Movements

Non Verbal Movements That Help You Sell

You don’t get a second chance to make a first impression.

A well known phrase, but often not taken seriously enough.

When you present your solution to a prospective client, you need to make the best impression possible. No matter how good your product or service is, you need to make sure that a simple little thing like body language doesn’t let you down.

Selling doesn’t just come down to price product, product, promotion, place etc. Presentation is key and poor body language is often the reason many people fail to make the most of this really important stage of the sales process.

Body Language Tips To Impress Your Prospects

You have worked hard to get in front of your prospect. Websites, social media strategies and networking all take time and money before you can even start to think about getting that little MacBook Pro out in front of your red hot prospect to sell.

Think About The Following To Make The Most Of Every Customer Facing Opportunity

And don’t just think this works face to face. Try these tips next time you are trying to sell over the phone or on a conference call. They work whether the prospect can see you or not!

  1. Lean forward – By doing so you will appear committed and interested in what your prospect has to say. It shows you are well engaged and paying attention.
  2. Open your arms – This will help you to appear honest and welcoming to those who don’t know you very well.
  3. Don’t point – If you need to use your hand to indicate something, use your whole hand rather than just one finger. Much less offensive.
  4. Smile – This might seem obvious, but make sure your smile is genuine. You might think that curling your lips up at either end tick the smile criteria, but a full on grin using your eyes will melt the heart of even the coldest prospect.
  5. Positive eye contact – Who believes anyone who doesn’t look at them in the eye? Do your best to present eye to eye in order to build trust in what you are selling. If you are on the phone then just focus on the phone or Skype picture. Believe it or not, that will really help get a positive result for you both.
  6. Use fewer gestures – Think about some of the best interviews ever. Neither the interviewer or the famous person sat opposite fidgeted in their seats, which meant the results were incredibly powerful. If you like waving your hands about to explain a point then try holding something like your pen or your other hand.
  7. Talk low and slow – You have a lot of important benefits to share with your prospect. Talk too fast or with a high voice and they won’t hear or remember anything. If you think you are talking a shade too slow then you are probably speaking at a perfect speed for your presentation.
  8. Strike a pose – People in power always know how to stand. When they walk in a room everyone knows they have arrived. You can do the same. Think Wonder Woman or Superman and your prospect will respect your confidence.
  9. Power of touch – Touching someone gently, in a professional manner is more likely to encourage them to comply with your request. It is a bonding thing. However, be sure that your prospect is a kinaesthetic person first.

If you want to know if you have got your body language right, then try filming your next presentation before you go in front of your prospect. It might feel weird, but it will give you the chance to catch and bin the negative body language, before you need to make it count.

Woman Boss

Women Breaking Barriers

Growing up, I had sales all wrong. I believed salespeople were life-of-the-party types – extroverts who could talk to a wall. I wasn’t like that, and I’m still not. But charisma isn’t what makes a good salesperson.

Top salespeople build strong, ongoing, trusting relationships. We’re not the center of attention. We ask probing questions, listen intently, have engaging conversations, and make connections – which gives women in sales a strong advantage.

Women know how to build relationships. We are hardwired to be nurturers, connectors, and collaborators.

“The best salespeople I know are women.” That’s what men tell me. Why?

Because women:

  • Build strong relationships and earn clients’ trust
  • Have intuition and listen to our gut feelings
  • See the complexities in a deal and dig deeper to find the best solution for each client

Women in sales build relationships differently than men. We love to share stories and delight in pulling out the details, rather than getting straight to the point or being told to “net it out.” We tend to consider the long-term implications of any decision, where men tend to focus on results and completing tasks.

We are also curious creatures; we love to “peel the onion” and get to the root cause of a problem. Maybe that comes from being mothers and aunts. When talking to children, we rarely believe the first words out of their mouths. We ask questions, put the pieces together, fill in the gaps, figure out what really happened, and find a solution – another ability that serves us well in sales.

Ready To Change The Sales Game?

Gender discrimination isn’t nearly as overt as it was years ago. Now instead of being harassed or insulted, women are more likely to be overlooked. To eliminate these subtle gender barriers, leaders and hiring managers must identify and address any hidden biases they have towards women.

Just as importantly, women must take their careers into their own hands. It’s up to us to demonstrate behaviours that change perceptions, contribute to company goals, and accelerate our own success.

