The Salesperson's Playbook for Financial Success

Many, if not most, sales people end up in this field for financial reasons.

I personally ended up in a sales role at a software-as-a-service (SaaS) startup a bit by coincidence.

It all started,while I was at a cushy job in a Fortune 500 technology company. I had joined this company right out of college, and was in my 3rd year there. I would describe the job as chill.

I would start working around 10AM, had plenty of time for random walks and naps during the day, and even managed to make time for a side hustle where I founded my own food startup.

But after a while, I got quite bored of the work. I was looking for a new challenge. That’s when I stumbled upon a new seed-stage startup in the hot new industry of artificial intelligence (AI).

Intrigued, I looked at the job openings they had at the time. None of them matched my current product and business development skill set - except one open role for an account executive.

I copied the hiring manager’s email address from the listing, sent him an email, and the rest is history. I stumbled into sales a bit by chance, but after a year in the role, I realized how misled I had previously been about what salespeople do.

I address the benefits of being in software sales in a previous blog, but the truth is, I got lucky.

Not all sales jobs are created equally, but at SaaS startups, sales roles are a great way to be an early contributor to a company’s success, learn a lot about technology, product and revenue and make decent money too.

Sales as a path to financial independence

Many people have heard about the Financial Independence Retire Early (FIRE) movement. Some subscribe instead to ChubbyFIRE or FatFIRE, which refers to a retirement state in which more money has been amassed, to the point that retirees can spend more (or the same), not less than they did while working.

FIRE preaches minimalism and simplicity in early retirement, FatFIRE shuns this and says spending to enjoy in retirement is OK.

In reality, I am somewhere in the middle. The part I am not sure about yet, mostly because I am still only 5-6 years into my working career, is retiring early.

I don’t know if I will ever want to fully “retire” and work on passion projects all day, or if I may just end up taking a more chill job and coasting to retirement. Only time will tell.

Either way, I do resonate with the financial independence (FI) movement, with the intention of being smart with money, so that it does not cause me stress in life.

With the recent events around Silicon Valley Bank, it only reinforced how important having a financial cushion really is. My partner and I both work in tech, and although his company is much more stable and larger than a typical SaaS startup, my job as a salesperson at a startup was certainly at risk.

Thankfully, I had a robust emergency fund of around 2 years of my average expenses stocked up. So, my concerns were more around if my money would be safe in a checking account, as opposed to worrying if I would have money for my expenses at all.

The good news is, FDIC insurance of up to $250K in a checking account seems to still be working for individuals.

The future has forever changed for startups, however, who will now have to figure out how to take the excess capital they have raised or collected as revenues and either spread it across multiple checking accounts, or invest in Treasuries or money market funds.

As if being a startup CEO wasn’t hard enough - now you also have to be an expert in capital allocation! Or you hire a finance person early on to help with this.

Starting saving and investing early in your sales career

Even when I was in my big company role early on in my career, I was still very much a frugal saver. Thank you to my immigrant parents for reinforcing these behaviors!

This has carried over to my current role as a salesperson. As I mentioned I am currently carrying around a 2 year emergency fund. This is probably excessive, but at the time of this blog (March 2023), my bank is paying around 4% interest on this money, so I am OK with it.

As the Fed stops raising interest rates so aggressively, and my money stops earning 2%+ interest, I will start looking at investing that money back into the stock market.

Because sales roles require a good amount of focus throughout the day, it leaves little time for active management of investments.

My partner recommended a robo-investing advisor called Wealthfront to me, so since 2021, I have been contributing the money I save from my base salary and commissions into it.

Wealthfront is a popular investment platform for young professionals to invest in diversified ETFs across the US stock market, emerging markets, commodities, bonds and other investment vehicles in a relatively straightforward manner.

Alternatively, you could just as easily invest in index funds that track the total US stock market through a self-managed brokerage account.

I like Wealthfront because even in uncertain times, they do a good job of de risking my money through diversification. The key is to not check the value of my portfolio every day, which I am generally too busy to do anyways.

The other places I like to park capital are in a Roth IRA and my company-offered 401k plan. I also have some stock from my previous employment at the Fortune 500 company, which I will probably just hold forever since it pays dividends and doesn’t fluctuate much in price.

Finally, since I am still earlier in my career, I do dabble in some high risk plays to try and maximize my return on investment.

For me, this is investing in individual tech stocks in a brokerage account and purchasing some cryptocurrencies like Ethereum. I might talk more about crypto in a future blog, but for now, I would recommend that most sales people not be like me, and avoid putting too much money (if any) into crypto.

Invest an amount of money that you are comfortable with losing 50%+ of in crypto, because realistically this is what will happen. But, you could also see a nice upside potentially.

