Handling the Emotional Highs and Lows of Commission-Based Work

This is CRE – The Unspoken Truth. Today our episode is handling the emotional highs and lows of commission-based work. And I’m Charlie Coppola, joined with my father Craig. And so I want to start out early on in your career. How did you handle months where you had no income, no money coming in?

Well, I had no money early on. And so I didn’t have very many months where I didn’t have any money, but I had a lot of months where I didn’t make any money. I mean, very much money. So I tell you, the first thing that we teach our young people when they train with us is you have to keep your expenses super low.

And so you can survive on doing a deal and a deal. You know, back in the day I could live on $1,100 a month. You know, so what’s that? $12,000 a year. So in my first couple months in the business, you know, I was a runner making nothing, and I was living on whatever I was. So I was living on a thousand bucks a month. And when I did my first deal, which was a 1,200 foot transaction, I think I made a thousand or 2,000 bucks. So that covered me for the month. And then I closed a two or three thousand deal, and fairly, pretty quickly, I was able to have enough for the year in there. But you really got to keep your expenses low initially. And so we teach our runners, I mean, we don’t pay them very much. We spend them 25,000 bucks and they work for us for three years. So they are learning how to live without very much money.

Yeah. And I would imagine you probably keep expenses low for at least a year or two. Like, it’s longer than you want it to be. Maybe longer.

You know, well, I kept my expenses super low until I got married to your mom.

Yeah. Yeah. Yeah.

And then two can’t live as cheaply as one. And during that time I ended up buying a house and renting out one of the rooms. And so I had a roommate, and so my expenses were low even after I owned a house. But you know, we say this to you all the time, and our kids, is live as cheap as you can as long as you can. And the reason for that is there’s two ways to be financially independent. And I’ve said this a lot: Robert and Kim Kiyosaki, who are longtime dear friends, they had their book, but they had really low lifestyle and they had a little bit of income coming in, and they were financially independent.

So you can make a lot of money and blow it, or you can make very little money and just have a low lifestyle and still be financially independent. And they were. And in brokerage, if you want to really weather the highs and lows, one of the ways, the key way to do it, is just to not have a very big expense account. It’s easy.

Yeah. Yeah. So when things are not going your way, do you have a mantra or something to just, like, stick with it and keep going, and not let the lows bring you down emotionally?

Yeah. I think we said this before on lots of podcasts. I mean, the number one thing is pipeline.

Yeah.

If you lose two or three deals, but you have 30 deals in your pipeline, you know, you’ve got some income coming in. So very quickly, I think that the idea is I want to keep my expenses so low that I don’t have to worry about it. And then number two, I want to build my pipeline up so that I can start saving money.

And I remember, I think I’ve told this, maybe not here on this podcast, but the first year, maybe second or third year in the business, I made six figures. That year, I took, in 1987, so it would have been the third year in the business, I took over 50% of my earnings, which would have been 60% or so of my post-tax earnings, and spent it all getting my CCIM, because I was reinvesting in myself. So a lot of folks go out and they’ll then go buy a car, or, you know, do some crazy trip. And that’s one of the challenges we see now, is everybody wants everything right away. Back in those days, we were okay delaying gratification. And so taking advantage of delayed gratification is something that’s super powerful when you’re on a commission-based job.

You need to… yeah.

Yeah.

You’ve said on other podcasts, pipeline equals heartbeat. And then another one of your quotes from another podcast: it’s nothing solves self-doubt like pipeline. And so…

It’s good.

Yeah. And I think pipeline is just, we want to know. I wanted to know. We have this sheet, tip sweet sheet, and I would just write it in there, and I just, like, when are these deals going to close, and how much am I going to make? And I’d just write a very conservative number on it, and I started going, okay, if I can close 70% of these, or 60% or 50%, I’m fine.

Yeah.

