KGCI: Real Estate on Air - What Jim Harbaugh's Contract Has to do with Structuring Your Biz for Success

Episode Date: November 20, 2024

Welcome, everyone. This is the Abundant Investor podcast, and we are Beth and Christine, your host. We are here to show you how you can live your rich life right now with the power of an abundance mindset and tools the wealthy have used for years that are accessible to the rest of us, things like real estate investing and using the powerful benefits of life insurance. We're so glad you're here. Now let's dive in. Hello, everyone. This is Christine Fisk from the abundant investor. I'm here with my business partner, Beth Rooney. And today we have a podcast for you that you're going to want to listen to about Beth's career as a real estate manager. She has so much experience, coaching, managing,

agents and offices. She's seen it all. And so today we want to dig into what Beth has seen, what works really well for agents, what are the big hangups. And she's got some really amazing ideas and solutions that we both want to talk about that can change the way agents build their career for success without having to grind so much. It doesn't have to be the grind in the new year that we're in right now, 2024. We want you to not feel so overwhelmed and instead to feel like there's possibility. If you're not an agent and you're listening, I think take note because this is relevant to anyone who wants to build wealth, is an entrepreneur, and maybe you're thinking about a career in real estate or real estate investing and some of these solutions that

we're going to talk about today are going to be relevant to you too. A hundred percent. A hundred percent. Awesome. So I want to start this conversation out with you, Beth, today hearing about, you know, one of the things I think that's a key to our business that's a huge strength for us is all of your experience managing real estate offices really in the top markets around Boston. You've been in some of the most desirable locations with some of the top agents and have seen over, I think you've said, 3,000 transactions. At least, at least. Yeah. Okay, tell us a little bit about your career managing those top real estate offices.

You know, what was it like? What did you see? Awesome. I'm glad to do this. So, you know, I started off managing in my mid-30s. I had come off of a stint at Fidelity Investments. I was there for well over 10 years. And I was managing salespeople there.

And that's, you know, I love your point about, hey, if you're not an agent, listen up. Because everything we're talking about today, the tools, the resources can be applied from one industry to another. And that's exactly what I did. I took everything that I learned from Fidelity, which, by the way, was an amazing place to start my career. The training I got, it just set me up for life, really. And so I was able to easily apply those sales process, that sales management skill set to real estate agents. So I started off in Milton where they happened to have two offices because a couple brands merged. And the two managers at that time were a little bit like oil and water.

And they needed a new fresh breath of fresh air. So how lucky they wanted to have you. So I came in. And gosh, it was fun. We had about 80 agents. The average age of the agents, I have to say, was much older then than there is now in the industry as a whole. But just some lovely people, you know, I really enjoyed my time there. And I was there for five years.

And we grew tremendously. And it was a lot of success. And then my company at the time needed someone to manage. Really, what was at the time, their flagship office, their Newton. office and the manager that was there had been there for I want to say 25 plus years and that market was is in still as a significantly larger market and they wanted to have somebody that had some experience in a successful track record to go manage that office so I did and that was really interesting too I got to learn a lot of very very different culture I think we had about 95

agents, significantly higher average sales price, a lot more transactions. And yeah, so that was a great experience as well. That's awesome. Can you just tell us a little bit about your role? What were you doing in managing these agents? Sure. A lot of it is, you know, helping agents set themselves up for success. You know, I was really like a business manager.

So if you think about it, like one of the things that I worked on, was helping people with a sales process, right? We worked a lot of that on that at Fidelity. So a sales process is really, we used a needs-based selling system. So understanding from your client, what's important to them by asking them really good questions, making them feel comfortable about providing truthful answers, and then tailoring solutions to their needs, and then moving forward with the sale. And so if you think about it, it doesn't matter if you're selling widgets, houses, or mutual funds.

The process is the same. You ask really good questions. You surface a need and then you provide a solution for that need. It's simple. And so a lot of my role was teaching agents to think about that as a sales process and really think about themselves as little mini micro business owners. and putting systems in place that they could repeat year after year consistently so that their business did not have all of these peaks and valleys that it was more like a flat line.

