Rule #31  Finances

Rule #31 Finances

Salespeople are motivated by two things: recognition and money. Sales

is an occupation measured by money. If you won the Rep of the Year

award but made less than most of your peers, something would seem

wrong. Make the most money of all the sales reps in the company and not

win Rep of the Year, and it would also seem wrong. The two go together.

In many other walks of life, it is common for promotions to equal higher

income levels. But in executive-level sales, it tends to be just the opposite.

Every time I get a promotion, my overall compensation actually goes down

because, in a pay-for-performance uncapped sales compensation plan, it is

routine for top performers to hit 200%–300% to quota and blow out the

earnings potential. It was not uncommon for the top few reps to make

more in a given year than the vice president of sales.

I want you to hit those kinds of numbers in the months and years ahead. If

you do, you should have a clear plan on what to do with your earnings. So

let’s talk a moment about finances. There are financial swings in every

salesperson’s career. There are great years, and there are forgettable years.

It’s important to be good and to know what you are doing. If we are honest,

however, then we have to admit timing (i.e., being in the right place at

the right time) and a host of other factors that are out of our control play

a part in our prosperity.

The best job I ever had came out of nowhere with a call from a recruiter I

had never spoken to about a company I had never heard of. At the time I

was working for major medical device company that announced a decision

that led to a dramatic change in our compensation and made us all contractors,

which led to a 50% reduction in pay overnight. Product recalls,

government intervention and legislation, and changes to the compensation

program happen.

I can’t tell you how or where to invest, but I can tell you to save for a rainy

day. I can tell you to make the only sure investment: pay off debt. I can’t

tell you that land, stocks, or bonds will be worth more in the future. But I

can tell you that the interest on your loan will have to be paid. You might

118 | J A SON ELMORE

lose on an investment, but the bank holding your note won’t. If you let

your mortgage go to term, you will pay more than double the amount you

borrowed.

Let’s run some numbers:

Mortgage: $300,000

Term: 30 years

Interest Rate: 3%

Property Tax: 1.25%

PMI: .5%

360 Payments: $1,577

Total Repayment: $567,832

Total Interest Paid: $142,582

I know you need a home. My home is one of my most valuable and enjoyable

assets. It’s emotional hold on me is unlike anything else I own. But do

you really want to pay $142,582 for the privilege of borrowing $300,000?

I can’t tell you that your other investments will do well. But I can tell you

that you can’t get ahead very fast giving away $142,582. When we take on

debt, we presume upon the future.

Let me say that again: Entering into debt is presuming upon the future.

We are telling ourselves that the future will be better than today for us

financially. But we are also enslaving ourselves to others. Do what you can

to get completely out of debt because of the freedom it will provide you.

Several years ago, my wife and I determined to get completely out of debt

based on the religious conviction and inspiration we received from Jim

Sammons and Dave Ramsey. Like most Americans in the early 2000s, my

wife and I had bought into “the plan”:

• buy as much home as you can (because it will accrue in value),

rather than throw money away on rent;

EL ITE EXECUTION | 119

• invest in a 401K (because company match will make it grow no

matter what, and the stock market has gone up on average for the

last sixty years); and

• utilize 0% credit cards to get what you want and find a better use

of your capital by investing to get ahead.

As most of you know, in the 2007–2008 downturn, “the plan” (i.e., “the

smart money”) came crashing down around us. Homes suddenly lost value,

leaving many upside down on their mortgages and trapped in their homes.

Many homeowners unethically walked away, sticking the bank with the

house. The value of most stocks in the market tanked, leaving retirees with

a big hole in their retirement plans—and the rest of us questioning the

merits of the system. Low- or no-interest credit cards offered by banks

without discretion created a credit fiasco as people mentally and monetarily

disconnected from reality in their buying habits, racking up $10,000–

$100,000 in credit card debt.

All of this “easy money” in the form of debt overheated our economy. As

a group, we Americans collectively mortgaged the future of the economy.

