this, there's a major lawsuit going on against all of President Biden's and his administration's student loan policies, all the big ones, and a lot of those things could have huge impacts on what the value of a consult is, what the value of our advice is. And that's fine. And so I kind of made the conscious decision after dealing with the business pressure of the pandemic, and actually, I got punched in the mouth with that because everybody fit the definition of a 1099 contractor, right, but the PPP stuff that a lot of people kind of talk about, you had to have wages for that, right?

So I'm dealing with this crisis where student loans are frozen, the refi market is totally frozen in April. I'm like, "Oh gosh, the sky is falling." And then a couple of months later, boom, things are back again. And then kind of with all the different sort of account adjustments and the PSLF waiver, all these temporary limited programs during the pandemic, those were actually some of our best months ever. And then we're kind of back into this quiet period of waiting around until the Supreme Court rules on a lot of these student loan initiatives. And so that kind of taught me the benefit of diversification in business lines, right?

Michael: So, I guess, help me understand how far the core student loan consults business grew or where it is now. And then I want to understand, I guess, the other diversifiers that you've been laying into this model.

Travis: Yeah. So when interest rates were low, income that we would make from things like private student loans or student loan refinancing would be maybe more than the student loan consulting revenue. And then when interest rates are higher...

Michael: Because you have affiliate relationships to student loan refi programs that was part of the business.

Travis: Right, exactly. And I want to repent to the fee-only absolutists that are listening to this, I want to ask for your forgiveness, but I will explain my rationale for doing affiliate marketing. Basically, my thought process is sort of, well, if somebody is going to go apply with a refi company that they've seen an ad for on TV and they're going to get a 5% interest rate, if I instead can say, "Well, I'm going to take some of my affiliate commission that I would earn sending somebody to" – because everybody does this. If you ever type in student loan refinancing on the internet, you're going to see tons of different places with affiliate links or links to direct websites, and everybody earns a certain amount per loan that's refinanced. So my thought process was, can I take some of this back and rebate it back to the person doing it? So that was kind of just my thought process.

And then my thought process was, well, how can I have the best deals? So I had to get creative and do some things, like realizing that I could do gift cards below a certain limit where I don't have to send anybody any tax reporting information, and I can get even larger bonuses that way by paying even more out of my commission for that funded loan. And then the client is getting a much better deal than if they went and applied at the place directly. So there's places out there that have done, historically, student loan consulting businesses that offer the service for free, but the conflict of interest is they only make money through refinancing. So, of course, that has a huge incentive to buy us the advice. And so the way I always tried to kind of balance that was we're going to do a student loan consult and we're going to give you the answer you should do no matter what. And we rebate enough of that commission where I don't feel like the conflict of interest is a temptation.

So that's kind of the thought process behind doing affiliate marketing. That's kind of the way I thought about it, is, of course, any kind of outside compensation, of course, it's a conflict of interest, but there's conflicts of interest that you can try to use to your client's advantage, I think, sometimes, and those conflicts, I don't mind at all.

Michael: So if I'm understanding it, and I don't know if these are the right numbers at all, but a client needs to do a student loan refi, there's an affiliate program that I don't know that will offer, and anybody who's willing to send them business $500 for a student loan refi lead, that closes. And so anywhere I go on the internet, if I'm going to Google around and find student loan refi programs, someone is going to make their $500 affiliate marketing deal. But your structure might be, okay, technically, they pay you $500, but you're giving the client a $100 discount or gift card or something. You're basically passing some of the dollars through to them. So you'll net only $400 and they'll get a better deal than anywhere else because you gave them a portion of your dollars.

Creating An RIA To Serve Clients On An Ongoing Basis [54:09]

Michael: So, I guess, help us understand just the business in the aggregate and what it looks like today, all the different things that you do between the consults and other affiliates and other stuff under the umbrella.

