The Systems Real Estate Agents Need to Pay Off Debt and Build Wealth

The Ultimate Realtor Retirement Plan To Build Wealth Fast

Learning how to save your money is an essential skill so that you can plan ahead for your retirement. Below, we’ll get into how to set up a real estate agent retirement plan that works for you. We’ll also discuss how to set up a budgeting system, taxes, and how to be disciplined when it comes to your finances.

Four Steps to Take Control of Your Finances 

In order to save properly for your real estate agent retirement plan, you need to have the right mindset. You need to think of saving your money as putting it to work for you. Every one of your dollars needs a job. Follow these four steps to stay disciplined with your money:

1. Establish a Budget and Savings Percentage

First, you need to establish a budget. Figure out how much you make every month and how much you spend.

You should also figure out what your savings percentage rate is. How much of your income are you putting towards savings? Whatever it is, see if you can work to increase it. Start developing a savings mentality. If your percentage is 10%, try to go up to 15%.

2. Use a System to Track Income and Expenses

Once you’ve figured that out, you need to find a system to help you stay disciplined. This can be as simple as a spreadsheet, or a budget tool such as or Mint. Use this system to track your income and expenses.

When it comes to debt, remember that you should not purchase items with your credit card that you can’t pay off right away.

You need to look at spending as if you’re stealing money from your future self. You’re making it harder for your future self by buying things with money that you don’t have today. This is one of the worst things you could do.

While debt can be beneficial for assets or anything that will eventually make you money, consumer debt and taking out debt for liabilities or depreciating assets is a bad idea.

Another system that can help you is setting aside time in your schedule to review your finances. Build a time block into your weekly, monthly, and annual calendar to review and categorize finances.  

  • Weekly – Review income and expenses and categorize both.
  • Monthly – Review debt and savings percentage, calculate net worth (assets minus debts).
  • Annual – Build your next year’s budget and review purchases from prior year to see where you can make adjustments for the year ahead.

3. Build Your Emergency Fund

Saving up for an emergency fund is important so that if something unexpected ever happens, you’ll have the money already set aside instead of having to use your credit card.

Ideally, you want to have six months of your living expenses in a liquid savings account for quick access.

Your priority should be to save up three months of this emergency fund. Once you have that saved up you can start looking at the next step, which is paying off your debt while continuing to add to your fund.

You might think that you should pay off your debt right away. However, you should focus on building up your emergency fund first. But in the meantime, you should definitely keep paying the minimum amount on your debts to avoid accruing extra late fees and interest charges.

4. Pay Off Debt

There are two ways you can pay off debt: the avalanche method and the snowball method.

For the avalanche method, list every single one of your debts and then rank them in order of the highest interest rate. Then, start paying off the one with the highest interest rate first.

You’re still making minimum payments on all the other debts that you have, but you’re focusing more of your attention on the debt with the highest interest rate first.

For the snowball method, write out all of your debts and then rank them by which ones you can pay off the soonest. Find which ones have the lowest balance on them, and then start paying off those ones first.

Choose whichever method you think you can keep up with long-term. If you can manage to stick with the avalanche method, mathematically that’s the best way to go because you’re paying off the highest percentage rates first.

With the avalanche method, it’s easy to feel burnt out because you don’t see enough progress taking place. On the other hand, the snowball method lets you get your first debt paid off, and then put all your money towards the next one. 

Even though you’ll still have the larger debts and highest interest rates left at the end, you’ll have all the smaller debts paid off so that you can focus all your money on what’s left.

However, you don’t have to choose one or the other, you can do a combination of both. Find what works best for you.

A woman using a calculator

Budgeting with Seven Accounts 

When it comes to setting up your budget for your real estate agent retirement plan, it’s a good idea to have multiple accounts. I actually recommend starting with seven.

Here are all the accounts I recommend setting up, along with the percentages of income that you should put into them every month. Start chopping up your money and get used to what it looks like when it’s split between all the accounts.

1. Necessities Account 

This account is reserved for true necessities, such as mortgage payments, gas, and food. You should put 45% of your income in this account.

Some people might spend more on their necessities. If that’s the case, then there are two ways you can accomplish getting 45% of your income in this account. You can either spend less money, or you can go out there and earn more money.

2. Long Term Spending

This account is meant for the money you’re going to use to pay off debts with either the avalanche or snowball methods. Once all your debts are paid off this money can be used for additional retirement investing, charity, or just for your personal enjoyment since you’re now debt-free! For this account, you should put in 10% of your income.

3. Fun Spending

You have to be disciplined and watch your spending, which is difficult for a lot of people. But that’s not to say that you can’t go out and have fun, because otherwise you’ll get burnt out pretty quickly. Just try and be conservative when it comes to spending. This account should be 5% of your income as well.

