The 3 Challenges Agents Face When It Comes to Achieving Their Financial Goals (w/ Sarah Ponder CFP)

What's up, Real estate business builders? I'm excited for today's conversation because we don't often have someone come on here. You know, as real estate agents, we're always focused on, like, you know, more leads. You know, what's the next squirrel that I can chase in the business. And we're easily distracted, and. And that seems to be most of the content that's out there. Sarah Ponder is a certified financial planner. Her obsession is helping agents figure out why we make so much money and why we have so little to show for it. So, Sarah, give us, like, a couple minutes on your background, and then we're really going to unpack this. I think you being in this industry is a godsend. You know, we have agents making millions and millions and millions and millions of dollars, and then they don't pay their taxes. Right. So give us an intro, and then we'll get into your superpowers.

Yeah, Lars, thank you so much. I really appreciate the opportunity to be here and talk with y'. All. So, like he said, my name is Sarah Ponder. I am a. I'm one of a zillion certified financial planners. I'm one of a handful that work with real estate professionals almost entirely. I got into this because my husband is an agent here in Austin, and that led into. I'm working with a lot of his colleagues. I love working with you guys, primarily. Primarily because I. I feel like great real estate agents are great people people, and you're just, like, fun. You're just fun clients. You know, you're like, the best people to have dinner with and, like, get life tips from and all of that. But, you know, primarily I got into it because there's not a lot of people serving you. A lot of the folks that are in the financial advisory space that are serving you are typically selling products and commissions. I don't do that. I just, you know, give advice, and clients pay me for my advice. So that's kind of key to why I work with agents like you guys. I also, of course, love that you have, you know, the very. The variable income, because it presents, obviously, a lot of challenges, but also presents a lot of opportunities for you to save and take advantage of the fact that you are a small business owner. And then finally, probably my favorite thing to do, which I'm sure we will dig into in. In business, is to have deeper conversations with clients about your why. And every time a client asks me a technical question about, know, should I invest in this or what should I do about my taxes and that, there is obviously a technical answer to it, but I love bringing it back to your longer term vision and helping you align your dollars and cents with your vision and values.

Awesome. So I, I want to get into the typical challenges you see when you start working with a client. And I also want to get into some advice you might give an agent that's looking to build wealth over, over the long term. But before I hit record, we started talking about the psychology of money. Can you kind of, let's just unpack that a little bit. And, and why is that sort of the basis of how you work with, I don't know. Everyone struggles with money. I, I, I, I think. But real estate agents specifically, why is that resource so near and dear to you?

Yeah, so it's one of my favorite books. And you know, obviously there's a million personal finance books out there. This is the one that I give every single client. And if you haven't read it yet, Google it. It sold a bazillion copies and there's a good reason for it. What's great about it is that the author, Morgan Housel, he writes short stories that illustrate really key points about just how human beings live and interact with each other and with our money. The first, on the first page, there's a quote that goes something along the lines of, your experience with Money is about 0.0000001% of the world's experience of money, but it's like 80% of how you view the world. And so if you just know that about yourself, you'll be able to make better decisions. Like just knowing literally that one thing, knowing that every decision that you have made about money, there's a really good reason for it. And it's not because you're crazy. It's because of a past experience or how you were brought up, or the year you were born. You know, lucky if you just know that about yourself. And then when you are faced with a decision about money, if you can think about why you're making it and step back, you'll be able to make a better decision.

Awesome. So, so let's, let's dig into that a little bit. So that's essentially saying that I have such a limited knowledge of how money works. You know, the tactical actual how money works and also psychologically how it works. Yet I apply that. That's my whole view of money. Right. So give an example of what that looks like practically for a real estate agent or anyone.

