The Secrets of Becoming a Millionaire Real Estate Agent

Welcome to Real Estate Business Builders. I'm your host, Lars Hedinborg, the founder of Real Estate B School. Bottom line, the real estate industry has failed to create a clear path to financial freedom. Traditional brokerages and coaching are designed to keep you running on the transaction treadmill with no exit strategy. While I didn't have any sales, marketing or business building experience when I got into real estate, I was willing to bet on myself and figure it out because my family was depend on me. Having served over 5,000 families with their real estate needs, I've made every mistake you could possibly make in this business. And I've helped hundreds of agents and team leaders realize their goal of true time and money, freedom and living a life without regrets. If you know there's another level of growth inside of you and you want to learn how to build a highly lucrative lifestyle business, then you're in the right place. You won't find any smoke and mirrors or hype here on this show. Just real world tools, systems, systems and strategies that work. Let's grow together. All right. Welcome back to Real Estate Business Builders. This is Lars Hedenberg, the founder of Real Estate B School. Today I'm going to dig into a topic that honestly is rarely talked about. And this is, you know, the, the money side of business. And I'm calling this episode the Secrets to Becoming a Millionaire as a Real estate Agent. So the lead up questions here are, you know, are you struggling to make the kind of money you thought was possible when you got into real estate? Right. We have these grand visions of being like financially free as a real estate agent and very rarely does it translate or maybe you're making good money but you don't have a lot to show for it in terms of net worth. Right. We know a lot of people making a lot of money and if you knew their financial situation, you, you would wonder like, what did you do with all those commission checks? And maybe the grind of real estate is just getting the best of you. In today's episode, I'm going to tell you exactly, you know, how I went from a modest, you know, multiple six figure net worth when I got into real estate to a multiple seven figure net worth. And I don't say any of that to sort of brag or from an ego standpoint. The thing is, it took me more than a decade to figure it out. I've lived a really good lifestyle. I've made all the mistakes you could possibly make in business and it hurts to even think about how much further I could be ahead financially If I didn't make some of those mistakes again. My name is Lars Hedenborg. I founded Real Estate B School in 2013, started this podcast over 500 episodes ago. My goal is to help real estate agents and team leaders grow and and scale their businesses so they can systematically increase their net worth and time away from the office. So before I get into the nuts and bolts, the nitty gritty of this concept of net worth and saving and how do you live a good life while you're still trying to sort of accumulate and all of that, I want to say do not forget to grab a copy of I put together a free report called the Real Estate Business Growth navigator. There are six distinct stages required to grow from zero sales, zero GCI all the way up to 3 million plus GCI. And the process is to help you build a sustainable and profitable real estate business no matter what stage you are at and no matter what stage you want to get to. Just go to realestate businessgrowth.com that's real estate business growth. And in the free guide I detailed the journey from real estate agent to business owner and how you can make that journey yourself. So go ahead and grab a free copy once you're done listening here. All right, so let's get into it. So, so why this topic? You know, how to become a millionaire in real estate. It's, it's flashy, it sort of has a little glitz to it. You know, maybe it's a little click baity. I'm not going to lie, I definitely thought that as I created the title. But what I've found is that nobody really talks about the reality of making and saving enough money to accumulate a seven figure net worth and liquid net worth. Right. I'm not talking in your home or you know, in your. Well, cars don't really have a whole lot of net worth. But I'm not talking the net worth in physical assets. I'm talking your ability to stroke a check in less than three days for seven figures plus. Right? Multiple seven figure net worth. And there are tons of coaches out there telling us how to sell more homes, but I've seen very few that are telling us how to generate net worth and have how, how to have something to show for your efforts in business. And I've seen top agents, like agents selling 50, 60, 70 homes a year for a decade that don't even have a six figure liquid net worth to show for their efforts. So in terms of this topic, I want to start with a quote by a guy, Mike Michalowicz I had him on the podcast probably about a month ago or so. I've read all of his books. This quote is from his book Profit first, where he says, putting your nose to the grindstone is a really easy way to cover up an unhealthy business. We