Travis: Yeah. So with the pandemic, it was almost kind of student loans are frozen again. Oh, look, they're frozen again. Oh, look, another freeze extension. Almost kind of part of it was I needed to do something to keep me busy, and part of it was I think this can help people and help diversify our revenue sources. So we started off with student loan consulting, that was the first thing, and then we did the student loan refi. I think it was the second thing. And then I think we did private student loans, which have a fairly limited use case, by the way. And then courses.

And then we got into mortgage stuff, so primarily doctor professional mortgages, trying to help people just be aware of deals. We'd find a lot of people be like, "Got my 8% rate for my credit," and they shop around and find a doctor mortgage lender that'll give them a 0% down payment for 6.5%, and they get to deduct the full thing in their mortgage interest and get to write all that off where they put more money elsewhere that's more efficient. So I was like, "That seems like a good business to be in." And then, most recently, well, we did the insurance agency, and then, finally, we did financial planning and have a tax arm attached to that.

Michael: So like a traditional RIA business.

Travis: Traditional RIA. We have the ADV disclosures, right? We have partners in the RIA. I'm the majority owner, but I have other partners as well in the RIA. The other entities are just owned by me. And then the thought process behind the RIA is we have roughly 18,000 student loan planning clients kind of since we've started. So 18,000 student loan planning clients is about over $4 billion that we've advised. So I feel excited about that level of market penetration in terms of we've advised 2%, 3% of all student loans personally. So that's kind of cool. Or actually, I should say point. Oops, I got a little too big for my britches there, 0.2%, 0.3%, right? But yeah, so we've really had success with that business, and the number of clients we've converted to the RIA today is around 1,400. And we are a little over a year in business.

Michael: That's a lot of RIA clients, 1,400 RIA clients.

Travis: In about a year, yeah, a little over a year. So that was a journey.

Michael: So just help me understand what the RIA offering is to 1,400 clients. What's the service? What do you do?

Travis: So when you have somebody that has 6-figure student loans as the avatar, the thought process is, in the student loan consulting side, I've always wanted to be the best at providing student loan advice. That's always been the north star, is be the best at providing student loan advice at scale. So there are people that are better than me at student loans, but it's the "at scale" part. So that's kind of the whole mission statement, right? And if you're the best at providing student loan advice at scale, not everybody is going to want financial planning. Majority of people don't. But the people that do are desperately looking for somebody who isn't condescending to them, frankly. The number of times I've gotten emails basically saying, "I talked to somebody and they told me, 'Ha ha, come back and see me when you have more money to invest.'" And I understand where advisors are coming from, because they have to make a profit.

Michael: Versus a doctor with 6-figure income, because they have no investment assets and negative net worth.

Travis: And so I recognize the need for student loan-aware financial planning just because a lot of these student loan clients are not nearly as profitable as some of the people that you might serve, for listeners that are listening to this, that are some of the real powerhouse people in the industry, right, that have average client household sizes of 2, 3, 5 million of AUM, right? These people might be starting out in their careers having $50,000 of investable assets. And so for the model that we found that works is just we charge, I'm going to say, this is going to change, but for a decent part of our audience, we charge $99 a month for financial planning and $99 a month for tax prep and planning. And so kind of some people do just financial planning. Some people do financial planning and tax. We do require people to be planning clients, to be tax clients. And then they can also add on AUM for 49 basis points.

So that's our model. Of course, that's all subject to change. And we do have some clients now that are at higher price points that we're kind of experimenting with different things.

Michael: So, what's the service offering? Just what do you do or give or deliver to them for $99 a month?

Travis: Yeah. So I think that that's the struggle, right, is my philosophy of overdelivering, right? And building that consumer surplus kind of ran into some cash flow issues early on. So when you let people, when you don't put really clear guardrails, we've had clients that book 6 meetings in a month, and I'm paying a flat rate to an advisor for that. And then they cancel in month 2. And it's like, "Oh, my gosh, I am lighting money on fire." And so we learned a few things about, "Well, let's spread it out a little bit. Let's have that cadence be meeting 1 in month 1, meeting 2 has got to be in month 2. Then you're going to have your semi-annual meetings after that." So that's kind of roughly the structure, is you have I would call it 1 to 3 meetings, depending on if somebody's moving over AUM or has a real specific problem in the first, say, 3 months. And then, after that, it's a semi-annual check-in schedule.

