Q: Recently, a gentleman wrote in about investing in a career in real estate.

Please remind your readers that while the average income of a real estate licensee is $40,000 a year, we are almost all independent contractors, meaning we pay our own expenses, business costs and advertising.

Selling real estate can be very profitable but a new licensee needs to remember that they generally do not have taxes paid by their broker, they are responsible for all start-up and maintenance costs and the annual fees associated with the profession are not cheap.

I am a real estate instructor and find it amazing how many people get licensed because they “like to look at houses.” Thank you for doing a great job of explaining how much work is involved in sales and directing your readers to great resources!

A: Thanks for your comments. While some “newbie” real estate agents still believe that selling real estate is a path to riches, as you indicated the vast majority earn about $40,000 per year.

You do get to write off your expenses against your income. Some agents also are able to put away money for retirement and reduce their taxable income on a year to year basis by contributing to a SEP-IRA or Self-Employed 401(k) plan. For more information on retirement plans, you should consult with a retirement specialist or accountant.

March 24, 2008.