BAM’s Key Details:
- BAM hosted the first of four webinars with Shahar Plinner, the founder of Formations, and Patrick Olp, Formations business consultant.
- They shared daily, weekly, and monthly habits for real estate professionals to take control of their finances and watch their accounts grow.
When the market is hot, and money is streaming in, it sometimes feels like you’ll always be on top. But we all know that the market is always changing. If you don’t have a financial plan, you could end up in a tight spot with seemingly no warning.
Being a real estate agent means you have the potential to earn an unlimited amount of money—but you’re also faced with the task of managing that money. Those who leave everything to tax season are often devastated when they see how much they owe.
Financial habits to focus on right now
Little adjustments to your daily habits can make a big difference when it comes to your finances.
These small changes will naturally build the muscle to increase the amount of money you keep in your account.
These are the daily, weekly, and monthly financial habits Shahar and Patrick recommend to agents who want to take their finances to the next level—and pay less every year in taxes.
#1: Look at your accounts every day
Shahar mentioned Grant Cardone, whom Byron credits with an idea he latched onto years ago: Open your bank accounts and look at them every single day. Just look at them.
The reasoning behind this is simple: If you look at your accounts daily, you become more aware of what you need to do throughout the day.
Your accountability goes up, and all of a sudden, next month, or sixty days down the road, that account starts to grow. Because what you’re looking at, what you’re paying attention to, has a tendency to grow.
And that daily recognition and accountability build the muscle to make it easier.
It’s a simple habit anyone can adopt. But how many people avoid looking at their bank account because they don’t like what’s in it—or because they’ve just spent some money and they’re dreading the number they’ll see?
That avoidance is something a lot of people can relate to. It’s also deadly to your business. Awareness is better.
#2: Allocate specific percentages to specific savings or checking accounts
You know it’s important to have a separate business account. But what do you do with the money in that account? And how much of each commission payment should go into each account?
Let’s say, you put [aside] 20% for tax. I don’t want any of my customers to pay more than 20% in tax…. And let’s say I run my business really, really efficiently, [so] 20-25% go to expenses. Which means now 60% of every dollar coming in from my business should sit in buckets for me and my family, into my own financial well-being—into the places that bring prosperity back to myself, not to other people.
#3: Take action every day to grow those accounts
If we combine the previous two habits—looking at your accounts every day and allocating specific amounts or percentages to specific savings or checking accounts—the natural follow-up habit is to take action every day to grow those accounts.
And, again, your daily awareness of those accounts is critical to understanding what you need to do to make those accounts grow—and to taking action every day.
This is what rich people do: getting into the habits of doing simple stuff every single day until they become atomic habits.
At another point in the webinar, Shahar pointed out the difference between a real estate investor and a real estate agent (who isn’t also an investor).
The real estate investor is constantly thinking about his ROI. constantly thinking about how to use tools in the code, basically to create the most value out of a property they got into. There is always something to measure.
The most successful real estate agents think—and act—like investors.
Three things agents should be doing on a seasonal basis
There are also some habits agents should be doing on a seasonal basis. These are habits that work together (though not concurrently) over the course of a year to improve an agent’s effectiveness and help them grow their business.
As a new agent, start to understand your seasonality. Because as a business owner, you need to perform, you need to restore, and you need to train.
Perform—In business, it’s about getting up every work day and doing the things you know (actually) bring in business. Know where you are now, and do the work that’s necessary to create real and measurable growth.
Restore—No one can perform 24-7-365 without burning out in a few years (or less). Sacrificing your physical or mental health for extra bragging rights isn’t a good long-term strategy. Smart real estate professionals know they’re playing the long game.
Train—When you train, train on financial literacy. This is something every business owner should know. If financial education and financial systems don’t excite you, consider the possibility that owning a business may not be the best option for you.
That said, we’re not talking about becoming your own accountant or your own financial advisor. If you’re doing your taxes on your own, you’re making an expensive mistake.
Awareness of your finances is critical to your success. But find yourself a trustworthy and competent accounting professional to help you with taxes. Otherwise, you risk leaving thousands of dollars on the table.