Agents… Do You Have A Financial Plan?

Wade Webb on September 20, 2023

agents have a financial planMaking money requires having an action plan.

Keeping money requires knowing how to set financial goals.

Let’s be real…

The reason why thousands of real estate agents got into the business was they want to make more money. And that’s why one of the things I am sharing is how to set financial goals. “I want to make more money” is not a goal; it’s a half-assed statement that’s going to keep your intentions vague and your bank account on the line of “safe.”

Do you want “safe” or do you want “comfortable and secure?” The sad fact is that 80% of all people will end up flat-broke when it comes time to retire. That doesn’t have to be you. That’s why in this week’s blog, I’ll show you just a bit of the type of information about how to set financial goals and put practices in place to achieve them. Once you know what you’re aiming for, you’re no longer shooting in the dark. So let’s dive right in and shed some light on your finances.

How to Set Financial Goals, Step 1: Find Your Cost of Living.

This one is very simple, but unfortunately, few real estate agents take the time to do this. All you have to do is add up the total costs of everything it takes to run your life:

Rent/mortgage + utilities

Marketing and business expenses

Car payment

Food and medications

Fun and entertainment

Taxes

Savings

Add up any payments or regular expenses you can think of, then tack on an extra $1,000 because who knows what could happen in life. You could get sick, or your car could break down or you could end up spending a little too much on dinner. This is your Survival Goal. It’s what you need to make consistently every single month just to stay above water. It will not give you a better life and it will not allow you to ever retire.

How to Set Financial Goals, Step 2: Your Good Life + Dream Goals (Phase 1)

Let’s take it up a step. What would it look like if you were closing a few more deals and living a realistically better life? Think about that next-step-up home you want to own. How much does it cost? What about a more desirable car? What would your vacations look like? Get in a relaxed mode and visualize it. Then get on the computer and look up the actual prices. Add them up. Do everything the same as you did with finding your survival goal, then tack on an additional $3,000. This is your Good Life Goal. Now take it even a step further. If everything went perfectly for you in the next 12 months and the money was flowing in, what would your business look like? How much would you be spending on marketing with all your new lead gen sources? Where would you be living? This is your dream life, and once you know how much it costs, you have your Dream Goal.

How to Set Financial Goals, Step 3: Adjust for the Future.

It’d be so nice and easy if we could just stop at step 2 and live in dreamland, wouldn’t it? Unfortunately, that’s how you become a member of the 80% of agents who will be working until they die. What you need to do now is find the REAL numbers it will take to live those life goals now and in the future. Do a 10-year forecast of your life, imagining that at the end of these 10 years, you’re going to step away from your business and just live. Write down all three goals, then multiply each by 12 (to bring them to a yearly amount), then multiply them by 10 (for ten years). Let’s say your Good Life Goal is $125,000 a year. Over 10 years, that means you’ll have made $1,250,000. Now let’s start cutting this down.

35% goes to taxes
25% to running your business
25% to running your home
Leaving 15% that you either saved or invested
Going by this, at the end of 10 years, you can now comfortably live your same lifestyle for a remarkable ONE YEAR and some months! Pretty scary huh? That’s why you need to start thinking about these things now. This step is not over until you find a 10-year number that you’re comfortable with. You either need to start cutting down on some of the expenses or raise the number entirely.

How to Set Financial Goals, Step 4: Choose Your Who and Why.

I’m not perfect; I’m human, just like everyone else. And that means I’ve found that I’m capable of breaking the promises that I make to myself. But what I’ve also noticed is that I NEVER break a promise that I make to others – especially those I care about. Most people won’t tirelessly grind day-in and day-out just for themselves, but they will do it for their spouse, their kids, their parents, or their coach. You need accountability. I need accountability. We all need it. It’s the cornerstone of greatness. Find yours. Don’t skip this step.

How to Set Financial Goals, Step 5: Decide Where Your Money Will Flow.

We’ve already talked about breaking your money down into categories. If all that money stays in one account, then those are just invisible boxes that will stay in your head and soon fade away to nothing. I sincerely hope that you’re not depositing your checks into a personal checking account. If you are, stop that now and open a business account. I’m not your financial advisor, so the type of account you choose to open is between you and them. But once you have that business account open, you need to start opening a few more accounts and moving the money appropriately right away into each:

Tax account
Home account
Fun account
Savings account
Investment account (Don’t make the mistake of not buying enough of your own product)
Business expenses account

How to Set Financial Goals, Step 6: Make a Commitment.

You’ve decided what you want, refined it, chosen a strategy to get you there, set up accountability, and put your banking system in order. Now I want you to make a written and verbal promise to those holding you accountable that says you will follow this plan and achieve these goals by doing everything you possibly can. It’s time to become the best possible version of yourself because now your ass is on the line.

