Why Real Estate Agents Need Their Own Cash Reserve

Home Value Leads | May 10, 2018 | Uncategorized

Recently, we published an article on the blog that discussed how understanding cash flow leads to more clients. Cash flow is one of the things that all business owners must grasp. Business owners that don’t grasp cash flow are doomed to fail.

The reason is because cash flow ensures that you can maintain your real estate agent business. Not understanding cash flow leads to disaster. However, what happens if there’s a cash flow disruption? This can occur to even the best run businesses. In addition, no business can anticipate everything that could happen to disrupt the economy.

Because real estate agents get commission for selling or helping clients to purchase high-price tag items, the health of the economy can affect your business. That’s why it’s important that you always have a cash reserve on hand to prevent cash flow downturns from significantly impacting your business.

Cash flow isn’t the only reason to build a cash reserve. Keep reading to find out why you must build a cash reserve to ensure your real estate agent success.

Why Real Estate Agents Need Their Own Cash Reserve

In addition to preventing cash flow issues from impacting your business, there are other reasons you want to build a cash reserve:

  1. Cash reserves spell independence – There’s a good chance you partner with a real estate organization like Keller-Williams, Coldwell Banker, Re/Max, etc. There’s no problem doing this. However, there’s nothing as great as independence.

Once you become an independent real estate agent, you’re on your own. The risks are greater. However, so are the benefits. Ensure your potential independence by building a cash reserve.

  1. Cash is worth…cash – Many people make money by investing in real estate, stocks and bonds, or even collectibles. However, nothing holds its value the way that cash holds its value. Cash is worth cash. It never gains value, it’s only worth what it’s worth that day, but it also never loses value.

In a way, cash is always a decent investment because you won’t need to convert it into anything before putting it to use. It’s nice to have some of this stuff, cash, lying around, right?

  1. Knowing you have a cash reserve allows flexibility – There will come a time in your real estate agent career when you must take a risk. Having a cash reserve on hand gives you confidence to take that risk when you must.
  2. Knowing you have cash is a boon to your confidence – You can’t be a real estate agent if you’re trying to sell houses scared. What we mean by that is you must be confident when you deal with clients. A cash reserve builds confidence.


Above are just four reasons to build your cash reserve. There’s another reason you want to build your cash reserve. As a real estate agent essentially running your own business, it just makes business sense.

What happens if you decide to change careers? Or, if you wish to become a real estate broker instead of an agent? A nice cash reserve most definitely will help you in those types of situations.


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