And then once you become fine, then it’s like, okay, now we’re just talking about what are we going to spend our additional money on? And there’s lots of places you could spend money on. Certainly a car, because you’re a broker and you’re touring. You could buy a fancy car. You know, I never bought new cars for a long period of time. I actually, and so I’ve only owned four cars in 35 years. So I just buy cars and I drive them for a long period of time, and I like them, and that’s it. You know, we were talking to Tom Bole, who’s been my sitting, you know, a partner at Lee & Associates. He’s had 22 cars in the same time that I’ve had four. And so he just, he likes cars. So that wasn’t my thing. I’d rather spend it on other things. And so it’s crazy.

I was going to… so we talked a little bit about the lows of the, you know, commission-based work. I want to talk a little bit about the highs. One of the questions I wrote down is, like, I’m not sure you’re going to have the best answer: how do you celebrate a big deal or a milestone? And I think if I were to answer for you, it would be like investing or saving. So maybe I’ll ask it this way, and you could answer that for yourself, but is there any broker in your office, or anyone in your market, anyone you know, that you’re like, hey, they do this when they close a big deal and they celebrate, it’s a cool way to celebrate?

Sure. So I will tell you that today it’s investing, but early on it was, to the same conversation we had early on, was how do I pay off my house?

Mhm.

And so I got real joy, real joy, once I had enough cash to know that I could survive the year, to start chunking down my house. And so when we sold that house, the one before the one we live in now, I owned it free and clear. And so I bought that house, and we were maybe in eight or nine years, and I paid it off. And so that was real joy in paying off that house. And then when we paid this house off the first time, you know, I paid this house, I say this all the time, I paid this house off five times, because I’ll reinvest. But when I paid it off the first time, there’s some real joy in that. So that’s one way that I do it.

I know some guys, there was one fellow that was a land broker. Every time he closed a big deal, he bought a new watch. So he was buying really fancy watches, and as the deal got bigger, he’d buy fancier watches. I know another person that was buying pens, like Montblanc and other pens. So there are ways of making that. Mine were more financial, to start chunking away some of the things that we had to pay for: 529 plans, colleges, those kind of things. And I felt a lot of joy in that. Starting to chunk and get ahead of those games.

Yeah. Do you remember your first big, you know, your first big check, first big deal?

I do.

Yeah.

I remember my first deal. I remember my second deal, because it turned out to be a crazy deal. A small world. My first deal was with two psychologists. My second deal was with this nonprofit organization that funded things in third world countries. And I did the deal, and a month later I wake up in the morning and there’s a whole bunch of people protesting out front of their building. Turns out that nonprofit was the arm for Ollie North to fund the Contras. You might not know this, but Ollie North was, during Ronald Reagan’s, the Iran-Contra affair was going through this guy Ollie North, and he was using this nonprofit to fund the money to buy arms in South America. And so I did the deal. They had no idea. Oh my gosh. It was like, this is like the second deal I did. I was like, “Wow.” They obviously bankrupted them the next week.

Dang.

Crazy. That was a small world. I never met Ollie North. I never… yeah, I never knew it, but they were burning crosses on the lawn.

It was funny. Yeah.

Wow.

Yeah.

That’s crazy. So we talked some on the lows and the highs, but I’m curious on the kind of mental side, the emotional stability side of it. Have you found yourself overconfident or complacent after a big year? Or, you know, I know complacent’s not really a word in your vocabulary, but…

Never. Never. You know, in fact it’s just the opposite: depression. You know, I’d go… as you know, I’ve been number one in the Phoenix office for a long time, and was for many, many years. 25 of the first 33 years I was number one. And I think the first thing is, every year I’d race to be number one, and then I’d be number one, and then January 5th I’d be starting at zero again with everybody else. And it was just a big letdown. Super high highs and super low lows. And even after I had made a bunch of money, it was still the same thing, because, you know, that’s how we keep score. Brokers keep score with how much money did you make and where did you rank in the office. Those are really the scorecards.