Michael: Well, and I'm struck, just napkin math, quickly, 1,400 clients at $99 a month, it's like $1.7 million of planning revenue before any asset management, of which, I'm assuming, your clients aren't primarily investment. But you're going to have some RIAs, little 401(k) rollovers, things that add in as well. So you get to a 2+ million revenue RIA, astonishingly quickly, in this rollout model.

Travis: Yeah. And I think that the other thing that is helpful that we want to do more of is we do have really good professional-specific insights, because when we have 18,000 clients, we have, within that, 3,000 physicians or 2,500 dentists, right? We have a ton of data that we're trying to build out, just more dentists with student loans, physicians with student loans, right? And I think that one thing that I want to encourage folks on is definitely that abundance mentality has always helped me a ton of, when I have even other people in the student loan industry, if I see them having that same abundance mentality, we swap stories all the time, and it's just because I just think that there's 40 million student loan borrowers. That's a lot of people to serve, right?

Michael: So help me visualize, I guess, what this adds up to. If I can ask, what's the overall revenue just across all the different stuff that you do at this point? I guess, there's the student loan consults, there's the RIA business, and there's the bucket of other affiliate arrangements and the rest.

Travis: The problem is it really changes all the time. There was a time that we were earning hundreds of thousands from the refinancing business line alone. But then there's months, well, more recently, with interest rates at 6% or so with student loans on pause where we would earn a couple of thousand in a month. And so that's an example of just how volatile the industry is and why we exist, right? Because if you're in a super volatile industry, you kind of have to have multiple product lines. Otherwise, how are you going to be able to pay people and meet payroll? So I would say, overall, the business revenue has ranged anywhere from low 6 figures to high 6 figures over time, with maybe some sort of normal distribution curve within that range. And that's not trying to be cagey. It's just sort of saying that it truly is all over the place with different business lines.

Michael: I'm just chuckling that, for a lot of advisors, just the RIA model feels fairly volatile. If you're AUM-based, you experience the ups and downs of the markets. Even on a subscription model, you're constantly navigating client growth and client retention and replacing anyone who leaves. And most advisors I know feel some level of stress around stability of revenue and profitability in the RIA model. And so I'm just fascinated that, for you, it's like, "Oh, yeah, that's the really boring, stable one." Because it sounds like you're in a world of, okay, depending on the outcome of Supreme Court cases and how it impacts people's student loan activity, you could have a million dollars of student loan consults show up in relatively short order in a certain Supreme Court outcome.

Travis: Yeah, absolutely. It's crazy.

Michael: And it's flat until that.

Travis: Well, and it's interesting, a lot of people think what we do should not exist. And to that, I would say, I probably agree. And I think it's kind of, if you're a cancer doctor and somebody invents a drug that cures cancer, can you go do something else? Yeah, you have to figure it out. It maybe wouldn't be short-term financially great, but yeah, you could do something else. And so that's kind of what I think about, right, is life is too short to worry, even though I worry all the time. So I'm a hypocrite. But that's what I try to tell myself, right, is, ultimately, is RIA revenue more volatile than the person who's trying to run a pizza shop who's competing against all these places that has a 20% chance of success? Doing an RIA… with you and your leadership position with XY, you have all this data that suggests, if you can survive, right, if you can just not quit, you would know. I don't actually don't know the stats like you do. What's the percent chance of success as long as you hang in there 3 years?

Michael: Well, the challenge is most people don't have the runway to hang in 3 years in the first place. We see, internal, in XYPN benchmark studies, again, this is serving people in subscription models with niches, which has a particular fast traction to it, people who survive, we typically see them, they're approaching or clearing $100,000 of revenue by the end of their third year at a run rate, and suddenly, it can double or more than double in the subsequent 1– 2 years. It's a huge frustration for most advisors that you often get more growth in year 4 than you got in the first 3 years, cumulatively, because of just how long it takes the flywheel of reputation-building to get going. And then, suddenly, 5 years in, we see a lot of people with $150,000, $200,000+ net incomes, because you just don't have a lot of expenses when you're operating as a solo if you make it that long. It can continue long enough to get the compound going in the first place.