Ready To Change Your Sales Future? Here’s how to start:

  1. Get your voice heard. Your ideas and insights are just as valid as your male colleagues’. Yet, every woman I’ve spoken with shares this story: “I’m at a meeting, and I offer a perfect solution to the problem being discussed. No one comments. Then 10 minutes later, a man says almost the same thing, and everyone thinks it’s a terrific idea.” One of my business partners always has her response ready whenever this scenario occurs. She immediately says, “I’m so glad you liked my idea.” The room goes quiet after that.
  2. Ask for advice from people you respect men or women. Listen carefully and adopt what makes sense based on your unique personality and selling style. We all need advice and guidance, and women are way more open to asking for help. We also like to give help. I never thought of myself as a mentor until a fellow blogger challenged me on this. “We are mentors for everyone,” she told me. “We write profusely and speak about sales. People take wisdom and insights from what we share”. How do you find a mentor? Ask. People aren’t mind-readers. Find someone you trust and admire, and start building a relationship.
  3. Step out of your comfort zone to test new ways of working. It’s better to apologize than to ask for permission. Always ask why you’re selling the way you’re selling. If your current sales plan is working, keep doing it. Otherwise, change it up. What works well for one salesperson might not be the right style for you. Find your own groove.
  4. Dress for the job you want, not for the job you have. Even if most of your colleagues show up in jeans and flip-flops, smart saleswomen dress for success. You don’t have to wear a suit and high heels every day, but consider what you need to do to step it up. If you want to advance in your career, you’d better not look and sound like everyone else. You might be the best thinker and innovator, but if you look like you just rolled out of bed, you’ll never get face time with clients…or with people more senior than you.
  5. Make time for yourself and people you care about. Don’t let the corporate world gobble up all your energy and dull your creativity. To be successful in sales, you’ll need plenty of both.

Successful sales organizations in the 21st century will facilitate teams that leverage the strengths of both men and women. Smart sales leaders want diverse teams who bring different skills, experiences, and perspectives to the table. Women are just plain naturals at selling. We know that. Now it’s time to tap into our innate strengths, build confidence, and get out of our own way.

Laptop

Get People To Read Your Emails

Question: How do you know your buyer will open your prospecting emails?

Answer: You don’t. What the buyer does with your message once you hit “send” is beyond your control. But what is in your control is making your email stand out by getting creative.

Your prospects and buyers get emails all day long. Think about that for a minute. If you cannot get your buyer to open your carefully crafted and personalized message, then all of your research and ideas on how you might be able to help go to waste.

With this in mind, the subject line is arguably the most important part of your email because it’s what gets the buyer to open and read. The secret to writing an intriguing subject line isn’t so difficult – you simply need to write something that would be interesting to the potential buyer.

*Note* not something that necessarily interests you. Remember: sales isn’t about you – it’s about them. Always.

I want to zero in on one subject line in particular. In my experience, buyers always say the best way for a salesperson to reach out is through a referral.

Again, put yourself in the prospect’s shoes. Would you rather receive an email from someone you never heard of before, or would you rather receive an email from someone that a trusted friend knows and vouches for? It’s a no-brainer.

Here are three email subject lines that draw on the power of referrals. They work like a charm for me, and I’m sure they will work for you too:

  • “(Name) from X company told me to talk to you”
  • “Alex Brown” (Just put the full name of the person in the subject line and nothing else)
  • “You are connected to Alex – I sold his (product)”

However, these subject lines only work when the connection between your referral source and prospect is legitimate, and the referral source has authorized you to use their name. Don’t go trolling through a buyer’s LinkedIn network to find an obscure common connection, and then drop this person’s name as if you are all best friends. That will just make your prospect mad – not to mention your “referral.”

To get great at referral selling, the #1 thing to do is grow your network. Connect with people you know, people you have worked with in the past, people you work with now, customers, prospects, and anyone else you have a bond with. Then, before you reach out to a new buyer, search them on LinkedIn and see if they’re connected to someone you know.

Finally, ask that person two things:

  • How well they know your potential buyer ( if they barely know each other, don’t use them as a referral).
  • If you can use them as a referral, or better yet, if they will introduce you to the buyer themselves.
Sales Changing

Changing Roles Of Salespeople

The art of great prospecting across different industries and across different kinds of sales reps differs. Though, there is one thing that remains the consistent: the way we as sales reps prospect today (from industry to industry) remains similar.

