Did you have an all-time-high GCI this year? If so, congrats. You were able to help out a record number of people this year. But let me encourage you not to let this record year for your business go to waste in your personal finances.
As a real estate agent, you don’t have the same benefits built in like your friends in the corporate world do. You don’t have a 401(k) or a pension plan that’s accumulated on your behalf. You actually have to proactively take steps to invest in yourself and your future in order to build that same wealth. In fact, just having the high GCI and not taking action with it leaves you in the exact same place that you were, from a net worth perspective, as when you started this year before you crushed it.
Let me encourage you to take action in your personal finances while the market is good. Just having a high GCI isn’t enough—it’s actually how you deploy your gross commission income that actually matters in building your net worth. Real estate has been hot for several years now, so don’t sleep on this opportunity to invest in yourself, to invest in your future, when it comes to your personal finances.
There is a solution to this problem of not having the tools built in that some of your friends in more of a corporate setting may have available to them. You do have to put it together yourself, so it does take work. One of the things that we wanted to talk about today was how to implement your own cash management plan. This is super, super important for top-producing real estate agents who want to take control of their personal finances, because no one’s going to do it for you.
To implement your own personal cash management plan, there are three big areas that we want to take a look at and make sure that you have in place so that you can live the lifestyle that you want for you and your family, both today, in good times, and in the future when maybe the market does correct.
Step number one is to fully fund your emergency fund. This is always where we start with any personal cash management plan. We recommend that you do it the smart way, use a combination of both a checking account and a high-yield savings account just so that your cash can battle inflation at least a little bit while it’s sitting there as your safety net.
Step number two, we regularly recommend that you invest into a brokerage account. It gives you the flexibility to access those funds as that backup to your emergency fund before retirement. But it also has the growth potential to outpace inflation in the long run, which is something that cash just simply can’t compete with.
Number three, we recommend that you max out your retirement plans. As a small business owner, you know the rhythm of taxes. If it’s an all-time-high GCI year for you, it’s probably going to be an all-time-high tax year for you as well. Investing into your retirement accounts kills two birds with one stone. It allows you the ability to take a big deduction on your taxes, reduce that tax burden, and invest into an account that can grow for your future retirement plans as well.
Don’t forget to max out your retirement plans. Whether it’s a solo 401(k), a SEP IRA, Roth IRA—it really just depends on your situation what tool is best for you. But don’t miss out on that opportunity in what is probably one of the biggest income years you’ve had in your business.
If you’re ready to take control of your money, get a personal cash management plan in place, and start investing in your future, feel free to reach out. This is what we do on a daily basis. We’d love to dive into the weeds with you, get this thing built out and get you on a level playing field with your friends, again, in the corporate world who have a lot of this stuff built in. Check out our website; schedule an insight meeting. We’d love to chat about how we can help.
Schedule a complimentary insight meeting to discuss your situation and how we may be able to help.
