Whether you know it or not, when you decided to become a real estate agent, you also decided to become a business owner.
What does that mean for a real estate agent?
It means you have to think like a successful business owner if you want to be successful as a real estate agent.
Well, what does that mean?
It means three things:
- You must be willing to invest in your business. You can not expect to launch or grow your real estate business without being willing to spend the right amount of money on the right things.
- It also means, in the beginning, plan on not being profitable. The average new business takes two to three years minimum to be profitable. So, if you aren’t making the income you thought you would in the beginning, do not take that as an excuse to quit. Instead, normalize it and make sure you have a plan for becoming profitable.
- Once you are profitable, invest in ways to keep more of your income with a team of financial advisors on your side–the right accountant, the right financial planner, and the right lawyer to make sure you are keeping as much of your hard-earned commission checks as possible. That’s what smart business owners do–they have advisors and financial experts help them make the best financial decisions to keep more of their money in their own hands and out of everyone else’s pockets.
The sad truth is the majority of real estate agents are no longer active after two years in the business. It’s because they see themselves as a real estate agent instead of a business owner and all that brings with it.
Don’t let that be you.
Listen in to today’s podcast episode to learn how to start thinking like a successful business owner so you can not only make more money, but keep more of it too.
To your success,
For show notes and audio recording click here.
I’ve decided to bring a claim February as a financial month here on the podcast. And my goal this month is to help you make more income and help you keep more of your hard-earned commission by using smart strategies that, frankly, most real estate agents don’t even know about. And here’s what’s so great about making money in my personal experience, making more money. It comes down to one thing, and yes, it comes down to strategies. I’ve given you those and will continue to give you those. But for this particular month, I want to change the way that you think about your money.
I want to change the way that you think about earning it as a real estate agent, spending it as a real estate agent, and even as a real estate agent, what you think you have to give away in taxes. I want to start challenging your thoughts about your finances and your money. Changing your mind is the hardest part of making more money, and don’t get me wrong. It is way easier than having to learn and implement a new strategy. But in my personal experience, changing your thoughts, changing your mind, thinking differently is way more impactful.
So that’s why I’m going to focus on the way you think about your money, earning it, spending it, all sorts of other things you do with it. It has a real estate agent. See, how do you think about your money? Your thoughts about money and wealth, and finances are reflected in your bank account. It’s like the scale, right? It’s like the scale of your mindset about money. So if you don’t like what you see in your bank account, I really hope that you listen all month long because I will be sharing some major shifts that I had to make. And I hope that you’ll make to start seeing that number B, what you want it to be, and seeing a difference and how money flows to you and flows from you.
This is not some woo-woo thing. It’s financial strategies, financial mindset strategies that I’ve used in my own life that had me going from selling zero homes for years, having to work at the bar Rock Bottom to make, to slowly but surely changing my mind. Which then changed the actions I took. Which then changed the results that I had and eventually turned into making over a million dollars per year. It was those small shifts in the way that I thought that changed those actions that made it feel like my solutions showed up. But really, I was just finally seeing them, which allowed me to create and implement the strategies that were effective in creating the results that I received.
So every week on the podcast for the month of February, I’ll be covering a different way to think about your real estate business, how you earn money, what you do with it, once it comes to you and how to make sure you are keeping as much of it as possible. And if you are in the Agent Grad School Inner Circle, I’ll be closing out the money with a list of my personal financial resources, including contact information for each member of my personal financial team, for my financial advisor, my retirement advisor, my accountant, my lawyer, as well as some other resources that I use in my business to make sure that I keep more of my money and some special discount links for you.
And if you aren’t yet an agent Grad School Inner Circle member, just go to AgentGradSchool.com/innercircle and join today. It’s totally free. And it’s the only place that I share these types of resources, personal insights, free classes, and all sorts of goodies that I don’t share anywhere else. I don’t share them here on the podcast. I don’t put them on the website. I don’t put them anywhere. So definitely don’t miss out on this month’s Inner Circle email that comes out at the end of the month. It’s the last week of the month in lieu of a new podcast episode. Just go to AgentGradSchool.com/innercircle and get yourself signed up. So on today’s episode, today’s topic is the business of being a real estate agent.
