As When we think of a job and the paycheques that come with it, what comes to mind is bi-weekly cheques giving us money for the time we have put in at work. Then we use that money towards budgeted expenses like bills, taxes, good, rent, and even some unplanned expenses like shopping. However, this picture does not apply to all careers.
Some careers like real estate, sales positions, and business ownership could be called “Feast or Famine” careers. The “Feast” part comes in when there is a lot of sales or business activity resulting in plentiful profits and pay. However, in these careers, not all times are good hence the “Famine” part. Famine represents times when business is slow, pay trickles in or even stops, and financial prudence is required to continue.
When looking into career options, we do look at the financial picture. We research the cost of education, any start-up expenses like uniforms or tools, and average pay. Yet we tend to overlook the month to month pay or business expectations which means people starting out in these jobs are unaware of the Feast or Famine cycle. When that first famine hits, many are unprepared.
Feast or Famine in Real Estate
We had a conversation about why jobs in real estate can be considered Feast or Famine careers with several interviewees like Laurie Gagnier, a real estate broker. To become a real estate salesperson (at least in Ontario), you must take several courses and work as a salesperson for a two-year articling (apprenticeship) period. Often you must also pay for start-up expenses like business cards, marketing materials, signage, memberships and dues, and a website. This means there is some initial investment involved, but you are able to register and start working quite quickly, something that draws people to this career. This article from Money Under 30 covers a lot of this information.
However, the finances involved with being a real estate salesperson are not so straightforward. Those interested in a quick start in real estate may be shocked when paycheques are few and far between.
The first Famine begins as a new real estate salesperson enters the workforce. As a new realtor, they must build clientele before being able to make a sale or take any commissions. Even once a realtor has a client base and sells a property, it can take time to process that payment. There are delays between a client saying “This is the house” and when the real estate salesperson is paid. Contracts are written, finances are arranged with mortgage brokers, inspections are completed, and whatever other steps may occur. All of these can delay when a paycheque is seen by a realtor.
For those working in real estate, the Feast begins when the client base is built and the sales become more stable. In particular, key times for sales are a boon to realtors like spring and early summer where a lot of property exchanges hands. It is during these times that many realtors bring in income that makes people either jealous of the career or interested in joining it.
But where there is a rise, there is also a fall. Or in this case, a winter. Real estate sales understandably dwindle during the winter months as homeowners are less interested in moving house. Real estate salespeople must balance the Feast or Famine cycles to ensure they can live without a paycheque during the down months. This is not always easy, but it is a fact of life for those working in real estate.
In this article, we felt it was not enough to explain the issue of Feast or Famine careers. Nor was it enough to provide the real estate example. Instead, here are some helpful tips to know if a career if a Feast or Famine and how to manage if it is.
3 Ways to know if a career is “Feast or Famine”
Ask: Talk to someone who works in the career you are interested in. Better yet, invite them to an informational interview where you can ask questions about their career openly. Take this time to ask whether a Feast or Famine cycle exists in the industry or if the paycheques are steady.
Search: Often industry representatives like boards and unions will post articles and help for people working in their industry. Search these websites to see if they supply information or support for money management related to unsteady business or paycheques. Even industry magazines can help like this article from RealtorMag.
Research: Look at industry performance reports, like property sales reports for realtors, to see if there is a cycle. If there are clear peak-seasons and off-seasons, the industry may be based on Feast or Famine careers. That does not mean the job will be this way, but it is something to be aware of.
5 Steps to manage Feast or Famine careers
Plan & Save: Before even starting out in a Feast or Famine job, take some time to save up and plan how you will address the eventual downtime. It is helpful to save up to 6 months worth of expenses to ensure you can survive any Famine periods. This preparation will also likely make those around you, like family, feel more secure as you navigate something they may see as risky, which Feast or Famine careers can be.
Budget: Of course, budgeting is key for any person, but for those in Feast or Famine careers especially. It is not good enough to save 6 months of expenses, you need to budget exactly where the money saved is going to go. As circumstances change, budgets are revised. Once you have weathered your first Famine or two, you can adjust your financial picture to account for any additional income brought in from your Feasts.
Be Active: While business is slow during a Famine, you should not be idle. Take this time to work on business planning, client acquisition, networking, nurturing client relationships, or professional development. Being active will better prepare you to maximize the next Feast.
Manage Stress: Few things are more stressful than money, or lack thereof. An important part of being successful in Feast or Famine careers is managing the stress from the financial uncertainty. While planning and budgeting will help put-off some of the stress, it will still hit you. Find ways to manage that stress like practising self-care or giving back to the community.
Build a Network: In a Feast or Famine job, your network is key. In particular, your client list! Take time and care in building a client network based on respect and honest interest in client well-being. Clients who trust you are working in their best interest are most likely to come back or send referrals. Recurring clients and referrals are a great way to build more consistent work thus a more steady paycheque.