The harm of a salary and of drugs
At the 99% Conference, well known Venture Capitalist Fred Wilson said, “The three most harmful addictions are heroin, carbohydrates, and a monthly salary.”
Anyone who is self employed and doesn’t rely on a predictable monthly salary knows first hand that there is nothing more motivating than financial uncertainty. When the chips are down, you hustle harder, you make more calls, you write more blog posts, you email more old clients, you push yourself harder than ever.
Really? It’s that harmful? Yes.
But is Fred right? Are those really the three most harmful addictions? Doctors will disagree, but for business purposes we will agree. Heroin is a hell of a drug, bad carbs spike your blood sugar thus your insulin and you can’t process food properly, and monthly income that is always the same stifles creativity and drive.
If as an agent, you knew how much you were making every month, would you really spend that extra hour after work cold calling past clients? Would you be pushing yourself as hard? If you were making a salary, would you care that your client is having a hard time getting approved? If you’re not on salary, you’re in their living room after hours, helping them sort through boxes of papers to find just what they need to make that loan happen. If you’re on salary, you turn your phone off at 5:00pm and go to happy hour and forget about that client.
Some will say that their passion drives them and the income is second, but we call bull. Everyone is in business because money is involved, otherwise you would all waive your commissions because you’re just so passionate and good hearted that it is the right thing to do.
The rise of salaries in real estate brokerages
No, because we’re a money driven people, Wilson is right in that a monthly salary is a dangerous addiction and we believe it hampers creativity.
Why do we bring this up? The idea of salaried agents is on the rise and we’re hearing more and more about it. In theory, it is a great concept that could really work, but in a sector as complicated and challenging as the negotiation-heavy real estate sector, the inner drive of agents comes from making sure their children aren’t out on the street next month panhandling.
