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How car salespeople can save and invest consistently when making a living on commission

The challenge of committing and remaining consistent with investment savings aside from your 401k when your money is dominated by commission-based income. 

A difficult challenge to overcome? Yes. But far from impossible. 

After all, you wouldn’t let a little negative equity or a fresh ding from the detail team ruin your car deal, would you? 

Neither would we. In fact, there are multiple ways you can amp up your savings and investments while sales, commission checks, and pay plans continue to fluctuate. 

The reality is, if you’ve been selling cars for at least a few years and certainly in a management position, you have a baseline monthly income that, even on a bad month, you know you are highly unlikely to drop below. You might not know your ceiling, but you know your floor. That floor is your starting point. 

Additionally, we find more people use commission-based income as a crutch (or what I call “head trash”) to delay savings than it is an actual roadblock.

How do I know? We don’t get many calls about booking last-minute vacations or bored rainy, Sunday afternoon Amazon shopping sprees. Every day, people make unplanned buying decisions without thinking, “I’m not sure what my commission check will be next month.” 

So, don’t let “unpredictable” sales hold you back from building and growing the kind of wealth that will one day allow you to step away from the dealership and enjoy more time with loved ones. 

Here are three different strategies to help ensure you maximize savings and investment opportunities while enjoying the finer things in life along the way. 

  1. Some Now, More Later 
  2. Flex-Savings, Max-Out
  3. Forced Savings Strategies 

Some Now, MORE LATER. This strategy involves selecting a de-minimis monthly savings amount and then quarterly or semi-annually dumping in much larger chunks. This strategy works well for people who consistently spend below their means. This way, you get in the habit of ensuring you invest some money each month, but the real savings happen a few times throughout the year. You get the peace of mind with building cash and then putting it to work in chunks when you have more certainty about recent and upcoming expenses. This plan can work well with non-retirement taxable investment accounts and 529 college savings plans. Neither of these plans has minimums nor annual requirements for amount or frequency. Both are easy to set up for automatic and one-time electronic transfers.  

Flex-Savings. Or what I call the “Max-Out” strategy. This involves picking a monthly savings amount beyond the ceiling that you THINK you can afford to save each month. This strategy works well for people who aren’t big on tracking expenses. You think you have a rough idea of where the money goes but have never actually dug into it.  Regardless, you’re ready to beef up your investment dollars. 

Let’s say $10,000 makes its way to your checking account each month (after deductions like 401k, medical insurance, taxes, etc.). You think your regular expenses are $7,000-$8,000 per month based on a combination of your credit card bill and what’s left over before next month’s commission check rolls in.  Set up a non-retirement savings plan, referred to as a taxable investment account or brokerage account, with automatic monthly savings. Start with $3,000 per month. Slightly more than what you think you have leftover “Max-Out.” Give it a few months. If you feel you aren’t bringing home enough, reduce the monthly amount as little as possible. Give it a few months. Doing this trains you, too…


These plans are flexible because you can easily adjust your monthly amount at any time. And non-retirement accounts do not fall under the same age 59 ½ rules as retirement accounts, so, you still have access to the invested funds if absolutely necessary without early distribution penalties. 

Forced. Savings. Strategies. Forced savings strategies utilize investment vehicles that contractually require minimum monthly or annual contributions. Forced Savings Strategies are great for people who aren’t certain how much they will make each month but want to commit upfront, eliminating the chance for those dollars to be blown elsewhere. These vehicles are also good opportunities for people who need help reducing their tax bill. 

Two examples of forced savings investment vehicles are Cash Value Life Insurance policies and Investment Real Estate.

Why are they forced? If you buy real estate, you have no choice but to make the mortgage payment. Once you’re in, you’re in. Cash Value Life Insurance (without getting into the weeds today) involves a contractual commitment to put X minimum dollars into the policy each year, or else the policy will lapse (surrender charges plus no more insurance). Forced. This strategy turns an option to save into a mandatory bill. 

A bill paid to yourself, for your future.

There is no right or wrong strategy to choose from. Selecting a savings plan is like picking out a CRM. You might ask, which one is the best? The Answer…


If you aren’t certain which is best for you and your family, consult with a CERTIFIED FINANCIAL PLANNER™.

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Rob Bacharach
Rob Bacharach
Rob Bacharach, CFP®, The Car Salesman’s Financial Advisor

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