In the book, The Millionaire Next Door, the authors point out it’s not the people with the big house, flashy car, or expensive watch who have the most wealth. In fact, it’s just the opposite. In this article I want to tell you about my neighbor who I just found out is worth tens of millions of dollars (who knew?) and how he did it.
Never in a million years would you guess that Mike is a multimillionaire. He works a regular job, drives an older truck, and lives a modest lifestyle. That’s why as we sat and watched the sunset together the other day I was so surprised to learn of his enormous wealth. He was very reluctant to discuss the details of how vast his holdings were, but I persisted until he told me everything (wink).
It all started over twenty-five years ago when Mike and his wife had their first child. He was working as a maintenance man (and still does) in a downtown office building. It was then that one of the painting contractors he hired mentioned their company was selling off some of their older trucks. When Mark learned they were willing to part with the trucks at pennies on the dollar, he decided to buy one.
Since he was mechanically inclined he repaired and refurbished the first truck he bought and sold it for a tidy profit. He used the proceeds to buy two more trucks and flipped them for a nice return. He kept doing this until he was buying and reselling entire fleets of trucks and vans and pocketing the profits–which were really adding up. Next, Mike set his sites on buying a building he could do the same thing with–fix and flip. As luck would have it, a nearby muffler shop had shuttered its doors and the building was up for sale. Mark purchased it for less than its actual value and after fixing it up found a tenant to move in. After buying a few more buildings from this national chain of muffler repair shops, he decided to fly out to their headquarters and ended up buying ten buildings across the country for $1.4 million dollars–which he quickly turned into twice that . . . and still retained half of the properties, which he still owns.
Since then, Mike has bought raw land, homes, and other real estate using the profits from his portfolio of properties. Although he didn’t give me an exact number, he and his wife are worth tens of millions of dollars–but you would never know it by talking to them or by their lifestyle. After our sunset chat I started thinking about my own finances, and all the squandered opportunities. If only I had been more like Mike . . . Maybe someone out there reading this can learn from my mistakes and Mike’s smart and shrewd money management.
Here’s what I wish I knew then (25 years ago) that I know now . . . thanks to Mike (and others who have applied these same principles).
1. The vision to see into the future and the faith and discipline to delay immediate gratification for greater wealth later in life. In a word, the willingness to “sacrifice” today for a better tomorrow.
2. Having a steady “day job” (or a spouse that has one) to be able to weather any financial storms that will inevitably blow through our lives.
3. Knowing that hard work and “sweat equity” will beat out a get-rich-quick mentality every time and that there is no white knight coming to our rescue, instead we have to do the work to make it work.
4. It takes money to make money and that means not spending everything we earn (and then some), but instead spending our money on things that will make us more money.
5. Amassing wealth doesn’t come without risk, but if we are going to gamble, why not gamble on ourselves. When we know what our strengths are and use our time and talent in the right ways, we will succeed.
There are several more traits that wealthy people share (frugality, for example) but in the end it all comes down to the decisions we make today about how we handle our money that will determine where we are years from now (God willing).