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loxinabox

Federal Account Executive

Opinionated
Fire Starter
Contributor
+1

Financial Planning on 50/50 Split

I have been an AE for a little less than a year after being promoted from BDR. I am building up an SaaS Enterprise Federal patch from essentially nothing so things have been pretty slow so far, but I have some great pipeline for the end of this FY and next. 

I am coming from a world with very predictable paycheck (the military) and I'm still adjusting to how to plan around variable comp. 

I have been very careful so far to live on my base and treat commission as a bonus, but I am married and looking toward buying a house and settling down soon.

For the pros out there how do you plan for long term financial decisions when you really aren't sure what that W2 will look like the next couple years?

How do you estimate household income? Are you more conservative or willing to bet on yourself?


🧠 Advice
💴 Money Management
☁️ Software Tech
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poweredbycaffeine
WR Lieutenant
11
☕️
You already said it: live on your base, have fun on your commission/bonus.

Take all of your commission/bonus money and put it in a separate account for a down payment or whatever else you want to set up goals for.
GrindingSales
Politicker
4
Account Executive
Bet on myself.  I know I need X amount to do all the things I want to do and therefore I put the pressure on myself to see that through. 
LordBusiness
Politicker
3
Chief Revenue Officer
My lifestyle for many years has driven my motivation.  Please don't take this as "financial advice" because it absolutely isn't that - but sales is about betting on yourself - and sometimes that means pushing your financial status a bit outside of base salary.  I've been pretty well known (in a joking way) to push my reps to trade in the Honda for the BMW, take the vacation to Hawaii now, don't wait 10 years -- funny how your sales performance will follow your financial commitments :) 
UrAssIsSaaS
Arsonist
1
SaaS Eater
Im a big fan of living within means and making sure the base can cover everything, BUT absolutely use this to drive my motivation. Bought a very expensive boat recently and that has certainly pushed my performance. Nothing like a little financial fire under that ass. 
hh456
Celebrated Contributor
2
sales
First - I’d look at historical performance and then grade 75% of that and budget for it. If you don’t have that, look at Glassdoor and find your positions annual average and apply the same formula. Everything above that you should save, live off the 75% average. You can re-adjust every few years for increased income. Second, take advantage of free money if it’s offered through 401k. Max out at what they’ll match at and stick to it. A 3% contribution matched at 3% on a 85,000 annual income will be worth about $7,500 a year in savings with compounding interest. That’ll get you to about 70% of your retirement savings just sticking there. I earn about 21-25% returns on my portfolio because I manage it. Obviously you’ll put more away as you age and earn more + social security and you’re there. It’s quiet easy to prepare for the future. I hope that helps and good luck.
DrunkenArt
Politicker
2
Sales Representative
I try to keep just enough in my checking account to cover consistent monthly bills (mortgage, phone, electric, etc) with a little buffer in case something changes. The rest gets divided up into a personal savings, 401k, and fun stock market money. In essence, live off your base and treat your commission as bonus money.
DungeonsNDemos
Big Shot
2
Rolling 20's all day
My recommendations:
1) Have your budget on a spreadsheet knowing your fixed costs and what you want to spend on fun/variable. Once you know your true expenses you can know how much you can afford to invest/save.
2) Think long-term (trips, house, cars, kids, etc)
3) Have some goals set for milestones and those purchases. Timely goals because time moves quick.

Now throw all that out and buy whatever the hell you want!

Or don't. 
But from what I plan on - live life based off base pay and let the commission be the accelerator towards your goals.
InQ5WeTrust
Arsonist
2
No marketing, mayo isn't an MQL
Live on your base - save/fun/holidays on bonus 

In London I pay about just shy of 45% of my base of rent. I work from home so wanted a nicer place. 

When I factor in Commish that's down to like sub 30. I save the Commish and assign it to investments or a holiday pot etc. 
Sunbunny31
Politicker
1
Sr Sales Executive 🐰
Day to day life is on my base.  Commission bought me the new car(s) when I needed them, the extra nice vacations, etc.  I maintain 529s and 401(k)s as well as savings.  Times have been lush and lean and I really hate tapping savings in the lean times...but that's what savings is there for.   
goose
Politicker
0
Sales Executive
Betting on yourself is a dumb idea. Live beneath your means. It’s boring but you will be happy when you are 50.

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