Travis: I think one thing that I would encourage people to do is just, 1) bet on themselves and, 2) be willing to fail and take more risks. That's easy for me to say, but I do think that some people can operate from a position of strength on this. It's kind of interesting talking to dentists because dentists have a 99.7% success rate when they acquire a practice in terms of paying off the practice loan and having a huge valuable asset. At the end of the 10 years, they're paying back the practice loan. And people always estimate that it's 80% success rate or 70% success rate. They don't realize it's 3 in 1,000. And then I think the staff that I've heard is 2 of those 3 are people that developed a substance abuse addiction and lost their license. So that means 1 in 1,000 people if you go and acquire a stable dental practice succeed at it.

Now, with RIAs, my guess is starting your own RIA is not nearly that level of success rate, but it's probably, I don't know, maybe 4 in 5 success rate. I think it's a lot more likely than that 1 in 5 success rate of the pizza shop. And then I think that it's kind of, if your niche isn't landing, if you're not having success after giving it a good length of time, then be willing to try something different, kind of like I did, right? Talking to all millennials, only 1 billion or only 2 billion people, that's my niche, right? And so I just had no success and had no impact really, and then I just sort of stumbled into, "Oh, my skill set matches this really big problem that people have, and oh, it's a problem that will probably persist because it's so volatile that the big companies don't want to get involved and just clean my clock." Because you know it's true. If a Fidelity or a Schwab or Vanguard or even NerdWallet or something just cared so much about this stuff, of course, they would beat me because I'm 1 person that doesn't have a ton of resources backing me, by comparison.

Michael: It's kind of the virtue of niches, you fly below everyone's radar screen, because ironically, your space is big enough to have a wonderfully successful business and not big enough to move the needle for a giant national corporation.

Travis: Right. And so maybe, how many people want to drink extremely sour IPAs made in whatever state? Maybe it's just a narrow subset. But maybe that's a huge group of people that's willing to pay a lot more than Bud Light. And then, if that doesn't succeed, well, maybe you needed to try a pilsner. Maybe you needed to try a stout or something. Maybe it was just the wrong type of niche. And so I think that the cool thing about volume, though, is the feedback loop, right? That's the thing that's exciting about it, to me, is if you get that kind of volume, if you come in and you have a bad process, you find out really quick. And it motivates you to try to fix it and make it less stressful.

So for us, I was just kind of shocked and horrified when I heard how many hours most RIAs put into onboarding new clients and just what the processes were. I was, "Oh, my gosh, that sounds miserable, just having to spend that much time with all the different tools and stuff."

But yeah, that's been one of the fun things. As you bring on over 1,000 clients in a year, well, you better have all these Zapier things firing to things that have open APIs [Application Programming Interface] that can then go set up a client profile and this thing so that you're not having an admin have to sit there and do all that for a really high cost.

Michael: And so you were building out all those integrations and infrastructure and Zapier links and such upfront because you knew from the existing base you were going to have a zillion people show up when you rolled out, because there was just so many people that had been through the student loan planning consults already.

Travis: Yeah. I think it's kind of back to that take risk as long as it's not an irresponsible risk kind of thing. So we have something, I think it's a 30-step Zapier that fires, that when somebody fills out an incoming form, then they're tagged a certain way in ConvertKit that opens up a Wealthbox account that sends over the data that we need to a folder that's created for them with all of their responses in a spreadsheet that shows some quick snapshot things that the advisor can use in that initial call. And the problem I find is I'm not a super technical person. There's levels of technical, right? I'm, I guess, technical enough to know what an API is, but that's about as far as it goes. And so, if it integrates with Zapier because it has an open API, great. A lot of the financial planning tools, they want you to pay huge amounts of money just to be able to access their API, and that's just not best practice at all in terms of the industry.