I wish I could have done a better job of that. But, you know, I kept winning, and I’m like, it’s been 10 years in a row, or 11 years in a row. How do I do this again? And I always use this quote, the Ronda Rousey quote: on my worst year, I needed to be better than some number two guy on their best year to be number one. And for a lot of years, I was. And so I kind of had to offset that with different things. And so I wrote down a couple things that I did that with.

And the first one was, and that’s where the idea of this fantastic life came up, in my book The Fantastic Life, is I didn’t want to be a one horse broker, where that was all, that was my life. So while I wanted to be number one at Lee & Associates, I also wanted to run, and you see my kind of my wall behind me. I also wanted to run marathons. I also wanted to be the world champion in Taekwondo. I also wanted to, you know, coach you and coach your sisters. And so I had a whole bunch of outside activities. And so the fantastic life theory became, when one area, like business, wasn’t doing particularly well, other areas were doing good. Me as a father, me as a husband, me as an athlete. And so that’s what, to me, it was like, I always rank myself in my resumes: what was I building that year? And so I might have an off year in business, but I didn’t have an off year as a dad, or I didn’t have an off year as an athlete.

It’s one of my last questions I had here. I wrote down, how do you not put all your eggs in one basket? For a broker, it’s one number. It’s how much, you know, did you earn? How many deals do you close? That’s it. And I think you talked about some of the support systems you use, which is having other things going on in your life. We see that at OneSource too, is we have one or two key numbers, but we have a bunch of other ones. And so, you know, that’s one way we don’t put all our eggs in one basket. But what else would you do on the business side to…

Yeah, you know, I think, you know, we have to say trust the process, and for brokers the process is, did I make my calls? And so I’m always, you know, I just made my calls for the… and now it’s the seventh of the month, and I’m done with this month. I’m going to start now on next month. I was ahead three or four months before I start traveling. And so I started saying, hey, did I make my calls? Did I do all the meetings I should have? That is my pipeline growing, and just diversifying.

At the end of the day, it’s all about how much did we make? But how much I made was directly dependent on how many calls I made, how many people I was talking to, how many boards was I on, how many transactions were in my pipeline. So I diversified that down to what’s the core principle, you know, first principles of, hey, if you’re trusting the process, you’re going to get there. If we have 160 deals in our pipeline at any time, then we’re going to close 130 transactions this year. So that’s what we want to do. And so one of the challenges now that I’m not doing all the deals is, I knew I could close deals, and so some of our runners aren’t closing as many deals. Their close ratio is not mine. So we’ve had to kind of adjust that. But yes, you’re looking at lots of things.

I wrote this. We used to talk about it in baseball all the time when you coached us: focus on the process, not the result, right? And it’s, if you’re doing your calls, if you’re showing up every day consistently, like, the results will take care of themselves, right?

I probably send out, you know, I’m a big quote guy, and if you were to break down my quotes, 70% of them have to do with consistency, process, showing up, right? And part of it is because I’m still telling myself, look, it’s about showing up. It’s about doing what you need to do. It’s about getting those things done. And, you know, my roles have changed, but the same things happen. I still have the process I have to do.

Yeah.

And that brings me back to the one point I did want to make. The number one thing I think I did better than any other thing was, from the very first day, I took a long-term perspective. The very first phone call to the phone call today that I’m making, 40 plus years later, I’m looking at the long-term perspective. I’m not losing relationships. I’m not pushing them. If there’s a time to close a deal, I’ll do it. If there’s time not, I don’t push it. And so I think that having that perspective, especially now that I have a legacy team that’s going to last long beyond my career, that I still have that perspective. And it’s really hard for brokers to do that. Really hard.

Yeah. Yeah. I think it’s good. It’s a Warren Buffett, right? I mean, he’s the best at it too. Is he’s 90 plus and he’s still investing for the long term.

He’s… yeah. He’s giving it away. He’s…

Yeah.

His kids are giving it away, you know.

Yeah. Yeah. Yeah. Yeah.

