I am positive that every single person that reads this entry has heard this mantra before, but I firmly believe that it's not what you make, it's what you spend!
The Problem
Over the past five years I have seen many real estate agents jump well into the six figure income bracket. A hot market is a breeding ground for a false sense of financial security for those who fail to plan. For a while, there was a new Mercedes, BMW or Lexus in the parking lot every week. Larger houses, lavish vacations, fancy dinners, jewelery and whatever else suits your fancy might not be the key to longevity in this sometimes volatile industry. Now that the gravy train has slowed many of those same agents are stuck in the quandry of finding a part-time job or getting out of the business all together. I am speaking from experience and have been there and done that many years ago. It was a humbling experience. Experts say six months of income in the bank is a great place to start. In this business, a full year is even better! Here's why:
Financial security keeps you from giving advice to your clients based on your own desperate need for a commission. Without it, your clients will most likely see through your desperation. That means they could and should go somewhere else. An even worse symptom of financial desperation is showing property to under qualified, under motivated buyers and taking overpriced, poor condition listings in hopes of making a sale. The probability is you will spend more money and time trying to force deals that aren't meant to be. DON'T LET FINANCIAL PRESSURE CLOUD YOUR JUDGEMENT.
If you are feeling the pinch of this market, I feel for you.
The Solution
You need a budget. Look at your expenses and do everything you can to know exactly where your money is going each month. Find out what personal expenses you can cut or eliminate. Determine which advertising is working for you. Focus on using e-mail and the Internet as an inexpensive way to keep open lines of communication with your database and clients. Don't panic. Use a systematic approach to eliminating debt and building savings. Weather this market and put money away if at all possible.
Eventually you will find yourself in a much more comfortable financial situation.You and your clients will benefit from your financial sensibility!
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