And so it's, well, we do as much as we can with the options that we have. And the cool thing is that all these new kind of offerings, whenever somebody does come out with something, it does allow you to serve more people at a lower cost, which is super critical to reaching down and serving a broader group of people. So that's what I'm excited about long-term is just, if we can hang in there with this business and just sort of keep it up, even if we don't grow that much, what I'm hopeful for is we can kind of get profitability by, obviously, price discrimination is the thing where you have seniors and military night, right, for a reason, because some people can afford to pay more than others. So maybe we figure out something like that. Maybe we figure out, over time, better ways to serve people more cheaply and then hopefully develop more professional expertise and have more niche expertise that grows out of just the volume of people that we help.

Michael: So out of curiosity, what is the core of that tech stack on the advisory firm that you put in place to be ready for the scale? It sounds like Wealthbox on the CRM side.

Travis: Well, to be honest, it's too much, and the reason for that is my thought process, the way I do things, is I ideate, and I try things, and sometimes I try to put things in more than one place in case one thing is not helpful because of how hard it is to switch. So I've got a big old list here that some people will be chuckling about, but I use WPForms a lot. It's kind of an open-source kind of easy thing to get a lot of client information that fires off to a lot of things that have open APIs. So we have Wealthbox. We have RightCapital. Nudge, we use a lot for tasks, management, and things like that. ConvertKit. We have custom-built Google Sheets and Excel sheets because that's what I know. And then we have Slack for internal stuff, Altris for custodian, Canopy for tax, ProConnect for tax, Copper for firing certain things to CRMs easily when admins are in the inbox, Zapier sends a lot of stuff everywhere, Gusto for HR, which, that was fun getting dozens of individual things in the mail from states about unemployment things that I had to pay that I was totally unfamiliar with, and then Xodo Sign. And that's just a small list.

So I guess I've always found that, from a software expense perspective, software is always really, really cheap compared to labor. So my thought process is always, if I have to have too many software tools, as long as they do what we need them to do overall, that waste that I have in having too many software tools is generally kind of offset by the labor savings. But what I'm finding is there's a huge cost to not having a single point of truth, and that's something that's really kind of hit us in the face a little bit. So I don't have a good answer as to what things should stay and what things should go. We just try to iterate. And they say fail fast in the startup world. Well, I guess, with a heavily regulated RIA environment, it's fail responsibly. So that's kind of what we're trying to do is just sort of figure out how to fail responsibly so we can figure out what parts of our tech stack are good and which ones need to go.

What Surprised Travis The Most On His Journey [1:12:28]

Michael: So, what surprised you the most about this journey of building and scaling the business?

Travis: Great question. Part of it is just how much work I feel like our industry has to do to explain the value of financial planning. And I don't say that in a weird way, I guess, but it's just sort of a transactional thing, is, "Give me the thing, I pay you for it, we're done," right? So as long as that thing you gave them is good, everybody's happy or at least 98% of people are happy, right? With financial planning, I think, again, it's just sort of this ongoing thing where it's just a very different business model.

So I think that's been the most interesting thing for me is to just see people kind of think of things. Obviously, the people listening to this know how cheap $99 a month is. And for the people that do cancel that say, "Hey, I want to cancel services because I want to take my $99 a month and throw it at my debt snowball instead," that's always been kind of surprising to me, I guess, which shouldn't be because any business with recurring revenue has churn, and different businesses have different levels of churn. But it's just sort of, "Man, but do you realize how much money you can save people if you make just 1 decision right over 5 years? You more than pay for yourself."

That's what kind of blows me away is just how many people out there are not paying attention to whether or not they can itemize, right, that give $10,000 a year to charity that are right at that threshold for itemizing. They could just donate it all in 1 year instead of every year and be able to save thousands of dollars in taxes. And there's all kinds of little things like that.