Yeah, so practically. So you guys are in the real estate industry. So you are literally physically every day in homes. That is your job. And you often are looking at the numbers of real estate investment both on. On the, like, personal side, like the forced savings of your own personal residence, as well as the residential real estate investment side. You know, over the long run, those tend to be pretty good investments. If you are spending all of your time in it, though, you. That's just what you see. And so because it's what you see, it makes it hard to see outside of the things that you see every day. And so, you know, for very good reason. A lot of people think the stock market is very scary because Wall street has made it very complicated. You know, most people don't even know how to buy or sell a stock or an etf. A lot of people don't even know what an ETF or a mutual fund is in the first place. And that's okay because, you know, Wall street made it complicated in the first place. But because you don't know what it is, and because maybe you do, but because you're not, like, literally in it all the time, it can feel foreign and scary. And so therefore, it can feel a little bit harder to diversify your entire portfolio. So it can feel. Feel harder to make decisions about investing in something that you don't understand. Does that make sense?

Yeah, for. For sure. For sure. Okay, so let's dig into the challenges. So when you, you know, 80% of your clients are real estate agents.

Yep.

And your husband's a real estate agent, so you kind of know how, how we operate. We mentioned one of them is just the roller coaster of income. But what are the typical challenges? You know, maybe three or four challenges that you see with a real estate agent. And it could be clients in general, but lay out, like, the challenges that agents have when it comes to personal finance.

Yeah. So the first is really a mix of business and personal finance. It's. It's just overspending on your business and not taking a, you know, a clear look at your profitability every quarter, at least, if not every month. For example, if you're spending on, you know, leads or, you know, whatever, you know, just. Just taking a, you know, quarterly ish view of that and making sure that you're getting the return on the investment that you're making, because maybe at one point you did, but maybe you're not still, or maybe you continue to make a, you know, a great return on whatever investment that you're making. So that's, number one is profitability. And within that profitability of course it's evaluating expenses, but it's also every time you get a commission check, give yourself some profit. So since you are running a business, you should be taking, you know, probably 10ish percent of every commission check and setting it aside for your own profit. And then depending on, you know, your spouse and your income, your total income, somewhere between 15 and 25% for taxes, put that off into a separate account and then every quarter, pay the tax man. Of course, those are just rules of thumb. This is not specific tax advice. But you know, making sure you do those two things first and then run your business and your life with the rest of that's really, really key. The second really big one is, you know, because you have such lumpy income and sometimes lumpy expenses, either personally or for the business, it can feel really hard to save systematically into, you know, whatever kind of, you know, retirement strategy or, you know, longer term financial freedom strategy you have. But I would really encourage you to do that. You know, for example, a lot of, you know, folks will want to have a Solo 401K or a SEP IRA. And you know, let's say you want to put 20 or $30,000 into that every year, but you don't feel like you can do that every single month. Start with 500, start with something meaningful but smaller so that you get into that habit. So that the more and more income you get, if you have the habit of saving and ideally the habit of putting the savings away where you're not looking at it or touching it, that will give you a better chance of actually being able to get the freedom that you want later in life. Every, every dollar you save right now is buying a little bit of your freedom in the future. Every dollar you spend right now is taking away a little bit of your freedom in the future.

So, so, so maybe we bring in the principles of the psychology of money into, you know, when you're working with somebody that is nowhere near, they've been in the business for 10 years, they're a top agent, but they don't have any net worth, they don't have any, you know, residual income, or they're just not where they need to be. How do you get them? Maybe it's just reading the book and helping them go through the book, but it comes down to habits, right? So they're habitually spending more money than making, you know, so they're, they're, they're habitually not moving closer. Maybe they don't even have a goal, but maybe step us through. How do you take someone who hasn't figured it out yet, and how do you work with them? What are the few things you'll do to work with them? To. To. To pivot?

Yeah. So one of the first things that we do is one of my very favorite meetings, which is called an imagination meeting. And in that meeting, typically, we haven't really done much of a financial plan yet at this point. You know, I've kind of generally looked at your finances, but we haven't, like, dug in really, really detailed yet. And in that imagination meeting, I used these three questions that I was trained on, the first of which is just tell me about your ideal life. If you had the money that you need to fund your life for the rest of your life, what would you do? How would you spend your time? Would you work? Would you not work? Would you buy a baseball team? Would you, you know, go to a horse farm? You know, what is it like? What is it that gives you energy and gives you life? So you'll write some answers there. Some people have, like, three bullet points. Some people have a page and a half. And then in the meeting, I'll ask you to share more about that. And typically we go a little deeper and we learn more about your family and your background and, you know, why it is that you want that life. So then we go to questions two and three, which are where you're back in your current life with your current resources, current family, current everything. And I ask you, let's say your doctor tells you that you have five years. You're not going to be sick, but one day between five and 10 years from now, it's all over. What do you do? Do you change anything? And then the third question is the same as number two, current life, current resources, but it's that the day has come and it's tomorrow. And so the question is not what do you want to do on your last day? The question is, what did you miss? So what did you miss? Are there things that were unsaid? Are there. Was there time that you didn't spend with someone or something doing something?