Now, whether you know it or not, when you decided to become a real estate agent, you decided to become a business owner. If you want to be a successful real estate agent, you cannot think of yourself as an employee who gets paid for showing up and doing their time. You can’t think of yourself as a real estate agent who gets big commission checks and then goes out and spends it all. You have to think of yourself as a self-employed individual and as a business owner. And this also goes for all you new agents. I don’t care if you haven’t been licensed for even one day or if you have never had any clients.
If you’re a part-timer, if you have a real estate license, you need to think of yourself as a business owner. If you think of yourself as just a real estate agent, you are totally missing out on so many wonderful benefits. The benefits of being a small business owner, many of them tax-related, and which essentially means that you get to keep more of your income. And you are essentially paid to invest in your business and your future and yourself and your family. We’ll be talking about this a little bit later this month, the tax piece. On today’s episode, though, I want to dive a little bit deeper into what being a business owner means for you as a real estate agent, why this is so important, and frankly, why being a real estate agent is, in my opinion, the best business owner to be of all of the businesses that you could or could have chosen.
The fact that you chose to be a real estate agent is really, really smart. And there are two reasons why being a real estate agent is the best business to be an owner of number one; you have no cap on your earning potential. What you make in income as a real estate agent is truly up to you and is truly limitless. And I can tell you firsthand, I had no idea that was the case when I first started. And the second reason, on top of the fact that you have unlimited earnings potential, which is such a huge thing that I didn’t even realize was so important.
But the fact is that as a real estate agent, we have no barriers to entry. None, meaning you don’t need a degree. You don’t even need a college degree. You certainly don’t need a higher education degree, which costs hundreds of thousands of dollars to get. You don’t even need a ton of money to start like a doctor or a lawyer or a restaurant owner, retail shop, or those types of people who spend hundreds of thousands of dollars before they even start making money.
You know, there is nothing stopping you. Even being a tradesperson, like a electrician or a hairdresser, has a higher barrier to entry than being a real estate agent. I have a few friends that are hairdressers and I asked them what they needed to do to get licensed, just because I wanted to compare to what it was like being a real estate agent. And they have to go to cosmetology school. Typically that’s at least a year or over a little over a year. Then there’s usually an apprentice time period. Cosmotology School costs around $15,000, and real estate agents don’t have any of those types of barriers to entry. There’s no time barrier and no money barrier.
It takes two weeks. If you do it full time to get licensed and a few hundred dollars, you take a test and bam, you’re licensed, and you have limitless potential. I truly don’t know what other jobs or business on the planet has such little requirements to potentially earn a million dollars a year. I just can’t think of one. And so that’s why I love it of all of the small businesses, retail shops, restaurants, etc.
I love that being a real estate agent is the best business to be in. So know that first and foremost. That you made a good choice. You made the right choice. You’re in the right place because there is no other business I can think of where at the bar to enter; the cost to enter the club is so low, but your earning potential is so high. So just know that there’s a possibility there for you, even if it feels hard. Nobody said being a successful real estate agent or a successful business owner is easy. You just know that the potential is there without having to go out into hundreds of thousands of dollars of debt, like most people do who earn that kind of money or businesses that have huge earning potential.
I think the larger question is how do you become a successful real estate agent?
How can you draw some similarities between being a successful real estate agent by looking at what other successful business owners do to be successful? And that is where this is the place where most real estate agents get it wrong.
For some strange reason, myself included before I got into it, the general public thinks that they’re going to quit their job quickly, earn six figures or multiple six figures in a few months, or even a few years without having to spend much money or time to make that happen.
That it’s going to be easier than a nine-to-five job. And that’s wrong. That’s 100% not the way to be thinking about starting a business or being a successful business owner, or being a successful real estate agent. And I’m truly not sure why I thought that. I don’t know why other real estate agents think that. There are so many real estate agents that come to me who say, you know, I just want to quit my job.
And that’s why I wanted to be a real estate agent. And for some reason, they think it’s good. That it was going to be easier than it’s proving to be. And they think that means something about them. And it doesn’t, it doesn’t at all. I think one reason there are over 1.4 million real estate agents in the US, and 80% of them statistically won’t make it two years, is because we are led to believe that this is an easy job. We are led to believe that this should be thought of as a job, as a profession, and not as what it is, which is being a self-employed person who owns a business.
