New Agents (and Old): Do You Know how Much You Made Last Week?

[Josh]

The question is fairly rhetorical. One of the things about being an insurance agent is that you're running a small business. It can be easy to earn a $1,500 commission and think "I just made $1,500". The reality is that it is rarely the case. Lead costs, travel expenses, etc all should be added into the equation to get a real answer to the question. This can be a major surprise at tax time, especially when taxes need to be paid on what you actually earned.

My suggestion: Open a business checking account and put all of your earnings in it and use it to pay all of your expenses. This can be the simplest way to keep a more accurate idea of how much you're really earning. If you earn a $1,500 commission, you may be surprised by how quickly that is cut into by operating expenses.

So do you know what you made last week? Month?

Hope this helps!

 

[Daytona_Guy]

My suggestion: Open a business checking account and put all of your earnings in it and use it to pay all of your expenses.

Where else would you have it, since all of the companies pay by direct deposit?

I got mad at Chase Bank last month because they charged me an over-the-limit transaction fee. I had over 200 deposits into my business checking account from 60+ different companies and they're charging ME for bringing business to their bank. I then realized what pain it would be to notify that many companies of a new bank.

The suggestion is to get to a place where your income far surpasses what you could possibly spend on expenses in your business.

 

[Josh]

Where else would you have it, since all of the companies pay by direct deposit?

A personal account. Most agents getting started don't split the line between their personal finances and the business expense. Especially if they're married and are mixing the finances of the spouse in as well, it can be very unclear how much they're actually profiting. Having a separate account altogether allows for the disambiguation.

The suggestion is to get to a place where your income far surpasses what you could possibly spend on expenses in your business.

Agreed. Not splitting things up makes it more difficult to track tax deductions and nearly impossible to create a P&L report which is very important if someone wants to use their income to apply for a loan like a mortgage.

 

[VolAgent]

Sounds like it is time for Josh to get a new CPA.

I have Tim Cook handle my taxes.

 

[Josh]

Sounds like it is time for Josh to get a new CPA.

I have Tim Cook handle my taxes.

I'm sure he's a little out of my price range for now

 

[VolAgent]

I'm sure he's a little out of my price range for now

Hey, the whiskey is good, but if I have to eat one more potato...

 

[exLeadJunkie]

The very definition of Business income is gross revenues minus operating expenses. So the ONLY way to tell how much you "made" last week is to have an accounting system that keeps track of gross revenues & operating expenses completely separate from personal expenses. Any time revenues & business expenses are mixed with personal finances, the agent will stay in the dark on what they are making each week. So many agents never learn that this is a business and must be run accordingly. One more reason why we see an extremely high wash out rate among insurance agents.

 

[Jumpercc]

I'm a newly licensed life ac n health agent in NY.want to be independent. Someone is com in to my house to offer 55% commis. On w/l. Is that a fair rate?

 

[Gooner]

The very definition of Business income is gross revenues minus operating expenses. So the ONLY way to tell how much you "made" last week is to have an accounting system that keeps track of gross revenues & operating expenses completely separate from personal expenses. Any time revenues & business expenses are mixed with personal finances, the agent will stay in the dark on what they are making each week. So many agents never learn that this is a business and must be run accordingly. One more reason why we see an extremely high wash out rate among insurance agents.

I know exactly what I made last week...Nada..didn't work!

You do know that this thread is a year old right?

 

[Thad.Sipple]

I know exactly what I made last week...Nada..didn't work! You do know that this thread is a year old right?

Part timer.





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