“Making sure you pay attention to the variable in your income and having an idea of where you’re going to end up at the end of the year can help you create a really solid game plan for investing.” – Ben Lex in today’s Tip 1770
How should you invest as a sales professional?
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Transcript
Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Ben Lex. Ben is a fee-only fiduciary advisor, which means he does not sell products or make commissions. He is passionate about helping sales professionals across the US manage their variable income and plan for a successful retirement. Here he is:
Ben Lex: Back today with another tip for sales professionals, and this is a fun one today. We get to talk today about investing and how should you invest as a sales professional. And while I can’t tell you exactly listening to this, how exactly you should invest, how much money, where and when, and why, but I can help lay a foundation for the importance of investing and the importance of seeking wisdom in this space for sales professionals, because I’ve seen it done wrong so many times. And so sales professionals are in a really unique position when it comes to investing because they typically have high incomes.
I know plenty of sales professionals all making six figures at the very least, and often much, much more than that, over $250 – $500,000 each year, which when done properly, managed properly, you can set yourself up really, really well for the future. And it’s in such a unique position that most of these career fields do not have even a glimpse of being able to do that. And sales is such a unique space to be able to invest within. And that It also creates some interesting things to think about.
And so today, as I talk to you, you might not be in that high income area yet, but I have a good feeling that you probably will get there over the course of your career as sales professionals are highly competitive, want to exceed expectations and want to succeed both personally and financially. And so things to think about when you are a sales professional that’s investing is where is your income going to end up at the end of the year?
Most sales professionals have some level of variable income. And so you might be a base plus commission. Sales professional, you might be fully commissioned. It’s interesting to know that and have an idea of what your OT is. What’s your out the door at the end of the year income going to be. And sometimes that means we have to hold off on investing until the end of the year, until we know where your sales and your income is going to fall because those two things are so closely tied together. And so it’s okay to put a pause in it. As great as it would be to know exactly how much you’re going to make at the end of the year, you have this unique opportunity to go make a ton of money.
And I would rather not know and have you make a ton of money at the end of the year and be able to do the right things than vice versa. So why do we have to wait is because there are different limits with how we can invest. In an IRA, and this changes every year, an IRA has a limit of how much you can put into it. It doesn’t matter if it’s a traditional or a Roth IRA. So we’re maxed out there, but it’s also important to know there are income limits. Depending on how you file your taxes is going to impact what that limit is as well. And so we don’t want to contribute to a Roth, find out that we made too much money to contribute to a Roth, and then have to backtrack to do everything.
It’s important to know that. But one thing I will tell you that you can take advantage of and should take advantage of as a sales professional is your employer 401(k). This is typically one of the best places to start investing and to get investing, especially if you make a lot of money, because you can stock a lot of money into a 401(k), over $20,000 of your own individual contributions each year.
This is an incredible place to start investing. I’ve never heard of an employee in the sales field that does not do some type of employer match. And so if you put in maybe 5% of your own salary and commission, you might get a 3, 4, or 5% match on that. And that is free money. And so this is why 401(k) are one of the best places to start. There are IRAs, and likely, if you’re a high-income sales professional, you’re going to have to venture into a brokerage account too, because you’re going to max out those other options, which is, again, an amazing place to be. If you are maxing out your 401(k) in your IRA and you have to get to the brokerage option, if you’re doing the right things, you are going to be successful financially. Making sure you pay attention to the variable in your income and having an idea of where you’re going to end up at the end of the year can help you create a really solid game plan for investing.
Scott Ingram: For links to connect with Ben, just click over to DailySales.Tips/1770. Once you’ve done that, be sure to come back for another great sales tip. Thanks for listening!