think that if we can just work harder, longer, better, if we can just hold out, something good will happen one day that is so good. But very rarely does that one day come. So in terms of achieving financially, this was something I learned from Tony Robbins. I did health and wealth mastery. I think it was called health and wealth mastery. I actually went to Fiji twice. And Tony Robbins tells us that the key to achieving financially is and accumulating net worth is to spend less than you make and invest the difference. So here I am, traveled 24 hours, door to door to get from where I live in Charlotte, North Carolina, to Fiji. And he tells me that the key here is to spend less than I make and invest the difference. And then he said, until you get to the point where you can live off the interest of the critical mass of investment capital that you've accumulated, so spend less than you make and invest the difference until you get to the point where you can live off the interest of the critical mass of investment capital you've accumulated. So essentially, that's like, I need a pile of cash so I can live off the interest. So there's a couple things that I want to dig into here that I've seen many in our industry fall down. The first thing, and going back to that definition, the first thing that we need to focus on is, is to make sure we're making more than we spend, or to flip that around, spending less than we make. I was just having a conversation with a guy in one of our higher levels of our coaching for real estate B school, and he was saying that he has, you know, he has 50,000 net, or he had. He basically said that he was. He was not getting. Getting anywhere, and he was getting 50,000 to come in. His only source of income was real estate sales, so gross commission incomes from real estate closings. He had 50,000 coming in every month, and he had 50,000 or more going out every month between his business and his personal spending. And I'm like, man, how does somebody that has $600,000 of income not move forward financially? Like, not have, you know, an increase in net worth to show for it? But it sounds simple, right? That you want to spend less than you make and invest the difference, or, you know, this concept of earning A profit, but it's not right. Most agents, I would argue, outspend their earnings and don't have anything to show for their efforts. So there are a few things we need to do here, especially during the time that we're going through is number one, is to think that we cannot buy our way to wealth. This is, you know, the fundamental reason in real estate, I think, because the industry attracts people that are sort of, you know, future focused and we're outgoing and we're entrepreneurial, and we're heavily marketed to with leads and technology and outsourcing core activities. All of that stuff is constantly. We're inundated. We're in these Facebook groups where everything is a squirrel, right? I see it all the time. And during this market shift, even more so, right? The tech stacks, the lead sources, they're turning up the heat on marketing because they know we're freaking out. We. We have the fud, right? If you've listened to past episode, the fear, uncertainty, and doubt is setting in big time, and we cannot let it get the best of us. So this is the time that you need to go through all of your expenses and eliminate the expenses that are unnecessary. I took a few days off site. I actually went to the mountains. I left my family at home for a long weekend in July, and I just spent a few days, and it turned out to be about six hours or so. I went through every expense line by line, personally and in my two businesses over the last six months. And I literally, if I didn't know what it was, I wrote it in a spreadsheet. If I thought it was worthwhile, I would keep it. If I thought it was something that we could eliminate, I would delete it. Or I would put it in a spreadsheet so I can get rid of it later. Or if I wasn't really sure what it was, and then I would follow up afterwards. So oftentimes when things are going well, we forget that the way to true wealth is not through spending, it's through saving. If you've ever read the book Millionaire Next Door, on the one hand, I can appreciate the book. I've done it a little bit differently. I've always been good at managing my finances, but I've always been good at making enough money to live an amazing lifestyle, to give a lot of money away, and then to also save. And so there are a lot of you, though, that don't have extra money. You know, you're living a big lifestyle. You're not saving and you're not giving and you're actually going backwards. And many of you aren't tracking your net worth. It's one of the foundational tools. We have everyone first out of the gate, first thing they do is their personal wellness assessment, their strategic business assessment and their net worth calculation. Every month, the first Monday of every month, they do those two assessments and their net worth calculation. And I know it's something that we can easily put our head in the sand and like the Mike Michalowitz quote, we can think that it's going to turn out good one day, but very rarely does it. So