What Should I Do With My Commission Check? - For Real Estate Agents
In this video Alexander Fazelani breaks down 4 ways to divvy up your commission check to avoid one of the most common mistakes made by real estate agents. Most agents fail out of real estate not because they lack sales skills or the ability to learn, It is purely due to the fact they lose momentum because of financial strain. That is why Alexander Fazelani thought it is important to share his experience and strategies to solve this common issue.
Strategy #1: Invest In Yourself First
One common trait among top producers is their commitment to personal and professional growth. After closing a deal, they prioritize reinvesting a portion of their earnings back into themselves. This investment may take various forms, such as starting a side business, exploring stocks and cryptocurrencies, or pursuing educational opportunities. By continuously enhancing their skills and expanding their financial portfolio, these agents ensure a steady path towards financial independence and wealth accumulation.
Strategy #2: Put Money Aside For Taxes
Many agents have faced the dreaded surprise of a hefty tax bill at the end of the year. To avoid this financial setback, top producers understand the importance of setting aside funds for taxes from every commission check they receive. By putting aside around 30% of their earnings, they ensure they have enough to cover their tax obligations without depleting their savings. This proactive approach not only prevents last-minute panic but also provides peace of mind and stability.
Strategy #3: Allocate Money for Essentials
While it may be tempting to spend all earnings on personal indulgences or investments, top producers recognize the importance of securing their financial foundations. They allocate a portion of their commission check towards essential expenses, including mortgage payments, utility bills, and vehicle maintenance. By establishing a healthy reserve to cover these baseline expenses, agents safeguard themselves against unforeseen financial hardships. Depending on their circumstances, maintaining three to six months' worth of living expenses is a prudent practice, although it's advisable to consult with an accountant or financial advisor for personalized guidance.
Strategy #4: Invest Back in Your Real Estate Business
Successful agents understand that reinvesting in their business is essential for sustained growth. Rather than getting trapped in a repetitive cycle of lead generation and manual processes, top producers allocate a percentage of their commission check to upgrade and streamline their operations. They invest in tools, technology, and marketing strategies that enable them to work smarter, not harder. By leveraging resources such as dialers, lead generation platforms, and targeted advertisements, agents can generate a steady flow of qualified leads, establish their brand, and create long-term success.
Managing commission checks wisely is a vital aspect of achieving financial stability and long-term success in the real estate industry. Top producers have developed strategies that allow them to allocate their earnings effectively, minimizing the impact of market fluctuations and ensuring a secure financial future. By investing in themselves, setting aside funds for taxes, covering essential expenses, and reinvesting in their business, these agents create a solid foundation for consistent growth and financial independence. Aspiring agents can learn valuable lessons from these strategies and apply them to their own real estate endeavors.