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beerisforclosers

Account Manager

Politicker
Arsonist
Valued Contributor
+6

Do you live on base salary or OTE?

There seem to be two types of reps at my company - those who live on base with an occasional splurge. And those who live like their OTE is a guarantee. COVID really highlighted who was who, and I'm just curious what your budget mindset looks like with an unpredictable paycheck.

If you sum up my expenses, I'm living...

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ARRisLife
Politicker
8
Account Executive
Love this post. Base Salary > Living expenses(too include base retirement contributions). Comish = savings for house & additional investments. 

Admittedly it took a little while to perfect that strategy, I was dipping into commish a bit in my early selling days as living in an expensive city kind of required it but that's been the goal since day 1.

I hope everyone sees the silver-lining in the last year as a bit of a healthy reality check to get their finances and emergency plans in order. Hate to see peers making great money living outside their means for material things. Get your finances in order and then have some fun play money! Don't live with financial anxiety!
beerisforclosers
Politicker
1
Account Manager
This is super similar to my own strategy. Got the house now, which has been great. And treated myself to a Peloton for my birthday. But I was thankful when the pandemic hit that I wasn't in trouble like some of my peers! It emphasized for me that I don't really need an extra 1000 square feet of living space for my dogs 😂We're comfy and cozy, and our mortgage is manageable even if the commission dries up,
SheWOLF
Opinionated
0
TC Sales
100% Agree with this! Base salary pays the bills, commish for savings, investing, some play money. 
Coffeesforclosers
Notable Contributor
6
Director Sales and Market Development
Pay yourself first, always put something away even if small. But boy have i gone hard on some commish checks. 
beerisforclosers
Politicker
0
Account Manager
Fair. Totally fair! Can't take it when you go; got to be responsible but need to enjoy life, too :) 
E_Money
Big Shot
5
💰
I'll never take a sales job where I couldn't live off of base. OTE is great, but if I have a bad month or quarter I don't want to have to worry about whether or not I can pay my bills. 
beerisforclosers
Politicker
2
Account Manager
Agreed. I couldn't do it either.
LordOfWar
Tycoon
2
Blow it up
I agree, and if you have a proven history then your record accounts for the higher base.

As salespeople we "kill what we eat", but sometimes the rest of the company fucks up the hunt and we still gotta get by.
Telehealth_2the_Moon
Notable Contributor
4
Director of Business Development
I thankfully have a comfortable base salary, the company structures things to treat commission as a great bonus which I really appreciate. The stress that has to come with a super low base position has to be a lot to get used to!
beerisforclosers
Politicker
1
Account Manager
Yea - if you're operating lower than 50/50, I guess you might have to trust in commission to some extent. I'm also thankful even at 50/50 my base is livable! 
Telehealth_2the_Moon
Notable Contributor
1
Director of Business Development
For sure, I think that needs to become the standard for commission. Pay a livable (preferably comfortably wage) and treat commission as a nice bonus. 
AlecBaldwinsHairline
Valued Contributor
3
Head of Sales Development
I budget for 80% of my salary, and the 20% goes towards fun and splurges.

All my commish/bonuses goes towards investments.
beerisforclosers
Politicker
1
Account Manager
This is such a good plan! I really shouldn't dip into the commish for fun, but I just love to travel too much lol
AlecBaldwinsHairline
Valued Contributor
1
Head of Sales Development
Do what you want, but don't forget what you need.  $1 today is worth $5 in 20 years if invested at 8% returns.
PhlipOut
Politicker
2
Account Executive
Now that my basic is "comfortable" I live mostly on that. Commission is for larger purchases, investments, savings etc..

I used to buy myself a designer tie when I got a quarterly bonus. Dry cleaners lost one and gave me like $40. Realised how pointless it was.

beware of the cashflow life. If your routine expenses grow at the same rate as your earnings, you'll always be paycheck to paycheck.
LordOfWar
Tycoon
4
Blow it up
Yeah, lifestyle creep is real and will screw up any future plans for homeownership or retirement. A few books changed my perspective on this:
- The Richest Man In Babylon
- The Millionaire Next Door
beerisforclosers
Politicker
1
Account Manager
Great point. Thank you!
poweredbycaffeine
WR Lieutenant
1
☕️
Are the reps who live on their OTE noticeably panicky in the last week of the month or quarter? Living on hypotheticals is a fast track to a stomach ulcer or psychotic episode when you can't pay off that CC balance or Landy lease payment because you goosed the earning period.
beerisforclosers
Politicker
2
Account Manager
There's one guy in particular who really stresses me out. So I can't imagine how stressed he is. His lifestyle is so out of control.
Telehealth_2the_Moon
Notable Contributor
1
Director of Business Development
You know it's bad when someone else's lifestyle is out of control enough to make YOU stressed!
Telehealth_2the_Moon
Notable Contributor
1
Director of Business Development
I can't imagine living to OTE for these exact reasons!
BulkPony
Tycoon
1
Enterprise Account Executive
I would imagine my commission structure is different from most here, where I am paid out monthly over the life of the contract (commish expires after 3 years). This makes it a lot easier to plan out the income and what to expect on a monthly basis. Would definitely put myself in the 'Combination' bucket for that reason. 