All prospecting is outbound.

Regardless of if the sales rep found the prospect or the prospect found your company, you (the sales rep) have to reach out to the prospect somehow to connect with them. That in itself is very outbound. It is on the sales rep to connect with the prospect. That process of connecting takes time and effort. You (the sales rep) are the one trying to connect with the prospect regardless of if the prospect knows about your company or not. Regardless of if the prospect sought out your company for your services or not.

Any outlet that could potentially be a way for me to connect or get in front of my prospect I have embraced and will continue to embrace.

I will do anything and everything (off the beaten path) to get in front of a prospect that I think based on my research could see potential value in what we help with.

When I first started working in sales in my early 20’s I did the traditional things a sales rep would do when prospecting. I still do those things and what frustrates me is there are only a handful of outlets that we have added to the traditional mix that a sales rep uses when prospecting.

The normal means of communication when prospecting as a sales rep are:

  • Phone calls
  • Voicemails
  • Emails
  • Direct mail (maybe)

Slowly but surely other outlets of communication have been introduced to sales reps. There are now things like:

  • LinkedIn Inmails
  • Twitter
  • Medium
  • LinkedIn pulse posts from your prospects

Just as buyers have blocked out our voicemails (no phones at their desks, or the voicemail goes straight to email), just like how our buyers have spam filters for emails from people they don’t know, etc. (I could go on and on).

Even if we the sales reps have potential value we can demonstrate to a company, it is getting harder and harder to get those conversations going in the first place.

These things that I see day to day doing my job prospecting not working make me wonder if a change is coming.

Great sales reps don’t just pick up the phone and dial a number. Great sales reps are the ones who research companies and from that research strongly believe they could potentially help that company they researched. We as sales reps need to all become seen as way more helpful. We have to change the stigma of a sales rep from one as salesy to one of helpful.

How will sales prospecting change in the near term and longer term future?

What does 1 year look like from now in the world of sales prospecting?

What about 2–3 years? 5 years? 10 years? 20 years? 50 years?

I am someone who likes to question the way things are done and why they are done the way they are done.

I always have questioned things that I do. Why is it done this way? Why is it not done that way? Why? Why? Why?

I am a curious person with questions that I want answers to. I like to think about the future of the world and future of how sales people will do their jobs.

The thing I love and care about in the world of sales is how we can better help our prospects.

I truly enjoy helping people find something that will help them in their job, change the way they do their job for the better.

This is what sales is for me. For me, sales is about helping and always has been about helping.

Sales is helping people who don’t know they are doing something inefficiently or ineffectively find a better way to do that thing they are doing.

Here is where I see a problem and where in that problem, I see an opportunity that I want to solve.

  • Even if you as the sales rep do all the research in the world.
  • Even if you have great triggers and reasons to reach out to a company because you know that you can help based on what you have researched.
  • Even if those reasons are very timely.
  • Even if that prospect has come to your site a million times, researched your company…

There are still only so many ways for a sales rep to reach out to a prospect and well, prospect them.

Sales reps put so much effort into prospecting a company and the mapped out people in the account but here is what happens to your outreach…

  • 1/2 the time your email won’t even get through to their inbox.
  • They don’t pick up their phones, or they don’t have a phone at their desk, or the receptionist doesn’t let you through.
  • The prospect doesn’t answer inmails. Or let’s be more precise – the prospect just denies your inmail on LinkedIn without even reading it.
  • They scan your Tweet. But don’t respond.
  • They throw your book out that you send to them in the mail because why are you sending this to them in the first place? They have no clue who you are?
  • They block you.

Even if you are the most helpful person, they do not know that because sales people have a stigma of not being helpful.

The prospect knows you are a sales rep.

And a sales person is not who they want to talk to.

Even if you know something the prospect doesn’t know and have a way to help them, they don’t care because once again, you are a sales rep! Sales reps are not usually seen as helpful.

Or at least that is how the sales reps of the past have made the sales reps of the future seem.

What if the prospect that you have researched doesn’t even know a solution exists to their problem? What if the prospect doesn’t even know they have a problem?

But, you as the sales rep think you know something the prospect doesn’t know. You know that you can help them. If only they would pick up the phone and hear you out. If only the prospect would read your email. You put so much work learning about them to find good reasons you might be able to help them.

