«By Mike Ferry The Money Report ©The Mike Ferry Organization 800-448-8423 Page 1 of 23 THE MONEY REPORT We’ve published about a ...»
By Mike Ferry
The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423
Page 1 of 23
THE MONEY REPORT
We’ve published about a dozen different reports that
relate to the real estate business, sales, agent production, and
the “how to’s” of making all this happen in a timely manner.
As our customers read these reports, I keep hearing the same
request … “Mike, do a report on the issue of money because it’s something a lot of us struggle with daily and in some cases we have struggled with it our entire lives.” So, here it is … “The Money Report!” “Money,” to say the least, is a very complicated issue and I’ll do my best to keep these thoughts simple and understandable. This is a topic people run and hide from and many times talk in very hushed tones about. I’m going to try to remove some of the mystery, fears, misjudgments, concerns or worries people have regarding money.
Remember now, I don’t know what is going on inside your head regarding money. I don’t know anything about the environment you live in nor who is influencing you or your background in relationship to money. We’re going to work under the assumption that everyone reading this report would like to earn and keep more money … knowing that in most cases additional income and a better understanding of money could lead to an improvement in your quality of life.
Where Do The Crazy Thoughts About Money Come From?
The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 2 of 23 Most of our thoughts regarding money come from a variety of places and if our thoughts regarding money are not positive, stimulating, adventuresome and productive, we have some work to do. The good news is we are 100% in charge of our thoughts, therefore we can change them and the results that we get!
Without a question, the biggest positive/negative influence we have comes from how we were raised as children. This means it is not uncommon to take on the attitudes of our family and carry them forward into our present-day lives. How did your parents/family deal with money issues? The answer in many cases tells us how you are going to deal with the same money issues. Did they discuss them in positive or negative terms? How strong is the influence from your past on your behavior today?
Now let’s look at your education. Too often there are no “money conversations” in the school system. It is terribly unfortunate that the very people who have such an enormous influence on us are often paid so little for what they do. Yet, our teachers have a tremendous influence on our entire lives.
Question: Was your belief system regarding money influenced by your education? Or in some cases, did you miss getting the education you wanted or deserved because of money? We know that our education regarding life/money has a big influence on how we think today. It is not too late to get an education on money!
Our religious training can have a tremendous influence on our lives and how we live each day. Like many of you I The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 3 of 23 was raised in the Catholic Church, and the most common theme was give your money to the church or give your money to the poor; mine is … “the best way to help the poor is … don’t join them!” Look at your religious upbringing as a major influence on how you feel about money.
Next … your peers, your friends and your environment are major influences on your thinking about money. Are your friends and peers successful in relationship to money?
Do they challenge you to think bigger … are they another reason why you keep raising your standards, or keep setting higher goals? Or is it just the opposite of this? Remember, these people are either influencing you or you are influencing them!
And … a lot of times our own adult adventures cause havoc in our thinking regarding money. By “adult adventures” I mean … an investment we made that may not have worked out the way we wanted … a loan to a personal friend where we got “burned” … maybe it was extravagant spending at some point in our own life that caused us a hardship later. Look at your money adventures carefully and remember that a positive or negative experience can dramatically change how you think about money. We so often act today because of yesterday!
We may only be seeing the tip of the iceberg as to what causes us to have the feelings that we have about money … but since we are all having various feelings, let’s take a close look at those feelings and – if they are not positive and productive – take some positive steps.
For the past thirty years I’ve started every seminar by saying we have three objectives in today’s program. They are: To teach the skills that other top producers use so you can use the same. Second, to have some fun, because we all need more fun in our lives; and third, to assist you in making more money by learning how to sell real estate at a higher volume. As I would finish these points, someone would always raise their hand and make a caustic remark like … “Are you going to spend a lot of time talking about money in this seminar?” (I’d always nod my head “yes”) or they’d say … “I didn’t come here to get a lecture about money, so please get on with the seminar!” Most of the time, the comments and/or questions weren’t in a positive tone and showed me how little people really understood about this interesting commodity called “money”.
“Don’t you know that money is the root of all evil?” or “I didn’t get into real estate to make a lot of money!” or “I do this because I love the people I work with or the homes I sell!” or the worst one of all … “money is way down on my priority list!” Interesting remarks, aren’t they? By the way, these remarks came from all types of people, in all shapes, sizes, ages, backgrounds and experiences. What I noticed was the bitterness so many people had about the topic. The reason for their bitterness/anger was often so deep-seated that they didn’t know why they felt the way they did, and there were The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 5 of 23 problems I was not qualified to handle or solve … so my response was to listen, smile and move on with the seminar.
After 15 years of listening to these comments, I decided to address the “money” issues at a Superstar Retreat in the early 1990’s. I talked about how to earn it, how to take care of it, and most importantly, how to end up with more of it.
