How to Master Your Finances in Real Estate
Let me share a little secret that saved my financial sanity when I first stepped into the real estate game. Trust me, this one's a keeper! 👏🏼
I still remember the thrill of receiving my very first $5,000 commission check (yeah, prices were a bit lower back then!). Naturally, I thought, "Wow, I've got $5,000. I'm going shopping!!" But… I didn’t. That money wasn’t actually mine to spend.
Luckily, an early mentor shared a simple yet powerful tip that has been a game-changer for me over the past 9 years. Here’s what you’re going to do…
Step 1: Divide and Conquer
Open up four separate accounts with your bank. When you receive a commission check, split it into four equal parts.
Here's the breakdown:
Personal Spending (1/4th): This account is all yours for personal expenses – rent, groceries, dining out, entertainment, you name it.
Taxes (1/4th): Allocate a quarter of your commission to this account. Come tax season, you'll be glad you did. Consider stashing it in a high-yield savings account to earn some extra interest.
Business Expenses (1/4th): Set aside another quarter for your business expenses. Whether it's marketing, client gifts, or office supplies, this account has got you covered.
Savings (1/4th): Don't forget to pay yourself first! Dedicate a portion to your savings for a rainy day or future investments.
While our systems may vary, it's crucial to consult with your tax or financial advisor before making any significant moves. Once you've built up some surplus in each account, consider adding a fifth account for investments – think retirement funds, stocks, or even real estate ventures.
This simple yet effective strategy has not only helped me stay financially organized but also empowered me to make smarter financial decisions as my career has grown. Remember, success in real estate isn't just about closing deals – it's about managing your finances wisely and securing your financial future!
Seeking more valuable real estate guidance? Enroll in my email list to receive weekly updates crafted by yours truly! Simply tap the image below to start your journey!