I would bet that most decision makers would want to know about products and services that could help them in their role or help their team to do better work.

This is why we have a problem in sales prospecting that is begging to be solved.

From both sides there is a need.

The prospect who cares about learning about new technology and new solutions that could help them in their roles…and…the sales rep who does research and has timely reasons to reach out and believe they can help.

This is where the next generation of sales prospecting comes in.

I don’t know what this looks like completely yet. I just know there has to be a change.

What I do know is this…

Prospecting and the way you get in front of your prospect is changing. It is not working the way it used to. People are blocking sales reps out.

In sales we tend to do things over, and over, and over, and over…even if the results aren’t there. Why? Because that is how sales works.

How will we communicate our message and reasons we as sales people are prospecting a company in the first place?

There has got to be a better way, a better way that prospecting should work for the prospect and the sales rep. There has to be a middle ground where it is a prospecting process that helps both sides of the table.

Think of a world where it is all about HELPING and not about necessarily SELLING.

Sure the sales prospecting process might end up in a sale. I envision a world of sales where it is about showing how you could help your prospect. Then the prospect decides if they see value. (The important part is that the prospect might not know you exist. They might not be searching for you or doing research on something like you. Or if they are, maybe they didn’t think of you as an option).

Instead of waiting for the prospect to come to you, it is about you as the sales rep being seen as a more research driven, more helpful and proactive person who presents solutions to potential problems that they might have based on your research that you have done.

I am not talking with the traditional methods we use now. Don’t even think about prospecting with our traditional tools we have today like email, with phone, with Twitter, with LinkedIn, etc…

It is something that doesn’t exist yet. It is something that we don’t use today but will be helpful to both sides of prospecting equation: helpful to the prospect and helpful for the sales rep in getting through to the prospect.

I would love to hear your thoughts.

Conference

Follow Up After Attending A Conference

I’ve just recently returned from a conference and it was an incredible experience.

So it can be pretty overwhelming to return home with a suitcase full of business cards and a ton of great ideas for collaborating, but not have any clue on where to start. For a lot of us, those business cards end up in a drawer, along with all our plans to follow up. So, how do you go about prioritizing your contacts and coming up with a game plan for connecting with them after the conference is over?

Here are seven steps that will help you make gains for your business from your networking efforts:

1. Organize all the business cards you collected into two piles: Now and Later. In the “Now” pile you should put the cards of people to whom you plan to reach out within a few days of the conference taking place; these are your “high priority” contacts. All of the other cards go in the “Later” pile. This will help you to prioritize and feel less overwhelmed by the amount of follow-ups you want to do.

2. Make notes on the back of the business cards you collected to help you with your follow-up. If you have an idea about how you might work with someone you met, write it down. If you talked about something you want to remember, write it down. Memory fades faster than you think, especially if you are meeting lots of different people.

3. Don’t send out any follow-up emails the day immediately following the conference. Everyone who attended is overwhelmed with a full inbox of unanswered emails – your email could simply get lost or ignored among all those other unanswered messages.

4. Personalize every follow-up email you write. People like to feel that you truly remember them so include one sentence in your email that draws upon a conversation you had at the conference or is in some way specific to this particular person. (This is where note-taking comes in handy).

5. Offer something in your email that is useful for your contact. Example: I really enjoyed talking to you about (insert topic here) and I thought you would find this resource (insert name of book, website, blogger, etc.) useful or relevant.

6. Don’t kiss up (too much) in your emails. If you met a great contact – Author, CEO – avoid blatant kissing up. It will come off fake. Keep it real and if you want to pay someone a compliment about something they said or did, do it without overdoing it.

7. When you send follow-up emails, keep them short and include an action step or a question that leads to continued communication. Keep the conversation going to develop a relationship with a contact that you made.

Business

Keep Calm Dealing With Angry Customers

When you walk into meet with a client, you have absolutely no idea what kind of day they may be having. Heck, you might be having a terrible day yourself. Regardless, sometimes sales calls can get quite heated and escalate to the point where you could lose the business if you don’t handle yourself properly.

