LIVING ON COMMISSION
by: Linda Brakeall
Commissioned sales is one of the few places where you get paid exactly what you're worth. One of my friends really hates that concept. "I could never live on that!" But loan officers have to do it all the time.
The most successful people I know love being on commission! They love being able to give themselves a raise just by working harder. Most people need a little help learning how to budget, and how to put away money for taxes and infrequent but important expenses.
So here's the rule: Never plan to spend more than half of any paycheck. You can have all kinds of fancy formulas but that's it. You have to assume that at least a quarter and maybe a third will go directly to the government for taxes. You should be putting at least 10% away for savings and investment and 5% for surprises is not unrealistic.
When I took over a large real estate office a few years ago I found out that one of my new Realtors was going through bankruptcy proceedings. I knew she a sold a lot of real estate and I couldn't figure out how she got in that situation. One evening over coffee she told me about being a rookie with another company. She fell into a land deal and made the single largest sale her company had ever made.
Within six months she received a huge six-figure commission. Within two years she was in debt over her head. The problem? She spent it all! She started borrowing trying to pay her taxes. She was so stressed out over the tax situation that she didn't sell any more real estate for the next year.
Don't let that happen to you. Loan officers aren't that different from Realtors or other commissioned sales people. A little planning in advance for regular and predictable expenses and a slush fund for surprises and you'll be covered!
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