As salespeople we have seen and should understand this economic lesson

from an example in our own field: The company (looking for a short-term

boost) runs a special offer to manipulate the market and customers (hospitals,

for example) into buying larger quantities of a product. But then the

company has to work through that inventory without the benefit of running

a special for the end user (patients who don’t get sick or injured at a

higher rate) in order to drive increased volume. So you don’t see an order

for a while. Worse yet, your company has a little success with the first offer

and decides to do it several more times that year. Now your customers get

trained to wait for the end-of-the-quarter deal or year-end special, which

screws up the order cycle and blows your ability to forecast. And then the

perfect storm hits you: The company realizes their manipulation has led to

an unsustainable situation, and they pull the programs that “juiced” the

sales but not the high quotas built on last year’s numbers based upon those

very programs …

With a concentrated effort, my wife and I did pay off our mortgage, celebrating

every step of the way as a family by using a thermometer chart that

hung in our house. I think you will understand when I say God was good

in allowing us to do so in just four years. I realize that will not be possible

120 | J A SON ELMORE

for most of my readers. But as I said earlier, a third-party story is a powerful

inspiration and motivator! Take this one to heart for yourself. With

God’s help, it can be done. You can be sure it won’t happen if you don’t

try.

Because our home was paid off, we were able to take a voluntary transfer

to another state without selling our home. It was a tremendous opportunity

for me, and it allowed us to put our children in a private school we

wanted them to experience. A year later, I was able to accept a promotion

and move across the country from the East Coast to the northwest Rocky

Mountains area. It was another tremendous opportunity for me, and it

allowed us to live in a city we had dreamed of visiting and to put our children

in another private school we wanted them to experience. A year later,

I was able to accept another promotion and move again.

We did finally move back to our home state. Each promotion was very

critical to building my resume and gaining valuable experience leading up

to what became the best job I ever had. Each move was an adventure for

our family, which we thoroughly enjoyed. As mentioned before, because of

my unusual success as a salesperson, the promotions unfortunately came

with a pay cut. While my job satisfaction and skill set was improving, my

income was not. But because I was out of debt, I had the freedom to accept

these promotions and give my family an amazing adventure. The house

did not sell until year two of our adventure, but that did not hold us back.

My debts and obligations didn’t dictate or inhibit my opportunities. Get

that freedom! Get out of debt!

I am not convinced that the pain of the economic bubble-bursting crash

was dealt with in 2008. Do some reading, think critically, and talk to people

who know. Use your success and your high income to put yourself and

your family in a strong position to weather another storm by being free

from debt. And relieve yourself and your family from the stress that

accompanies debt—future crash or not.

A true salesperson will be motivated by money. We equate success with

wealth. But a salesperson struggling with debt who is stressed by payments

is more likely to make a poor choice to address near-term financial problems.

There is a reason why those we entrust with national security secrets

have their finances monitored, and even managed, by others during their

tenure, lest they be tempted toward corruption under duress—or fall prey

to blackmail. Debt-free living will not make you less money-motivated. It

will, however, ensure that you are properly money-motivated and free to

EL ITE EXECUTION | 121

make great career choices. It will make you better salesperson.

In his book David and Goliath: Underdogs, Misfits, and the Art of Battling

Giants (Little, Brown and Company, 2013), Malcolm Gladwell notes that

when researchers asked some of the most wealthy people about feeling

wealthy, it was pretty straightforward. Interestingly, when asked, many

wealthy people reported that they don’t feel like a success. Success is a measure

of how we feel, which is harder to quantify than wealth.

Here’s my point: What would you do if you won the lottery? You would

immediately break free from debts hanging over your head and have

enough money for all your needs and wants going forward. And you would

then do things you can’t do now. You want to get rich? You need to feel

rich. Take your big commissions and pay down your debt, eliminate stress,

and create mobility and opportunity. Feel what it’s like to be debt-free.

Feel success.

For what it’s worth, I don’t know anyone who ever took this advice to

heart until after a severe financial crisis impacted them personally. It may

be that some lessons can only be learned the hard way.

Elite execution demands that you master your money to provide mobility,

create opportunity, and achieve contentment.

Gabe Seymour

Owner of Pest Patrol | Podcast Co-Host | Text me @ 503-985-6607

2y

This is good stuff Jason Elmore... Buying this book now.

Like
Reply

To view or add a comment, sign in

Insights from the community

Others also viewed

Explore topics