If you have been in sales for any length of time, you most certainly have encountered a client who is rude, belittling and/or who outright criticizes your company, product/service or even you personally. There are a multitude of reasons why a client may act this way and it could range from anything such as problems at home, difficulties with other employees, issues with a supplier, legal troubles or they just saw your primary competitor in the hours or days prior who planted seeds of doubt in their mind. The fact of the matter is, you won’t really know unless they feel comfortable enough sharing this with you. If they don’t, don’t ask. If you don’t have a very well established rapport, don’t meddle in their business. Do what you came to do, sell your product or service.

So What Happens When Your Client Gets Out Of Hand And Says Or Does Something Unacceptable?

  1. KNOW YOUR PRODUCT/SERVICE INSIDE OUT

This should go without saying but before you go into any sales call, be sure you are an expert on whatever it is you are selling. If you can’t remember everything, be sure to contain supporting data or documentation in your detail binder and have it ready for demonstration. Be sure to know exactly where each article is located in your binder in order to avoid fumbling around, wasting unnecessary time and looking unprepared. Being prepared will enable you to keep calm and address your clients’ comments and concerns directly and precisely. If they catch you off guard and say or ask you something that you don’t know how to reply to or don’t know the answer to, simply acknowledge that you don’t know and will have to get back to them.

2. DO NOT REACT

Think, then react. It’s only human nature to snap back and lash out at someone who acts out at us in a negative way but you must control this urge. It will get you nowhere besides kicked out the door and never welcomed back. Think about what it is exactly that your client said that you found offensive or untrue and ask them why they said what they did. Are they misinformed? Remembering details incorrectly? If they don’t provide you with a straight up answer, do not react or engage further.

3. KEEP FOCUSED ON YOUR PRODUCT/SERVICE

Although it might be difficult, try to keep focused on what you are selling. This will reduce the likelihood of any further provocation or outbursts from your client. It also removes any emotional stimuli from the interaction.

4. FIND A REASON TO FOLLOW-UP 

In the event that you are unable to keep the meeting focused on your product or service, you should end the meeting and reschedule for a later date. You can directly inform your client that based on how they are acting or feeling, that perhaps it would be best if you met another day the following week to discuss. An indirect approach would be to inform you client that you will be able to bring something of greater value to the next meeting (create an excuse to have a follow-up meeting) and would like to make arrangements to do so.

5. SMILE AND TRY TO MAKE A JOKE

If you do this right off the get-go, it can go 1 of 2 ways: Either it will totally piss off your client or it will make them laugh and relieve their tension. Regardless, it’s a gamble. If you’ve already ended the meeting and rescheduled, that would probably be the safest time to make a joke but again, only do so if you are pretty darn sure how your client will react.

Whether you are in sales or any customer service type of role, it is only inevitable that you will encounter difficult customers and how you react (or don’t react) will determine whether or not you will keep those customers.

When I was 16 working as a receptionist, the head receptionist told me “Just because someone is having a bad day, don’t ever let them take it out on you! There is no excuse. If someone is rude to you, you have my permission to kick them out. No questions asked.”

I never forgot that advice. It was empowering to be able to stand up for myself and not have to be treated like a doormat. Nobody should be treated that way.

Negotiation

Successful Negotiation Strategies

Negotiation is a skill set that can be tough to master, but worth having in your back pocket no matter where you decide to go in life. Whether you find yourself in the boardroom making deals, running for office to bring positive change to the community, dealing with staff or getting ready to ask for a well-deserved raise, the power to negotiate is the life skill at some point everyone will need in their career.

Unfortunately, negotiating is also a tough wall to climb for women: not only do we don’t do it nearly enough, but there can be nasty consequences even when we do step up. It’s not just a fear of backlash or stepping out of turn, it can be a very real way to damage reputation, hurt new job prospects and be seen as less of a team-player. Negotiations then, need to be done so the party on the other side hears a clear message: ”It’s not just good for me, it’s good for you too.” With a true negotiation strategy, the objective is not to win or concede, but to work out a plan so that everyone can get more of what they want.

Here are some strategies to take the next time you find yourself at the bargaining table:

Prepare For The People Problem

Human beings live tangled lives at the best of times, and how a situation appears on your end could be a completely different story to the person on your end. Different viewpoints and backgrounds will always be part of negotiations, because the agreements are being made by people in the first place. To help defuse the ‘people problem’ include working with the other party’s values when developing solutions, actively listening to the other side, and allow others to let off steam so long as emotional reactions can be kept at bay. It can actually be productive to sit tight and let others get emotions off their chest, so long as responses remain calm and avoid putting more fuel on the fire. The best thing to do however, might be to take as much of the person out of the problem to begin with: if possible, develop a working relationship to establish trust and common ground before getting down to the bargaining table. An existing relationship can help curb any instincts to see negotiations as a battle between adversaries, and instead as a joint exercise of working together for the best of mutual benefit.