And so, I don't know, I guess that part is kind of interesting to me. But what that tells you is people do not make decisions purely based on numbers. They make decisions based off of how they feel a lot of times. And what helps with the student loans is people have that worry about their student loans that causes them to take action. And that's been kind of interesting. So I think, probably for financial planning, I think sometimes when people have event-based niches, like divorce or people selling a business or something like that, I think that's why that's so successful. It's because people have this very specific pain or anxiety or worry that they're dealing with that pushes them to get help instead of the people that need the help but just don't want to admit that they do, that they aren't dealing with anything acute.

The Low Point On Travis's Journey [1:15:04]

Michael: So, what was the low point for you on this journey?

Travis: Yeah. To be honest, I can think of 2 low points for me. I think one low point was probably the umpteenth student loan pause, right, where I think it was probably early...it was either early 2022 or early 2023 when it was very communicated for months, "Hey, this is the final student loan pause. We're going to start repayments again. This is definitely going to start back up again." And I had been investing a lot of resources to make sure that our business was ready to help people so that we had enough people in the chairs to serve the demand that was going to come so that we didn't disappoint people, right? Because I'm a people pleaser and I take things just too personally sometimes. And that's something I'm really trying to work on because I hate letting people down, probably tied to that whole near-death experience of just needing to feel like it's justified that I lived.

And so, yeah. So I guess I was getting ready to do that, and then, at the very last second, this big piece of legislation the Biden administration was trying to pass failed. And then there was all of this pressure from the president's party to extend the pause again. And so this was a great thing for borrowers. It helped borrowers a lot. But just as a human business owner that had made all these investments to try to be ready to serve people, it was just...and after dealing with so many repeated false starts, it was just like the bottom fell out for me. I was just so sad and depressed about it. Not necessarily because I just wanted to make a ton of money, it was just sort of I was just emotionally exhausted just because I'd gone through this so many times trying to build up our team to be ready to help people. And so that was one of the big low points for me.

And then I think low point number 2 was when we got involved in tax stuff, and I just discovered we were just nowhere near where we needed to be with very little time left in the tax season for our first tax season. To be very transparent, I walked out of my office and wanted to throw up on the side of the street because I just couldn't think about disappointing that many people so badly. I just took it very personally. And so those were 2 of the real low points.

Another low point is just getting hit with a huge Google algorithm update. Even recently, they rolled out a lot of hardcore stuff trying to combat all these AI-type articles. And suddenly, all very carefully written edited, fact-checked content is suddenly downranking to only websites with high domain authority, regardless of the content quality, or only forums, because Google struck a deal with Reddit to feature their prominent content more prominently. And then, since that has snapped back a little bit, we've recovered a little bit of that, but it's just a volatile journey, right? And I think that's what I haven't thought through more carefully enough is just being content and happy with what I do have, being happy and content with, okay, if we serve people this month, that's a success. If I help pay indirectly for someone's kids college education because I was able to give them a job, that's a success.

And so I'm trying to redefine what success means to me. I really liked the book "Enough" by John Bogle, because it kind of goes into his, "What if I had owned all of Vanguard instead of made it a not-for-profit? And I would have been worth $50 billion instead of $50 million. But you know what, 50 million is still a lot of money. So, ha ha." So that's what I'm trying to keep my North Star, is trying to remind myself, why did I get into this business? Because, so often, we ask our clients, what is your ‘why', right? And why are you doing what you're doing? And how much do you need to be happy? And I think, a lot of times, I know for my own sake, I can say that I don't look at that for myself really enough. So that's just something that I'm trying to work on in terms of low points and reflections on those low points.

Michael: So, anything else that now that you wish you could go back and tell you 10 years ago as you were starting down this journey?

Travis: Yeah. I think, maybe don't beat yourself up so much. I think, a lot of times, we're our own worst critics, right? And we have a lot of either imposter syndrome or fear, or we don't take actions that could help us. And so I've, to kind of be a little vulnerable, right, enormously benefited from just counseling for anxiety stuff, right? I'm sure there's people listening to this that are struggling with other things, right, certain types of behaviors. For me, one of them was video games. I got to a point where I was so stressed out during some of these long business pause or student loan pause periods where I would play 5 or 6 hours of a video game in a day instead of doing work. And it's, well, am I a failure because I did that?

