Passion VS Pay: The Key to Making More Money While Working Fewer Hours

Welcome back to Real Estate Team Builders. This is Lars Hedenborg, the founder of Real Estate B School. And we're in part two of probably like a four or five part series where I'm breaking down. How do you get the most out of the hours we have in terms of how do you make the kind of money that you want to make, work the kind of hours that you want to work and to do it with a level of stress that's not overwhelming and overbearing that honestly leads to not great stuff. It leads to vices and addictions and sedations and just the stuff like overeating, watching too much news, you know, doing too much social media. So our businesses can become the thing that sucks the real goodness out of life. And so how do we break it all down? You know, we're all given the same amount of hours every week. How can some of us achieve in all these areas of our lives at a very, very high level? And then why is it that some and most people honestly struggle to achieve success whatever they they however they define success? And it is not only money, right? A lot of times money makes life easier so that you could maybe calm the nerves a little bit on just being able to live an amazing life, but also provide for your family. So part two of this process, this journey that we are going to go down is how do you make more money in less time and this concept of passion versus pay. And if you missed part one, I went into like just being honest with yourself about where you spend your time and doing a time study exercise, quite painful, really enlightening if you actually go down that path. So I'm going to force you to go back one episode and consume that and take me up on the offer to send you a copy of that time study. That process will change your life. You have to trust me. So once you've done that time study, it's now and it's going to take you through the whole process like documenting where you spend your time, how much of your time is spent doing business, business admin type tasks, personal admin type tasks, media, self care, quality time with family, working on your business, working in your business. So just an awesome exercise and you really need to slow down and really do that exercise. Once you've done that, now you have some decisions to make. And this is where I haven't achieved everything like compared to like the ultra successful people in our little world of real estate. I've done the thing, I've sold thousands of homes and I've done It in a super leveraged way where the year we sold 420 homes, I worked 42 days and I think I made close to $3,000 an hour that year. And so I've made all the mistakes you can make. But in the area of business and real estate productivity and real estate team building, I've succeeded at a very high level. And I say that because what I'm about to tell you, it may hurt some of you. You're coming out of this time study exercise, now you have an honest look at where you're spending your time. And, and now the decisions you have to make is what do I do that really makes me serious money? And then what do I love to do versus hate to do? So it's this, you know, if, if you're drawing on a piece of paper, a quadrant, and we actually do this in our business freedom planning system within real estate B school, you could do the exercise just turn an eight and a half by 11 paper sideways. So turn it landscape, draw a box and the upper, you know, so essentially it's passion versus pay. So there are things you do as a real estate agent and team leader that are low pay and there are things that you do that are high pay. And then there are things that you do that are low passion. Like you hate doing them. And there are things that you do that are high passion, you love doing them. I found that when I went down this path and I looked at where I was spending my time is that most of the things I was doing were low pay. Then the question was, did I love doing them or did I hate doing them? And then the things that I was doing that were high pay, most of them I wasn't passionate about. So I was sort of forced, you know, probably, by the way, God wired me, I was forced into this path of like the only position I could be in my world is a business owner because I don't like prospecting, I don't like showing homes to buyers. I'm not super passionate about managing and onboarding new agents. I'm not super. And so I just delegated and elevated over a series of four or five years to get to the point where as a solo agent in 2008 I sold 44 homes and then 420 plus about five years later with maximum leverage and maximum profitability. And so let's list out all the tasks that you could be doing. Let's just straight up take the real estate. Being a real estate team leader or even just a super busy real estate Agent there's probably 12 jobs you're doing, which is the challenge, right? If you're in your car, a lot of chances are you're not doing highly productive activities. And that's going to hurt a lot of people. It's like, well, how, who else is going to show homes or you know, work with, go to inspections or attend closings or run a lockbox from. A lot of that work is, you know, showing agent type work. And you know, a runner, like a person that just spends their time all day long in my market, I can hire a person that's willing to drive around for me, not drive me around, but just drive and run errands for me for 12 bucks an hour, right? And so we had to be honest with ourselves about what we're spending time on. So there's like runner type activities like that, super low pay. You may actually like being in your car and thinking you're free and you're like, this is great. I'm a real estate agent and I get to like run from a closing to pick up this check at the attorney's office to I got to take a few photos. I have to design a brochure, I have to input a listing into mls. I have to, you know, lead, generate, I have to do lead follow up. I have to do, you know, consultations with buyers and sellers. I have to negotiate contracts, right? Get a home under contract for a buyer or seller. If you're a team builder, you're interviewing agents, you're coaching agents, you're running team meetings, you're maybe putting out content, right? To attract buyers and sellers. You know, one to many type activities. You can tell in that list that just running things off the lower dollar productive tasks, including showing homes all the way up to like coaching agents and onboarding new agents and lead generation and lead follow up and consultations with buyers and sellers. They went from low dollar productive to high dollar productive. The question is, that's easy, right? You can honestly say, can I hire someone? And it's not that you will hire someone, can I hire someone to do that for me? Can I hire someone to run signs and lockboxes and pick up checks and pick up something a seller left in a garage after a closing pickup sign? Can I hire someone to do that? Yes. Is it very expensive? No, it's not expensive at all. But why are you doing it? You're doing it because it just seems like that's what you're supposed to be doing. And so I'll even pick on some of our top Level team builders. Guys that are doing two and guys and girls that are doing two, three, four million plus of gci. And I'll get into their calendar and we'll even do team health interviews where we'll come in, talk to their spouse and their team members about where they're spending their time and the culture and the cadence of the business. And we'll get from