Yes, for some reason, I think myself included, a lot of real estate agents who become licensed think they’re going to be really lucrative without having to spend money, without having to do much to get there. And I don’t know where this is coming from because I know nobody’s really teaching this. It’s just like what we think. And it’s certainly what I thought before I became a real estate agent. And that’s what a lot of our students think as well. They thought it would be easier to be more successful more quickly. And I don’t blame them. I thought the same exact thing,
But here is how to think of yourself, as a business owner. Do not just think of yourself as a real estate agent. There are a lot of things that successful business owners do, but there are three things in particular that I think are crucially important for successful business owners and successful real estate agents, and most business owners who don’t do these three things won’t make it. And the majority of real estate agents don’t make it because they aren’t doing these three things.
Number one, business owners invest capital, invest money to open their businesses.
Think about it. If you are a restaurant owner or any type of business owner at all, you’re investing. Usually, you have small business loans, or you have all sorts of things that you have to buy and invest in before you can make a dollar. And for some reason, real estate agents don’t expect to spend any money to be successful. Now I’m not saying you’ll have to spend hundreds of thousands of dollars like a restaurant or millions of dollars like a startup. I’m not saying that at all. But there is a mindset in successful business owners that they have to in the expectation that they’re gonna invest a lot of money to be successful before they make a dime.
And for some reason and real estate agents don’t have that mindset. The second thing is that the successful business owners do not expect to be profitable in two to three years. Startup companies like, you know, the big successful companies, the ones that you’re probably hearing about, you know, going public, they don’t expect to be successful for five to seven years often. That is not out of the ordinary for a startup company. Now I know we aren’t startups. We’re not going public. That kind of thing as a single real estate agent. And so, I think that’s similar to a small, a small business.
And typically, the small businesses administration will tell you expect not to be profitable for two to three years. That’s the years. That’s why the small businesses, the small business association exists and give so many loans to small businesses because they know they’re not going to be profitable and they know they need help those first couple years. So that is an expectation of small business owners. And for some reason, not an expectation of real estate agents and the reason that is so important to have that expectation that you aren’t going to be profitable the first year that you’re going to be spending a lot of money that first year and not see it probably for a few years after is number one, expect it don’t fall into this trap of the fantasy that’s out there that you should be profitable a few months in because if you’re not, you’re more prone to quit.
And not only that, but I want you to do the opposite. I don’t want you to quit. I want you to keep going just because you don’t make a profit the first couple of years, you know, I think about I’m a big investor in a couple of restaurants and not only when they were sending me their numbers and saying, you know, what would you like to invest in this company? My expectation was not that they were going to be profitable the first year. You know, they spent 800 to a million dollars investing in the business to open the doors. They were not going to be profitable, meaning pay off that kind of debt and, you know, be in the black for years.
And that was all a very normal expectation and expect it. And so my advice is to take a page out of that book, take a page out of successful real estate, a successful business owners playbook, and do not take the fact that you aren’t as profitable as you want to be. Or you have some debt that you had to get into to have to open your business as a real estate agent, do not take that as a sign that you should quit, or that you’re a failure, or any of that. No, not at all. Take it as this is what being a new business is. As long as you have a plan for profitability, do you don’t have to expect it a few months in, or maybe even a year in, so normalize this do not feel like a failure, expect it, plan for it, make sure that this reality, it doesn’t completely, you know, destroy your family or financial life.
But also no, the reality is most business owners don’t expect to not have to go into debt, to open a business and they don’t expect to be profitable in the first year, sometimes the first three. The third thing that a successful business, small businesses do that most real estate agents don’t is they learn ways to keep more of their money when they start earning it by doing a few things. By first of all, investing it back into their business. I see so many real estate agents. Once they start earning money, they think they don’t have to invest back in their business at the level that they need to, to be even more successful, more easily.
And successful business owners invest. One of the things they invest in is in their future and a team of experts, an accountant, a lawyer, a financial advisor, to make sure that they are doing everything they can to keep as much money in their pockets as possible, doing things like having a retirement plan. When is the right time to do that? What is the income I need to do to help to do that? How do I max it out? How do I make sure that I’m taking all the deductions, paying yourself a salary, things like that, which we will go into a little bit later that this month. So those are three things that most business owners do that most real estate agents aren’t.
And there are holes in your business. 80% of real estate agents won’t make it two years because they don’t have. They’re not thinking they have to invest in their business before they start making money. They think they have to be profitable within a few months. And then when they do become profitable, they aren’t investing enough back into their business to drive those profits up even more. So don’t let that be. I want you to be thinking about this stuff. This is stuff I want every real estate agent listening to know that these are the realities of owning a small business. And you, as a real estate agent, are a small business. I wish somebody had told me that all of this stuff when I first started, I just would have been more prepared.
