Financial wellness for agents: Mikaela Patterson

Between keeping on top of sales, prospecting and staying ahead of the competition, there is plenty of opportunity for on-the-job stress as a real estate agent. But when it comes to your own financial success, Entourage finance broker Mikaela Patterson explains how personal financial wellness can lower your stress levels.

What’s the difference between success and financial wellness?

In real estate, success is different from one individual to the next.

It could mean pulling up at a listing presentation in the Mercedes-AMG GT Roadster or opening an office in the adjoining postcode. For others, it’s taking every second Friday off to play golf.

So what’s financial wellness? Equally, it’s different from one person to the next but, universally, it’s about being able to live without the stress or anxiety that comes with a growing range of financial commitments. Being armed with expert advice is the key to achieving this.

Financial stress
There are five key triggers for financial stress:

  • bad debt
  • home/business loans
  • retirement
  • supporting the family
  • budgeting

In 2016, Core Data surveyed 1,440 employers to build its Workplace Financial Wellness Index. Worryingly, three out of five employers agreed that financially stressed employees tended to carry the stress at work. Financial issues can affect mental health, marriages and relationships at home, and also manifest in presenteeism (43.3 per cent), low morale (30 per cent) and absenteeism (16.7 per cent) at work.

Some reports suggest financially-stressed workers take an extra four sick days per year compared to their financially secure colleagues.

Success in real estate is achieved through process: achieving contacts with prospects, honing listing presentations and negotiation skills; customer service; marketing innovation; brand development, and much more. Agents, property managers and business development managers will have an entourage of trainers, mentors and suppliers to help them achieve this.

Success in real estate isn’t necessarily the precursor for healthy cash flow. For many real estate businesses, cash flow is influenced by the rhythm of the selling season and popular lease renewal periods. For the real estate professional, outside the 9am-5pm is the separate pressure of mortgages, business and personal loans, school fees and more.

So how do real estate operators achieve financial wellness, both professionally and personally? It’s a multi-faceted challenge requiring a multi-faceted answer: and it comes from your financial entourage.

Who is in your financial team?
Financial wellness is like building a house: if the owner tries to save costs by enticing the electrician to try their hand at plumbing, a sub-standard home is delivered. Similarly, skimping on a holistic approach to wealth management will inhibit financial wellness.

Real estate agents are focused on knowing their marketplace, database development, prospecting and keeping a finger on the pulse of the latest proptech, industry legislation and supplier innovations.

This focus leaves little time to tackle the finer points of financial wellness. Even then, real estate professionals shouldn’t be expected to bumble their way through tax structures, lines of credit, loan products and more. An accountant that specialises in real estate will recommend a business structure that best suits a principal’s operations and minimises their taxable earnings. They’ll optimise the earnings of contractors, too.

It’s the same for lawyers: a specialist in real estate will ensure their client is compliant with relevant acts and ready to take advantage of acquisitions when they’re presented. Real estate professionals have brokers to whom they refer clients. But not all agents, property managers and BDMs have a broker as part of their financial team.

Brokers have an intimate understanding of the financial dynamics of real estate and seasons of trade. Some agents report 50 per cent of their annual earnings can be made in a single quarter.
Just as they do for buyers, a broker will tailor a strategy that supports financial wellness for real estate professionals. They’ll examine the individual’s peaks and troughs in earnings and career vision to outline a path to financial wellness.

Understanding your finances
Real estate involves six- to seven-day weeks, vendor and landlord phone calls at 10pm, and adjusting business operations to navigate regulatory and market forces.

If someone commits to a career that can carry stress, they don’t want the cloud of poor cash-flow following them around.

If an agent hits the magic million in GCI, it represents little more than a plaque on their desk if their spending increases in step.

Positive financial behaviour – saving and not borrowing money for daily expenses – can often have a greater impact on financial wellness. While real estate professionals focus on increasing volumes and commissions, a multi-skilled broker – a trusted advisor – will advise how to maximise your financial position and curate your cash-flow to best prepare you to meet your goals.

They’ll review current monthly repayments for your mortgage, business, car, equipment, personal loans and credit cards.

For instance, if you have multiple loans, the broker will utilise their knowledge of products across their lender panel for a consolidated solution. They will also look at refinancing opportunities to further enhance cash flow.

A trusted adviser can also add value by looking at an overall wealth strategy. This could include examining where current and future income is directed for tax purposes and providing expert guidance on retirement strategies.

This is vitally important for ageing principals who are looking at exiting the industry. Conversely, brokers can help younger professionals better manage their debts and achieve their goal of buying into a business – fulfilling a succession plan.

Professional vs financial goals
Any professional should have a mixture of short and longer-term goals. Importantly, professional goals are not financial goals.

I’ve heard many real estate agents say, ‘By the end of the third quarter, I want to have increased year-on-year listings by 20 per cent’. For their long-term goal, they want to ‘write $1 million GCI per annum in two years’ time’.

Having professional goals provides the rocket to get out of bed in the morning. But, as mentioned, hitting professional goals doesn’t automatically translate to financial goals. Earning more money doesn’t reduce stress if you’re not managing it properly, and often sees people spending more on things they can’t afford.

Having a sound financial management strategy helps you build good habits to achieve your financial goals and, therefore, financial wellness.
Financial goals are varied but commonly include:

  • Being able to buy or upgrade houses
  • Being able to add to or start an investment portfolio
  • Paying off credit cards
  • Paying off your home
  • Paying down or consolidating business or personal loans

While the methods for achieving these goals are just as numerous, a disciplined savings strategy can be applied to all.

ANZ’s Financial Wellbeing Survey found individuals who actively saved were more likely to be comfortable in their finances. ANZ estimated the average Australian saved 12 per cent of their disposable income.

Your financial wellness journey can start with simple management strategies today.

Automating round-ups with your bank and directing those funds straight into a savings account is the first way to support financial wellness. By tracking what you spend and reviewing your expenses, you’ll become more mindful of where your money goes.

From there you can build better habits and be more intentional with your spending. This may include setting a modest amount for personal spending. Any additional commissions may be optimised in a separate savings account.

People who don’t trust themselves to be disciplined should change their behaviour and separate the savings account from their everyday transactional account.

The benefits of financial wellness
Financial wellness leads to better productivity, better relationships and less stress.

A team of financial specialists – accountants, brokers, financial planners, conveyancers and lawyers – is the best way to achieve this.

The most effective way to improving financial wellness is not through market share – it’s being financially smarter.

Mikaela Patterson is a finance broker with Entourage Finance. She has been in the industry since 2006 and loves helping her clients make educated and informed decisions on their loan structure, in turn creating security for themselves and their families. For more information visit

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