Not in SaaS so that is why I assume my structure is different from most. 
beerisforclosers
Politicker
1
Account Manager
Very interesting. I'm not sure if I'd like more predictability; it's the variation that keeps me motivated in a lot of ways!
MMMGood
Celebrated Contributor
1
Senior Account Executive
Definitely a combo. All of my living expenses (mortgage, food, utilities, school tuitions, clothes, etc) are budgeted from the base. Commission is “extra” for things like family vacations, big item purchases (hot tub, car, etc), investments, savings) 
beerisforclosers
Politicker
1
Account Manager
HOT TUB - this has been on my splurge list for so long and I can't justify it but one of these days I'll have enough in investments to commit hahaha
JJASBE
Catalyst
1
Director, Solutions Sales
This is an area I constantly struggle with.  Looking forward to reading some practical guidance in here.
LordOfWar
Tycoon
1
Blow it up
Before kids I lived on OTE and had nothing left over. Now I'm living on base and all commission is all invested in low-cost robo ETFs.

I leave a little to play with on crypto and weed stocks, but I assume all that is already gone since I'm an ape at self-directed investing.
Money
Executive
1
Head of Sales
I (barely) sold loans at a bank during the great recession. Had people in there all the time who had the money, but kept over spending. Here's what I had them do:

Add up the following monthly bills:
- Mortgage
- Car loan
- Water/gas/electric
- Insurance
- CC/student loan minimum payments

If you get paid twice a month, divide the total in half and that's how much of your base salary you deposit into 1 checking account every pay period. Open that account in a separate bank than you use today and throw away the debit card they give you. Only use that account to pay bills. 

Put the balance of your check into a separate account - that's your spending money.

Also suggest having a savings account you build up to 6mo of living expenses (bills + food) in case you lose your job. You never touch this money unless there isn't enough your spending money checking account to pay for an emergency (not vacations).

If possible, put at least an employer match into a 401K (up to the annual max) and max a Roth IRA annually (if you're eligible). 

Good baseline for folks getting started and making less than 140K.
Blackwargreymon
Politicker
1
MDR

On base salary with well invested savings
Clashingsoulsspell
Politicker
1
ISR
Pay yourself first, always put something away even if small
DonDraper
Politicker
0
National Sales Manager
Base for me, Commission just goes to my wife and son. 
beerisforclosers
Politicker
0
Account Manager
What a guy!
Allisce
Tycoon
0
Account Executive
My base is too low to cover everything, I have some credit card debt from earlier in life I’m taking care of. I do really well with saving in the big commission checks so I have a nice rainy day account that can help on low months. In terms of stress it’s helpful that our commission is made up of pieces from month 1,6,&12 so I’m not living and dying by the current month. 
beerisforclosers
Politicker
1
Account Manager
Nice. Good luck with the debt! So many of us have been there - blessing to get it in the rearview mirror!
ounceoz
WR Officer
0
US Sales Director
If you can I would get in the habit of being able to live on your base. Use your commission to pay for stuff with cash. I have seen reps get stuck in roles because they can't get themselves of the OTE TEET.
Smithy
Politicker
0
Director of Sales
With a young family, basic salary covers the outgoings and savings, and the OTE is the fun coupons. 
SlideDecksAreUseless
Personal Narrative
0
AE
I try to find a base I can live off of and pay my bills. Nashville cost of living isn't cheap. It's important to find a balance of base and OTE - strong commission money is really where you can take a leap in terms of investing and setting the ground work for home ownership etc. 
GDO
Politicker
0
BDM
I live of my base and invest my commission. My current job has me set up with a “high” base so the base and ote are pretty close togheter. 
CuriousFox
WR Officer
0
🦊
Hot tub party
MR.StretchISR
Politicker
0
ISR
Love this post. Base Salary > Living expenses(too include base retirement contributions). Comish = savings for house & additional investments.
Maximas
Tycoon
0
Senior Sales Executive
Combination.

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