Yeah, yeah, absolutely. I mean, it sounds really like, to me, like you're doing a lot of coaching or coaching them on how to run a business essentially. You got it. Yeah, and it's really aligned with the work that we're doing now and especially you're doing in this role. And that's the way that EXP is set up and part of the reason we joined them. So that's amazing.

You saw so much. So when I think about, I just got my license last year, right? And I really got it for real estate investing. And then we decided that this is something that we're able to provide our audience with a lot of value. And my perspective is more of an outsider because I've really newly have my license. And I love learning from you what the most successful agents did. And just in general, what are these top performers, especially in an office like Newton, right? I think of that as like one of the highest average home prices in the Boston area.

It's where the country went to college right there. I was in the backyard for several years and I kept going back because we just have ties to that area. what were those agents? Like what are the secrets? What's the secret? Well, you know, it's funny. I think of one agent. She was my top agent at the time.

And she was probably selling about, I don't know, I want to say $25 million a year in real estate, which is not shabby. And she kept feeling the overwhelm. She had a team and she just wasn't organized. So one of the things we sat down and built was a consistent plan. So every time she got a listing, she launched the listing the same way. She was phenomenal and she still is phenomenal at preparing a home for sale. She has really great eye. She really did a nice job.

She did her own staging. She actually owns her own. She ended up using the basement to store her own furniture and all this kind of stuff. So she really was like an artist about preparing the home for sale. So we put systems in place that she could do that every single time. But then she did things like the way she ran an open house. She ran the open house the same every time. She really got to know the neighborhood.

It came down to the detail of her husband owned a restaurant in town and she served the same coffee cake and the same orange juice at every open house. And her consistency became her brand. And business took off. And she was doing $50 million a year, a few years later. Wow. And year in, year out. And so the key there, yes, the key there, and I've seen other agents do this.

When I managed our Milton office, the office as a whole was really good about working together and sharing consistent practices. And the way we launched a home in Milton was so consistent. We preview it on Tuesday. We launched it on Wednesday. We had this, now it sounds boring, right? It's like, you know, like trying to get in shape or anything like, anything you do in life, the key is consistency and having simple processes that you can repeat every time. I think of another agent that I had in a different office later in my career.

And she was a really high-end agent, but every time she got a listing, she would panic. And she would like start from round zero. And she would spend all her time in that listing. So she'd have these huge peaks and valleys because she never was able to launch a listing and continue to consistently prospect and maintain, you know, presence in the market and all that kind of thing. When she would get a listing, she would only be able to do one thing and look at that listing. And it didn't serve her well. It didn't really serve her sellers well.

And it just wasn't the formula for success. The formula for success was having systems in place that were easily repeatable and that were well thought out and that you didn't have to think about every single time. I love that. I love talking about that because I think it's not the stuff that people always want to hear and absorb. It's not the sexy stuff. It's the, and I love the analogy to working out. You just get to wake up and do the workout. Don't think about it.

actually that's why I love that I hire to work a coach, a trainer, because I don't think about it. I just get up. The process is there. All I have to do is show up and do it. I don't have to think, what do I want to do today? Do I feel like running? Do I feel like lifting? It's just done. So I love that you provide that and emphasizing how important that is. And yes, it might sound a little bit boring, but actually, like, that masculine style structure in the background allows us to then be free to be ourselves in the relationship building and selling and having creativity around staging or whatever it is with the house. Like, I love that. It makes it so much easier to hand off tasks because you're not, you, it's a process you're handing off, a list of these is, this is

what we do every time. Here's what I need you to do. It's not like, oh, gosh, I have, you know, this other example of this other woman would always have an assistant, but she would always complain that she had to spend so much time with them explaining them what to do. Well, it's because she didn't have a process. You could just say, here's my process, execute. Right. So it really, I would, I would tell people all the time, I would draw this, this circle that people would, if anybody worked for me, they knew two things. They knew that I was a huge fan of Kaizen, which is a continual improvement in these processes. I talked about it all the time. And I drew this circle around having sort of this, your database, your sphere of influence, whether that's on social media or in, you know,

your emails, what have you, and then connecting them with, with them consistently, and then evaluating their needs, and then having a really good sales process that you could explain to them, like the book that we just created, our seller's guide. Then you could just lay out to this, in this case, a seller, what to expect, what the process was going to look like, and then provide exceptional service during the whole transaction. So they were well communicated with. They knew what the next steps were.