And I think a lot of the emotional turmoil and kind of beating yourself up for not making a bunch of money so quickly would have been avoided. You know, I should of knowing what I know now, first of all, I would have been, I would have expected to invest about a thousand dollars a month into my business to be successful. I would have had a full year of living expenses, essentially, whatever I was making in my, in my job before I quit it, I would have had that in the bank before it became a real estate agent. I just wished somebody had told me the realities of being a small business owner of being a real estate agent.
Before I became an agent, I would have, I would have so much would have been different. So what happens is most real estate agents think they’re going to get clients or make money without having to spend a lot of money, do not make this mistake. Especially in the beginning, you’re going to be spending more money than you’re making for the first year or two. Okay. That is normal. That is a successful business. When it, when a small business goes to the SBA gets a loan, they give them loans on this business plan. It doesn’t mean you’re a failure. So do not make this mistake. Or you will be one of those agents who do not make it because you’ll quit thinking that it’s not about you, that you’re not doing a good enough job.
No business makes money without spending money, not one. And so you have to not only think of yourself as a small business owner, but you have to be willing to invest and spend money in your business. You can not have a successful business of any kind, especially a new real estate as a new real estate agent. If you don’t spend money to become known. And that was the point. That is the money you should be spending, not on a fancy car, not on, you know, taking people out to lunch, none of that. You need to spend money becoming known in your community, in your town as a real estate agent and making it known why people should choose you as the real estate agent, even as a brand new agent.
And yes, there are reasons why people would wanna choose a brand new agent over the season and agent, and sure you can rely on referrals from people. You know, that’s free. You could pick up the phone and bug everybody, you know, you could drive around town and drop off gifts. You could knock on doors, but those things are free. They aren’t scalable. And they aren’t things that most real estate agents want to do. And so what do you do instead to invest in your business while at first, how much should you be willing to invest? Especially as a new agent, this is really important. Now I believe, and I will be, this is not, you know, across the board, but I really think you have to be willing to invest in your own success, have at least $600 per month on activities and things that will get you clients.
So in this case, I’m not suggesting things like your gas or your car, right? So do not quit your job or do not expect to be wildly successful as a real estate agent unless you’re spending about five to $600 per month, which I know it seems like a lot, but you have to spend something to become known. And when you do the math, that’s about $10,000 a year. Would you spend $10,000 a year to make a hundred thousand dollars a year? I certainly would. And I believe with the things that I tell our students to spend their 500 to $600 per month on that you can be up at six figures, multiple six figures.
And our students who’ve been doing it long enough are making multiple six figures spending less than that on their businesses. And so you have to be willing to do what it takes. If you don’t have that in the beginning. I certainly did not have that in the beginning. I had to put things on credit cards. I had to get a second job at a restaurant. I had to do whatever it took to get where I wanted to go. So do not make the choice to do nothing. That is the very worst choice that you can make. You have to be willing to invest in your money. You have to be willing to take a risk on yourself and, and, and be willing to invest in your own success.
So if that means putting some money on a credit card, if it means getting somehow a second job, whatever it takes, you have to be willing to do it because that is the way to a successful real estate business. Now, obviously, you’re going to spend more, the more you make. And so I want you to be thinking about your expenses as a percentage, as you get more successful in the beginning, you’re going to be spending money, not making money that is normal. And for those agents who start making some money over that six figure mark that’s where so many real estate agents make the mistake of being cheap, and their business do not do that. I know because I did the same thing. There is a famine that you just went through trying to be successful.
And you’re like, Oh, finally, I can like pay my bills and not worry so much. And so many agents kind of take their eye off the, off the ball there, and then wonder why they don’t have more income as time goes on.
When you own a business time, unlike being an employee time, it does not equal automatically more money. You have to do things to grow your business. So once you start getting my getting, you know, your income situated, certainly pay off that debt, but expect to invest a certain percentage. And my advice is about 30% back into your business so that you can grow your business. So every dollar you invest, if you’re spending it in the right places on the right things, which I’ve told, like, if you’ve listened to this podcast and not, if you know exactly where to do that, and if you’re one of our students, you know exactly where to be spending money as well, you can predictably spend a dollar and get three, four and $5 back.
