It’s Thursday and you know what that means… NEW REAL ESTATE PODCAST EPISODE! This is all about how to prepare your finances for those hard seasons (that will come) as a real estate agent.
On this episode of Agents Unfiltered we’re talking about the “B” word (hint: it’s budget) and how to set yourself up financially!
Listen to Episode 9: The “B” Word
Tips to SETTING YOURSELF UP FINANCIALLY AND THE BEST WAY TO DO THAT as a new agent or experienced agent. Self employed – spending money wisely, slow season and don’t have checks coming in, taxes.
1/3 taxes, 1/3 savings, 1/3 bank account (to live on) is what Danielle suggests! This is if you have a team that pays for marketing. So if you don’t have that, then it is 1/4 and you set 1/4 set aside for marketing.
In the beginning it is extremely difficult to save, but there usually comes a moment where everything turns and everything is up and you start spending and splurge and you need to prepare for the down and put things in savings for when you are low.
Danielle – where were you during the recession? Started in New York and then moved to South Carolina for 9 months to a year and then the market tanked; moved to Seattle and it was great for 6 months and then it tanked ,so I moved to Spokane and it was good for 8 months and then the recession was full-blown. It was tough in the beginning, but the crazy thing is there’s always homes to be sold or bought so you really need to be flexible in your plan and how to navigate it. I did work another job during the recession because I was new, but that also allowed for me to save which helped a lot.
Paycheck to Paycheck.
It is scary for realtors because we can go 3 months without a paycheck so if you aren’t a good steward of your money during a busy season it can get really scary in a hard season! You go through times when you are super busy so you can’t focus on everything you need to do as a realtor so things will stall and then it will dip and you need to be prepared.
Ali: I have heard all of this advice, but not done it. I am setting myself up financially now by:
- Meeting with Edward Jones figure out investments and what I can do
- Cassie is helping me set up a S-Corp
I’m finally in a place where I am comfortable enough to not live paycheck to paycheck. I’ll be the first to call myself out to say I don’t think about money and plan out so this is hard but I know it is necessary since I don’t have a paycheck every few weeks.
S-Corp vs. C-Corp
S-Corp is important for tax purposes (TALK TO YOUR ACCOUNTANT). For some people it won’t be beneficial – it is all about if you’re married, how you want to be taxed, type of income you bring in, etc. But the difference between that and a C-Corp is type of corporation (you get taxed twice – you as a corporation and you as an individual).
S-Corp is a passthrough, so the corp doesn’t get taxed, but you get taxed on the profit. You can be a S-Corp and not employ yourself and set it up as commission so when you are ready to employ yourself it is all set up. OR you can set yourself as an employee with a W2 and pay taxes throughout the year and not have as much in terms of taxes at the end of the year. And you are paying into social security, you can pay into unemployment, etc. that can help you. As 1099 you don’t pay into social security the same way.
LLC is limited liability so it doesn’t have as much coverage. If you are bringing in more money a S-Corp is better, but if you are less than LLC works great. A lot of real estate agents go with S-Corp.
The good thing about S-Corp is everything goes into business account so it is accountability and then you pay yourself a salary. The money you get from the check goes straight into that account.
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ABOUT US -🎙 Agents Unfiltered is a podcast with the goal of connecting and building community between realtors nationwide. Get ready for some relatable and relevant information about “The Do’s, the Don’ts & the What The Fuck’s of Real Estate.”