They knew what some of the hurdles might be that might come up. And then stay in touch with them once they're a past client. And if you do that, they will always refer you to a new client. the woman that I'm talking about in Newton, every time she got a listing, she got a second listing because people were overjoyed with the work that she did and would tell their neighbors. I love it.

And they would hire her. And then she would sometimes even get a third. That's amazing. It's just, it's so helpful, I think, to think about that and to know that. And you're right. Like, that's a lot of what we've spent the last half of 2023 doing is building out our real estate under our, our brand Rooney and Fisk, part of the abundant investor, building out the systems and process

so that we don't have to think about what happens when a new buyer comes in. They're automatically in an email funnel and they're going to get emails timed appropriately that makes sense that are supportive and then we get to be there holding their hand and be empathetic and emotionally intelligent and available for them in all the ways, but not worry about all of the details and the smooth, smooth process of going about buying or selling a home. So that's awesome. So that's awesome. I think that is so helpful.

Like what a great nugget for people to hear that from you. And I just think this is so valuable for anyone starting out or ready to like revamp their real estate career, which is a perfect time to rethink how you're doing business because the world is changing so much in so many of the ways that we used to do real estate. And I talk about this a lot. Like it's baffling to me that people are still using methods that they used 20 years ago as their main way to generate new leads, right? The world has changed so much. We're so digital.

And then all the digital technologies continue to change. So we get to stay on top of those. And that's what a large part of what our business is being built on. I want to hear also, Beth, though, what were your concerns for your agents? Like what were the things that got them tripped up, but besides not having process? Like when you think about the agent career, what are the obstacles to them growing their business or feeling consistency? Yeah.

You know what? There was a huge trend there, Christine. And it didn't matter if I was in Milton or Newton or Brookline or Needham. The trend was so significant and so clear for me to see that these agents, every January 1st, are starting with a clean slate. They have one stream of income, and that is a transaction-based business. And that is not a great way to start.

As a matter of fact, I was looking on Instagram the other day, and I saw an agent that's a top agent in Wellesley, Massachusetts, which is one of the most affluent communities of Greater Boston. And this is what she wrote. It's January 3rd. Is anyone else thinking, quote, How the hell am I going to do it all over again?

And that there aligns the problem, right? And part of that is that they're not thinking about their business. They're not necessarily to think about their retirement planning. They don't have the same tools available to say like when I was an employee or an employee at Fidelity, I had a 401K. I didn't think about it. I just put money away, right? And as a business owner, yeah, as a business owner, you,

you get to think about that differently and you think about it for yourself because your employer, the brokerage, isn't always thinking about all of that. They don't have, they can't. You're not an agent. You're not an employee. Right. Exactly. I'm an independent contractor.

So it would keep me awake at night to the point where, you know, I would oftentimes bring in financial planners. But it was always a misconnect. Like it didn't, it didn't match, right? They didn't ever take action on that. It was almost like, oh, here he comes again. Maybe I wasn't bringing the right planner in. I don't know.

But now I wish I knew now then what I know now about tools that would have, what are available to agents. And they are still available. And my eyes have become really wide open to that in the last two years as I've learned more about properly structured life insurance. What a perfect tool to fit that need of agents not having a plan. And the other thing, you know, like, so the question is, right, the theme I saw. The theme I saw was like they're starting January 1st with a clean slate.