So I think that behind all of the success stories, people kind of edit it, and I think that people are not as honest as we could be about what is the real story. And the real story is sometimes usually more interesting and more balanced in terms of how things happened. So, I don't know, I guess that's just my thought, is I guess I want to encourage all the advisors listening to this. If you were in business for yourself, probably, disproportionately, a high number of them are if you're listening to this, right, because you're trying to get gems that you can use to have a better life and a better career.

I would say, go for it. Don't be so afraid. Get help if you have any kind of video game addiction or anxiety problems like I had along the way, to don't beat yourself up about it if you have those issues. And just remember your why and make sure you have success. It's not a constantly moving benchmark for, "It's always more and more and more, I've got to hit my growth targets or else I'm a failure." So that would be my main takeaway. It's just I wish I would just go back and just really encourage stressed-out Travis more to not be just so burdened and enjoy the journey.

Travis's Advice For Newer Advisors [1:21:02]

Michael: So, any other advice you would give just newer advisors coming into the profession and trying to navigate their path?

Travis: Yes. So I think I would say go somewhere where you're feeling like you're learning something. That's kind of the priority besides just earning money to pay the bills. You got to do that, but yeah, I think you either go somewhere where you're going to make a lot of money quickly and build up enough of a nest egg to have time away to figure out what you want to do next, or you want to go somewhere where you're not making as much but you're learning a ton. So those are kind of the 2 options, I think, for a good start to a career. And once you've done 1 of those 2 paths, maybe if you made a lot of money, you have time where you can just take a sabbatical and just clear your head. That's what I kind of needed after doing really intense work in a corporate setting. I just needed some time, frankly, because I was just overwhelmed with just how intense the work was and just how tired I was from waking up at 5:00 in the morning and getting back when it was dark. And that space is kind of the creative space that I needed to create all this stuff that I didn't even know I was going to create.

So that's why I tell people bet on themselves. If you're a younger advisor getting started, if you think that you want to be a practice owner or a partner in a big practice one day, like you should be, then you should try to do it a lot faster than you think that you'll get there. So that's another thing, is I think, a lot of times, people put it off. And I think that's not a good idea. If I think about if I had to do what I did to start these businesses after having kids, it would have been way harder. And so I think that's another thing, is you're a lot more capable of taking a ton of risk when you're younger than you are when you're older. And so that means the best time to take the risk is just right now. And I think people are like, "What if I fail?"

Well, I think one thing that helped me, Michael, was I was a bond trader, and that was what I was paid to worry about all day, right? What's the worst thing that can happen with the bond? That's kind of what a bond investor cares about, is getting paid back, right? So you have to define your downside risk. And if your downside risk for a young advisor is, "Oh, I start my RIA. I burn $50,000 because it doesn't work out. Then I have to go back and be a servicing advisor somewhere for a salary," that's not that bad of an outcome. That's actually the worst-case scenario, and that's actually not that terrible of a scenario compared to a lot of other bad things that can happen to someone.

Michael: Yeah. Given the demand and going rates for experienced advisors with many years of experience who can hit the ground running with clients, a lot of people's fallback if they try to build a firm and it doesn't go well is you just have to settle for a 6-figure salary somewhere. I'm going to try and make light of it. Your downside risk is capped in a fairly favorable way.

Travis: And what's your upside? And what's the upside risk, right? That's the other thing, is risk is variable. Variance goes 2 directions, right? And in the sense of a career of a young advisor, it's asymmetric. So if you think about all the good things that can happen, if you would have told me that I would earn 7 figures a year for multiple years in a row back when I was working in corporate America, working my tail off for what I was making, I would have said you're crazy, and I think that I would say that that would never happen. And it didn't happen because I set out with the goal of "I want to make this amount of money."