Okay. So think of it that way. I think of it as an investment in growing your business, not an expense that you’re just throwing away, that you aren’t ever going to see. Again, there are expenses that you’re, that you are throwing away. Things like having a magazine do not have a magazine. You’re not going to get clients that way. There are lots of ways that that real estate agents aren’t investing in their business. They’re just kind of throwing money away on things that make them kind of look special, like a magazine don’t do magazines. I have real estate agents come to me and ask me, what can I do to be successful as a real estate agent?
I literally tell them the business plan. I literally give it to them. And I, in that business plan is in the beginning about $65 worth of expenses, investments in your business and maybe a hundred let’s, let’s call it a hundred, especially after about six months. It, it goes from about 65 to a hundred dollars. And first of all, they believe it’s not that easy. It can’t be possibly that easy when I tell them exactly what I did. Just like I’ve told all of you on this podcast. And like I tell all of you students every single week. Yes. It’s that simple.
It’s not easy as my students know who start putting this plan in action, but it’s simple. So, and I think it needs to be more complicated, more expensive a lot. It’s not. And so I tell them, spend about a hundred dollars per month on the tool. I use it in my business. And these three tools got me to a million dollars per year. It was $15 a month on MailChimp, $50 per month on your website. And eventually about six months in, when you start having people come to you about $50 on a CRM. So you can keep track of everybody and follow up. So for a hundred dollars a month, you can make, if you spend on those three things, you could can break the six-figure mark.
And yet, so many real estate agents, especially ones that have been in the business for a while. It’s so hard to show them there’s an easier way, a cheaper way, a better way to do stuff. They pushed back. And truly that is, those are the things that you should be investing in, not the magazines, not the zip codes, not all sorts of other things. Those are the basic basics. But on top of those things, really, in the beginning, you should plan on spending a total of about $500 per month. That’s about 10,000 per year on your business with the type of expenses that I’m talking about.
This is not including things like your gas and your car and your meals and things like that, that you’re certainly want to keep track of. And certainly, our census from a tax and bookkeeping perspective, but I’m talking about five, five to $600 a month, about 10,000 a year on things that directly relate to you, getting clients and expect to spend this money before you’ve made money spending this money is how you will make money in real estate. You have to be willing to spend money on your business. This is the number one thing that agents fight me on, or that agents come to me and they say, I have no money. And I’m like, well, what did you expect?
You are starting a business? How are you planning to get clients? If you have not a hundred dollars a month to spend, or $500 a month to spend on getting clients? I don’t. I thought about the same thing, believe me. And so I’m kinda trying to scream from the rooftops to let every single real estate agent know that plan doesn’t work. Let me be the first to tell you, because that was my plan and it didn’t work, which is why I ended up in a terrible, miserable place. Literally rock bottom from both an emotional scene and a physical shop, or the other thing is a lot. So that’s why real estate agents are told to spend things to spend time.
My students know, I always say, you either have to spend time, or you have to spend money. And that’s something we’re going to talk a lot about in next week’s podcast episode. But that’s why so many real estate agents, in the beginning, are told to cold call or call their sphere or a door knock because they’re free activities. But the problem with those activities is not only are they salesy and most people don’t like doing them. And especially these days, most people don’t like being on the receiving end of them, but those things are not scalable. And so in order for you to know, am I spending the right amount of money on the right things? You have to ask yourself, am I, am I going to become known as a real estate agent by spending this?
Am I going to answer the question? Why should somebody choose me? And is this a scalable marketing activity? Things like having your website that can convert visitors to leads and an email follow-up system. Those are the things I teach that are scalable marketing activities. Meaning you do not spend more time over time. Like when you call your sphere, bugging people is not a business plan, and it’s also not scalable. That means the more clients you have, the more time you have to spend calling those clients every few months. That is not a scalable business. That means you’re going to be spending more time generating leads over time.
And if you have a scalable marketing activity, like a website, like a email follow-up system and the things I teach inside, agent Grad School, then you are spending less time your spending a lot of time upfront getting things set up, but you are spending less time over time getting clients. So those are the requirements of am I spending the right money on the right thing?
