Difficult Conversations About Money and Being Self Employed

By
Real Estate Agent with John L Scott Market Center 700512026

One of the toughest parts of being a REALTOR® is that you never know when you're going to make money or when you're going to have a dry spell. 

 

If you're a financial wizard, or really mindful of "saving", and sticking to a budget, then this part of life probably offers you more peace-of-mind than it does for the rest of us who struggle with money and the conversations that ensue.

 

Some of the most difficult conversations people have with their partners-in-life are about money. Putting money away, paying your bills in  a timely manner, saving for the unknown future crisis. Quarterly taxes is one of those bailiwicks that I struggle with. When I get paid on a transaction, the first thing I want to do is pay my bills. It gives me such a sense of relief. If money's left over, it's a boon. The formula that our tax consultant has given me, is to put a third away with every commission received to pay quarterly taxes. Then there is the conversation about how to protect your money, so that you are paying yourself and saving that money for your future retirement safely without it being taxed. 

 

Having lived much of my life as an artist, money was never at the top of the priority list. Often my friends have heard me say it this way, when regarding my relationship with money:

"Oh, I have money! Great!" As if it's one of those surprises that sneaks up on you and is totally fabulous for as long as it lasts. I bet other artistically-minded folks will nod their heads in agreement. 

 

So, how do you juggle not knowing how long it will be without money flowing in monthly? My niche market is based on a mostly-vacation-home business, although I do sell properties during the winter months, but there is no routine to this at all. I have a certain amount of angst when I don't have a cushion for an extended period of time. Striking a balance is somewhat of a moving target. As I get older I want to create a foundation of comfort so that if (at this point it's not when, but if) I decide to retire I have choices that make for a balanced life. 

 

I'm interested to know what others do to create a semblance of peace while working hard and often "for free". 

 

One thing I would love to see offered is a class for REALTOR®s  about how to prepare your finances to have something for the lean times. Not being naturally good with money, I would enjoy being given direction directly related to what I do. 

 

 

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Fred Griffin presently on Leave of Absence 08/21/2018 08:33 PM
  2. Brian England 08/22/2018 06:38 AM
  3. Debbie Reynolds 08/25/2018 05:00 AM
  4. Will Hamm 09/19/2018 02:03 PM
Topic:
ActiveRain Community
Groups:
Coaching-Personal Development
Building Your Niche
Bartender, Make it a Double
Best Practices
Old Farts Club
Tags:
finances and real estate

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Rainmaker
150,675
John Henry
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Hi Gayle, I am half artist and half businessperson...

The first half RULES.  To the detriment of the second half...

You have to CONSTANTLY push and never idle because you never know when a long dry spell hits.  I've learned that lesson.

Thanks for your observations!

Aug 23, 2018 02:07 PM #43
Rainmaker
964,412
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

This subject is one that definitely should be taught, as others have mentioned, in junior high and high school.  I started working at a bank right before I graduated high school.  The lessons I learned have been passed on to my daughters.  It's amazing to me how many people mis-handle money.  Just last week a prospective tenant for my luxury high rise rental condo explained he wanted to pay the entire years lease up front.  "Why would you do that?" I asked.  "Because I don't want to miss a payment."  And he has $143,000 in his checking account!  For a 28 year old I was shocked he didn't want to buy a house, was that successful, did not understand the benefits of owning a home, did not understand the differences in owning vs. renting, and had no idea how to manage his money for the best economic benefit!   

I'd offer that realtors should pay themselves first, never spend a commission check before it's in the bank, manage debt to use credit cards with the lowest interest rates if they have to, and keep 6 months $ in a savings account only for emergencies.  It's not that easy, but it can be done!

Aug 23, 2018 06:48 PM #44
Ambassador
1,341,892
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Bruce Hicks we so OFTEN work for free that people have that constant misconception that we are making money hand-over-fist. Not true! And you bring up an interesting perspective, which would lend itself to a whole new topic of conversation. 

Corinne Guest you are a better person than me. Uncle Sam is not my favorite uncle!

Kevin Mackessy yes, in a perfect world, you're right. 

John Henry you're speaking my language. 

 

Aug 23, 2018 08:08 PM #45
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1,341,892
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Jan Green your thoughts are so intelligent! I don't EVER count my commissions before they're "hatched". My company now (I moved to a new company 18 months ago when my original one retired) always wants the broker demand right away. I don't do that. Can't count it til it's done! "It ain't over til it's over". I can only wish that I was as smart as you were at  a young age. Many don't listen to our experience. We do it with compassion and empathy, to guide. But some aren't ready to listen.

 

Aug 23, 2018 08:28 PM #46
Rainmaker
964,412
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Good for you!  I was lucky to happen into my job at the bank.  Five departments and 5 years later were all great lessons!  Back then, we could float checks and wow did we become crafty with trick!  Write a check and it would be deducted 2 days later - not anymore!  You are so right.  Some never listen :) 

Aug 23, 2018 08:33 PM #47
Rainmaker
376,109
Matthew Klinowski, PA
Downing-Frye - Naples, FL
Golf Community Real Estate Specialist

Hi Gayle, thanks for sharing your thoughts.  Being self employed is challenging. Cash flow is king.  Sticking to a budget is critical.  I also feel strongly you should set aside a percentage of every sale for reserves.  This will help during years when the market dips.