Through a lot of hard work and luck and sort of being willing to try things, it sort of happened. And I'm not trying to claim that it was all luck or hard work or anything. It was really a mix of all these things, right? I think that's the story, is this stuff is messy. And you just try to do what you think is the right thing at the time, and you keep growing and learning. And that's what I hope, is I can be in this business long enough that I get to continually figure stuff out that helps people, that helps people have that light bulb moment go off.

The thing that I love is just when somebody realizes...a good example is just a parent plus borrower that has $400,000 of student loans, nothing saved for retirement. They make $100,000 a year. They think they're screwed, right? They think they have no hope. They're extremely sad about their life. They think they're going to work until they're dead. And the thing is they have no idea about ACA subsidies. They have no idea about claiming social security at 70. If they make some lifestyle changes and save up $100,000 in 2, 3, 4 years, they could spend that from age 65 to 70, and then claim all the social security income and downsize the house and have no mortgage, and they can retire.

And it's just so exciting to see somebody that doesn't quite fit that combo of what a lot of traditional firms can serve, have that light bulb moment go off because of the power of financial planning that just totally changes their life. So that's the other thing I hope for people, is like the Warren Buffett quote, "Tap dance to work." So I think that's the other thing, is even if you're making good money, I would say to other young advisors, "Can you change some things so that you do tap dance to work?"

So one of the things that I'm experimenting with is not working on Fridays. I'm trying to kind of more enforce more time to relax because I don't do a very good job of it. And yeah, that has a revenue impact, of course, but that's not the point. The point is to tap dance to work and be excited about it.

What Success Means To Travis [1:25:58]

Michael: So, as we wrap up, this is a podcast about success, and just one of the themes that comes up is that word success means very different things to different people. And so you've had to meet just these fascinating success journeys, the student loan business became a multi-million revenue business, the advisory firm very quickly became a multi-million revenue business as 1,400 clients showed up, which is still amazing to me. So the businesses seem to be in a very good place. How do you define success for yourself personally at this point?

Travis: I think, personally, I define it as the tap dancing to work. And I think that I was so kind of, again, worried, right, about, are we going to go out of business? Or am I going to be able to pay all these people? Will I have to lay off people? I spent so much time worrying that I didn't have the enjoyment levels that I should out of work. And so that's my definition of success, is sort of make enough of a profit to feel good about spending the time doing this business stuff instead of other things that I like to do, right? Because, ultimately, you're trading some amount of time for money, right? Even if I'm not working a ton, you're still making some amount of trade. So make enough that it feels like that's worthwhile to do. And then have a lot of fun, and then minimize stress levels.

So kind of one thing that's a little different from the way I handle and I encourage our advisors to handle client relationships instead of maybe some other places is if a client is rude or disrespectful or unpleasant to work with, I tell advisors to fire the client. And the thought process behind that is if my advisors are not enjoying their book of business that they're working with, how can I expect them to tap dance to work, right? And one of the benefits of having a lot of clients is you're able to prune your group of people you work with more aggressively. Also, when you don't necessarily have to have a certain amount of revenue or money to meet that service or a minimum amount of income you need personally, it's helpful, right, because then you can create the kind of business that you can be excited about. And so that's, I don't know.

I had lunch with some CPA once, and he was one of our top clients. He said all these horrible things in the meeting to a lot of our employees and stuff, and we just have to tolerate it because he's 10% of our revenue. And I was just, "That sounds awful. That sounds terrible." I always want to be in a position where, whether it's my boss or a client or whoever it is, I want to be able to tell somebody, "Hey, life is short. I'd prefer to not have you in it if you have to." And that's luckily not that many people. I don't want to make it sound like we're doing that to a lot of people. But sometimes just that makes all the difference because the rule is I think, what do they say, 1 negative interaction is the same thing as 10 positive interactions in terms of people's happiness in service businesses. So that's another thing we try to think about a lot, right? It's just making sure that people have fun. That's what we all would want, right, to have fun doing this.

Michael: Thank you for joining us on the "Financial Advisor Success" podcast.

Travis: Absolutely. It's a pleasure to be here.

Michael: Thank you.