My bad, it was late and I had a few adult beverages prior to typing that post. You can show the $23,000 as an expense which is good for tax purposes. The point I was trying to make is that the $4,400 discount is reported to the IRS as income. In hindsight, the day I found out about being "Income Updated" on the furniture discount was the day I became a State Farm Agent. I couldn’t believe it. That would be like buying a new car and the manufacturer reports a $4,000 rebate as income to the IRS. What a rip off!
In the future, I will endeavor to cease and desist with drinking and posting.
Infoe - I do not have anything against you and I don’t mean to be rude & condescending towards you. I don’t know where you are in the process (in the pool, an intern, or a TICA) but I wish you all the best! Personally, I wouldn’t recommend buying the office furniture package. It was easier for me because I was pressed for time and it was one less thing I had to worry about.
I know of TICAs in Michigan who are writing 100+ RAW New Autos every month and they are not making any money. They are buying the business via internet leads and writing stuff all over the state, which is not the way you develop a quality book of business.
My bad, it was late and I had a few adult beverages prior to typing that post. You can show the $23,000 as an expense which is good for tax purposes. The point I was trying to make is that the $4,400 discount is reported to the IRS as income. In hindsight, the day I found out about being "Income Updated" on the furniture discount was the day I became a State Farm Agent. I couldn’t believe it. That would be like buying a new car and the manufacturer reports a $4,000 rebate as income to the IRS. What a rip off!
You're still missing my point. In no way is buying office furniture income. Now, there is a way that $4,400 can turn into income. If you bought the furniture from them and they loaned you the money, but then forgave $4,400 of the loan, then yes that is income. So, I can see how that might become income. You still haven't shown how the other $19,000 in supposed income came about.
VolAgent = I was was wrong in my original post. Just the $4,400 discount was reported as income. The $22,000 was the total cost of the furniture package. Did I mention that I had been drinking last night when I typed that? As I like to say, only the best and brightest become State Farm Agents.
infoe = First of all, I am not bitter. I am trying to shine a light on the process of Becoming A State Farm Agent, which is the title of this thread and something I have done.
As for the cards I was dealt, I took over a large book that had not been worked in over ten years. Thus, I have already qualified for Ambassador Travel Level 1. You claim that you can sell, but have you ever sold Life Insurance? While you were reading about it in class or practicing your scenarios with your peers, I was writing apps. (104 Life Apps issued year to date which is an average of over ten per month)
Being a new Agent, I still have a lot to learn, but I am making it infoe. However, I am also looking at what other type of business I can open because this could turn into an 8% deal. Thus, I need to cut expenses and figure out what to do if and when my P&C commissions fall from 11% to 8% (semi-monthly variable portion of your contract). As for moving your Agency, they will not allow it. In some rare cases, I have heard of it happening but… Oh wait, you are smarter than the other kids so I am sure they would let you.
Beware of the DAFO infoe or you might end up being the one who is bitter! - Todd
Last edited by Nazz Utopia : 10-31-2009 at 02:30 PM.
VolAgent = I was was wrong in my original post. Just the $4,400 discount was reported as income. The $22,000 was the total cost of the furniture package. Did I mention that I had been drinking last night when I typed that? As I like to say, only the best and brightest become State Farm Agents.
infoe = First of all, I am not bitter. I am trying to shine a light on the process of Becoming A State Farm Agent, which is the title of this thread and something I have done.
As for the cards I was dealt, I took over a large book that had not been worked in over ten years. Thus, I have already qualified for Ambassador Travel Level 1. You claim that you can sell, but have you ever sold Life Insurance? While you were reading about it in class or practicing your scenarios with your peers, I was writing apps. (104 Life Apps issued year to date which is an average of over ten per month)
Being a new Agent, I still have a lot to learn, but I am making it infoe. However, I am also looking at what other type of business I can open because this could turn into an 8% deal. Thus, I need to cut expenses and figure out what to do if and when my P&C commissions fall from 11% to 8% (semi-monthly variable portion of your contract). As for moving your Agency, they will not allow it. In some rare cases, I have heard of it happening but… Oh wait, you are smarter than the other kids so I am sure they would let you.
Beware of the DAFO infoe or you might end up being the one who is bitter! - Todd
I have sold life before, however it was just me. I won't mention what institution as you may or may not know there's lurkers here. As I'd advise you not to put your name at the end of posts. We've had some experienced SF agents pull their accounts here for fear of being recognized/retribution. Congratulations on 104 life apps that's great. Did exactly what they wanted.my minimum expectations is going to be 12 a month from myself and my team. I'm not going to keep the pissing match going with you as I have nothing to prove to you and I guess in your own machismo way your just trying to help out. And as for moving your agency you can. As many times as you want. Reason I know this is local agent friend of mine has moved about 4 times in his 7year career. Only thing is you can't be a certain distance from another agent. Moving state to state or out of city well that's a diferent story your basically starting scratch all over again. However they have been offering this to florida agents since the HO issue started. Just fyi. So nazz a question where you could help me out. What would you recommend me do for the furniture? I had inferred from some older posts here that they basically ram it down your throat or force you. I'm going to be taking over an office. Couldn't I purchase the furniture used from the agent if its in good condition?