Okay. So If they don’t meet those three criteria, is this something that is going to answer the question? Why should somebody choose me? Is it a scalable marketing activity? Then I do not spend money on it. Okay. And a magazine with your face on it. And the recipes does not answer the question. Why should somebody choose me? And you know, you may hear like a little aggression in my tone. It’s because I know there’s so much misinformation about how to get clients, and real estate agents are spending so much money on the wrong things. And it’s so serious to me because so many real estate agents quit.
Their job, become real estate agents and then become kind of disenfranchised by what the reality is. Once you become a real estate agent, and then they decide to quit, and then they make it about them. And that’s not, it’s just, you need to know where to spend the right amount of money. And so that’s why I’m giving you this barometer of where to spend your money, where to invest your money as a real estate agent, whether you’re brand new or not.
So for everything to everyone listening, that’s what I spent my money on in the beginning. Once I figured that out, it took me two years to figure this out. But then once I did, this is what I tell every single real estate agent. And you have a website. You need email funnels to convert. Website leads into clients, and you then eventually about six months down the road. When you have started, people start coming to you. You need the right CRM from there. Once you start making a little money, you have to then spend money. What I did to spend money on people who supported me to grow my business, my admin assistant, my marketing assistant, so that I could be with my clients. That’s where I wanted to be. Not back at the office for a cold calling or driving around, dropping off cookies.
No, thank you. And so you can have a six-figure business. If you have the right website, the right email follow-up system, and the right CRM, all things that you get inside, agent Grad School. If you become a student, that will get you those three things and answering that question, why should somebody choose you? That is what you put on your website. And when you talk about in your follow-up system, we’ll get you to six figures, multiple six figures, not overnight, but with consistent action, becoming known for something in your marketplace, answering that question, why are you directing people to your website? And then knowing how to follow up with them in a way that adds value to them, which then converts them to become a client.
If you do that for six months, you will have clients. So that’s what I mean by spending money and investing money on the right things to grow to six, multiple six figures. Now let me be clear. I’m not talking about expenses that your accountant would want you to dock those things you have to do as well. I see those as the cost of doing business, right? You have to buy gas, you have to have a car to get to places. That’s not what I’m talking about here, but yes, those expenses will exist as well. What I’m talking about is a couple of hundred dollars a month under a thousand dollars a month, right around 500, $600 a month, investing in getting clients for yourself and your business and investing in the tools to help you get clients and make money.
Okay? So I did not have this kind of money. When I started, I didn’t realize I needed that kind of money when I started. And so I did whatever I could to stay afloat, put things on credit cards, I got another job. I worked really hard, and I felt stretched really thin. And I wanted to give up multiple, multiple times, but I knew that I wasn’t a failure. And this is where it, I really want you to hear you aren’t as successful as you thought you were going to be as a real estate agent at first. It is not because you can’t do it. It is not because you failed, do not make it about you. Keep going.
Like I did. I promise you, you will find the right things. And if you keep working on it and believe in yourself, even if that means you have to try it a bunch of different things before you kind of find your formula that works, and yes, you are going to have to do things that you know, you’re not really excited about it. We’re going to have to, you know, spend money. You’re going to have to put yourself, make yourself a little uncomfortable to become known as to why somebody should choose you and your business. Okay? So once you change your mindset and you lower your expectations for those first two years, and you invest in your business, as you start to make more money, what else do you need to do as a business owner?
Here are just a few of the base, other basics things you have to have to do, even if you aren’t selling any houses yet, even if you don’t have any commission checks yet. And even if you aren’t profitable on paper, yet, these are the kinds of basics that I want you to be thinking of. First of all, open a separate bank account and have a separate credit card. We’re all of your expenses as it relates to your real estate business. Every last one of them, every, every mile, keep track of every mile, keep track of every expense. All the gas, have it go out in and out of a separate bank account in a separate credit card so that when it comes time for tax time, like this time, next year, you can, at the very least have a really nice loss to offset.
What other, whatever other commissions that you are getting. That’s something that I did not understand. When I first was a real estate agent, I was making money. I had to pay all these taxes on it, but I could have deducted so much of my expenses that I wasn’t keeping track of. So I highly, highly recommend literally today, get a credit card where you can earn points for things on it, or get cash backs because with a business over time, those points are going to really in those savings that cashback is really going to, to add up one year I flew for free on all my Amex points, every trip I went on. So really, it makes a difference. So that’s number one, have a separate bank account, have a separate credit card, and make sure you’re tracking all of the things you were spending money on it.
