Don't mind me, I'm just thinking out loud...
Would it surprise you if I shared I heard a *true story about a very “successful agent” who Grossed $900,000 in 2016, per his 1099, but her Net was only $135,000 and from that $135K, she still needed to pay the taxes on the $900K?
What if I shared, I know of an *agent that Grossed $300,000 in his 3rd year in the industry, (not bad!) but had no money in the bank, no money to pay the IRS and a wife that was barely hanging on due to his absence (whether he was physically home or not)?
Would it surprise you to know, assuming you believe this stat I heard recently on Super Agents Live Podcast, that *only 2% of the real estate agents in America Net over $200K annually? Many Gross much, much more, but I’m talking Net, what you put in the bank after expenses and after you set aside your taxes due on each check.
When our brokers announce “This Month’s Top Agents” or at our broker's awards ceremonies, they hand out #1 in GCI (gross commission-able income) or #1 in GSV (gross sales volume) where we get to claim our total gross market value of units sold as a badge of honor: “I sold $33 Million in 2016!” At what cost? Sometimes I watch 12 team members walk to the stage to accept an award for $33 Million in Gross Volume...do the math!
Now this is not sour grapes on my part, I do quite well for myself and I have a wall full of framed certificates that say "I’m wonderful" in my office. I’m just thinking about the potential carrot NAR and our brokers dangle to the public, the recruiting ploys to suck people into this “easy industry with no ceiling”, only to discover "it’s hard work and there’s no floor either."
The barrier to entry into real estate is low; for a few hundred dollars and less than $2,000, a few months of training, only to take test that will serve you, not one day in the trenches; we let people in under this allure of wealth and flexible hours.
Why do we celebrate Gross at the office, when Net is all that matters at home?
Why isn't business training a required class to get your real estate license? Why aren’t licensees trained on being a CEO, COO and most importantly, CFO? This is not a job, you now own a business. These are skills I've learned through my coaching at Buffini & Company. Why don't licensees get trained in money management and keeping more of what they earn as a required prerequisite? Trained to sit down and look at ROI over production and do the math; is this time and expense worth it?
Brian Buffini shared with the audience I was sitting in, that early in his career, he was once asked to sit on a panel after receiving a #1 SoCal or #1 in his company award and share his secrets to success. Brian then, quite candidly shared; afterwords his wife Beverly asked him why they asked him to offer advice to the audience? He said “Well, because I’m #1!” to which Bev replied, “But Brian we’re broke and we can’t pay our taxes?” Brian knew I things had to change and he did change them quite a bit as we see from his success the last 21 years running Buffini & Company.
I’m not bagging on success, wealth or even the trappings of either. I'm working hard for that station in life myself, but I'm bringing my family and personal life along the journey in tact or I'm not making the trip. I'm reminded of that the age old wisdom from:
Mark 8:36 “For what does it profit a man, to gain the whole world, and forfeit his life?”
I’m just thinking out loud that we have a very top of line centric industry, but a very bottom line need for the good life. I wish this industry had the NCI Awards: Net Income Awards (after taxes). I wish we celebrated the happiest family awards, the longest-happily-married to a Realtor, the healthiest Realtor, the most joyful Realtor, the most giving back agent, and so on.
Don’t mind me, I’m just thinking out loud.
*(Stories & Stat from Super Agents Live Podcast-Hosted by Toby Salgado)
-some details tweaked to protect privacy
"Thank you Toby for your call today, your blessings and advice, much appreciated!"-Thomas 3/15/17
Some info is from my notes from many Buffini & Company Trainings too, like Peak Producers
1. Image courtesy of Stuart Miles at FreeDigitalPhotos.net
2. Image courtesy of Sira Anamwong at FreeDigitalPhotos.net
3. Image courtesy of photostock at FreeDigitalPhotos.net