New Agent - How To Split Up Commission Check?

Question

Hi All,

I am a new real estate agent in Ventura, CA. I recently took the jump from being a CPA, which was boring and not fulfilling to becoming a real estate agent. I have other streams of income, but I wanted to reach out to BP to see what everybody thought when it comes to splitting up your commission checks. Below are the 4 categories I was thinking of splitting my commission check into:

• Taxes – not enough agents account for this
• Investing in your business – marketing, tools, etc.
• Personal day-to-day expenses
• Investments -into other streams of income - Stocks, RE investments, etc.

These were the 4 major categories I could think of and I was curious as to how people would split these up based on a percentage. Below were my thoughts, but I wanted to see what you thought

• Taxes – 35%
• Investing in business – 20%
• Personal day-to-day expenses – 25%
• Other streams of income (investments) – 20%

Would love to hear what everybody thinks. Thanks in advance.

Kushaal Malde · Answer

It's good that you're setting aside taxes!

The thing I would question or alter is your breakdown for personal day-to-day expenses and whether that could be reallocated more aggressively towards investing in your business or other streams of income, which could also be dependent or influenced by your "other streams of income".

Ultimately the allocation should depend on your business and investment goals.

Billy Davidson · Answer

@Bruce Lynn Thanks for the comment. Totally agree on focusing on listings and sales! Do you have any suggestions when it comes to generating leads? Any programs you subscribe to? Im really banking on my reputation in my home town and all the good relationships I have made throughout the year.

Also, since you seem to be very established. What are your percentage breakdowns when it comes to splitting up your commission checks?

Thanks

Bruce Lynn · Answer

I think saving for taxes is good.

Focus right now on getting listings and sales...that's what counts.

Don't spend too much time on things that are not generating revenue.   Lead with revenue.

Billy Davidson · Answer

@Kushaal Malde Yes! I always hear horror stories about real estate agents not being able to pay taxes at the end of the year, which is why I made taxes my first area to distribute my commission checks.

I think you are totally right when it comes to altering my personal day-to-day expenses. I need to live below my means and ultimately pay my "other streams of income" first. Which area do you think would be more important my business or my investments? If you had to make your own breakdown what percentages would you use for the 4 categories and would there be any other categories?