Are you on-track to success? How do you know? Today, we’re discussing the early warning signs that point to future success or failure in real estate – those little clues that you’re probably overlooking. We’re going to be drilling down into the 12 key pitfalls that can undermine your success in creating wealth, and how you can avoid making them!
1) Lack of understanding that your business exists to create Profit. Profit is your product…not customer service, not consulting, it’s profit! Do you know your cost per transaction? Cost per lead? Do you do a monthly profit and loss statement? Some agents don’t even really know their true commission split!
2) Not knowing your numbers cold. If you don’t know your financial picture, you won’t be able to improve it! What numbers to know? (Refer to both the Real Estate Treasure Map and Harris Rules for help on this). NUMBERS to know:
- Personal financial requirements monthly to survive.
- Personal financial requirements to thrive. (usually survival x 3)
- Total number of active listings it takes to fuel enough closings to meet or exceed the cost of your financial existence plus your goals. (MAGIC NUMBER).
- Debt you must pay off
- Savings you must create
- Tax liabilities
3) Not paying yourself first. If you only save when there’s something left, then you’re not paying yourself first. Minimum standard: 10% to yourself, 20% to taxes. That top 30% should never be in your cashflow. If you can’t pay your bills on what’s left, how will you get ahead? You must lower your costs AND increase your income to create profit.
4) Blowing too much on buying leads, trying shiny new things out and speculating on lead generation. Gambling on the easy button versus investing in your own skill set.
5) Getting behind / staying behind with your taxes. Penalties and interest suck and the IRS doesn’t negotiate.
6) Not having health insurance or adequate insurance.
7) Thinking you will get rich one day from your commissions, versus understanding it’s what you DO with your commissions that creates wealth.
8) Hanging out with people doing and making less than you are who think you’re a freak, versus expanding your exposure to well adjusted, wealthy types who also are philanthropic and believe in abundance. (Lack of exposure to wealth).
9) Not being a listing agent. You’ll never have enough time as a buyers agent to work with enough buyers to create the income necessary to invest and make your money work for you.
10) Thinking rich people are evil, that they only have what others don’t because they took it away from someone else. (Mindset of scarcity).
11) Not having a real investment strategy which involves rental property, investment funds, flips, etc.
12) Not studying wealth creation and taking action! Thinking you’ll only get rich when you have a big closing, when a relative dies or you win the lottery. These are not a plan.