4. Education Account

Another 5% should go into your education account. This account is used to improve your skills and value to the marketplace. Think of it as investing in yourself to learn something new or get better at something you’re already doing. This can be finding a mentor, taking a class, or buying a book. Many of us fail to earn more income because we cease to continue learning after high school or college.

5. Retirement Investing 

This is an account for investing in your retirement, and it should be 10% of your income.

You can either put it directly into this account or into a low-cost index fund. These types of accounts usually have the lowest fees. A good one is VTSAX with Vanguard.

Down the road you can do something different with this money, but these two options are a good choice if you’re just getting started.

6. Charity

It’s important to give some money to either a charity or church. You’ll usually get something back out of it. Not in the form of money, but just a positive experience knowing that you’re helping others. Any additional percentage not utilized should go here if you feel the desire.

7. Taxes

When it comes to taxes, the process is different for realtors compared to other types of jobs. This is why saving for taxes at the end of the year should be another aspect of planning your budget.

You need to save at least 25% of your income for taxes, maybe even a third. You can use a separate, seventh account to do this.

When the time comes, you’ll be prepared for tax season, instead of stressing out because you haven’t planned for it.

Take Advantage of an IRA

Unlike traditional W2 income jobs, real estate agents don’t typically receive an opportunity to invest in a company-sponsored 401K plan.

However, that doesn’t stop you from investing in an individual retirement account (IRA), like a Roth-IRA, Traditional IRA, or if you have a business, a SEP-IRA.  

Utilizing an IRA will give you tax benefits for saving money that’s set aside for long-term retirement.  The downside is that the money is less liquid than simply investing in a portfolio or savings account.  

Also, there are limits to the amount of money that you can invest annually in an IRA.  For more information about IRA’s check out this awesome video here.   

Additionally, some brokerages like eXp Realty offer stock purchase programs that are worth taking a look at. 

For example, agents and brokers at eXp Realty, can take 5% of their commission income and apply it towards eXp stock at a 10% discount. This is as close as you’ll get to a 401K as a real estate agent.

However, before investing any money I would first prioritize saving up your emergency fund and paying off your biggest debts first.


First, it’s super important to hold yourself accountable when it comes to budgeting and setting up your real estate agent retirement plan. Find somebody who wants to get involved with you, such as a spouse, close friend or relative, or coworker.  Ideally you want to find someone who is also looking to improve their finances, so that you can hold them accountable as well.

Money’s not always the easiest topic to discuss in detail with others.  However, if you both agree to not judge each other and are truly in it to improve, it will be worth it long term. 

Because finances are just numbers, there’s no subjectivity.  This means that you can easily tell if you are winning or losing compared to the goals you set for yourself, and can be held accountable by your accountability partner.  Additionally, regardless of where someone is starting from you can level the playing field by using percentages rather than sums.  

Financial Advisors

Another tip is that financial advisors aren’t as necessary as you might think. If you took the money that you were going to pay a financial advisor and instead just invested it in a low-cost index fund, that money would compound over time.

In addition, many people create a budget based only on the money that they’re going to make in the future. Instead, you should take into account the money you have in your account right now and use that to create your budget.

Several stacks of quarters next to a jar filled with them and sprouting a small plant

Work on Mindset

Keeping a positive mindset when it comes to your real estate agent retirement plan is key.  Don’t ever get discouraged with your starting point when it comes to money, knowledge of finances, or both.

We commonly overestimate what we can do in a day or week, but underestimate what we can accomplish in a month or year with consistent effort and a solid plan.  If you lose small battles on your way to a financially free future, don’t let that stop you from winning the war.  

Always continue educating yourself and surrounding yourself with positive thinkers and doers.  This can make all the difference!

Additional Resources

A great resource to help you create your real estate agent retirement plan and get other financial advice is the r/personalfinance subreddit on They have extensive information for each age group, and cover topics such as goal setting, credit, debt, retirement investing, and budgeting.

Several real estate agent books you should read to learn more about budgeting and investing are:

Final Thoughts on Real Estate Agent Retirement Plan

Retirement is something you need to start saving for sooner rather than later. When it comes to having a real estate agent retirement plan, the most important thing is using a system. Even if you don’t use the seven account budgeting system, find one that works for you and stick with it.  

Remember, it all starts with your mindset and believing that understanding your finances matters.  If you prioritize taking action around your finances, staying organized and sticking to a goal will get easier every time you do it!

Kyle Handy

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I’ve helped hundreds of real estate agents, team leaders, & brokers all over the country increase their sales, online presence, and create scalable systems. I would love the opportunity to work with you. Together, we can make this year your best yet!

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