Primerica - a formative experience on the way to being a Boglehead

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Badger1754
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Primerica - a formative experience on the way to being a Boglehead

Post by Badger1754 » Mon Apr 02, 2018 6:06 am

Due to some requests on PM, I’m going to share a defining experience for me that defined my journey to being a Boglehead. My wife is often bothered as to why I’m such a paranoid penny-pinching cheapskate. I can trace it down to four reasons:
  1. ”Ancestral memory” of my extended family being expropriated, imprisoned, and murdered under communism in the old country for being landowners, entrepreneurs, and businessmen
  2. Having a front-row seat while working on Wall Street during the 2008 crash and its bloody aftermath, and watching decades of accumulated wealth (and skills, and earning power) go up in smoke. For example, the multimillionaire Managing Director salesperson of 20+ years experience (who everyone looked up to and envied) of synthetic CDOs and other exotic mortgage products probably lost his shirt and will never make that kind of money again
  3. Reading Burton Malkiel’s book when I was 19 (around the time of the dot com bubble), and then doing some math with Excel and my parents’ attempts at day-trading
  4. This story (below)
The story starts when I was a freshman in college. Middle class kid from nowhere, USA. Dad was a working professional. Mom was stay at home. Frugal family, but they could have done worse. The town we lived in was quite insular, and more than a bit removed from brights lights and big city. Also, we only had dial-up Internet (broadband didn’t really reach our town in the late 1990s).

So off I went to a college whose student population alone was larger than the town I grew up in. Freshman year, puttering around, wondering what I’m going to do with myself for the summer. Spring semester hits, and I am starting to panic. My better-connected friends had all secured internships for the summer at some marquee names, and I had... nothing. One day, a “career fair” comes to my university that was technically only open to juniors and seniors, but nobody checked my ID at the door, so in I went.

It was a mob scene. Lines at every booth. People wearing suits. Carrying their resumes in padded leather portfolios. (I was wearing a polo shirt and jeans). “Intimidated” comes to mind.

In this crowd, I suddenly see an open booth with a giant Citigroup logo complete with umbrella. I knew nothing about Citigroup except 1) I had a checking account with Citibank, 2) I was vaguely aware that they were a large, prestigious NYC corporation. So I wander over.

Immediately, I’m approached by a young-ish, good-looking guy, perfect hair, tailored suit, thousand-watt smile, asked if I’m looking for opportunities that summer. I shyly admitted that I’m only a freshman and not technically not supposed to be there. He winked, said he won’t tell anyone, and they are quite open to hiring talent regardless of age. Introduced himself as a “Regional Vice President”.

“So, our company is called Primerica, but we’re part of Citigroup. We are one of Citigroup’s largest distributors of investment products, financial advice, and life insurance. We’re all about entrepreneurship and building your own book of business, but with the backing of the Citigroup platform. Is that something you might be interested in?”

“Sure.”

“OK, why don’t you walk me through your resume?”

So I did. It wasn’t that great. In hindsight, I realized his questions were probing specifically on my depths of relationships at all places I worked in high school, and the clubs where I was a member in college, but I was thrilled to be talking to a prestigious, Wall Street executive!

“Wow. You’ve got quite an impressive background. Look, I’m not supposed to do this, but we can treat this as a first round interview. If you’re available next Tuesday, we’re hosting a dinner reception in town for our candidates.”

I ran home and called my parents. “Mom, dad, I got invited to a dinner reception by a VP at one of the Wall Street firms!!!” They didn’t know any better. “Wow, that’s great honey, good luck!”

I didn’t have a suit, so I ran over to Macy’s and bought one. It didn’t fit quite well, but my work-study earnings weren’t going any further. I cleaned up my resume. I practiced my elevator pitch.

The following Tuesday, I skipped an afternoon class, and caught a bus downtown. I showed up 30 minutes early at the Marriott hotel ballroom and milled around in the lobby reading the Wall Street Journal and memorizing bond yields and the Dow closing price.

The ballroom doors opened. I was shuttled off to a table where Mr. Regional Vice President With A 1000-Watt Smile was waiting for me. “You made it! We’re thrilled to see you. I was telling the senior guys all about you, and they’re excited to meet you. That’s why we put you at this table so close to the stage. Well pull up a chair and have a cocktail. Dinner will begin shortly.”

Then the other seats started filling up. Something began to smell a bit wrong, although I may not have realized it at the time. Me and Mr. RVP were the only guys wearing suits. The other seats at the table, which I thought would be filled by my young, hungry classmates, turned out to be people much, much older than me. One didn’t speak English. And another looked like he literally came off the street.

Dinner started coming out. A salad course. Then some chicken. I sipped my Diet Coke, declining the wine (I’m underage! What if it’s a test??)

