[Why] Your Paycheck Sucks

How many times have you ever gotten your paycheck or direct deposit and been disappointed?  Or worse, you “blanked” and the sum total of your paycheck was exactly $0.00?

Perhaps you thought to yourself in that moment, “Man, I’ve got to close more deals!”


But let’s stop and think for a moment about why crappy paychecks actually happen:

Your paycheck sucks because you don’t close enough deals.

You don’t close enough deals because you don’t have enough quality deals in your pipeline.

You don’t have enough quality deals in your pipeline because you don’t have enough quality lead sources from which to generate regular new leads.

You don’t have enough quality lead sources because you’re not spending the majority of your time proactively cultivating new lead sources.

You don’t spend the majority of your time cultivating new lead sources because you’re so attached to the small number of (crappy) deals you need to close to make a little bit of money that you waste and mis-manage and wrongly prioritize your time every single day.

And finally, it’s likely you mis-manage your time all day long because you don’t know how to effectively spend your time cultivating new lead sources.  In other words, you don’t really know where to start looking for new business in a way that maximizes your efforts.

More Business Equals More Time

Question: when you’ve got 50 active deals in your pipeline that all could close within 90 days, do you have the time to go back and forth between processors and underwriters all day long trying to get 1 crappy deal closed?

Of course not.  In fact, LOs who produce a lot of business know this in advance and make better decisions about taking on a deal in the first place.

They spend the majority of their time qualifying the lead upfront – looking at every angle, just like an underwriter might do – so that the deal can fly through the system to the closing table.

Really smart loan originators will tell their lead sources upfront when a deal is marginal and manage their expectations that it could die in underwriting, or better yet, that the client doesn’t qualify and don’t waste your time.

Thus, the more deals you are juggling, ironically the more time you’ll have to cultivate lead sources because you know that the deals you’re putting into the pipeline are high-quality and won’t require any more touches from you once you release it to processing.

The opposite scenario is also true.

Low-producing originators are “attached” to crappy deals, trying to “ram” them through underwriting .  This is one of the most rampant time-wasting, credibility-damaging, relationship-crushing activities that struggling loan originators engage in on a regular basis.

“But I need the money” is what I often hear from loan originators in these situations.

I get it.

But what you need more than the golden egg is the goose that lays those golden eggs reliably, predictably, week in and week out.

The #s To Focus On

I believe that every loan originator has the capability to earn $250K a year, and that’s my minimum goal for each client I work with.

So here are the #s you should focus on:

  • Approximately 20% of active deals in a pipeline close each month;
  • To close 10 deals a month you need to take 50 applications/month;
  • To take 50 applications/month, you need approximately 10 – 15 producing lead sources that send you referrals regularly;
  • Upfront, you’ll need to meet with at least 30 or more lead sources to land 10 – 15 that will send you referrals;
  • You should be meeting with at least 1 new referral source/week to maintain and grow your pipeline of 10 closings/month once you’ve established your 10 – 15 reliable referral partners.

This data comes from tracking several dozen loan originator businesses over several months.  Obviously these #s are just averages and there are plenty of scenarios that will fall outside of these #s, but generally speaking you can count on the above conversion ratios.

Here’s the most important takeaway: you are a salesperson first, administrator second.  Don’t confuse administration (loan processing) with productivity.

Every hour spent processing a loan is an hour lost selling yourself and cultivating new business.  Obviously it has to be done, but plan your day wisely.

Use the 2 to 1 time ratio: for every hour you spend processing a deal, you should spend 2 hours cultivating business.

Productive sales-people earn hundreds of dollars per hour or more; the most productive and in demand administrative personnel get paid up to $40 or $50/hour.

Here’s a good question to leave you with: if you are brutally honest with yourself, based on how you spend your time all day, are you a salesperson or an administrator?

Use this as a wake up call to get back to being a full time salesperson.  Do it, and watch your income skyrocket.

And, I’d love to know how you balance your time.  Share in the comments section how you organize your day and/or where you struggle when it comes to time management and whether or not you’re spending more time as an administrator or as a salesperson.





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