Just give me (one more!) financial try!

Here's a question I've been thinking about...

Can we talk about money?

It is such a taboo topic, but if you know me or have read any of my rants, you know I rarely shy away from a fun topic. Money may not buy happiness, but it does pay the bills. It feeds our families, funds the things we value and, hopefully, gives us some peace of mind about the future. It can also create enormous stress when we don't manage it well. And I am not too proud to admit that the number on my 1099 at the end of the year has historically had a little too much influence on my self-esteem. I know I am not alone in that.

My father was a Realtor, and he gave me advice he had learned the hard way: Never spend a commission until it is paid. You may have “earned” it when you put the deal together, but American Express does not take hard work. They want cold, hard cash. He also had a sign on his desk that now sits on mine: “God, just give me one more good market!” My dad threw amazing parties, lavished his friends with gifts and always had a shiny new car. That apple did not fall far from the tree, let me tell you.

My dad sold homes in Texas through oil booms and busts, the collapse of Enron and hurricanes. (That one always makes me think about Realtors with homes in escrow, hoping to get paid and then BOOM: Hurricane, wind and floods, oh my!) He knew firsthand how quickly a market could turn. He gave me very good financial advice that he himself did not always live up to. Gratefully, I was able to recognize some of those same patterns in myself and prune back that branch a little so the rest of my tree could grow fuller.

Real estate agents are good at a lot of things. Managing money, shockingly, is not generally one of them. At our brokerage, we encourage agents to build some financial guardrails around themselves. We can help split commissions into separate buckets: money for today, money for taxes and money for the future. We also have a relationship with Charles Schwab to help agents who want to establish a SEP IRA. It gives me such pleasure to see agents secure their financial future a little bit at a time. I also strongly believe in owning real estate as part of long-term wealth building. We work in this asset class every day, so it has always made sense to me to participate in it ourselves when the numbers and circumstances make sense. For me, owning real estate has also been an important part of building toward the financial future I want.

I am always yammering at you about systems and processes, and this week is no different. Do you REALLY have a system for retirement? Surely you do not want to be the agent who simply expires instead of retires, right? One of the best lessons my father ever taught me was the power of compound growth. But nothing compounds if you never start. If you haven't done it yet, connect with a financial planner as part of your end-of-year goals so you can get that buttoned up. Real estate can give you an extraordinary income. But income and wealth are not the same thing. One pays for your life today. The other gives you choices tomorrow. My dad taught me that lesson with his words. He also taught it to me with some of his mistakes. I was lucky enough to learn from both.

So to answer the question I have been thinking about… Income and wealth are not the same thing. Plan accordingly.

Nicholas Yale

Designated Broker/Owner | Brokers Hub Realty