The presentation began. Mr. RVP goes on stage and introduces a senior leader, Mr. Regional Managing Director as an inspirational leader. I don’t remember the details of Mr. RMD’s rant, but a few points are still fresh in my memory.
  1. He introduced the rule of 72.
  2. He talked about term and whole life insurance. Charts showing the S&P 500 were displayed. Not sure what that had to do with insurance, but whatever.
  3. He went out of his way to deny that Primerica was a fraudulent multi-level marketing organization. How? He cited a professional MLB player who apparently was a major participant. And the fact that Primerica was part of Citigroup. And then he asked, “would Citigroup support a fraud?” (“NOOO!!!” shouted someone in the crowd)
  4. He then introduced the 11-tier multi-level marketing compensation structure. “You make money, and when people you recruit make money, you make money off that too! As you work your way up the structure and help your clients, you make more and more money. Do you know how much money I made last year?? $700,000!! I set my own hours. I work with the clients I want to work with. You can do that too!! Nothing is standing in the way of what you can make!!!” (“Hallelujah!!!!” shouted someone in the crowd, probably the same guy)
Then the closers came around to the tables. One came up to me and said, “Look, we’d like you to come to our offices in New York City and spend some one-on-one time with our senior guys. We’re very close to making you an offer, but he’s going to want to suss you out personally.” How could I say no?

Ran home and called mom and dad. “Mom, dad! Citigroup is close to making me an offer for the summer, I’m going to their office in New York City for the final interview!!” Again “That’s amazing, honey! We’re so proud of you!!! Good luck!”

Mr. RVP left me his business card, so I Googled Citigroup’s headquarters. “Are you at 399 Park Avenue or 388 Greenwich Street? I’m looking forward to meeting you guys.” “Oh no, those are our corporate headquarters. We’re headquartered at [some address in Englewood Cliffs, NJ — other side of the George Washington Bridge]. See you next week!”

I’m baffled, but what the heck.

I get into the city, and then realize to get to Englewood Cliffs, NJ, I have to travel from Penn Station up to the George Washington Bridge Bus Terminal, and then take a commuter bus over the bridge. Okay...

This was pre-Google Maps days and I had a dumb phone, so all I had was an address, and a bus timetable. I can’t make any sense of the address or the bus timetable as I have no idea where we are. Finally, we pass by a giant warehouse-looking facility with a Citigroup logo plastered on it. THAT MUST BE IT!!!

I ring the bus bell and get off. I walk up to the warehouse looking building before I realize.. I am not sure how to get in. I walk around the warehouse and find the front entrance.

“Hi, I’m here for a job interview with Mr. RVP.”

Bored looking security guy calls the manager. Manager shows up. “Um, kid, this is a warehouse. We don’t have any job openings here.”

“But, but,” I protested “I’m supposed to interview for a job with Citigroup in Englewood Cliffs, and I thought this was the Citi building.”

“Yeah, we are the only Citi building in Englewood Cliffs. What’s the name of your contact?”

Manager then takes pity on me, looks up Mr. RVP in the Citi corporate directory only to find.. no address attached to his contact. Looking at my sad 18-year-old Bambi eyes, he picks up the phone and calls Mr. RVP. “Yeah, there’s a kid here in a suit, looking for you guys. He says he has an interview. Where are you located exactly?”

Manager (really, a guy with heart of gold) finds their address, puts it into MapQuest, prints out the directions for me, and then hands me a bottle of water, telling me good luck. So I trudge out (suburban NJ, next to no public transportation).

30 minutes later, I show up at Primerica’s “Northeast US headquarters” which appears to be the first floor of a nondescript 4 story office building. There are three rooms in that suite.

Mr. RVP is waiting for me (he appeared to also be the receptionist). And told me that while they are thrilled to have me, first I need to pay $200 for a background check. And then another $200 for an insurance broker’s license. (Full disclosure, at this point, I had less than that much in my student checking accounts.)

I start to squirm, and said I was here to have the final round interview with the senior guy. Mr. RVP said “Oh of course!” and with pomp and ceremony shuffles me into the room with Mr. RMD.

Mr. RMD’s 1000-watt smile is gone. Replaced by a scowl. Looks at me, and lays on the hard sell. “Look, this is how the business works. You sell whole life insurance to your friends and family. If they buy, you get a commission. If they sign up to Primerica, you get a cut of their commissions. But before you can do that, you have to pass the background check and get an insurance broker’s license.” Meanwhile, Mr. RVP goes back to his receptionist desk, and returns with some forms and a credit card reader machine.

“But, but.. if you’re hiring me, why do I have to pay for for the background check and license?”

“It’s simply how our business works. Look, everyone had to pay their own background check and license fees to work here. I got paid it. Mr. RVP over there paid it. Now do you want this job or not?”

“I’m.. not sure. I’m not sure I’d be comfortable selling these products I don’t understand to my friends and family.”

He softens a bit. “Oh, we’ll teach you. Don’t worry. And if you’re really successful — and I’ve haven’t seen this often — you could be an RVP by the time you graduate. Think about it. You, a Vice President at Citigroup, when your classmates are still Analysts and Associates.”