They only have a single stream of income. How can you increase your, to increase your streams of income so you have multiple streams of income? Well, one great way to do that would be through real estate investing, right? It makes so much sense. You have a front row seat and it's right there in front of you. You know so much more than the person starting from scratch. You got it. An agent can, you know, an agent can, an experienced agent can look at a property and say,

that is a great property. It should sell for X, Y, Z. And I could get X, Y, Z if I, if I, if I improved it and resold it, or if I rented it, you know, they have that knowledge. A good agent has that knowledge. It's easy for them. But oftentimes, we're not. seeing them take advantage of that knowledge and really be a real estate investor, which would kill

two birds with one stone, right? It would give them some future income and it would give them a second stream of income. Right. It just seems like such a natural retirement plan for or part of one for a real estate agent who's already, that's the business. That's the business. And they know like the back of their hand and those opportunities are so more, they're much more easily available too, not only in their backyard, but nationwide and building bridges with other agents like we're doing right now and looking at these investment properties across the U.S. Yeah, absolutely, absolutely. And so the question that I think agents come up with is, you know, well, how do I fund it?

How do I say, where's the best place for me to save my money? Because if I've been saving it in, say, like an IRA, I can't access it. And I think it's a really good question. And I would argue that saving their money in an IRA is probably not the best place for them to save it. Why? Because they're going to have to pay taxes on that money someday. Even though they get a little write-off today, they have other write-offs. As an independent contract, you have a lot of right-offs.

So do they really need that extra $6,500 write-off? Or could they deploy that money elsewhere in a place that's going to grow tax-defer? and eventually have access to that tax-free where they can use that money whenever they want, for whatever reason they want, and ideally to invest in real estate. Yeah, that makes so much sense. And we just came across, I just came across this article in the New York Times, I think it was from last week, talking about how so many retirees are surprised at the amount of tax that they're paying on their retirement funds.

So this is something I think that gets overlooked early on in the process when we're told, when we maybe we have an employer or when we're on our own and we learn about these self-funded IRAs or ways to save money and it's tax-free. We think they're to our benefit right now. The reality is that they're going to get taxed when we're in retirement and we don't know what those rates are going to be. We don't know what our financial picture looks like, but we know now. So what you're saying is with this strategy, we put the money into this high cash value life insurance and that we can access it later without being taxed on it. You got it. Yeah. So what we're talking about today right now and this solution is called it's life insurance, but it's properly

structured high cash value life insurance. So what does that mean properly structured? It means that we're actually buying a little bit as the least amount of death benefit or life insurance that the IRS will allow us to buy and still say, yes, this is a valid life insurance policy. So that has the least amount of death benefit and the most amount of opportunity to overfund it with cash. So it allows people to have all of the benefits of a life insurance product, right? Like disability. So I think, you know, you asked me earlier, what kept me up?

night about my agents, you know, if you're a real estate agent or any independent contractor are 1099, right, and you are in a transaction-based business and you can't work for whatever reason, you're sick, injured, guess what happens to your income? It stops. It evaporates. It goes away. And what do you tap into? It's not going to be your 401k or your IRA, right? Right. And not 59 and a half, right? So a life insurance policy has something called living benefits. So while you're alive, God forbid, you're sick or you have a chronic illness and you can't work, you can tap into that future death benefit.

So it's even a lot more than the money you've put aside. You can tap into and use for whatever reason you want, maybe to keep you afloat until you're healthy again and you can go back to work, whatever it may be. So a life insurance policy provides those living benefits. They provide protection for your family. God forbid you were killed or you died. Your family then gets a death benefit.

It's a very, you know, I think of, I think I'm thinking of an agent right now that I know who is definitely the primary breadwinner in the household who has young children. And a term policy isn't going to provide necessarily all these other benefits, access to the cash, you know, living benefits. It's a, it's a, it's a, God forbid he dies, you know, then he gets, the family gets money. A properly structured permanent life insurance policy provides all of these other benefits plus the death benefit. Yeah. And I think that's, you know, it's worth mentioning that this is not just for agents. It's for anyone, like you said, who's a 1099. And it's something that, you know, our conversation about this started because I had

invested in this for all the same reasons as someone who owned a marketing company and was looking for a way to start to build up my own reserves to begin to invest. And also for these protections, because I too was primary breadwinner and really didn't have any protection should something happened to me. And I think about five years ago, I had kind of a wake up call when I had a really bad back situation. And I wasn't working quite as much. I mean, I thankfully, I still had a great year I was able to work from bed, but I was like I was laid up a lot. And it just went up to the fact that, wow, if something else happened, there's really no backstop. So this provided that. And then everything else I learned about it, it's part of why we've been investing in real estate

and now have, you know, the ability to continue to invest in real estate pretty easily, right? Like that cash becomes available to us over time. And for us, it's been less than five years that we've had the money in that policy. And it's just a really new eye-opening way to put money aside. And let's talk about the fact that no one's talking about this. Right. You know, it's funny. Except we are. Yeah, exactly. You see me smiling because it's been in the news a lot. So if you're a football fan, you know that Jim Harbaugh is a massively popular little controversial coach at Michigan. And he's going for the championship. Championship game.

