As a real estate agent, you want to see those sales commissions coming in quickly and at firehose volume. But what will you do with all the money you earn?
You could blow it all on useless things. Or, you could set up your finances like a business-savvy professional who makes other agents think, “Where’d they learn to do all that?”
A lot of agents forget that, if you’re not working for an employer, staying ahead of your taxes is all on you. On top of that, if you’re not tracking your income and expenses, it’s way too easy for the latter to outpace the former.
In BAM’s Cont. Ed Course, we break it all down and show you exactly how to get your bank account set up for maximum success, satisfaction, and peace of mind. Because you’ve got better things to do with your time than worry about whether you’re saving enough for taxes, how many accounts you need, or what tax benefits you might be missing out on.
Here’s a few notes from the course to help you start managing all those commissions headed your way.
First of all, you’re going to need a business account. And for that, you need to be incorporated as an LLC, an S-Corp, or whatever is best for you for your area. Talk to your CPA, money manager or a consultant at your bank to get some clarity on this.
Your Main Business Account
Set up an account specifically for “Business Commissions.” Then set up direct deposit so that all your commissions end up in this account.
Direct deposit will save you time and make it easier to track every commission you receive. The less paper you have to deal with, the more efficient you can be as an agent. And the more efficient you are, the more you can earn.
Automatic Distribution and Your Top Three Channels
Once you have your commissions set up to directly deposit into your Business Commissions account, you’ll need three more accounts to divide every commission you earn.
- Personal Household Account — for expenses like your mortgage, car, groceries, etc.
- Tax Savings Account – to make sure you’re saving enough to pay your annual taxes
- Business Checking Account – for business-related expenses
How Much for Each Account?
While there is some wiggle room for these, and you’re free to experiment, it helps to know roughly how much of each commission payment should go to each of those three accounts:
- 35% goes to Tax Savings
- 35% goes to your Personal Household Account
- 30% goes to your Business Checking Account
If you find you’re not spending 30% of your commission on business-related expenses, you can also direct some of your business checking account funds to an investment account. You can also divert 5 to 10% to a personal savings account to create a “rainy day” fund or save for specific personal goals (travel, enrichment, personal tech, etc.).
Who says you can’t have fun while you’re learning how not to look like a noob when you’re out there helping clients?
Your Cont. Ed course instructors know their stuff inside and out, and their experience in the field has only leveled up the edgy humor that only BAM delivers. What you get are 65+ videos of top-quality edutainment designed to make real estate a little less terrifying.
And your clients will notice the difference. So will you – every time you check your bank accounts.
Check out Broke Agent Media’s Cont. Ed Course now to see what you’ve been missing.