Your Money Matters

The National Association of REALTORS® defines financial wellness as “a measure of our overall, personal well-being as it relates to your money.” As REALTORS®, you help your clients accomplish goals and make important financial decisions. However, when was the last time you stopped to think about your own future and financial well-being? If you haven’t begun focusing on your financial wellness or if the process has caused a headache or two in the past, you’re not alone. Just check out these stats from the National Association of REALTORS®:
  • 90 percent of REALTORS® are independent contractors facing complex personal finance situations.
  • Only 43 percent of REALTORS® are saving for retirement.
  • 42 percent of REALTORS® feel unprepared for a financial emergency.
The unique nature of your business results in an ever-changing income, which in turn impacts the taxes you pay and the types of retirement and medical plans available to you. To help you better assess, plan and track your finances, NAR has launched the Center for REALTOR® Financial Wellness. This online tool offers a wide array of materials and resources designed with you in mind.


It’s okay if you don’t know where to start. Upon logging in for the first time, you’ll be prompted to take a Wellness Checkup. This 10-question assessment measures your financial situation. Based on your answers, you’ll receive a list of short-term and long-term goals to guide you. Remember: financial wellness is a process, not a one-step solution. The goals fall under four categories: Budgeting & Finance, Real Estate Investing, Retirement Planning and Succession Planning. The site is interactive and allows you to check off goals as you complete them, set reminders and even make a list of customized goals and deadlines.


The Wellness Center’s Financial Journey tool allows you to see how your financial decisions impact your current finances, your happiness and your future financial situation. It can be difficult to make decisions that benefit all three areas at the same time. Sometimes happiness comes before all, while other times it’s important to think about your long-term finances first. You can go through the Financial Journey as many times as you’d like to see how different decisions impact your end goals.


The Wellness Essentials section breaks down key financial wellness terms, in addition to the costs and benefits of being a REALTOR®. First, learn about the role of a broker and get a comprehensive list of the things you need to begin and sustain your business. In addition to paying for your license, you’ll need to consider other expenses, like REALTOR® member fees, your phone bill, computer, marketing materials and transportation. Once you find out how much you need to spend to become a successful REALTOR®, you’ll be prompted to learn more about the role of a REALTOR®, how to become profitable and how much money you can expect to earn in this industry.


Are you curious about the true differences between a bank and credit union? Do you know how much you should be saving each month? Are you interested in a list of the different retirement plans available? The Center’s Budgeting & Finance section has resources to help you, your clients and your staff make sound financial decisions.


Having a savings account is a great start in your journey to financial wellness. However, savings accounts are best for short term solutions and emergency funds. It’s estimated that in ten years, the money in your savings will be worth 40 percent of what it’s worth today. Investing, on the other hand, is a way to put your money to work for you and accumulate wealth. The money you earn correlates with the current market and inflation. So, as inflation grows, the amount you earn does, too. In the Real Estate Investing module, you’ll find out how investments can be part of your financial wellness planning and get the basics on making smart investments. The site names three categories your investments should fall into:
  • Safe: The value appreciates along with market trends.
  • Stream of Income: Generates incomes through rental payments.
  • Tax Advantage: Includes rental properties that are eligible for tax deductions.
This section also gives tips on making a down payment and getting your feet wet in commercial investments.


If 401Ks and IRAs sound like foreign languages, the Retirement Planning section has you covered. Whether you already have a retirement account or are unsure of how to start one, the resources in this section answer a wide array of common questions.


Everyone needs a succession plan – but do you have one in writing? Instead of making a last-minute decision, use the Center’s Succession Planning resources. This will help you decide if selling your business or leaving it in the hands of a designated successor is most beneficial for you. NAR says it takes “between one and three years of preparation to get the most value from your business.” When thinking about your succession plan, consider this:
  • Is there anyone I have mentored and can trust to take over my business once I retire?
  • Have I calculated how much my business is worth – looking at the current market value of my company’s assets and forecasting my company’s future income? Tip: The Succession Plan module shows methods for finding your business’ asset accumulation, income, discounted cash flow, replacement value and market comparable analysis.
  • Do I see value in keeping my business property and renting it to a new business?


Finally, the Tools and Calculator section allows you to calculate your budget, expenses and the contributions you should make to your retirement and savings accounts. Also, conduct a cash flow analysis and find your Internal Rate of Return (IRR) and Net Present Value (NPV) for your commercial investments. Getting started on your financial wellness journey can seem intimidating, but it’s not nearly as scary as not having a plan at all. The Center for Financial Wellness is the perfect place to begin and track your progress throughout your career.