The National Association of REALTORS® (NAR) Power Broker Roundtable this month discusses how to build wealth.
Moderator:
Robert Bailey, Broker/Owner, Bailey Properties, Santa Cruz, Calif.; Liaison for Large Residential Firms Relations, NAR
Participants:
Mark Stark, CEO, Berkshire Hathaway HomeServices, Nevada and Arizona
Mike Brodie, Broker/Owner, Keller Williams Realty, Plano, Texas
Tracy Kasper, Broker/Owner, Silverhawk Realty, Meridian, Idaho
Alex Milshteyn, Team Leader, Coldwell Banker Weir Manuel, Ann Arbor, Mich.
Robert Bailey: I once read that building wealth is so simple that all you need to know can be summed up in a single sentence: spend less than you make and invest the difference wisely. But if you’re in the real estate business for the long haul, one of the biggest challenges you will face is creating a sustainable future. In fact, the issue of preparing REALTORS® for retirement is of such importance to NAR’s 2017 President Bill Brown that he has formed a Presidential Advisory Group (PAG) led by NAR Past President Sharon Millett. Today, we’ll talk to three brokers and a top-performing agent who are committed to the concept of building wealth. Mark, where does the process start for you?
Mark Stark: Agents need to ask themselves three questions. The first is, “Where am I now? Is my house paid off, am I meeting expenses, do I have enough income to support my lifestyle?” The second is, “What do I want? A decent income and lots of family time, or a yacht, three vacations a year, and property in three states?” And the third question is, “What am I willing to pay for what I want? Do I want to work 60 hours a week? Can I handle the risk and invest smart enough not to have to do that?” There has to be clarity about what you want and what you’re willing to do to get there.
Mike Brodie: Planning ahead is essential, as is carefully budgeting your time and money as you’re building your business. Then, as you amass more cash, you begin to create multiple streams of income, whether it’s buying rental property or investing in other ways, or starting your own business. I came to Keller Williams some 37 years ago because I believe their profit-sharing strategy can help real estate professionals fund their future. Whatever it is, you have to plan ahead.
Tracy Kasper: Bill Brown recently advised REALTORS® to not just look ahead to retirement, but to be on the lookout for opportunities that will help you retire gracefully. It struck a chord with me because being in real estate is a learning curve. You can stay ahead of it if you sustain and maintain your pipeline. Generating and regenerating leads every day is a sure way to succeed. Once you do that, you can begin to look for those multiple revenue streams, from investments, finding partnering opportunities with builders, rental agencies and others. Too many agents don’t think ahead.
Alex Milshteyn: I did. When I turned 30, after several successful years in the business, I made a rock-solid decision: I wanted to have the flexibility to retire at age 40 if I want to. I don’t know that I will want to retire then, but I know I want the freedom to be able to. So I sat down with a financial advisor and we mapped out a plan to get me there.
RB: Good for you! What’s your best advice to others?
AM: Start with a retirement account. Build revenue, then create a roadmap that works for you.
MS: Warren Buffett puts it this way: Choose the right story for yourself. It’s a personal decision, which is why you have to focus on where you are and where you want to be.
RB: How important is it for that message to come through loud and clear from the top?
MB: Critically important, because most young agents are focused on getting a foothold. Really good coaching encourages them to look ahead to the long-term.
TK: There is no magic pill for building wealth in this business. It takes hard work and saving enough money to get you through the peaks and valleys.
AM: Unless you’re okay with spending the rest of your life chasing that next deal, you have to create and stick with a plan that will give you financial freedom.
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