the team leaders, like, yeah, this person comes in for a little bit in the morning and then they disappear all day long. And then I'll talk to the team builder and I'll say, what are you doing all day long? It's like, well, I'm working on two flips currently. And you know, and so I've got to like, basically act as GC on these flips. And, you know, and I'm like, how do you think that chaos is rubbing off on your team? Right? You're telling your team that they need to lead, generate and guard their mornings. And here you are like haphazard chicken head cut off all day long. And then I'll say, all right, so let's break it down. How many flips have you done? Like, what have you netted this year? How much stress is that? You know, like, well, you know, I've closed on four. One lost money, and then the other two, I think I netted like $35,000. And the other three, it's like, okay, like, let's break it down, like dollar per hour. And so to me, it's all about time, money and stress. Where are you spending your time? How much money are you making in the time that you're dedicating to your business? And then what level of stress and even risk are you enduring? And so that's the journey that I went on. And that's how I challenge folks in real estate B school. It's just to think about your time differently. And it comes down to this simple equation. And I ran these numbers coming out of my first part year. So I worked 10 months in 2007, sold 27 homes, netted $37,000. I had a bad deal with my broker and I wasted a bunch of money. So I brought in about 250gci. I grossed 175. After I paid my broker too much because he gave me no business. And then I netted 37. I worked about 2,000 hours in those 10 months. A rough calculation. So 37,000 is what I took home for 2,000 hours. That's $18.50 an hour. I left a multiple six figure corporate job making about 100 bucks an hour to make $18.5 an hour. I declared in early 2008 that that was not acceptable. Right? An 80% decrease in my pay per hour was not acceptable. I drew a line in the sand. I said, I'm going to figure this out. I'm going to get to the point where I can make $500,000 working 2000 hours. So simple math, 500,000 divided by 2000 is $250 per hour. That was my benchmark. And from that moment forward, anytime I touch something less than $50 an hour that I could hire someone less than $50 an hour to do, I was like, okay, I got to stop doing that, got to stop doing that, got to stop doing that. So it got me out of almost every job except listings and bringing on team members and like leading the cadence and the culture of the team and doing some financial tracking type stuff that I'm super good at. Spreadsheets and marketing Systems. So like four or five things that were 250 to 250 or more, some were like thousand dollar plus activities. The challenge is when you look at your time, I bet you in a two or two week period you're doing thousand dollars an hour activities. You're just not getting credit for it. And so that's the challenge is like, yeah, we might be passionate about showing homes. Like on a sunny day, you know, on a Saturday, you're working with two clients and you're showing these beautiful homes and you know, you're like, well, there's a $15,000 commission check here. So it's super dollar productive. It's not dollar productive. It's only dollar productive if you want to make $25 an hour. Because that's what a world class showing agent gets paid. We have a training system to become a showing agent. It's an actual job that you can do as a real estate agent. And it pays about 25, $30 per hour. Great position. Most agents are struggling. They would love to show homes and not have the pressure of being a salesperson. So be honest with yourself about passion versus pay. Am I passionate about it? Does it pay well? There are things that unfortunately you need to do that pay a lot of money, but you're not passionate about. That's where I excelled in the beginning. I was willing to do the job of a salesperson really at a high level, spend as many hours a day as possible. New business development, which is talking buyers and to buyers and sellers for the first time, and then lead, follow up and Then I worked on marketing systems and then I had buyer consultations and listing consultations and I negotiated deals and I quickly hired a showing agent, quickly hired an administrator who is my marketing coordinator, my listing coordinator, my closing coordinator. I quickly got out of all the administrative tasks including running stuff around town. So my challenge for you is to think about where you're spending your time, the specific tasks, and then rank them, high or low passion, high or low pay, and be honest with yourself. And then you have 90 days to get everything off your plate which is low pay, low passion and even high passion, low pay. And then every 90 days you do a time study and you get rid of the things that aren't leading you to where to where you want to go financially. And only you know that, right? If you're not where you want to go financially, you're spending time on things that aren't financially. Like they're not moving you closer to making more money in less time. And that's like my, my whole secret of my success. And even in real estate B school I started real estate B school. I got into the grind of one on one coaching and doing everything in the business right back in the me doing everything. And then I built leverage and I got great business coaches. The act of one on one coaching is where the true value happens. But I built the tools and systems to allow other people to come in and coach at a very, very high level. Folks that are selling 3, 4, 500 homes a year that have done done it with our tools and systems are now feeding in to our members on an unlimited basis, unlimited coaching calls, right? And each of our coaches are good at a different vertical. So if you're at the point in your journey where you, you want to at least know what the stages are of growth. If you're a million dollar team leader and you're struggling to grow without increasing your hours, you're increasing your stress and you're not making more money. You're chances are you miss something at one of the earlier stages of growth. So there's start, start, ramp, build, lead, exit and own. Those are the six stages of growth. Go all the way from zero to a hundred, 100 to 500 to 3 million plus. Right? So chances are you missed something. A tool or a system or the team structure or a question that you need to ask yourself. The Real Estate Business Navigator is a document I put together to help you with this exact thing. So go to realestate Business growth dot com, that's real estate Business growth dot com. There's no agenda there except to get this report in your hands to help you navigate business growth. So, my friends, stay tuned for next week here or the next podcast. I'm going to go into the ideal week, so I'm going to break down how to structure your week. Now that you have honestly looked at where you spend your time, you've done an honest assessment of this whole passion versus Pay matrix that we talked about. Now I'm going to talk about how do you structure your calendar so that you can put the most dollar productive things that you're most passionate about into your calendar and start to make this shift out of just grinding and working too many hours and not having a lot to show for it financially and being super stressed to more of a potentially and eventually a lifestyle business. So we'll see you on the next episode. Be good.