You do not have to purchase the office furniture package from Putnam and nobody from State Farm will pressure you to do so. They will expect you to have your office looking good, but I think you can save a lot of money by setting it up on your own.
Do you know the exact Agency you will be taking over? If so, I would ask the AFE to take you in there and introduce you to everyone ASAP. Again, I don’t know what stage of the program you are in.
I’ve been reading this site for over a year and never posted anything until after I signed my contract. Todd is a reference to Todd Rundgren and his two bands: Nazz & Utopia
If I was you, I would never ask the DAFO for help. Work with the top Agency Interns in your class and find Agents who can help you. Leadership (AFO & DAFO) is not there to help you. You need to learn how to play the game and sign your contract.
FYI - I know you can move across the street, but you said that I should move to Florida.
You don’t seem to believe us when we tell you that it is not the deal that State Farm claims it is. This is the lowest paying sales career that I have ever had. Thus, I am looking to start another business. If State Farm Agency is such a fantastic opportunity then why would I be thinking about opening a new business? I should be growing my book and working towards the future. Instead, I am going to cut expenses and try to ride this out. It is an eight percent gig! Two million dollars in premium = $160,000 gross, but first you have to get to the two million dollar amount. Good Luck!
Rodd Tundgren
Last edited by Nazz Utopia : 11-01-2009 at 04:16 PM.
How can you purchase your own trip for the same as what it costs you in taxes? That is nonsense unless you are in a 35% tax bracket, which I doubt, if you are broke and making as little money as you claim. The trip costs whatever your EFFECTIVE TAX RATE is. I'm sure you have many deductions, etc from your personal taxes. I was able to get my Effective Tax Rate down to 3.5% in 2008. 6.3% in 2007. So the trip I went on this year cost me an additional $252 in taxes. I guarantee you can't go to Disney World for 5 days in the best accomodations for $250 (or Austria).
fastrak1 - No offense, but are you a State Farm Agent? If not, you have no idea how State Farm can put the hurt on you via a 1099. They don't even call it a 1099. Rather, you are INCOME UPDATED!
I've always been in sales and thought I could make an expense report sing. W R O N G State Farm redefines the term new math with what they tell the IRS and how they report things.
Here is an example of how State Farm will rip you off if you purchase the TICA office package from Puntnam. I won't even go into the sales experience, which is terrible. As an example, they do not even tell you what the furniture cost until the very end. At which point, they tell the TICA it is $13,000. Once they are done with your INCOME UPDATE, you paid $23,000 in the eyes of the IRS.
(this will make you wish you were in Hawaii or Austria)
$ 4,200.00 ship and install
$ 4,408.63 furniture discount (because you are a State Farm Agent)
$13,319.83 cost of furniture
=========
$22,284.46 total amount of 1099 after you are "income updated"
Thus, three desk and a few cheap chairs cost a new Agent twenty two grand in the eyes of the IRS. Do me a favor fastrak1, don't ever post on here again about what is nonsense when it comes to State Farm and taxes. I am sure you know a great deal about the current US Tax Code, but twice now you have ripped on State Farm TICA's or State Farm Agents about tax issues where you were misinformed. Again, are you a State Farm Agent? I have several friends who qualified for Hawaii and told me they could have had a way better trip for less than what they were taxed (i.e. "Income Updated" by State Farm). Thus, it is not nonsense to think that an Agent could take their spouse on a vacation for less than what they were taxed via State Farm and the IRS.
- - - - - - - - - - - - - - - - - - regardless of our personal and business decisions none of the new agents are in the situations promised - antfarm
AMEN
(except for you infoe - you must be smarter than the other kids - just don't drown on the Kool-Aid) Oh wait, I forgot that you are in a good market with a nice DAFO and a good AFE. Thus, they would never lie to you. Right?
I AM a SF agent. I'm sorry about your Putnam furniture woes. I wasn't addressing that, but will be happy to.
About the taxes on the trip, what kind of moron are you? It doesn't matter what they gross up your income for, it matters what you pay taxes on. For example:
Grossing up income $10,000 for trip doesn't equate to the trip costing you $10,000. Could you have gone for less than $10,000? Sure. I'm not that stupid. I realize they play games with the cost to maximize their tax write-offs as well. However, AGAIN, if you are broke and writing everything off and have very little income to show, your $10,000 trip costs you very little in taxes. Assume your EFFECTIVE tax rate is 10% (which seems high for someone like you) the trip costs you $1,000. No way you can go cheaper and better than that. It's not rocket science and you don't have to know much about the tax code. Your accountant does tell you your EFFECTIVE tax rate right? If not, get a new one.
