I’ve been going to the same barber for a few years and we usually get to talking about the economy, investments and such. He doesn’t openly brag about being a multi-millionaire, but it’s plainly evident based on our discussions that he is one. He’s somewhat a case study in The Millionaire Next Door: Surprising Secrets of America’s Wealthy with a few twists.
Here’s my assessment of how he amassed his fortune:
- Real Estate Mogul – He owns multiple rental properties. Not just single family homes, but entire plots of land that major businesses lease from him, apartment complexes and he’s developing a cul-de-sac into single family homes. He started off small and kept rolling his profits into more and larger properties. Sure, he’s come across the tenant from hell now and then, but those were few and far between.
- Business Savvy… and Patient – He knows the real estate market very well and he waits for deals to come around. He doesn’t go out seeking deals as soon as he has a wad of cash; he sometimes sits on the sidelines for years and then the perfect opportunity comes around. He’s an older guy, and he’s had a lot of time to hone his skills. He’s patient. Being impatient is what gets people in trouble. I knew young kids trying to flip condos in Miami beach a few years ago because they saw everyone else making a ton of money doing it. The one I know indirectly still got killed in the downturn; he couldn’t flip his and he’s out over six figures.
- Frugal – Just through some casual observations, it’s evident he’s a frugal guy. He dresses modestly, he doesn’t take extravagant vacations, and he doesn’t drive a fancy car. Due to the demands of the job, he basically eats an apple during a bathroom break around lunchtime each day, but that saves a few bucks a day instead of eating out or ordering fast food like many other people do for lunch each day. He’s also very careful with how he spends his money, like being well-insured for the properties and always using travel insurance for vacations. The combination of multiple streams of income and frugality make for a huge net worth in your later years.
- Small Business Owner – Like all smart business owners, he gets other people to work for him and generate income and offset his costs. Rather than just running a one man barbershop, he has a couple other barbers working there. I’m sure they get to keep their tips and a fair share of the price of a cut, but surely, they must pay him some sort of monthly rent. This probably helps pay the mortgage and utility costs of the shop so everything he makes himself goes right to the bank. He started off as a young entrepreneur and it’s rewarded him for life.
People normally think of “the rich” as being a corporate executive, a “Wall Street Fatcat” or a tech insider on the West Coast, but there are lots of ordinary Americans walking around out there that you’d never think are millionaires.
Do You Know Any Unassuming Millionaires?