I’ve been working with Realtors for more than eleven years.
Over those eleven years as a Certified Public Accountant, I’ve seen the nitty-gritty of how much my clients made and how much they keep.
When it comes to money, many people will lie to themselves.
They may even lie to their team members.
However, very few people have the gumption to lie to the Internal Revenue Service.
Lying to the Internal Revenue Service is an excellent way to be confined to wearing an orange jumpsuit every day.
I know the numbers.
I’ve seen people come into Real Estate bright-eyed, bushy-tailed, and excited to make their vast fortunes as a Realtor.
Many of these people only last a year or two, and then they move on to a different career.
I have a deep respect for Realtors.
Of all the business people I’ve worked with Realtors are some of the best.
Realtors are almost some of the worst businesspeople because they don’t evolve beyond the salesperson’s role.
To build real wealth as a Realtor, one must transition from Salesperson to Business Owner.
Cash in the bank is the best indicator of success in the Real Estate industry.
If there is lots of cash in the bank, that is an indication that someone understands the secrets of money.
Cash in the bank is the clearest indicator of success in Real Estate.
If you as a Realtor have not acquired more than a bare existence in the years since you began your Real Estate business, it is because you either have not learned the secrets that govern the building of wealth or you do not observe the secrets of building wealth.
I’m here to share with you the top five money secrets top performing realtors should know.
By applying these five secrets, you can turn your real estate business into a cash cow.
Remember, you have to use the money secrets.
If you don’t use the money secrets, it is the same thing as not knowing the money secrets.
Secret One – The Amount of Money You Have Is Directly Tied To Your Money Habits
I’ve been writing about money for a long time now.
Writing about money only led to a strange observation.
The topic of money is kind of boring.
For half of my life, money was either pieces of metal or pieces of paper.
Now money is simply a number on a computer somewhere.
What you have to realize is that money is a result.
If one has money or doesn’t money, the best thing to do is start to question why one has or doesn’t have money.
I know people that make millions of dollars a year, and they still live paycheck to paycheck.
I also know someone that retired in his early thirties and is a multimillionaire. He never earned more than five figures when he was working.
Most people don’t have money.
Most people live paycheck to paycheck.
Most people will blame others, the government, inflation, or their Ugly Cousin Joe, for their lack of money.
I propose that the blaming of someone or something else is probably the reason that person doesn’t have money.
There is only one person to blame for the amount of money you have or do not have in your bank account.
That person is you.
Benjamin Franklin has the best quote I’ve ever read about money.
“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”
I’ll repeat his quote for emphasis.
“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”
We all have good money habits, and we all have bad money habits.
If our good money habits are better than our bad money habits, we have cash in the bank.
If our bad money habits are better than our good money habits, we don’t have money in the bank.
All you have to do to improve your cash in the bank situation is improve your good money habits and weaken your bad money habits.
Secret Two – It’s Not How Much You Make That Matters. It’s How Much You Keep
Someone once said:
Sales is for vanity, profit is for sanity.
When I was younger, Lending Tree had a commercial with the following message:
My name is Stanley Johnson.
I’ve got a great family.
I’ve got a four-bedroom house in a great community.
Like my car? It’s new!
I even belong to the local golf club.
How do I do it?
I’m in debt up to my eyeballs!
I can barely pay my finance charges.
Somebody help me.
Sure growing a real estate business is wonderful. It’s exciting.
However, if you’re not making the money you want selling thirty homes per year, you won’t be making the money you want selling 150 homes per year.
Secret Three – You Have To Be A Business Person
If you want to be a Top Performing Realtor, you have to become a business person.
The only Realtors I know that have become millionaires are the ones that have become businesspeople.
Most Realtors don’t begin their career as business people. They start their careers out as salespeople.
Nothing wrong with being a salesperson if that’s what you chose to be.
Being a salesperson is the same thing as owning your own job.
When you have a job, your earning potential will always be limited.
If you’re happy with having a ceiling on your earning potential, then you’ll be satisfied remaining as a salesperson.
However, if you want to gain freedom over your time, life, and money, there is only one option.
Become a business person.
Business people become masters of measurement.
They gather the right data and use that data to make informed decisions.
Business people understand their money.
The simplest thing to understand in your business is your money.
Everything else in business is much more complicated than money.
Money is objective.
Unlike people who are irrational and emotion-driven.
Yet, I’m astounded at how many Realtors don’t understand their money.
Consequently, they get confused and overwhelmed.
Understanding how money works in your business is one of the most critical skills you must acquire if you want to be a successful business person.
Secret Four – Pay Yourself First
My first two years in business, I violated the pay yourself first rule.
The consequence of my poor money decision was the following:
- I depleted my savings
- I maxed out my credit cards
- I was a few months away from losing my home
I was in dire straits.
Fortunately for me, I spend one morning contemplating the severity of my miserable situation.
I cried many tears.
There I was. I had an accounting degree. I was a Certified Public Accountant. I had an MBA.
Nine years ago, I had more knowledge about money than 95% of Americans.
Yet, I was a complete moron when it came to money.
If I with all my knowledge about money could decimate my finances, what makes you think you’ve got a chance?
I swallowed the bitter pill and realized I messed up my life royally.
I decided to make a drastic change.
Here’s the change I made.
I started to pay myself first.
That one decision to pay myself first was the best financial decision I’ve ever made.
Paying myself first changed my life.
Paying myself first help me create my ideal life.
Secret Five – Keep Your Money Accountable
Once I started to pay myself first, something dramatic happened in my business.
I started to spend less than I earned.
Charles Dickens has the best formula for happiness in life.
“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Nothing causes stress like overspending.
I’ve seen Realtors deplete their retirement accounts so they can make payroll.
This is just horrendous.
There is always a new and better way to do things as a Realtor.
There are five million shiny objects running around trying to lure money out or our wallets.
When it comes to spending your money, your goal should be to avoid spending money at all costs.
Instead of spending money, you should be investing money.
How do you know when you are spending money and when you are investing money?
When you invest money, you multiply your money.
For example, when you spend a dollar on advertising, it should give more commissions than the cost of advertising.
Return on Investment should be your mantra when it comes to using the money in your business.
Imagine if your local bank would give you $1,000 every time you gave it $100.
How many times would you want to give the bank $100?
As many times as you could.
It should be the same with the money you invest in your business.
If you don’t multiply your money when you exchange your money with a vendor or employee, then it is time to fire that vendor or employee.
Otherwise, you are giving that vendor or employee your paycheck, and you are depriving you and your family.
Conclusion
If you as a Realtor have not acquired more than a bare existence in the years since you began your Real Estate business, it is because you either have not learned the secrets that govern the building of wealth or you do not observe the secrets of building wealth.
There are five money secrets Top Producing Realtors should know.
- The Amount of Money You Have Is Directly Tied To Your Money Habits.
- It’s Not How Much You Make That Matters. It’s How Much You Keep.
- You Have To Be A Business Person.
- Pay Yourself First.
- Keep Your Money Accountable.
“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”
The way to improve your money situation is to strengthen your good money habits and weaken your bad money habits.
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