My objective was to help my customers move through any old thoughts, negative attitudes or beliefs that were stopping them from accomplishing what they wanted financially. My customers wanted to discuss the thinking process required to build a more productive and profitable real estate career. So, here are my thoughts from that meeting in the early 1990’s. I wonder, of course, if 15 or 16 years later the thoughts still apply. Well, keep reading and find out!
What is Money?
It is the reward we receive for the services/products that we offer other people. In business we measure success by both the service we offer and the income we receive for offering those services. As the demand for what we do increases, and the demand by others for those services increases … the amount of money we earn increases.
Another way to look at the whole money issue … is to say that money is the device we use to show the demand/need for what we do. The higher the level of demand … the more people are willing to pay … the more we will earn.
Here’s a simple way to look at it. In business, the higher the quality of the service extended … the higher the The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 6 of 23 income. The reverse of that of course would be … the lower the quality of the service, the lower the income.
Look at money from this perspective. If for some reason at this moment you do not have the financial resources you’d like, then one of two things is happening in your
business or personal life:
The good news is … both of these are very solvable problems …through working together we can solve them … keep reading!
Let’s look at a few questions …
As you can see, it all comes down to the service we offer and the public or customers recognizing and wanting that service!
Let’s take a different approach. Who do you know in the real estate business that earns a lot of money? How much do they earn? What do they do that you do not do? Next … who do you know outside of real estate that earns a lot of money? Same concept … what do they do that others in their business do not do?
The answer to these questions about successful people is … their contribution to other people is more significant/larger, in demand more than those that don’t earn a lot of money. Increased service, increased value, increased contribution … increased income!
Okay, Mike … What Services Will People Pay A LotFor?
The public is 100% aware of the fact that real estate agents charge substantial amounts of money for the services they offer. They are also very aware that the services being offered are not that different. We also know that the amount of money being charged can vary dramatically for a variety of reasons (read “The Commission Cutting Report” ASAP) … the views as to what real estate agents do is pretty much all the same. The public is skeptical of what we do and they The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 8 of 23 voice that concern continually and, in some cases, adamantly throughout the sales process. This is done either in the questions they ask, the objections they give or the fact that they will only list their home for “x” commission. So the question then becomes … “What real estate services will people pay a fair amount of money for?” Here’s what I
believe they will pay for:
10) Great Customer Service and Continuous Customer Service – This goes back to reliability, professionalism, and great communication! This is what customer service is all about and this definitely … pays well.
There are only two types of activities in the real estate business … income-providing activities and administrative duties and activities. The question of course is where are you going to spend most of your time? The agents who earn the largest amounts of money spend 75% of their time on income producing and 25% on the administrative side of the business. With this thought … to create more income we must: a) spend time on developing a strong sales/money mindset; b) spend time on physical conditioning; c) become an efficient, consistent prospector; d) do great lead follow-up;
e) pre-qualify 100% of your leads; f) learn to make energetic, enthusiastic, canned, professional presentations; and g) use great negotiation skills.
This concept is one of the easiest ways to stop any chances of an individual earning good money. By motion vs.
accomplishment I mean the amount of time confusing motion … a lot of movement, a lot of busy activity and wasted time … with no accomplishment as a result. Once we make the decision to move away from motion to accomplishment, we put ourselves in a position to not only become more productive, but also to earn a lot of money. Let’s look at some of the real life examples of motion vs. accomplishment …
If and when we move away from motion to accomplishment, the next thing we have to do is focus our energy, our enthusiasm and our time on producing revenue for ourselves.
To produce revenue we have to: a) increase the number of saleable listings we take; b) get them sold in a timely manner; and c) reduce our non-income producing time.
Ideally, we’ll do all three of these at the same time! When we discuss increasing revenue we would be remiss if we didn’t talk about the importance of net income as part of the conversation.
As you may have heard me say time and time again … “there is no point in earning a lot of money if you can’t keep a major portion of it for yourself!” So let’s look at how we can control expenses to improve our net income.
The Money Report ©The Mike Ferry Organization www.mikeferry.com 800-448-8423 Page 14 of 23 Unfortunately, a good portion of the training for people who want to become top producers revolves around spending anywhere from 40% to 70% of your gross revenues buying business or running your business … which doesn’t make any sense to me.
If you are working for a traditional real estate company, your expenses should run from 15% to 20% maximum … assuming you are not spending a lot of money on marketing and personal promotion. If you are working in a high commission company or a rent desk operation, your expenses should run between 30% and 40% maximum … again assuming you are not buying business.
First suggestion is to hire a good bookkeeper, or if you feel comfortable a good CPA and a good financial planner.
Second is to track your expenses for the next three to six months so you can know exactly what you are really spending on your business. Third, create a budget once you know your expenses and stay with it. It is tough to do, but important. Fourth, consider operating from various checking accounts. For example, a personal account, a tax account, a business account … and be sure to divide every check you receive accordingly. With dedication and discipline, plus some good financial advice you should be able to make some substantial progress within 12 to 18 months. Start on these four thoughts immediately.