So that doesn't sound like financial planning at all. You're helping people avoid regrets in the areas of life that matter most to them. And the financial piece is probably a pretty foundational piece in that. Here. Here is something that I want to get your perspective on. And as a business coach, I struggle. I'm personally good at this. But folks that I coach and I want to get your perspective on the folks that you advise. I think people have A hard time envisioning. They just think it's going to be okay someday. And they have a hard time like, looking at the reality of their situation. And if it's not where it needs to be today and you don't have the habits in place to, to get to where you want to be in the future, like how do you get people to be honest with themselves about their situation? And, and it may be a dire financial situation, they may be working too many hours, have nothing financially to show for it. Their lifestyle has crept out of control. Right. So how do you even navigate that with somebody?

That's a great question. It really depends on the person and, you know, what their motivating factors are and their personality style. But I. So after that meeting, after that first meeting, the, you know, the three questions imagination meeting, then we do what's called the obstacles and organization. And that's really where kind of I continue to do the sort of interviewing style of, of you and ask you to start digging into your, your, like what, what solutions can you come up with that would help you get closer to that, number one, and help you close the loop on number two. And number three, if there were things that you would miss or things that you need to change? Because I find, you know, I can come up with a list of answers and eventually I will give some answers. But you have to, within yourself, begin to answer that for yourself because, you know, if, if someone doesn't want to change, they probably shouldn't be getting a financial planner in the first place. It's funny, I have. Yeah. I mean, I find that the best clients are the ones who, of course you have to have the means, you have to have the finances to plan in the first place. But you have to know that you want to change something. If you don't want to change something, you know, come back to me when you're ready, basically. You know, not that you're going to like rock bottom or anything. I don't really think that's, you know, the case for a lot of folks. But you just have, you have to know that it's time. You have to know that you're ready to do the things that will bring you, bring you life, enjoy.

And how does that present itself? You know, so, so when you're talking to someone, probably have some sort of introductory before they hire you, I'm selfishly trying to figure out like, how I can better serve my, my clients.

Sure, absolutely.

But it's got to be the same thing. So how do you know, like what sort of cues do you pick up on or questions you answer before you even, you know, do that exchange where they're going to hire you to help them. How do you know that someone's ready to change?

That's a really. That's a good question. I find that if in the, in the intro meetings, if people are talking a lot about the things they want to buy in the future, and that's a big, a broad word, it could be kitchen upgrade or it could be object, then that's, that's telling me that that's what's on your mind as opposed to if they're telling me that they want time to do X, Y or Z to kind of bring it back to the, you know, psychology of money. There's this. There's a chapter in the book called Rich vs. Wealthy. And, you know, a lot of people want to be both, but they don't really know the difference between the two. So when you're rich, you're. It's a presentation. So being rich is the things that you see above the ground. If you drive down, you know, a neighborhood, roughly speaking, everything above the ground is probably going to be kind of similar, you know, size of house, type of car, etc. But the wealth is what's below the ground and it's what you don't see. And the true definition of wealth to me is the ability to control your time. And so I have to see that people want that and they have to. It just has to be clear to me that, like, they're not asking me for how to get the best returns on a certain investment. I mean, obviously I know a lot about that. That's how I'm trained. It's important to have, you know, a relatively modest but, you know, portfolio that is going to, you know, give you what you need. But, you know, when we're reviewing your portfolio, your question should never be, how much did it outperform? Blah, blah, blah. Your question should be, is my portfolio helping me achieve my goals? Can I get that freedom that I want?

