Determining What Your Time Is Worth

As a real estate agent or a real estate team leader, have you ever slowed down enough to really consider what your time is worth? You know, there are jobs as a real estate agent where you get paid like 12, 15 bucks an hour. Think about running signs out to a property or taking pictures of a property or, you know, I don't know, running a check from the attorney or from your client to the attorney right there. All these jobs we do as a real estate agent that don't pay a lot of money. And on the other hand, I mean, think about when you're sitting in front of a seller and you have the opportunity to bring a listing into your business that you know will sell, that might be worth 10, 12, $15,000 commission. How much is that 90 minute listing consultation worth to your business? I want you to stick around because I'm going to invite you into the Time Freedom Challenge where I'm going to push you and coach you and just offer you an opportunity to think about time and money differently. If you like these videos, give me the thumbs up and subscribe to the channel and make sure you turn notifications on. You know, as I look at my business growth journey and our most successful members, I think about this concept of how do we detach time and money? And here's what I mean by that. You know, there are a full 12 jobs that a real estate agent does and each of those jobs have different tasks associated with them. So let's take marketing coordination, right? Somebody has to maintain your database, send out maybe direct mail or an electronic newsletter or post on social media. Let's take listing coordination. You take a listing, somebody has to get the pictures coordinated. You know, maybe there's a staging consultation involved or you know, an inspection, a pre inspection before you get the home on the market. Let's take closing coordination, all the T's and I's that need to be crossed and dotted and all of the detail that goes along with negotiating repairs and you know, what's that worth in your business? And so we get sort of caught up in our business doing everything ourselves. In real estate B school, we have developed a metric, a concept, a construct that we call Business Freedom Index or bfi. It's a very simple calculation and I want you to slow down and go through this calculation with me. I promise you I'm not going to bring out a spreadsheet. It's a simple calculation. I'll run through a couple examples and I want you to think about what your actual BFI is and I'll give you the definition in a second, what it is today and what do you want it to be in three short years from now? So BFI Business Freedom Index is simply a, a calculation of your AGI, your adjusted gross income from last year. So whatever that number is divided by the hours that you put into your business. And if you are working with a spouse, it's your collective hours. So if you file jointly and your AGI is $250,000, let's say, yeah, let's say there's two of you and you work 50 hours a week, each of you, so 2,500 hours each, each times two is 5,000. The 250 is divided by 5,000 hours or $50 an hour. Let's say you're a solo agent and you earned a net six figure income. So maybe you took in 150, 160,000 GCI, you pay your broker some marketing expenses and your AGI on your tax return, basically your pre tax income is $100,000. But let's say you worked 60 hours a week consistently for the year to generate that $100,000. That's a typical top producing agent. That's someone that's coming into our business Foundations program, our entry level program for solo agents that want to scale their real estate business. That's a typical agent that's making it about six figures and they're working about 3,000 hours a year. Let's do the math on that. 100,000 divided by 3,000 is $33 an hour. So we went through that. There are some jobs you'll do as a real estate agent that you're making 250, 500 $1,000 an hour. That listing consultation, you know, generating new business over the telephone, you know, sitting down for a buyer consultation and securing that client, that activity, you know, securing the client, the buyer client is worth way more than the next day. You go out and spend three hours opening doors to homes, showing agents don't get paid $500 an hour. So just think, the mindset I want to challenge you on is to think about your business differently. Alright? So at this point you should have what your BFI is. So in this example was $33 an hour. How do you look at your business differently so that you could be in a different situation financially in the future? Let's say you want to go from $33 an hour, your BFI to $100 an hour. What would that look like? So you have to raise your income from 100,000 to 250,000 and decrease your hours from 3000 to 2500 hours. Right. 250,000 divided by 2500 hours is $100 an hour. You can triple your BFI, go from 33 to $100 an hour and take your hours down. What is that? About 60 to 50 is roughly 10. Around 15% decrease in your working hours. That's the power of BFI for me. When I first did this calculation back in 2008, I looked at 2007 and I think my take home was like a measly $36,000. And I worked a lot of hours, 60 to 70 hours a week on average. In that first part year I was in real estate, I calculated my BFI and it was like one time I calculated was 14. I think I fudged it a little bit the second time because I felt bad for myself. And it was 18. Either way, it was less than $20 an hour. How do I go from less than $20 an hour to $2,300 an hour just a handful of years later? It's this concept of just looking at where I'm spending my time and being honest with myself. Is this thing I'm doing right now the highest and best use of my time? When I think about one of our members that has really accelerated and achieved a 10x increase in her BFI, it's Cody Riddle out of Phoenix, Arizona. When I met Cody, she was a successful real estate agent. She had been through a bit of a grind when it came to her real estate business and those great recession years. This is before real estate B school even existed. So she was 18 years in the business when I first met her, and she was doing about 250 to 300,000 GCI. The challenge was she was working way too much. She's fallen out of love with real estate. Over 3,000 hours a year. Let's use round numbers. Let's use 300,000. Actually, that's her gross. So 300,000 after expenses. And probably she took home about $200,000, which is amazing pay, but not if you're working like 3035. Some agents are working 4000 hours a year. In her example, let's use 3000. So 200,000 divided by 3000 hours is $67 an hour. It's pretty decent pay, right? Most people you meet that have sort of regular jobs are not making $67 per hour. She was ready to give up her business at that point. So we got to work. We came up with this three year vision for where she wanted to be. How she wanted her business to look, to focus just on listings, to have a small, nimble sort of Navy Seals team around her. We took her business from 250,000, 300,000 GCI in that range to last year she did 1.2 million GCI. And this year she's on track for 1.5 million GCI. Her hours have come down from 3,000 hours to closer to 2,000 hours. Her take home this year. Let me just do quick math. She'll be at almost, you know, 350 to $400 per hour that she puts into her real estate business. So a more than a 5x increase in her Business Freedom Index. So as you sit here today, where are you in terms of the money you're generating, the income versus the unit of time you're putting into the business? Right? That's Business Freedom Index. Where do you want to be? What's aspirationally three years from now, where do you want to be? And when you think about where you are and where you want to be, what's holding you back? What are the things you must stop doing? Are you showing homes on evenings and weekends when you can hire a showing agent? Are you involved in paperwork? Marketing coordination, Listing coordination, closing coordinating, right? Are you doing all the administrative jobs in your business? Are you running signs around town? Are you taking your own pictures? Are you entering listings into the mls? All these things that you're occupying your days with, think about the dollar per hour that you could have, someone that is better suited to do them anyway so that you can focus on the highest and best use for your time, the highest dollar productive activities. We call them DPAs. In real estate, there's only four. It's prospecting, lead, follow up appointments, consultations with new buyers and sellers, and then negotiating deals. If you're doing anything other than those four things, chances are you're not making the kind of money you want and deserve. I mentioned earlier the Time Freedom Challenge and this is just an opportunity for me to coach you and train you and teach you a new way of looking at your time and your money and delinking the two. Right? 250 to $500 per hour consistently in your real estate business is possible once you understand the principles, the tools and techniques and hacks and systems that you'll use forever in your business. So go to thetimefreedomchallenge.com or click on the link below. If you like this video, give me the thumbs up and make sure you subscribe to the channel and turn notifications on until next time. Think about where you're spending your time and don't be discouraged where you're starting. Be encouraged by what's possible. We'll see you in the next video.