Aug 24, 2018 05:28 AM #48
Ambassador
1,341,892
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Or even months when it dips, Matthew Klinowski, PA!! 

Aug 24, 2018 09:18 AM #49
Rainmaker
2,755,625
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

I believe people have the discipline to manage money or they don't.  I've seen too many people who know (are taught) a budget and what to do and what not to do to stay out of money trouble ... and they just don't have the discipline to do it. Many are living paycheck to paycheck, with no savings.  We have become a society of instant gratification and consumerism.  

Aug 24, 2018 12:15 PM #50
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Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Kathleen Daniels you make a strong point. For many years I struggled with my relationship with money because I chose the path of an artist and that meant working one or two other jobs just to make the bills. At one point, my bestfriend's boyfriend, a CPA I think, did my taxes as a favor to me and he told me that I was living "below the poverty level". I didn't even realize that. 

Soooooo....I've been on both sides of the proverbial fence. Money was never a #1 motivator, except when I decided as a young post-college graduate to do road construction because it paid really well! It kept me going while I worked in the theatre at night. We make choices, yes. Discipline is part of the equation. I choose not to judge those who struggle because I've been there myself.  Instant gratification is epidemic, though in our US society, whether related to money or social dealings, I'm in agreement. 

 

Aug 24, 2018 02:08 PM #51
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Hi Gayle, Fortunately I have always had a husband backing me up and being a bit of a spend-thrift I tend to save for a rainy day. 

We do talk about this in our company. It is good to plan ahead and never spend all that you make.

Aug 24, 2018 02:28 PM #52
Rainmaker
364,317
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
Santa Cruz Mountains Property Specialist

Great topic Gayle Rich-Boxman Fishhawk Lake Real Estate    As others have said, our schools are missing the boat by not teaching this.

I just pay myself a monthly salary no matter how much more money I happened to make that month.    So the commission check goes into savings, then I do a transfer into checking and call that a salary.   From that, I pay all the bills.

If my savings account happens to swell beyond a six month expense cushion, plus what I owe in taxes, I might give myself a bonus from time to time.   But I try to tuck any extra away for retirement.    

Aug 24, 2018 02:35 PM #53
Ambassador
1,341,892
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Debbie Reynolds I'm lucky in that way, as well. But, we are looking for him to have a less stressful worklife, so money will be changing! 

M.C. Dwyer I love that idea! Very creative! 

Aug 24, 2018 05:23 PM #54
Rainmaker
3,164,392
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Self employed people can be made to feel like they are stealing money rather than borrowing it ! 

Aug 25, 2018 05:23 AM #55
Ambassador
1,341,892
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Sally K. & David L. Hanson not sure what you mean by that?

Aug 25, 2018 07:13 AM #56
Rainmaker
3,164,392
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

What we didn't have time to say was...when self employed people are going to borrow for a mortgage...the ebb and flow of income can make borrowing money for a mortgage more of a challenge than it is for people with "real" jobs.

Aug 25, 2018 09:33 AM #57
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Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

While true, Sally K. & David L. Hanson, I was speaking more from the point of ours as realtors, agents and whatnot. Not from a borrowing standpoint, but just how we survive in months of downturn in our cashflow. 

Aug 25, 2018 10:03 AM #58
Rainmaker
3,164,392
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

I understand that...it is all part of money management ..or in toooo many cases, lack thereof...

Aug 25, 2018 10:05 AM #59
Rainmaker
1,452,962
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

I feel your pain!  I am much like you this way, and just throw it all at my spouse who is the person managing all the funds that come and go, and keeping the books up to date.  He has always done a stellar job at this which is such a relief.  I don't look back, only forward.  Having a good chunk in the bank is a really good feeling, and he'll let me know if we're getting low.  I know this sounds lame but it works. ; )

Aug 25, 2018 02:20 PM #60
Ambassador
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Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Georgie Hunter R(S) 58089 it doesn't sound lame at ALL!  To me, it's being present. Totally PRESENT. And you and I are blessed that we have those partners who embrace that piece of our daily lives. I am so very grateful for my financially astute husband. I've always managed through the years, but this takes a lot of the angst away that you and I might have to deal with! I appreciate your outlook. Keep doing it, as I see from my point-of-view, you look HAPPY!! 

Aug 25, 2018 06:57 PM #61
Rainmaker
240,431
Faith LaRosse
Springer Realty Group - Wyomissing, PA
Serving Berks, Chester & Montgomery Counties

Ahhh, that dreaded conversation- MONEY.  You make great points here Gayle, especially for those that are self-employed.  

Sep 10, 2018 05:10 PM #62
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