In this opinion piece, colleague Nicholas Lim shares his insights on the costs of self-employment that remain elusive from the public eye.
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As a new RES, I used to favor the idea of being self-employed to have the flexibility to do my work as and when I wanted. There was nothing to enforce the sense of urgency in any matter. What time do I wake up, what constitutes a good day, and when do my work hours begin and end? All these questions were very much in the grey area without thought, just a highly motivated young agent in the industry.
I have set goals for myself but there was no sense of urgency for me to take action. I only told myself “It’s okay, I will make this amount by the end of the year 2024”, with no idea how to. It’s different from employment with a superior coming down on you to achieve/or failing to achieve a certain target that will push an individual to get things done with detailed planning and a clear direction. I believe that to succeed there is a goal in mind, then comes a plan and motivation from within to call for action.
I spent many days at the start of my career to brush up on my knowledge thinking that I was “working”, after a while it felt as if I just wasted my time. I was not accomplishing anything of substance, was not contacting countless clients, was not closing anything, I used research as an excuse for working.
One fateful day, I got to know a fellow RES who enlightened me with a broader perspective on this industry. The difference between self-employment vs employment lies in the difference in benefits.
The benefits being (agents don’t possess):
Transportation fees
Medical leaves
CPF
Chalet stays
Entertainment Fee
With all these differences in mind, it meant that we agents have to work even harder to cover the differences, or else we would be better off being employed. This perspective made me anxious, knowing that I am starting behind simply based on these benefits.
He then gave me another perspective that would get me on my toes to start hustling. As a young agent, I dream of being part of the Propnex Millionaires as they say aim for the stars and you won’t fall far. It is commonly known that self-employment is equivalent to running a business. When we look at ourselves as a business, there is an opportunity cost for agents. It is like opening a shop and paying for the rent every day regardless that it is open or not. The more we have to open the shop to increase the probability of making profits to turnover each day.
If I were to use a million dollars as a benchmark:
$1,000,000 / 365 days = $2739/day
For every day that I do not get a deal closed, I lose $2739. Isn’t this amazing? The time I spent idling around has cost me so much. This may seem absurd to some but it makes a lot of sense to me. To me, it is not so much about the amount that we target to hit. These two new perspectives have changed how I see Real Estate as an industry and pushed me to make sure I get things done. Ultimately, how we perceive things determines how we will approach them.
Now that you have gained these two new perspectives like I did, is freedom that “free” anymore?
By Nicholas Lim