Step Back And Focus On The Actual Issues At Hand

Sometimes the subject you’re trying to negotiate around isn’t actually the problem. Staff rejecting a new contract might not be looking for significant salary gains, but could be instead concerned about over-exhaustion from a growing workload, or that new changes could compromise their quality of life. By looking after the interests, such as smaller monetary gains in exchange for more flexible time, it may be possible to find solutions that satisfy all parties, even when none could be seen in the original disagreement. What’s more, while upon first glance positions may be opposed, the same is not always true of interests. Find options that benefit the interests of all parties will go a long way towards getting to mutual agreement.

Brainstorm As Many Options As You Can

Thinking up a variety of choices is a critical strategy for any negotiator, and it can also be one of the most difficult. Too often negotiating appears a case of one or the other. By looking at the bigger picture however, it is possible to recognize that there may be other resources at the table that will satisfy all involved. How do you find more options? Brainstorm, ask questions, and draw on creative energies. If they aren’t full-out solutions, don’t sweat it: you won’t always have a full-out alternative answer to the problem at hand, but if you have in idea of different solutions all parties can take them forward to work out the details.

Don’t Be Afraid Of Walking Away And Try A New Approach To Achieve Your Goal

Not always the easiest choice by a long shot, but sometimes the best thing to do is step back and find a new way of achieving what you want.

When it comes to negotiation, recognize that you may have a difficult road ahead of you, but if the issue is of value than it’s worth the effort to see to it that all parties come out ahead.

Recruitment

Avoid This Resume Mistake

Thanks to LinkedIn, everyone has a copy of your resume. You don’t get the luxury of editing it before sending it on to specific hiring managers. It does however provide countless benefits, including direct access to hiring managers and recruiters. Keeping your page up to date with specific job details and accomplishments will greatly benefit you throughout your career.

One thing that won’t? A history of job hopping.

Two years here, six months there, one year here, four months there…yikes!

It’s okay to move positions and teams within the same organization. In fact, it’s encouraged! Changing roles within the same organization shows likeability, progress, and loyalty. Jumping from one company to another every year is what’s going to get you into trouble. Job hopping indicates a lack of focus and underperformance, especially in sales.

It takes approximately six months to a year to fully settle into a new position. If you’re not giving yourself (and the organization that hired you) at least that, then you better have a good explanation when you go to interview. Why would a company choose to invest time and resources in someone who has a history of providing little to no return for their previous employer?

If you’re thinking about leaving your current job, make sure it’s for an opportunity you can’t refuse. Don’t settle for the next best thing for a buck fifty more. The grass isn’t always greener. Find a mentor at work and learn as much as you can from them. Ask them how to pick up the slack or find more responsibilities and ask for a raise.

Pennies

Budgeting On A Fluctuating Income

Let’s face it, life is tough and is always throwing us punches. No matter how stable and secure we may think we are, at any given moment everything can change at the drop of a hat.

Whether it’s an emergency home repair, health issue or job loss, everyone should have some sort of emergency savings to cover these unanticipated costly events.

In sales, most of us are on a highly variable income. We are typically compensated by a base salary plus commission which may be paid out monthly, quarterly or only annually. Some sales positions are 100% commission. Being on a variable income makes it significantly more challenging to save, however it’s not impossible. Here are some tips that will help you get started:

ANALYZE YOUR INCOME AND IDENTIFY THE MONTH WITH YOUR LOWEST EARNINGS (AFTER TAX)

A quick way to figure out this number, is to simply look at your base salary and ignore commissions. If you make monthly commission, look at the previous year and identify your lowest month and use that as your figure. If you are on 100% commission, identify your lowest month and if that is zero, look at the frequency of your sales and you may have to develop a quarterly budget.