The day we launched this, he would be playing that night. And so his contract is up. So about six years ago, the last time he did a contract, he actually used life insurance within that contract. It was a brilliant idea, a brilliant solution for Michigan to put in place. And it's a tool that's been used for, for centuries, for decades, decades. So I'll give you some examples of famous people, not just Jim Harpoe, but Stanford University.

When it started, the Stanford family had a life insurance policy that they borrowed from to start Stanford. Walt Disney had a life insurance policy that he borrowed his cash value from to buy the land on which Disney World stands today. J.C. Penny founded, brought in the 1920s when when everything was, you know, the S-I-H-I market crash basically. Right. He borrowed against his policy to stay afloat. Right. And a lot of his competitors did not because they didn't have that. They went out of business. So another person that's maybe not as famous, Doris Christopher, who's Doris Christopher? Who's Doris Christopher? Well, she's the woman that started the pampered chef. A lot of people have heard the pampered chef. She borrowed from her policy to start a business out of her basement and grew

that business and sold that business for $900 million to Warren Buffett. Now, that is what we're talking about. Let's go. These life insurance policies are set up so that you can access that cash value to invest in yourself. Whether we've talked a lot today about real estate investing, but you can start a business with it. You can do whatever you want with that money. Borrow from it, you're borrowing from your future death benefit, and you can either pay yourself back, which we believe you should or not, because it's a loan against your future death benefit. And the life insurance policy gets paid back, life insurance company gets paid back that loan upon your death.

They just subtract whatever it is you owe from your death benefit. It's really a brilliant way for people to manage their funds, especially independent contractors. I started a policy myself when I became an independent contractor two years ago when I left, you know, management. And it's just so great to know that my husband and I have these in place, God forbid, something happens to us and to be able to tap into to do real estate investing. I love it. I love it.

And if people want to learn more, if they want to do like, they're like, okay, this sounds interesting. Tell me more and where would I get this type of properly structured cash value life insurance? Well, I am licensed to sell it. And I've helped a lot of clients in the past year do that. Actually, we're hopping off a call here. I'm going to jump on a call with a client and help them with their policy. So I am well trained in it. I know it well.

We have a couple videos up on our YouTube channel at the Bend Investor. We have time. If you go to our Instagram page and our link in our link tree, we have an opportunity to set up a one-on-one meeting. You could learn we could learn more about you there. We have all kinds of videos in that link tree that we could provide to you to give you an example of how this might work. But it's, you know, it's definitely a process. And it's not talked about because it's a private life insurance is private. And so people, you know, people that have it don't talk about it.

And you can't Google like how much life insurance does XYZ person have because it's private, which is a really great thing. You know, especially, for example, if you're saving for college, right? If you have, I have four kids, two out of college, one in college and one about to go to college. Well, I'm painfully familiar with the FAFSA program. And the FAFSA program takes into consideration your 529 and it almost works against you and getting any financial aid. If I had known about life insurance when my kids were little, I would have saved in a properly structured life insurance policy because it's private. And that means I don't

have to put it on my FAFSA and it doesn't work against me all that savings in helping me get financial aid. So there's so many, it's really multifaceted, the benefits. And going back to real estate agents and having that panic set in every year, how can they get over? that, I think there's two things. One is to have systems and processes in place so that they know that they're going to be, you know, their business is going to run like a well-oiled machine, and two, to really start thinking about adding additional streams of income to their business. Absolutely. I like that so much because I think this day and age, being diversified is so important because you never really know exactly what's going to happen and it's protection. That in of itself is

