10 Reasons I Chose Insurance Vs. Real Estate as an Entrepreneur | Get Money EP
Once I chose to leave the US Marine Corps after 8 years on active duty, I needed to quickly find a way to replace the income that I was earning while I was in the military. I was presented with a scenario where I had to start making money immediately. I basically had three choices – become a real estate agent, become a loan officer, or become an insurance agent.
Today I am going to talk about why I chose insurance over real estate. I am going to go over 10 specific reasons.
Understanding the nuances of insurance was much easier than understanding the different deals that would happen in the real estate business. At any given time more people are likely to buy insurance than a real estate property.
With real estate, there are a lot of steps involved in making a sale. And even then it takes months for a deal to get approved. With insurance, it happens quickly. In many instances, people are pre-approved and it’s a matter of filling out an electronic form.
In the real estate industry, there are so many players that it has become overly saturated. Contrast that to the insurance industry and there are so little people involved that you capture a significant portion of the market.
When you sell a house or any other property, you are not going to see your client for the next few years. At least generally speaking. But in insurance, financial status keeps changing for people every six months. So, you can be there for them more and build a personal relationship. Thus you’ll get recurring revenue.
In real estate, you can eventually start building a team and become a real estate broker. The same can be done in the insurance industry as well but you don’t need a license. Therefore, the scale can be higher in the latter.
There is a lot of stress involved in real estate and a lot of legwork. You can be called at any time by a client and you have to show them the properties. On the insurance side, you can just make a phone call or a video call. Transactions can be done online. So, it involves much less stress.
To start off your business as a real estate business, it might cost $500-$3000 based on the license provider. In insurance, it costs about $500, at least in Illinois.
In simple words, you could say that your compensation in the real estate would be linear while in the insurance industry, it would be exponential. Due to the ease of doing business, you can do more volume and so, earn a lot more.
In the real estate industry, technology has really advanced to a point where real estate agents’ work and need has reduced drastically. This has affected their income as well. On the insurance side, technology doesn’t have similarly drastic effects. The need here is for emotional intelligence rather than artificial intelligence.
History is proof that real estate and mortgage industries are heavily affected by a financial crisis such as a recession. In the insurance industry though, the demand for insurance actually goes up. People need protection and security during crises in which the insurance industry can provide.