My radar is seriously up at this point. “I don’t think so. I’m really not comfortable with this business model.”

“Well, if you don’t want to sell to your friends and family, you can still be successful. Can I just get your credit card to get your background check and paperwork set up?”

“No. I’m really not comfortable doing that.”

“Look, if you walk away now, we won’t hold this spot for you. Don’t come back to us later.”

“I don’t think I will.”

“Fine. Get out of my office.”

I give Mr. RVP the Bambi eyes, and ask if he can at least point me to the bus station since now I am hopelessly lost. He relents and says he’ll drive me there. We pass the next 15 minutes in complete silence. I get on a bus back over the George Washington Bridge, take the subway down to Penn Station, and leave NYC an older, wiser, sadder, and more cautious person.

student
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by student » Mon Apr 02, 2018 6:36 am

This reminds me of my own experience. I got a call from them about a job several month after I started my job. I went. There were many people there and the head guy was clearly a salesman. I didn't bite. Some years later, I got a call from another guy at a different office. I believe I was already tenured and I obviously wasn't going to quit and work for them. I went to the meeting anyway. So after the talk, I said I wasn't interested. He got angry and asked why did I come. I told him that he was the one who invited me.

Edit: Corrected a typo.
Last edited by student on Mon Apr 02, 2018 6:55 pm, edited 1 time in total.

FRANK2009
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by FRANK2009 » Mon Apr 02, 2018 5:04 pm

A few years ago, looking for a good retirement gig, I also found myself at a job fair. I spoke briefly to someone at the Primerica table and was offered a chance to some type of meeting/lecture. with a chance to join their outfit. I don't have a finance/economics/mathamatics, etc degree, or any experience in the field. I accepted but googled the company just to make sure they are legit. Well needless to say, I cancelled and told them "not interested". Ugh complete waste of time!

Longtermgrowth
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by Longtermgrowth » Mon Apr 02, 2018 7:28 pm

A MLM (multi level marketing) company. They have to recruit many, to get a cut of their commissions, to really make much.

So: pay for initial training, recruit everyone you know (while being as vague as possible so they don't google it before you can pitch them in person), and try to sell a few policies as well. The company pays you as an independent contractor.

Here's a detailed article on it that the OP might enjoy reading through: http://www.finance-guy.net/streetonomic ... ica-review

Miriam2
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by Miriam2 » Mon Apr 02, 2018 8:52 pm

Badger1754 wrote: Due to some requests on PM, I’m going to share a defining experience for me that defined my journey to being a Boglehead. My wife is often bothered as to why I’m such a paranoid penny-pinching cheapskate. I can trace it down to four reasons: . . . .
Enjoyed reading your story Badger! Thank you for taking the time to post it. I'll bet that was the last time you snuck into an upper-classman job fair 8-)

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friar1610
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by friar1610 » Tue Apr 03, 2018 9:01 am

Great story! I was once in an audience where a "financial planner" - it may have been Primerica but I don't specifically recall - asked if anyone knew what the Rule of 72 was. I raised my hand and explained what it was. He was blown away that a mere mortal and a financial unsophisticate would know anything about this mysterious, closely guarded rule that only wise and learned financial "experts" we're privy to. Your mention of the rule in your story makes me think the guy must have been from Primerica.
Friar1610

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willthrill81
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by willthrill81 » Tue Apr 03, 2018 9:43 am

I was briefly recruited by Primerica when I was 18, though my 'recruiter' paid the $400. I only got my insurance license since you have to be 21 to get your securities license. I quickly learned that they use the same 'business model' as Northwestern Mutual: recruit people with lots of contacts, milk those contacts for all their worth, then move on to the next recruit. The overwhelming majority of recruits don't last one year.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Cody
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by Cody » Tue Apr 03, 2018 9:54 am

How typical is this story. Is it common practice at many corporations or just a few?

Thanks for the story.

Cody

alfaspider
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Re: Primerica - a formative experience on the way to being a Boglehead

Post by alfaspider » Tue Apr 03, 2018 3:13 pm

Brings backs memories....

Circa 2007 I was looking for a part time job during law school and had my resume publicly posted in various job sites. Out of the blue having just woken up on a Saturday morning, I got a call from a guy claiming to be with Citigroup asking if I'd be interested in a management position :shock: He asked me various questions about my background , which I mostly stammered through in a daze. At some point, he mentioned it would be with the "Primerica Division" and that it would involve "investment management." We scheduled an "interview", which was to happen somewhere in Northern Virginia.

Once I was actually awake, I decided to do some some googling and learned what Primerica actually was :oops: I didn't bother to show up and never heard from them again. Quite the letdown, but at least google saved me from wasting half a day. To this day, I've been wary of doing business with Citigroup given that they allow themselves to be associated with a shady MLM.

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