the second point I want to make here is that don't be in such a rush, right? Don't be in such a rush to, to make your million. I remember in real estate school, I forget what the context was, if it was CE or we were getting. No, it must have been when I was speaking to a new real estate class. We tried it as a recruiting tactic. It didn't really work well for my real estate team. But I remember a guy standing up and, you know, I think we were asking, they were asking me questions and this guy, I don't even know if he had a question, but I remember he's saying like, he's in real estate so he can get his. That's like he's, I'm gonna get mine. And it was all about the money. Like I'm here to make them the money. And I have, I have no idea if this guy made it in real estate. The statistics, you know, definitely don't support, you know, 84% of real estate agents do not renew on their second anniversary. This guy though, was not playing the long game, right? Most people overestimate what they can do in a year, but they underestimate what they can do in a decade. I was just at an event for exp called the build event, build 22 and Tony Robbins spoke on day three for four hours straight. And one thing he always says, and I did a lot of stuff, I spent six figures with Tony Robbins, went to all his stuff. One thing he always says, pretty much in every talk is exactly that. Most people overestimate what they can do in a year, but they underestimate what they can do in a decade. My first business plan, I had a three year vision, a five year vision and a ten year vision in all the areas of life that mattered to me. But specifically what my income was going to look like, what my net worth was going to look like, how many hours a week I worked, how many weeks of vacation that I took. So don't be in such a rush, right? Just have a clear vision of where you're going and get to work every day in terms of getting there. So to wrap this up here, you know, I know this is a touchy subject. You know, like I said, there aren't many coaches that deal with this stuff or even force you to think of this stuff because if you're not where you want to be, there's. There's some shame. There's some shame that's involved in it. And I can't even remember a coach. I've had dozens and dozens of coaches. I can't even remember a coach that has asked me about my finances or, you know, I've had financial coaches, you know, where part of the coaching was to figure out, you know, personal finance and net worth and all that stuff. But it really hasn't been the focus. The focus is always how can we grow the top line. It's always marketing, it's always sales, it's always conversions, it's always more, more, more how to sell more stuff, never how to make sure that you're on track for financial freedom and you know, where your stress is coming down and you're actually living a life worth living and building, a business worth owning. And I wonder why that is. You know, I think, like I said, I think it's because very few people have actually figured it out. Even some of these coaches have not figured out financial independence. And I think there's shame around most people not being where they want to be. If you've ever done Dave Ramsey, any of his stuff and you've heard him quote statistics, you, you know, about like only 30% of Americans can write a check for a thousand bucks or you know, some crazy 70 something percent are living paycheck to paycheck. And that was pre inflation and pre the insanity of what's going on in the country now. But I would say it's time to let go of that shame and just start where you are. You know the expression when's, you know, if you need shade, when's the best. If you want to sit under a tree, under the shade of a tree, when's the best time to apply? Planted that tree. It was 20 years ago, right? When's the next best time? Is today. So we need to start working on this stuff today, let go of the shame. Just sort of do a net worth analysis. You know, if you need help with any of this, go to Facebook messenger and just message me on Facebook and I'll send you a copy of our net worth calculator. There's no agenda there. I just want to spread the word of responsible business building. So that's it for today's episode. You know, I hope I challenged you a bit in terms of how to move your business and life forward during these challenging and chaotic times. Do not forget to grab a free copy of Real Estate Business Growth Navigator. Just go to realestate business growth.com if you enjoyed this episode, make sure you share it with someone who wants to grow their real estate business and achieve true time and money freedom. We'll see you next time. Thanks so much for listening. Would you please take a minute to share the show with other agents who may be struggling? And if you love the podcast, please leave us a five star review on Apple Podcasts or your favorite podcast platform. And make sure you visit ScaleOrDieBook.com to get a free copy of my book. That's ScaleOrDieBook.com it's a nuts and bolts guide to building a real estate business that gives you true time and money freedom so that you can live a life without regrets. Thanks again and see you on the next episode.