Strength and courage,
Wade

The Money Is The Monster Not The Real Estate Market

Wade Webb on June 8, 2022

money is monster not the real estate marketConsumers live in the payment and not in the price. Think of how we all justify logically when buying something by the monthly payment and let’s be honest never really consider the price of the big ticket items. Now more than ever Realtors© need to know and understand the financing world and lending world and how it is impacting our real estate markets. Remember the classic monthly payment sheets that we had the lender do for our listing showing what the down payment amounts were, the monthly payments and minimize the purchasing of the home down to the simpler decision?

We see it in the cars, boats, electronics, pretty much everything is living in the payment to make the buying decision easier for the consumer. We need to take those payment sheets now and put them on steroids. Show the consumers what the down payments are, the monthly payments are but more importantly what they will be if they wait and time the market! Show them the financial impact on them if the payment goes just 2% higher on them. How does that look for them now? The payment jumps on them but show them the overall impact of borrowing costs for the higher interest rate if they wait.

The cost of borrowing will be higher than the anticipated correction of their house payment I guarantee it. For our sellers we then show the income qualification that is required for a buyer to purchase their home and show them how fewer buyers can actually qualify to buy their home at the new interest rates versus the interest rates in 2021 folks.

The money is the monster not the market and not the agents. Know and understand the money and advise the impact on buyers now with the rates, payments, down payments, income and qualification criteria getting tougher every week now and the sellers that buyer pools are being eliminated that are able to buy their home now. This isn’t about the market and the agents and what is happening in North America, it is all about the money.

Think about it, the government wants to curb inflation, curb our spending, allow for supply chains to catch up and make sure those that used their home and rates to spend away, get out of the housing market before defaulting and they are doing that through the money and raising the interest rates. Our clients need advisement on the money and education on the impact of the money on them at home, if buying or if selling and it is our jobs with the help of our mortgage partners to do that and educate them now more than ever. Should I refinance? Should I buy? Should I sell? What finance options are best for me the next 5 years? What do I need to do to get my cost of living in check? How do I avoid defaulting on my home? These are the conversations, questions the consumers (including myself the other day) are asking and wondering if I should be locking in my variable mortgage now?

Join the conversations the consumers are having and show up and educate and advise our clients on the financial and economic shifts and changes that are happening. Don’t by like my financial advisors who have been silent and never even called, emailed me as the stock market has completely shifted the last few months and not a word. Don’t be that advisor agents! Show up and explain, advise and educate our clients on the shift and we are here to help. Remember this is just a correction and a shift and not a crash and what else has been better for anyone investing than real estate. This is time to gain market share agents and to really do what we do for our clients.

Strength and courage,
Wade

Is Your Money Mindset Fixed on Growth?

Wade Webb on December 15, 2021

is your money mindset fixed on growthOur relationship with money is formed at a young age. And contrary to popular belief, it’s not our management of our money, but rather our relationship with money that keeps us from truly breaking through and achieving financial independence. This is great news to the 73% of N. Americans who recently ranked their finances in a Creditwise survey as the most significant source of stress in their life. And is it any surprise? According to Bankrate, 63% of N. Americans don’t have enough savings to cover a $500 emergency. It’s clear that it’s more important than ever for us to look at managing our finances from a different angle. If we can learn how to better prioritize growing our finances, we can significantly reduce our stress.

 

  • Acknowledge that money is energy. – We put a lot of weight on money because of its association with survival, safety and security. All of which are basic needs for us as human beings. But because of the connection to survival, we make money mean a lot. In reality, money is a neutral currency. It isn’t bad, it isn’t inherently good. It’s neutral. If we can accept this idea that money is just another form of energy, we have the ability to then use money to align with our values. This is where so many people are going wrong. They’re spending on autopilot and not consciously considering where they want to put their money. Neuroscience tells us that our conscious mind plays a very small role in how we run our lives. This means we are running our lives the majority of the time from our subconscious mind which is where we store beliefs and habits that we have preprogrammed. A practical way to make this distinction to using money consciously is to ask yourself the question, Is the way I spend and save my money currently aligned with my values?

 

  • Identify the money beliefs from childhood. – What we learn about money up until age 7 is most impactful. What your parents did to earn money and how money was spoken about in the household can lead to shame associated with money (which can impact your spending and saving behavior.) For example, if you were told that the wealthy person in your community was “greedy” and therefore “bad” by your parents, then your subconscious mind would associate being wealthy with shame and an inability to be loved. One of my clients had a mindset belief that she was only able to make money if she worked really hard for it. This belief meant that she associated hard work, long hours and blood, sweat and tears with success. She had told herself this was the only way she was able to earn. In doing so, she was blocking off the flow of money in other ways. For example, clients that fell into her inbox through referrals asking to pay in full, or going into a launch and having clients come in without her having to push hard for the sale. When my client recognized this and actively started to tell herself, money comes easily to me, she was able to see all the ways she could create more money doing less, and has since streamlined her business model and added $100k in annual revenue.