Yeah, it's. It's all the same stuff that, that I'm. I'm trying to help my clients with. So this is, this is awesome. Tell me this. This is sort of a little bit just given the current economic environment, interest rates, world might end, probably nothing's gonna happen. How do you even navigate, you know, I'm sure some clients come in, like, a lot of fear, uncertainty and doubt. How do you navigate, like, knowing that the course is probably the same.

Yeah.

But they come in thinking like, you know, there's, they may need to make drastic moves or we've gotta go into cash or onto gold or they, they're not even in the game. Right. Like how do you navigate that? Sort of. Because our personality types, I'm a sort of a different personality types but we're a little bit flighty, you know, we just think everything's going to be good. We're people, you know, people people. Right. So we're just like, as long as we just love on our people, everything's going to work out fine. And we're not numbers people. Generally I am happen to be a numbers person, but our industry is not. So how do you navigate those emotions? Given the current economic climate? Is there anything different that you do now that you didn't do, you know, pre pandemic, you know, three, four years ago?

Yeah. Yeah. So when it comes to like savings and investments, the, the main thing. Right. So in the last couple of years when it was boom times, I was really encouraging clients as much as possible to make their full retirement lump sum contribution for the year so that when they got that big check, they took care of it and they at the very least, you know, got that tax deduction and are, you know, saving for their future now. It's much more. Review your budget, cut out anything that doesn't bring you joy. Like I'm, I'm kind of a Marie Condo person, even though I have three kids under five. So my house doesn't look like that. But I'm very much like, if an expense does not bring you joy, cut it out on either the business or the personal side. And going back to that systematic investing, systematic savings philosophy. So, you know, pay yourself first before you do anything else. That's the, that's the big thing. And there's another part to that question that I'm sorry, I'm not remembering.

No, it was just, it was along those lines, you know, like, is there anything specific, you know, so the answer, your, your prescription is probably the same three years ago as it is today. It's all sort of timeless, you know, psychology, money habits and all of that. But is there anything like. Well, maybe you don't. With the headers. The, you know, interest rates are through the roof. Most agents think they're not going to sell any homes anymore. We're going to lose 30% of our roster. That's what our NAR is telling us. Probably more.

Yeah.

So given all of that, that's, that that's going like, how are you helping your clients or new People that come in sort of navigate all of that.

Yeah. So again, this is a few psychology of money, just reminders, which is that nothing is as permanent as it feels either, either during the good times or the bad times. And we know that not by looking at predictions and what we think is going to happen in the future, but just by looking at history. I mean, history is cycles. You know, human beings operate in cycles. The world operates in cycles. And when you, when you know that, when you also know that at the end of the day, net worth is just a number. If you have taken care of your, you know, your house and your food and the basic needs, your net worth is just a number. So if, if during these particular times you have to slightly increase debt, but then pay it down really quickly when things change, it's just a number. You're just moving things around. Don't make, you know, don't make drastic permanent decisions based on some, based on a semi permanent short term situation. Yeah, those are the two big ones. Net worth a number. Nothing's as permanent as it feels right now.

Don't make a permanent decision based on a temporary. What was the rest of that?

Yeah, just based on a temporary situation. So that's really both and that, and that applies both to the everyday personal decisions that we make and the global macroeconomic thing. So, you know, global macroeconomic trends are all cyclical, but also so are our lives. Like, you know, if you are one of that 30% that does have to drop out of the real estate industry, you know, life is what it is, right? Like maybe it's a gift to you. I hope you don't. But maybe it's a gift to you. Maybe it's an opportunity for you to showcase a new skill or to meet a new person or to give back to your family or your friends or your community in some way.

Awesome. As we wrap up here, what's like just some words of advice to give our community. You know, inventory is non existent, so all the agents are, you know, scrapping over like less homes for sale, you know, so we're sort of freaking out a little bit. From an income standpoint. I think the world is having all of its challenges. So if you have agents, you know, in the, in the FUD, the 20, 24 hour news cycle, it's not good. They're gonna struggle. So what, what advice would you have or any parting words here? And then I'll give you a chance to kind of just point us to how to get in touch with you.

Yeah, yeah. So you mentioned it the 24 hour news cycle. So I don't watch the news. I read some, you know, you know, well researched journalism, but I don't, I don't watch any news. And I've turned off all notifications on my phone except for the like, highly critical ones. And I know that's probably not exactly what you asked, but I am telling you that that does clear your brain.