CREATE A BUDGET BASED ON THAT NUMBER

Identify all of your current spending to have an idea of where you are at. Firstly, begin with your non-variable income (i.e. mortgage/rent, property tax, utilities, etc) and then your variable income (everything else ranging from food, entertainment, travel, etc). Don’t forget all the small stuff that adds up like subscriptions, gifts, clothing, gym membership etc. Be sure to include absolutely everything you can possibly think of because this is where you will be able to make some cut-backs. Add up all of your variable and non-variable income separately and combined.  Then compare it to your lowest earning month and deduct that figure from your expenses. What kind of deficit are you running? Where can you cut back? Can you be shopping for basic necessities elsewhere to save money?

PAY OFF HIGH INTEREST DEBT FIRST

With some high interest debt, you may actually end up spending more money paying off interest than your actual debt. If you can obtain a line of credit from your bank, usually those rates are significantly lower than credit cards and other debtors and you can use those to pay off your higher interest debt in the interim and then work towards paying off the line of credit.

UPON PAYING OFF DEBT, AUTOMATICALLY TRANSFER THE SAME AMOUNT INTO A SAVINGS ACCOUNT

This is where I was able to save most of my money. I had a car loan that was $750 per month. As soon as I paid it off, I set up the exact same amount of money to be automatically transferred to my savings account each month. After all, I was used to that amount being withdrawn from my bank account each month, so why stop now?

SET UP A TIERED SAVINGS PLAN

I have a variety of savings accounts, all of which have a different purpose and I use them in this precise order:

  1. Chequing account – A basic account I use to pay all of my bills.
  2. Savings account (low interest) – First line of savings which I use for mostly home repairs or vacation.
  3. High Interest Savings Account – Backup – Only withdraw funds if regular savings account is low.
  4. TFSA (Tax Free Savings Account) – This is similar to an investment account. Only accessed in case of emergency.
  5. Mutual Funds – Investment only accessed if all other accounts are limited which would be an extreme emergency.
  6. Line of Credit – Absolute last resort.

INVEST IN RRSPS

Very commonly in sales positions where we may be taxed at the rate of our base salary and not at a higher rate once commissions are included, we may end up not paying enough taxes and owe taxes back. In this case or if you anticipate that you may be earning less money the next year, then you should consider investing in RRSP’s. This will reduce your overall taxable income. The only disadvantage is that once you invest in RRSP’s, this money is no longer liquid.  Therefore if you plan on needing access to this cash, it may be better to simply pay taxes and keep your money in savings.

Real Estate Investing

Investing In Commercial Real Estate

There’s pros and cons to many different types of investing. At the moment, I’m not sure whether I’ll pursue residential real estate or commercial real estate. There’s benefits to both and ideally in the long term I would like to have a diverse portfolio that incorporates both residential and commercial estates.

I’ve been spending a lot of time researching the benefits of investing in commercial real estate and thought I’d condense them into a post on here. I firmly believe educating yourself on the different types of investing you can do is a great way to mentally prepare yourself for it in the future. If you own a physical business, you might be unsure of the benefits of investing in commercial real estate versus leasing commercial real estate.

Here are the main benefits I’ve found about investing in commercial real estate:

  1. Regular cash flow – If you choose to rent out your commercial property, then you’ll get regular cash flow. This is almost a passive income as there’s not much you have to do to maintain the property, meaning if you don’t show up to work you’d still get paid. My goal is to build up a number of different passive income streams over the next few years so that I don’t have to work. A monthly income from a rented commercial property would be a great way to boost that income.
  2. Longer term client – Because commercial real estate tends to be rented to businesses, it’s likely that they’ll want to stay there longer than a person would rent a home or apartment for. This means less hassle, less time and money wasted on finding clients and hopefully less stress.
  3. Lower your operating costs – If you own a business you might find it substantially cheaper in the long term to invest in commercial real estate to house your company rather than renting. Obviously this is something you’ll have to sit down and work out, but in the long run it’s often much cheaper to buy. You’ll also be able to get some pretty impressive tax benefits that will help you get rid of the mortgage quickly.
  4. Asset appreciation – In time, it’s likely that your commercial property will increase in value, just like a traditional home. This will mean you’ll probably make money on your property if you ever want to sell it. Of course, this depends so much on the area the property is in and the condition of the property itself, but the general rule is if you make a good investment you can expect some asset appreciation over time.

There’s probably a bunch of other benefits I haven’t yet realized, but commercial real estate investment certainly seems appealing to me.