And of course, your income, even if you don’t have an income, keep track of those expenses in a separate bank account on a separate card so that you can deduct them on your taxes next year. Number two. Keep that full time job as long as possible. But whenever you do quit, make sure that you have health insurance. One thing a lot of real estate agents don’t realize is when you’re not an employee anymore, you need to get your own health insurance. And yes, you should have health insurance every single day, especially right now in a pandemic. So if you don’t have a spouse whose employer provides health insurance that you can be part of, make sure that you protect yourself and sign up for your own health insurance.
It’s probably going to be a couple hundred bucks a month, but get some kind of coverage. Even if you know, you have a high deductible in case anything goes wrong. The number one reason people go bankrupt in this country is because of medical bills. So get insurance, and the national association of real estate agents has some insurance. If you go to their website, they have some insurance resources for you and some group rates because they know that most brokers do not supply health insurance. So do you not skimp on that and make sure that you kind of, when you think about quitting your job, make sure that you think about a couple, a hundred bucks that you’re going to have to pay on your own for health insurance on the insurance topic.
Number three, make sure your car insurance is adequate. Especially if you’re driving people around, you may need to increase your liability insurance coverage. So talk to your insurance provider. When you go from driving to work everyday to pretty much your car being a business, you may have to make some changes to your car insurance. So call your insurance provider and talk to them about what you need. And chances are you’re going to increase your liability or your, you know, people riding in your car insurance. Next, like I’ve been saying, spend at least $500 per month on your business as a new agent.
And when you add things like your car expenses in all the other expenses that it takes to get up and running as a real estate agent reality is that you’re, you’re, you’re looking at a thousand dollars per month minimum for that first year. And if you don’t have that, then find a way to do it. Be willing to do the credit card, to be willing, to get the second job, whatever it takes because you’re at the very least is going to need to pay for your car, pay for gas, pay for your insurance. And then you have to spend something on getting clients. Number five, like I’ve been saying, do not be afraid to invest in your business. You’ll hear more about this on next week’s episode, but as a self-employed individual, which is you as a real estate agent.
And as I am hoping you’re starting to think of yourself as a business owner, you get to deduct so many of your expenses. So spending money on your business will not only make you more successful if you’re spending it on the right things but will also help your tax situation and what you owe a way it’s just a more, you can keep more of your heart and commissions. If you spend some money, not only will it increase what you do, if you’re spending it on the right things, not only will it increase what your commissions are, but when you spend money and deduct them, it’s not dollar for every dollar you spend. You’re only spending $70 because you can deduct the rest or a $7, excuse me, 70 cents.
Okay. So when you invest in your business, it’s not a dollar for dollar. You get the deduction, which means the expenses are even lower than it feels like at the time. Number six, you, again, you have to have a good accountant that understands being a self-employed person and understands being a real estate agent, not next week, but the week after we have my CPA, who specializes in real estate agents and self-employed people, and she is going to give you a ton of tax step tips. She saves clients, real estate agents in particular, thousands of dollars on their taxes legally, by making sure that they do certain things that most accountants don’t realize.
So stay tuned for that episode. I think you’ll love it. That’s the third week of the month. And then number seven, have a money-making mindset. Don’t be cheap on your business, don’t skimp on yourself. Spend wisely, save and spend in ways that get you the business and life that you want. Even if it’s scary, because it’s worth it. It’s an investment in you. It’s a risk you’re taking on yourself. And that’s what next week’s podcast is going to be. It will be talking about the money mindset shifts that I had to make to make more money. And then that following week, we’ll be talking to my favorite CPA who specializes in helping real estate agents keep more of their hard-earned money.
So I want you to make more money. I want you to have the life and the business that you always dreamed of. And I know that talking about money kind of feels like you shouldn’t talk about money kind of thing. But we all got into this business as real estate agents, because we wanted to be self-sufficient. We wanted to have an income and have more freedom. And in order to do that, you have to be willing to invest, and you have to be willing to find ways to keep more money. And the way to think of yourself as a business owner, not just a real estate agent. So please, I hope that’s the takeaway from this episode, think of yourself as a business owner, be willing to invest in your business in the beginning, and then be willing to find the right team of people around you, who can help you keep more of the money that when you start making it.