How do I save money to invest?

The great part of sales, software sales specifically, is the possibilities it enables. If you join a good company with a great product and team, it is very possible for you to earn $250K+ / year, and probably much more.

The problem I see and hear is that sales people get caught up with upgrading their lifestyles. This is quite common even outside of sales, but once people start making good money, they immediately want to spend it on luxury items like new cars, houses, purses or watches and other consumable goods.

I personally don’t have the desire for luxury items, but I understand it. You have money, why not spend it on nice things?

The most balanced take that I’ve seen from financial gurus and influencers is to pick the top priority luxuries that you want to spend on, and cut the rest out. For example, if you are a travel lover, set aside money every year for 1-2 nice vacations. But then don’t spend money on a new car and watch too.

The reason I mention lifestyle is it is the biggest influence on your ability to save and invest money. I remember reading an article a while back about a man that was working as a janitor, and only upon his death, did he publicize his fortune in the form of mostly donations. His total net worth was around $8 million when he died.

Nobody expected him to be worth this much money, and even his own family was surprised. This man worked for many years, lived a normal lifestyle, and invested money diligently. We can all do this.

The saving and investing strategy that any sales person can do

Let’s keep it simple. One of the sales influencers I follow named Jamal Reimer summarizes the concepts of investing as a sales person really well. And one of these mantras is to live on your base and invest your commissions. Jamal is fully retired from software sales, and gets to work on his coaching business in his available time, so his advice is relevant.

Personally, I invest some of my base salary too. But, I also acknowledge that this is only really possible once you are making around a $100-120K / year base salary at a minimum. Many sales people may have other obligations like kids, a mortgage, or debt from college so it may not be realistic to invest part of your base salary as well.

So, in this case, aim to do what Jamal says. Live on your base and let it cover your expenses.

Then, for every deal you close and get commissions from, invest that money. I gave some ideas on where you could invest your money, but you can research and figure out what works best for you whether that is index funds, real estate or other investment vehicles.

The key, in my opinion, is to invest in low-stress, low touch assets. You still want to maximize your ability to sell, so don’t get bogged down on fancy investments that take you away from being able to make more money.

How I plan on reaching Financial Independence with sales

We’ve talked about saving and investing as a way to reach FI. But I truly believe that sales careers specifically are one of the best kept secrets to achieving FI with this route.

For one, sales is much more mentally and physically sustainable of a career than other high paying jobs like being an investment banker, lawyer or doctor.

These other jobs require long hours, they are physically taxing in some cases, and they also require you to be in an office or physical setting all day.

Software sales jobs are in most cases fully remote, and they don’t require crazy hours. Except maybe in the first 6 months of your role where you are ramping, you can successfully make $200K+ in a software sales role putting in 45-50 hours / week of dedicated, focused work.

I know this because I’ve done it. And my goal is to keep improving to the point where $300K+ / year with 45-50 hours or work per week and a few weeks of vacation a year is possible.

My plan is to do this for the next few years, then re-evaluate. The questions I will ask myself are:

1. Is this fun and am I happy with my current sales role?

2. Can I do this for another few years?

3. Am I making an amount of money with the time tradeoff that is optimal for me?

Sales isn’t for everyone

If you are not someone who wants to be accountable for results, or can handle moderate amounts of stress, then sales may not be for you. There are still a ton of other great routes to make enough money to reach FI or achieve whatever goals you have.

In tech specifically, software engineers, ML engineers, data scientists and other engineering professionals can make anywhere from $150K+ at a startup to $300K+ at a large tech company.

If you aren’t technical, you can go into product roles, which can pay similarly impressive salaries. For specific tech salary ranges by profession and company, check out Levels.

For me, sales is the optimal balance of challenging and rewarding, and as I see more results, my compensation reflects this.

I wouldn’t recommend it to everyone, but if you like taking on challenges, maybe consider a role in sales.

There are even layers to sales - for example, if you want a more chill but still relatively well paying job, you can look at account management or customer success. These roles are responsible for helping customers after they sign on with a new software vendor.

It won’t be as fast-paced as being an account executive, but it will give you a better work-life balance with the opportunity to still make good money.

Don’t get too stressed about your financial journey

At the end of the day, make sure you are still enjoying life and not so focused on making money for financial independence that you lose sight of what’s important.

We will all die someday and it won’t matter how much money you made, because you will leave it all behind.

Memento Mori or “remember you will die”, coined by the Stoics, is a good reminder of this.

Enjoy your work, but also put some time into your relationships, well-being and other parts of your life that are important to you.

It will ensure at the end of it all, you can look back with little to no regrets, with pride about everything you have accomplished.