I think it's perfect.

Yeah. When your brain is clear, it gives you more space to do the things that actually matter, both personally and professionally. Professionally, you know, that means calling your clients, being in front of them, doing pop buys, you know, annual reviews. All of those things are all the things that fulfill you and then also long term build your business and so cut out the clutter so you can do the good stuff.

Yeah. And I like to describe it like, you know, I say like, like you're like, put your blinders on, you know, some horses, you're in Texas, so I don't know, you guys may have horses. My daughter's super into horses.

In Texas. There's some on my other, on the other side of my fence. Not on my particular house, but yeah.

So some of them, when they run a race, not all the horses, but some of them wear blinders, you know, so they don't, they can run their own race and they don't get spooked out by their horses. And that's kind of like your world. Right. So for you, you're, you're trying to help our industry in planning. You have three kids under five. You have a husband and you probably have a few other things that are important to you and that is more to do in a, than in a 30 hour day. And there's only 24 hours in a day.

Yeah.

Yet somehow agents, you know, allow for the world to get in. Like the world is like, I can't believe what's going on in Russia and Ukraine. I can't believe that it's. We're going through de dollarization. I can't believe that. You know, and obviously I watch a little bit of the news, but I do have just a couple sources. Not on the 24 hour news cycle. YouTube can be really.

I don't even know how to find cable news. Like.

Yeah, but, but I love that. I think that can solve so many issues because as a business owner, there's an infinite amount of work to do. There's no shortage of opportunity in your market. There's no shortage of opportunity even if you think there is. And it's only you Telling yourself because you're in the news that everything is going to crap. It's not going to crap. Right. You're the only one that can opt out of this market if you fall prey to the news. So I love that. I think that's a great way to end. What is the best way to get in touch with you? I know your website is realestate wealth planning dot com.

Yep.

There's a contact page there. If you know this is sort of like you need this. And I don't necessarily know how you work, but I know you're a planner. You're not selling product, which is awesome. So that's one way to reach out to you. Then. What's your Instagram? It's real estate.

Also real estate. Wealth planning.

Yep.

Yep. So yeah, those are the two best things. The there's a phone number and an Instagram. I do have an associate that kind of helps me manage the Instagram. So if you really need something, make sure you say it awesome in the DMs. But yeah, so I do financial planning comprehensive. So that does mean investment management and financial planning for agents and also retirees and pre retirees. So if you have clients that you know that kind of thing. And then we do a little bit of tax planning and bookkeeping and payroll as well. We do not file taxes, but we coordinate with the tax filers.

Awesome. Awesome. Is there now I won't even ask you the question because I've got. I've got a big tax bill, but it's too late to do anything about it and it only means I had a good year, so I guess it does.

Congratulations.

Not going to complain.

Congratulations, everybody. Congratulations. You get to pay taxes.

Awesome. One last question. Psychology of Money. Is there any other book you would recommend that we read?

Yes, if you're a parent. Well, these are for parents, which I know a lot of. You know a lot of this. A lot of us are in real estate because we have families. Ron Lieber wrote two books. If you have kids of kids of any age or honestly, even if you're just an aunt or an uncle. I love this book. It is called the Opposite of Spoiled. The Opposite of Spoiled by Ron Lieber. And it is all those, you know, tough money questions that kids are going to ask you. Everything from allowance to how to. How to handle, you know, homeless folks and interactions with that kind of thing. So all, all, every topic is in there and, and it's great. And then he's got another one for if you have kids that are kind of middle school. Middle school, high school. It's called the price you pay for college, also by Ron Lieber, and very much helps you think about how to make that investment and how to make the best choice for your family.

Awesome. I love it. I. I love it. When I haven't heard of books, you know? So, like, it's awesome. And I've got a 12 and 15 year old, and I'm just contemplating, like, read that book. Tomor price you pay for college.

The price you pay for college. Yes. It will make you feel so much better. You'll know what to look for. Yeah.

Awesome. All right, Sarah, I appreciate your time. This has been amazing. And we'll talk to you soon.

All right. Thank you. Have a good one.

Awesome.