So stay tuned all month long for more mindset shifts, more information about how to make money, how to increase your income, and your profits. And keep more of that when it comes in. For this episode, I wanted you to have one simple takeaway, think of yourself as a business owner, not a real estate agent. To be willing to invest in your own success. Do not quit if you are not profitable in the first year or two. Normalize that and do what it takes to stay afloat until you are profitable.
Just a reminder to be thankful that you don’t have to invest as much as other small business owners to start your business, unlike others, you don’t need to invest tens of thousands or hundreds of thousands of dollars in an education or in capital, or, you know, like the restaurant’s having to redo a space and pay rent and all of that before they make a dollar. Be willing to spend some money on your business from day one of being a real estate agent. And if you don’t invest in your business, your business can not grow. You can not spend nothing and plan to make like fifty, eighty, to a hundred thousand dollars a year. You can not get there without spending money on your business, especially when it comes to learning how to get clients and be successful. To have clients coming to you.
And just remember being a real estate agent and a small business owner is so drastically different from working on a job and getting a paycheck every month. Do you not bring that mindset into your business? You do not get paid for sitting in a chair, okay? You will not make it. Your business will not grow. And if your business doesn’t grow well, then you’re out of business. And so come back to real estate with a mindset that you have to get results one way or another. You can’t do nothing and expect something different to happen. It’s not going to happen. So do not quit your day job before you have some money to invest in growing your business, be willing to spend on the right things.
You know, for every dollar you spend, you should be able to triple it. If not more, not in the beginning, but eventually, and know that you have to spend time or money to get the results that you want to be a successful real estate agent. I just need to be honest with you. It’s not going to happen unless you shift the ways that you think about yourself, you or not an employee. If you don’t get paid to show up at work, you get paid to get results. You either have a client, or you don’t. You have a client, you get paid when you get them results. The results they’re seeking, which is a new home or their home sold. So be willing to invest in yourself to get the results you want to see.
People are not going to just knock on your door. You are and say, Hey, can you sell my house for me? I really wish it was like that. But you also aren’t going to knock on the door on their door and that for them to say, Hey, great. I’m so glad that you came. In fact, I want to sell my house today. It’s not going to happen. So you have to go out there, and you have to be willing to become known, and you have it. And you have to answer that question. Why should somebody choose you? And you can do it in ways that aren’t salesy without driving all over town, without doing these unscalable methods, like picking up the phone and you can do it all from home. You can, you can do it in a digital, scalable way that you have to be willing to spend some money every month to get yourself out there.
And it’s worth every penny to believe in yourself, take a risk on yourself to become known in your marketplace. And then you start investing the money and knowing every time you spend a dollar, you are gonna make triple at a minimum and remind yourself that there is no business owner who became real estate agents included without investing in their business, being willing to spend money, getting that business to be known by other people. That is what you should be spending money on and yours, your business, any real estate agent’s business, it will be no exception. The key is being sure you spend money on the right things and don’t spend money on the things that won’t get you clients on what I call vanity plate marketing.
Chances are, if your face is on it, you’re not answering the question. Why should somebody choose you? Okay, you need more than just being around. You have to have an answer to that. And so we teach you how to do all those things at agent Grad school. We teach you how to build a scalable business, to spend money on digital marketing so that people come to you without really you having to leave the house. And so if you are interested in joining agent, Grad, School one more accepting new students. Again, you can join the wait list, go to courses.agentgradschool.com/waitlist
And I will keep you in the loop. Okay. I am excited to see you next week. On another episode of Confessions of a Top Producing Real Estate Agent the Agent Grad School Podcast because I’m going to be talking about the mind shifts that I had to make. And I hope that you’ll make from going from not having any clients for the first two years, to being able to quit that job have more clients than I know what to do with and become one of the top 10 agents in the U S I had to completely change my mind about how I thought about being a real estate agent. And I’m going to share what those things are next week. So I can not wait to see you then.
Thank you so much for listening to today’s episode. Remember change happens when you take action. So apply what you learned today to your own real estate business. If this episode has helped you subscribe, leave a review and share it with all your real estate agent friends, and as always, if you want even more great resources to create the real estate business you’ve always wanted and have the life you want outside of your business to head over to agent Grad School dot com and sign up for the free weekly trainings, you’ll get free classes, discounts, and other goodies that only go out to real estate agents on that email list. See you next week, right here on Confessions of a Top Producing Real Estate Agent the Agent Grad School Podcast.