The day every single one of us passed our state exam, we signed a one way ticket to a very highly competitive, blood thirsty entrepreneurial ground, where’s there very little help and most of the people willing to give it, want something from you first. There’s not a lot of systems in place that encourage conservative spending because that to many organizations “encourages complacency”. However, I’ve seen a lot more agents go broke from trying to look the part, than I have from agents actually playing it. So here’s The 5 Financial Mistakes Every New Agent Should Avoid.
1. Stretching Your Budget
Starting up as an independent life insurance agent Is similar to starting up any business. The more lean you can run it, the higher your margins will be, giving you more opportunity to invest in your business, which then gives you more opportunity to grow it. If you’re transitioning from a stable paycheck, in a career that you are used to getting paid every single Friday, for the he same amount, before joining life insurance, I would recommend you to trim all the fat out of your budget before you do. Every extra dollar you have to invest in your business is going to increase your probability of succeeding if you put in the work.
2. Buying Things That Aren’t Making You Money
Before some of you get grumpy that I’m telling you how to spend your money, hear me out. I do want to clarify that this advice would be for someone who’s on minimal budget, and/or unstable ground as far as their experience of being an agent is. I would much rather see the money from those new Lebrons or that Movado, go into something that’s going to generate you more business and brand awareness. When you’re first starting out, investing extra money in things that will directly be use for your business will also help steer more of your time into your business, which keeps you focused and that will help you grow faster and achieve what you came here to do.
3. Not Setting Money For Taxes
So you’ve had your first significant year, the daily carrier deposits brought in more than you ever thought was possible. It was like an a digital ATM that was an auto fill. But now April rolls around and you have some serious questions. How much do you owe? What was actually a business expense? I owe the city how much? Do I actually have to pay this?
Yes. The answer is yes.
See these are all questions that are common to someone who may be coming from a W2 Work life where it’s all taken care of for you. Not here sweet cheeks. You have to do that yourself and if you don’t, the IRS will come knocking and that’s never a good day. Wage garnishments, Tax Leans, Interest on back balances, and constant letters from the United States Government. Thanks but No thanks!
Be smart, set aside at least 30%. If you can’t find a way to do that, you better be extremely frugal and consisting at keeping good track of your over head. Trust me. Nothing will stop your momentum like a problem with the IRS.
4. Making Significant Purchases Because You Had a Good Month
Here’s one that I openly have to admit that I fallen victim to myself. I’ve made mistakes before. I’ve gotten excited caught up in the moment, and purchase something because I felt like the king of of my castle at that moment. We all have. However I cannot count on enough hands how many times I’ve seen that become the the threatening downfall of an agents entire career.
You see, in the insurance business, we play a numbers game. Sales and rejection both happen in waves. Sometimes they last awhile. Sometimes we work our asses off and still end up checking into the Goose Egg Cafe. 👌🏼
And other times we actually do nothing and business literally falls out of the sky.most of the Agents who’ve been at this awhile understand that its the law of large numbers playing out. However, It’s within those moments that we all tend to be overconfident because our endorphins are firing on over drive and we think it’s going to last forever. One of the worst financial mistakes you can make as a agent, is committing to a significant purchase such as a house, or a new car during one of these moments. Always be thinking 3 to 6 months ahead, and have a plan to survive the inevitable ups and downs of this business.
5. Not Investing in Social Media Marketing
Full Disclaimer. Yes, I do have a bias towards this one because i run a business selling this product. However for some people who don’t have time, only have the option of paying money so i fulfill and manage that need for them.
As a life insurance agent, manager of agency- investing in business 12 months to 48 months out, is important for your staying power through economic change. Marketing expert, Gary Vaynerchuck tells us the only thing that never goes away in a bad economy is your reputation, and completely agree. The only way for ourselves as agents, to scale our reputation is to build awareness on top of it. The best way to do that, is to intentionally and strategically, execute a daily social media strategy, whether that be in either investing your time, your money, or both. You can do this for yourself for free. If you have enough time. There will come a day in the foreseeable future, that the Insurance market changes and the abundance of agents no longer exists. The ones who properly prepare themselves and set up this transition, will be the industry leaders as we moving forward. Were not going backwards. What side will you be standing on?
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