And I don't believe an INCOME UPDATED is the same as a 1099. Isn't a 1099 income? In an income update they gross up your income the desired amount and then deduct it right back out, so that the end result is that you pay taxes on the "benefit" you received, whether it be a trip, a reward, a trophy, etc. I don't believe you are 1099 on the furniture, but rather your income is increased and then deducted for taxes. I also believe they give you a loan on that money and let you pay it off over time rather than in a big lump sum. Sure, argue all day long how unfair it is that they make you buy the stuff (I'm in agreement with you on that) but thats the way it is. I bought the same stuff 10 years ago and the "cheap chairs and desks" look like they did the day I bought them. However, I've changed out most of it and sold it because it is outdated now and I don't like the look. Never cried about the quality though. Maybe it is crap now, I don't know.
The only 1099's I've received are for actual commissions through SF Mutual, Life, Fire, etc. I know your contract is different, but I don't think it is from that standpoint.
The point is that I believe you are misinformed and/or don't understand what you are talking about, so I think I'll keep posting.
- - - - - - - - - - - - - - - - - -
Originally Posted by Nazz Utopia
My bad, it was late and I had a few adult beverages prior to typing that post.
In the future, I will endeavor to cease and desist with drinking and posting.
I
My bad on posting my reply before reading to the end of the line. I didn't realize you had a drinking problem on top of your math problems. I will be gentler in the future.
I'm only kidding by the way.....don't go crazy on me
Last edited by fastrack1 : 11-02-2009 at 05:37 PM.
Reason: Posts merged
Grossing up income $10,000 for trip doesn't equate to the trip costing you $10,000. Could you have gone for less than $10,000? Sure. I'm not that stupid. I realize they play games with the cost to maximize their tax write-offs as well. However, AGAIN, if you are broke and writing everything off and have very little income to show, your $10,000 trip costs you very little in taxes. Assume your EFFECTIVE tax rate is 10% (which seems high for someone like you) the trip costs you $1,000. No way you can go cheaper and better than that. It's not rocket science and you don't have to know much about the tax code. Your accountant does tell you your EFFECTIVE tax rate right? If not, get a new one.
OK, I am not drunk tonight (no Scotch yet). Thanks for the explanation, but it wasn’t necessary as I am aware of how taxes work at a remedial level. My friend and former Field Development Agent, who has only qualified for one trip, told me that he and his wife have been on better vacations than the State Farm Hawaii trip. He then went on to say that they could have gone on a nicer trip somewhere else for less money than what they would be taxed on for the State Farm Trip (i.e. $10,000 in a 25% bracket = $2,500). Perhaps, he was exaggerating. He said they have been on some nice all inclusive trips that were inexpensive. He likes to drink (see a pattern developing here) and said everything was very expensive in Hawaii. I was just repeating what he said, but apparently I didn’t do a very good job.
I was always told that the State Farm trips were first class, but I did hear from more than one friend that this year the trip to Hawaii was not as nice for a variety of reasons. As for the furniture, it is quality and it is made in the United States. I am kind of a red neck about stuff made in America. It goes well with my drinking problem. Oh wait, my Scotch is imported from Islay in Scotland. (golf & whiskey = what a country)
Last edited by Nazz Utopia : 11-02-2009 at 09:01 PM.
It is clear no one with a solution is chiming in to help us that started in 2004 that are now in a huge amount of debt
Originally Posted by Nazz Utopia
Grossing up income $10,000 for trip doesn't equate to the trip costing you $10,000. Could you have gone for less than $10,000? Sure. I'm not that stupid. I realize they play games with the cost to maximize their tax write-offs as well. However, AGAIN, if you are broke and writing everything off and have very little income to show, your $10,000 trip costs you very little in taxes. Assume your EFFECTIVE tax rate is 10% (which seems high for someone like you) the trip costs you $1,000. No way you can go cheaper and better than that. It's not rocket science and you don't have to know much about the tax code. Your accountant does tell you your EFFECTIVE tax rate right? If not, get a new one.
OK, I am not drunk tonight (no Scotch yet). Thanks for the explanation, but it wasn’t necessary as I am aware of how taxes work at a remedial level. My friend and former Field Development Agent, who has only qualified for one trip, told me that he and his wife have been on better vacations than the State Farm Hawaii trip. He then went on to say that they could have gone on a nicer trip somewhere else for less money than what they would be taxed on for the State Farm Trip (i.e. $10,000 in a 25% bracket = $2,500). Perhaps, he was exaggerating. He said they have been on some nice all inclusive trips that were inexpensive. He likes to drink (see a pattern developing here) and said everything was very expensive in Hawaii. I was just repeating what he said, but apparently I didn’t do a very good job.
