Stay in Alignment with the Advice You Give
As real estate advisors, consultants, and brokers, you are masters at sharing a long standing truth; most Americans build wealth through home ownership over any other single action. Some will also build businesses and go through the cycle of earning income > buying assets > holding them > reinvesting cash flow > and repeating that for decades. But it’s easier said than done.
Since I entered the real estate business in 99’, I’ve witnessed Realtors turn tenants into homeowners (or try to!) with vigor. We then get back into our leased BMWs, return to the mothership, and pay rent to our brokerage indefinitely. We often don’t develop our own brands as it’s easier to leverage theirs. We typically source all of the leads and spend all of our time in the field as nobody at the local office is coming in and sorting through the dozens of cubicles to find you. Us top performers pay in six figures per year to the franchises and independents alike. Sounds familiar, right?
I’m sweating because I just did the math. From 2005-2020, at the average of $120k paid in… and that’s $1.8 million paid in as a “tenant” to a real estate brokerage. In 2017 when I joined eXp, I received 21,708 shares of stock as they gifted me my $16k cap back through the ICON program. The stock is trading in at an anemic $7.20 a share today, but that still equates to $115,200 from that one year alone! Remember, I was paying that in per year for we are talking about a $235,000 decision I made in the single year of 2017.
Now hear me out, I love a good trophy, as at my most unmanaged, I can be a real prince. You guys know the currency of a prince is acknowledgment and the currency of a king is: whatever is good for the Kingdom (Insert princess and Queen as needed)! I took the $235,000 difference and would again. You can keep the trophy. Before you begin to congratulate me on my minuscule level of maturity, I had to face the mirror. Am I doing what I advise on?
Retirement Parties Are Called Funerals in This Business
Retirement parties are also known as funerals in the self-employment game. If you enjoy the lifestyle, you know that you can’t sell a book of contacts, you can’t get paid on referral more than once, and the income is far too great to walk away from. It wasn’t easy saving money in 2007 so many of us are playing catch up. If you don’t have an exit plan, you’re likely someone else’s exit plan.
Being a shareholder to a brokerage that shares ownership is a longstanding investment for the golden days. The concept of sharing half of every dollar in back to the agents allows the brokers to direct the agent growth and get compensated for the additional support of getting them to their goals. The stock and rev share of a safety net for us deal to deal technicians walking that endless tightrope with no soft landing. If I’ve paid in $1.8 million in the 85/15 perpetual commission or rent, that can explain why retirement seemed impossible to achieve until I took massive action.
Direction and Speed is the Solution (and Trap)
Which leads me to direction and speed! I personally am really good at going fast and after 18 years of breaking land speed records, I realized that I am now decades away from where I need to be; I went in the wrong direction.
You know how it goes… hard work, more money…better decisions, more money…stress and fatigue validate more spending….big life, big responsibility and you are officially trapped on the hamster wheel of being a slave to your lifestyle.
I took a 180 turn in 2017 at 40 years old and started to go slow in the right direction. I brought over a dozen partners and we grew through them. Yes eXp gave us our caps back in stock because we were savages, but we actually had fun working together and building culture. Now eight years later, we are 3,100 strong and already sold 15,000 homes and we are only in February.
Direction is more important than speed. Lesson learned.
Learn from my story. Don’t waste time on the hamster wheel. Email hello@richtomasini.com and we’ll do the math.