insurance to have multiple streams of income set up and why not leverage the skills that you already have and the things that you're knowledgeable about and good at and by the way we so undervalue these sometimes so I bet there's people listening here saying well I don't really have any skills I could share or I don't have something to start a passive income stream and I would argue absolutely you do hop on the phone with me for 15 minutes and I'll tell you five of them that you could go out and make money on yeah I love I absolutely and that's exactly what we're doing we We're doing that in many ways, just the fact that you're licensed to sell life insurance, Beth, and that we're also listing homes for people, helping buyers find home, helping people find

real estate investments. We have clients in that area right now. We are diversified, and then never mind digital products, where we create something like our guides and then we sell, or videos, and then we sell them, and we don't have to continue to show up online. we just point people to the video and they pay the $49 or whatever the prices. And you just see that, you know, that revenue coming in on a regular basis. Does it take some effort?

Sure. But that's the systems and processes that you're talking about. And I think that that's one of the really awesome things that we're able to do now in our business is to set those up and keep going. And, you know, keep going on the things that we really want to spend. our time on without getting flustered about, oh, gosh, what email do I send this person now, right? Right.

And I'm not agents, having coached some agents from a career perspective and mindset perspective, this is preventable. The types of panic that's set in and the confusion and the overwhelmed that eventually, usually by the time they come to me, they are feeling not always, like, but sometimes folks come to me and they just say, I'm really overwhelmed and how am I going to continue? you to grow my business. I had a $10 million a year. I want to have a $15 million year. And like this agent that you're referencing in Wellesley, and she's doing amazingly to feel that energy of that post that's like, how am I going to do this again? And I think most agents seeing that are saying,

well, at least you have done it before. You have the knowledge how to do it. How about me? I'm just starting out in a tougher, you know, what feels like a tougher market. And I think that, you know, she shouldn't have to feel that way. No one should have to feel that way. It gets. to be easier. We don't have to, we kind of have the subconscious desire, I think, based on our experience to work hard in order to feel the result, to feel the success. And I just call BS on that. I don't think that that's true. It can be easier. I agree with you. And I want to add that, you know, this year we both moved over to EXP. And one of the things that I really was impressed with the XP is that they share this mindset of helping agents diversify their income stream.

So they provide stock options to agents. They provide the opportunity to revenue share. They encourage agents to work with each other to share those talents that you mentioned and, you know, in show people like, you know, I've done really good job figuring out how to run open houses. Maybe somebody. else is really good at calling on expired. They have some great scripts in sharing those tools and resources. So it's really brilliant. And I've noticed that a lot of the EXP agents that we're working with are investing in real estate. It's like this mindset that they have, right? It's a mindset that's different than your traditional agent. And being up in New England, I think we're a group of

people that are very traditional in our mindset. Yes, sir. I'm interested. inviting people that are listening to widen their mindset, to think about the world a little bit bigger and to seek agents that maybe are already doing this and learn from them. And we've had that great opportunity this year to really meet agents from all over the country and they're doing this in a very, very successful way in creating abundance and consistency in their income and a really bright future from themselves, regardless of market conditions, and that's what we're trying to do. Love it. That is beautiful. It's so true. We were on one of those calls yesterday. We have another

one of those connection calls with another agent tomorrow. And it's so collaborative and it doesn't have that competitive feel at all. It's just, and we're encouraging each other to share our knowledge. And just within EXB, we have audiences of people that can learn from what we know and our customers of ours. So it's really beautiful. This has been so informative. I really appreciate you, being on the hot seat today as I as I ask you and you share about your experience, which is just really valuable. So anyone listening, please follow along at the abundant investor on Instagram. You can go to our website, theabundantinvestor.com for more information. We're going to be adding even more and streamlining that site pretty soon. And feel free to reach out. We have links to

our connection calls with us on both of those places, on Facebook as well. And we want to be in collaboration with you this year. So 100%. Don't be shy. Reach out and have an amazing day. We hope you've enjoyed this episode of the abundant investor podcast and learn something new. We would love to hear from you. And if you did get something from this episode, please subscribe and rate this podcast so more people can find it and live their rich lives too. And remember, Remember, an abundant mindset means there's always plenty to go around and through giving we receive.