And so I think if we just saw pipeline, long-term perspective, balanced outside activities. Doesn’t mean your day is balanced. That’s a misnomer. I had balanced activities, but it was because I worked first and then I did all these other things, and I got lost sleep. But we have to really understand the process of a brokerage is not done in 40 hours a week, or 50. And, you know, it could be now at my stage, but certainly when you’re young, no.

We’ve done two other topics on here. One was brokerage and marriage, and the other one was brokerage and parenting, right? So managing family life outside of brokerage. And kind of the last thing I want to touch on here is, obviously, you know, it’s an emotional roller coaster as you close deals or you lose deals, and you make no money one month and then you have a big month. But I do think it’s probably exponential when you bring in a family or a spouse. And so moderating your own emotions is one thing, but then moderating your family’s. Any comments on that topic?

It’s super hard to get out of the office. We live close to the office. Drive five minutes and go from high octane, type A…

Competitive.

To being a father and husband.

Selfless, and yeah.

It’s really hard. I’m not sure I did a good job of it. I have a great wife who did a way better job of it, and she was, you know, for the most part, really good and understanding about how much pressure there is. And there is a lot of pressure. Let’s just call it what it is: being a broker, and a high producing broker at that. There’s a way to be a low producing broker and not make a lot of money, of course. But to be a high producing broker, there’s just a lot of stuff that’s happening all the time that’s high risk, and so it’s very stressful, and closing deals is very stressful. It’s not nearly anymore, because I’m financially solid, but for a long time, and we’re talking 30 years, it’s hard.

So I don’t know if I have great answers, other than, you know, when I tried to leave, I tried to leave and I tried to do activities that would immerse me. Even though I was always on the phone, I was forwarding and talking to emails. I mean, I’d be at baseball practice with you and I’d take a phone call, and I’d be hitting fungoes with a phone call. Those things happen. But then as soon as that’s done, I’m right back into the deal. So I got pretty good, I think, at focusing in the moment and being with it. It’s changed now because we’re so connected. It’s even harder today, because we are connected. 7:24.

I’d say one thing you did well, and it was also more of the times too, is like, when you got home, you left your phone. You know, it was easier when you didn’t even have a phone, but yeah, you’d leave it in the car. And so, you know, there wasn’t that thing pinging in your pocket trying to get your attention when you were at home. And I think that is a challenge today.

Yeah. The speed and depth of transactions is really improved.

Yeah.

And so it’s good. It’s not very good. It’s good for us, because we’re, you know, we are a very high octane business and we’re on it all the time. I’m working on a sale of a building right now, and literally 50, 70% of all the emails have been after hours or on the weekends. And so that’s… and it’s in my nature to kind of just answer them and do it. I’ve been training our young runner how fast things work, and he doesn’t get it. And so I’m like… he said, you know, sent me a text, “I’m with my girlfriend. I’ll get to it later.” I’m like, no. When we’re with our girlfriend or our wife or our kids, we stop. We tell them, hey, we got five minutes, we got to do this thing. And he didn’t understand that. I mean, this is how it works. Now, not all brokers will agree with this. And I would say that most top brokers would. It’s a different…

You know. Yeah, they’re a different breed. They just get on.

Well, it’s high school football versus NFL. The speed, you know, or whatever it is. College football, college basketball versus the NBA.

That’s true.

The speed and the technicality with speed, you know, all…

Well, it’s interesting, because I just got off the phone with Mike Lipy, you know, and he’s in his 70s, and he calls me back within 3 minutes. I mean, it doesn’t matter, nights and weekends. And he doesn’t need to do that. And that’s just the nature of top producers.

Mhm.

Doing it for a long period of time. And I’m like, this is just how I do it. And I’ve noticed that there’s a lot of people preaching out there that you don’t put boundaries, and do this other stuff. And I totally get it. But I just look at that and go, great. You can be number two. You’re not going to be number one doing that.

Yeah. Yeah. I love it. Well, thank you. This is really good stuff, handling the highs and lows of the emotional commission-based work.

Thank you. Appreciate it.