Commercial real estate advisor: My budget and planning for the future
About this video
Bart Thompson, a commercial real estate broker, explains how his income jumped thanks to commissions and how he manages it. He sets money aside for taxes and investments before spending, then walks through his monthly take-home pay, expenses and savings.
You'll be able to
- explain how a base salary plus commission makes up a broker's income.
- calculate take-home pay from pretax income and taxes.
- describe the habit of setting money aside before spending what is left.
Key words
- Commission
- Money a salesperson earns as a share of each deal they close, on top of any base salary.
- Base salary
- The fixed amount a worker is paid no matter how much they sell.
- Pretax income
- What you earn before taxes are taken out.
- Take-home income
- The money you actually receive after taxes are paid.
- Investments
- Money put into things like property or shares in the hope it grows over time.
Transcript
My name is Bart Thompson, I'm an Associate Advisor here at Pinnacle Real Estate Advisors. I'm a commercial real estate broker, and my base salary is $18,000, and I will have made $100,000 in commissions this year. I'd never made more than $30,000 a year until this year.
You know, 18 months in as a commercial real estate broker. I have debt that I'm paying down with the money that I'm making, loans that I had to take out from my previous business ventures, but frankly, the way that my relationship with money has changed the most is that I now spend a lot of time thinking about how I'm going to put it into investments.
What I do is, I take a percentage out of every check I make and I put it into an account where I'm not allowed to touch it. And then that's for taxes and investments. And I'm allowed to spend what's left. Over the course of a year, I'll make an average of $10,000 a month pretax.
And from that, I'll probably end up paying around $3,800 in taxes, for a take-home income of $6,200. My rent, I live in a luxury high-rise downtown with a roommate, and my share of the rent is $1,550. With about $179 for utilities and internet, I've got my cellphone plan, at $93, I have paid off my car, and so I spend about $200 in gas, $150 in insurance and repairs per month for commuting.
I spend about $1,200 a month in food. I don't cook, so sometimes I go to the grocery store, but I eat out a lot. And that is my biggest expense. And then I pay $100 a month for my gym, and I also have personal trainer I see twice a week, and that's about $200.
My travel runs at about $800 a month, that has to do with airplane tickets. And the fact that I just turned 30, and everyone I know is getting married. So, $100 a month in entertainment, movies and bowling, and $220 a month in shopping, outdoor gear, that sort of stuff.
I contribute $1,000 a month to savings, and the rest I, that also goes into a pool, which I'll eventually invest in real estate.
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