 

  • Move beyond your programming and create your own money blueprint. – Moving beyond your current money stories starts with awareness, which occurs in the prior step. Once you understand your conscious mind, you then have the ability to change these beliefs. The final step is to ask yourself a series of questions to cement the new beliefs and create new habits. These can include when I am financially secure, what do my days look like? One of my clients came to me after being in business for a number of years, and was generating money through many different offers in her business. She was tired, business felt hard and she had lost faith that she could build a profitable business. The problem was that she had created a story in her mind that the business model she most wanted wasn’t possible for her until she was earning at a certain level. By shifting that mindset, she then recognized the physical changes required within her business model, and is now up 300% in revenue for 2021, working less than she ever has in her life.

 

  • When I am financially secure, where do I invest my money? – Personally, this question highlighted to me that I was living my life with the belief that I couldn’t invest or create opportunities to grow my money until I earned a certain amount. It showed me that I was telling myself a story that only wealthy people are prioritizing ongoing investing, which is counterintuitive. What habits can I incorporate into my day to understand my money and how it’s working for me more effectively? For many of my clients, they avoid their money because they don’t understand it. Having a growth money mindset means prioritizing learning, and being open to learning about money. That might look like checking your cash position every morning, or setting a bi-weekly date with your partner to discuss your household financial position. By understanding your money mindset blocks, you’ll be far more open to create habits you actually stick to. It’s more important than ever that we open a conversation about our relationship with money. By aligning the way we use money to our values, and getting clear on our subconscious programming from childhood about money, we can create new behaviors and open ourselves up to creating more wealth. If you take the time to understand your resistance to money, you’ll be much more likely to create healthier habits and practical strategies that you practice consistently.

 

With your new mindset, you’ll be well placed to seek out the advice and counsel of an accountant or financial advisor who has the expertise to help you level up your finances and start building wealth.

Strength and courage,
Wade

Game Changing Money Habits for Realtors©

Wade Webb on June 6, 2018

realtor game changing money habitsOver the years I have been taught by my father, T. Harv Ecker, Napolean Hill, Jim Rohn and so many others the habits of money. Here is an exciting thought! Why not work full time on your job and part time on your fortune? How would you feel if you could honestly say, you are working to become wealthy and not just to pay my bills? When you have a plan you will be motivated and this week I want to share a simple formula for creating wealth. Here’s my thought on how money should be allocated.

The 70/30 Rule
After you pay your fair share of taxes, learn to live on 70 percent of your after-tax income. These are the necessities and luxuries you spend money on. Then, it’s important to look at how you allocate your remaining 30 percent. Let’s allocate it in the following ways:

Charity
Of the 30 percent not spent, one-third should go to charity. Charity is the act of giving back to the community and helping those who need assistance. I believe contributing 10 percent of your after-tax income is a good amount to strive for.

The act of giving should be taught early, when the amounts are small. It’s pretty easy to take a dime out of a dollar. But it’s considerably harder to give away a $100,000 out of $1 million. You say, “Oh, if I had $1 million, I’d have no trouble giving $100,000.” I’m not so sure. $100,000 is a lot of money. Start early so you’ll develop the habit before the big money comes your way.

Capital Investment
With the next 10 percent of your after-tax income, you’re going to create wealth. This is money you’ll use to buy, fix, manufacture or sell. The key is to engage in commerce, even if only on a part-time basis.

So how do you go about creating wealth? There are lots of ways. Let your imagination roam. Take a close look at those skills you developed at work or through your hobbies; you may be able to convert these into a profitable enterprise. You can also learn to buy a product at wholesale and sell it for retail. Or you can purchase a piece of property and improve it. Use this 10 percent to purchase your equipment, products or equity—and get started. There is no telling what genius is inside you waiting to be awakened by the spark of opportunity.

Savings
The last 10 percent should be put in savings. I consider this to be one of the most exciting parts of your wealth plan because it can offer you peace of mind by preparing you for the “winters” of life. Let me give you the definition of “rich” and “poor”: Poor people spend their money and save what’s left (if any). Rich people save their money and spend what’s left.

Twenty years ago, two people each earned a $1,000 a month and they each earned the same increases over the years. One had the philosophy of spending money and saving what’s left; the other had the philosophy of saving first and spending what’s left. Today, if you knew both, you’d call one poor and the other wealthy.

So, remember that giving, investing and saving, like any form of discipline, has a subtle effect. At the end of the day, the week, the month, the results are hardly noticeable. But let five years lapse and the differences become pronounced. At the end of 10 years, the differences are dramatic.

And it all starts with the same amount of money—just a different philosophy.

Strength and courage,
Wade

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