There’s No Freedom Without Leverage

And leverage is just a concept that you will have a tough time growing your business, growing your life, growing your wealth, growing your relationships if you don't understand the concept of leverage. So at its, at its core. And I'll give you an example of mine and then I'll talk about Stacy Peterson, which was our first paid coaching client back in 2013 for real estate B school. A good example of leverage for for my journey was my first administrative hire. Got into real estate in 2007. In 10 months March through December 2007 I sold 27 homes. 40 for that next full year just as a solo agent. And I hired a part time administrator in February, March timeframe who quickly went full time. And then that next year, the end of 2009 I hired my first buyer agent. We did 58 transactions. I did 55, then 118, 178. The year 2012 we did 248. I sold one one transaction. And it was because I understood leverage. And here's the exercise I want you to go through. There's two parts to this. I want you to figure out the amount of money you're making for the unit of time, the hours that you're working. The calculation that I did back in early 2008 once I got my tax returns from 2007, the 10 months that I worked I netted on 250 gross. I gave my broker 75 grand, I remember was 176 from the broker on like 249 of GCI total GCI. So I quickly left that situation that was not, not going to work long term. On the 176 though I netted 37,000. I wasted money on everything. Didn't know anything about return on investment. I didn't have an economic model in place. All the things I learned painfully okay over the years, trial and error I didn't have back then. But I did work 2000 hours in 10 months. $37,000 take home divided by 2000 hours worked in 2007 in those 10 months is $18.50 an hour. I left a multiple six figure corporate job working about 2000 hours. So I was making about $100 an hour to make $18.50 an hour. But I had all this freedom, right. I was working seven days a week. So it didn't exactly translate the way that to over time I figured it out. Here's what I did though. I drew a line in the sand that I was going to make 500,000 in real estate working 2,000 hours a year, which is a 40 hour workweek, 50 weeks, two weeks vacation. Very simple math. Do that math. It's $250 an hour. It allowed me to view everything I touched with an eye toward, like, I can't do that. I can't run a yard sign. I can't design a brochure, I can't print brochures. I can't enter a listing into mls. I can't drop off a lockbox. I can't show homes. I can't. If I want to make $250 an hour and still deliver an experience to my client that is, you know, world class, I can't be doing all these things. First of all, I'm not good at all these things. You know, there's the passion versus pay. I'm not passionate about showing homes. I'm not passionate about, you know, God made me in such a way where I, I don't want to like, ooh and ah over, you know, I don't know, a home and, and, and take a whole Saturday and, and show homes to a buyer that may or may not, you know, even buy those homes. Right. And so I just, I was wired in such a way where I was wired more for the business building aspect. But I knew it was important for someone that loved helping buyers. And so I just understood leverage at a very high level. And I knew that I could pay licensed agents maybe 40 to $50 per hour. So about, you know, 80, well, probably, probably less than that. But 80 to $100,000 a year is what I figured. I could pay a good buyer agent on a split basis. So I didn't take them on a salary, but the, and the economic model worked really well. But I would get buyer agents to come in, make 125 to $150,000 a year, which is 22 to three times more than they were making on their own. But it was on the right economic model. So that's the concept of leverage, is that you cannot do everything in your business yourself if you want to make more money in less time with less stress, which is the B school prime.