I was always told that the State Farm trips were first class, but I did hear from more than one friend that this year the trip to Hawaii was not as nice for a variety of reasons. As for the furniture, it is quality and it is made in the United States. I am kind of a red neck about stuff made in America. It goes well with my drinking problem. Oh wait, my Scotch is imported from Islay in Scotland. (golf & whiskey = what a country)
It is clear no one with a solution is chiming in to help us that started in 2004 that are now in a huge amount of debt
SF is the only insurance company that I have ever heard of that offers an opportunity with high capital investment and low return that potential agents are still jumping at.
Most of the folks jumping at it now are not "agents". They are new to the industry. Plus, the Farm is still selling the opportunity as if we are still under the AA97 in a lot of ways. It is a matter of time and it will catch up to them.
After one year as a TICA, I did not receive my contract from State Farm and am considering going Independent in the exact same location. Through SIAA (Strategic Independent Agents Alliance), I can obtain appointments with Citizens (Hanover Insurance), Encompass, Hagerty, The Hartford, Main Street America, Safeco, State Auto, Travelers and Progressive. On my own, I have arranged an appointment with Mass Mutual (Life, Annuities, Mutual Funds, 401K, 403B, etc…).
I can't see how it won't catch up to them, for most of Us hired early on either in 2004 or 2005 in the areas I know about Us new agents are down to one staff and in some situations no staff. The way we get paid on semi monthly it's difficult to grow your book with one person much less none. This is going to continue to happen and it will not only hurt Us , but the company too. The ones most affected that started in '04 and '05 are hurting. Many are gone now, some are still here struggling everyday wondering where the Great Opportunity is they promised Us. We owe so much money most of it to them that we can't see the light at the end of the tunnel. Many have taken second jobs just to get by. I know they monitor these boards and would love to know who I am to make me stop posting. Careful what you say and I really don't even think I have ever said the companies name on here. The way to survive is cut staff and expenses after you get your contract and that's not a plan for growth not for the agent or the company.
Originally Posted by AZAA05
Most of the folks jumping at it now are not "agents". They are new to the industry. Plus, the Farm is still selling the opportunity as if we are still under the AA97 in a lot of ways. It is a matter of time and it will catch up to them.
It is amazing that no one in the company gives a dam about 2004-2005 TICA agents. Like collateral damage. We were just the cost of doing business and experimenting with the contract and early payout.
I sat down with a former TICA agent (now has his contract) yesterday. I perceived him as very successful. He was the #1 producer in our AFO this year (total production). He spent $80k on marketing this year to make that happen. He borrowed $50k on a equity line, but did say he would get that back on the bonus. He said he was making money as a TICA, due to reimbursements, etc but is really struggling now because he doesn't get the kickbacks anymore. Has not paid himself in 7 months.
However, he did get a bunch of awards and will be a level 3 traveler! He sort of back up what many of you say here, although not quite as bad or in such a desperate situation. He seems to understand his contract well and how to try to make money at it. I suspect his production will drop as he backs off advertising and staffing, but that his bottom line will increase.
So call me obvious but might the AA05 deal have been a tool to make it easier for them to use extreme NEPOTISM??? . . .Discrimination against anyone not from their "family" of chosen ones?
Anyone with a law degree see the legal grounds I see?
I sat down with a former TICA agent (now has his contract) yesterday. I perceived him as very successful. He was the #1 producer in our AFO this year (total production). He spent $80k on marketing this year to make that happen. He borrowed $50k on a equity line, but did say he would get that back on the bonus. He said he was making money as a TICA, due to reimbursements, etc but is really struggling now because he doesn't get the kickbacks anymore. Has not paid himself in 7 months.
However, he did get a bunch of awards and will be a level 3 traveler! He sort of back up what many of you say here, although not quite as bad or in such a desperate situation. He seems to understand his contract well and how to try to make money at it. I suspect his production will drop as he backs off advertising and staffing, but that his bottom line will increase.
Will he ever be able to make any significant money under his contract?
I sat down with a former TICA agent (now has his contract) yesterday. I perceived him as very successful. He was the #1 producer in our AFO this year (total production). He spent $80k on marketing this year to make that happen. He borrowed $50k on a equity line, but did say he would get that back on the bonus. He said he was making money as a TICA, due to reimbursements, etc but is really struggling now because he doesn't get the kickbacks anymore. Has not paid himself in 7 months.
However, he did get a bunch of awards and will be a level 3 traveler! He sort of back up what many of you say here, although not quite as bad or in such a desperate situation. He seems to understand his contract well and how to try to make money at it. I suspect his production will drop as he backs off advertising and staffing, but that his bottom line will increase.
sounds stressful ... that is a lot of money to spend ... wow!
Re: Becoming a State Farm Agent
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