A year ago, my neighbor Joe and I were talking outside. Our conversation turned to real estate and why it is such a compelling long-term investment. He told me about his friend and realtor who owns more than 100 rental homes one state over.
I was intrigued – Joe told me about the money this man named Fred earns each month, and how he has millions of dollars at work in his dividend stock portfolio at any given time. Joe recommended that I talk to him. I was only a year out of college, not in a position to buy an investment property yet, but I still wanted to establish contact. It seemed like he’d be full of great advice, so I grabbed his info off of Joe.
Up to that point, I pictured this guy wearing a well pressed suit holding a cat with a monocle. There’s a certain image that society projects onto the wealthy, and the stock photo was successfully uploaded to my brain.
However, I looked him up online and was thoroughly surprised.
You would never guess in a thousand years that Fred was a major success. His LinkedIn picture was an amateurish selfie in what I believe was a bathroom, and the profile gave very little information – certainly not a stuffy vibe. There was a cat in the background, but regrettably, no monocle could be found. Fred didn’t have a promotional website or any sort of online presence for his business. The only thing available was his phone number and an email address. I think he wanted things to be this way.
I also saw that he owned another business, but no information was given. When I asked my neighbor about it, he told me that this was Fred’s cash cow. He was making over $600,000 per year by going to junkyards, pulling out a certain part from cars (I won’t name which one), and selling them via an EBay store.
Fred is a sleeper millionaire who is killing it in business! He makes more than most doctors, bankers, and lawyers. I found out that his realty business is a side project that he does for his own enjoyment, and to remain active in his community.
My introduction to Fred was a major shock to the system. Up until that point, I’d been chasing a dream job on Wall Street as if it was a single answer to all of my prayers. I still think that a stable corporate job can be a great launch pad for a career in business or entrepreneurship, but I was ignorant of the hushed success occurring all around me. We are raised to think that doctors, lawyers, accountants, bankers, and more recently, tech entrepreneurs are the captains of our society – that these jobs define “making it” in America. While they carry a great deal of prestige and are much better paying than a job at Cracker Barrel – they are crowded trades, and the alternatives are more numerous than most venture to think.
Gone are the days of large corporate expense accounts, gold watches upon retirement and a stable job in the Fortune 500. Unfortunately, the media still utilizes outdated ideals, leading to a notable disconnect from reality.
Wall Street has faced major wage compression and increased regulation, yet the “lush life” Wolf of Wall Street came out in the midst of the global financial overhang. The American legal profession has been flooded with new applicants and fundamentally changed by automation. Yet, the television series Suits aired with wide viewer appeal illustrating a very different set of circumstances.
Many people made large sacrifices for the sake of prestige and are realizing that their compromises did not pay out as handsomely as anticipated. I say this with multiple friends in big law and on Wall Street in mind – by my judgment, all but a few of them chose an idealization over a career path that truly matched their values.
What’s more is that many of these local (and quiet) success stories revolve around men and women living on their own terms. The world has become highly institutionalized – but not every high achiever need be wed to these bastions of power.
Marcus Aurelius is credited with saying, “The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane”.
He’s also credited with having more than a dozen children with his first cousin… but one son survived so it all worked out in the end. I digress.
I think we all have a proud Jewish grandmother inside of us, whose bones are warmed when we progress down the beaten path. It probably feels pretty darn good to get into a competitive medical school, and in converse it would be terrifying to watch your friends go off to college while you stayed home to create a landscaping business. Your gut is a pretty good guidance mechanism, but there’s a difference between resisting social norms for the sake of a calculated risk, and making a rash decision to “follow your passion” as a basket weaver with zero preparation.
After my meeting with Fred, who turned out to be a super guy, I started connecting dots that I had neglected earlier. For instance, I used to ride my bike by one of the nicest homes in the town where I grew up. It was on a large lake with a big dock, multiple boats, and a giant water trampoline. I had learned that the owner was not a surgeon, or a movie star, but rather a peat moss farmer. This man owned a number of peat bogs, where the moss is grown and harvested for use in landscaping. A few lots down, the married founders of a local construction company owned another beautiful home.
As I started paying attention to who did what, and where it got them, I saw all sorts of unsung successes in my area. I found a man with no college education who was making $20,000 a month in the lawn treatment business – he was in his late twenties. People in direct sales, plumbers, interior designers were pulling in some serious money in my area – much more than many of the folks in town working for blue chip companies that were safe and sounded moderately good at a cocktail party.
One thing these local successes had in common was that they were owners, not workers. In short, successful owners tend to financially outperform even excellent employees.
Employees will get a steady paycheck every two weeks whether the company sold $10MM or $100 over the period – but they usually don’t get to participate in the growth of a business as an equity holder.
Another thing that served these sleeper millionaires well was that their failures and thick skin allowed them to pursue a mission that didn’t necessarily sound cool to others. Of course, once they found success, everyone wanted to be their friend, but I’m sure they went through a protracted period of obscurity.
The majority of millionaires in our country are business owners, and while many fail, those who succeed enjoy immense success. If you are up for that kind of challenge and have invested in the right leadership, creative, and relationship skills, then ownership might be the right calling for you. I take it that you have some level of interest, being that you are reading a blog about the Untemplater lifestyle.
On the flip side, what careers provide the path to millions today? You can be a professional athlete, a famous actor, Fortune 500 CEO, rock star investment banker, maybe a killer software developer. The truth is, there aren’t too many positions where you can achieve these heights as an employee. With all that said, you needn’t take an alternative path for the money – a sense of self-reliance and satisfaction that “you did it your way” is plenty to enjoy.
As an exercise, I’d ask your friends and family for introductions to any local business owners that they know who are marching to the beat of their own drummer. Sure, it’s probably nice to work at AT&T – the benefits are great, right?! But at the end of the day, there are plainclothes powerhouses in every town that few would think twice about. It’s much easier to establish friendships with these people, as they are generally more accessible. Chances are you’ll learn plenty of things about these folks that you’d never get from an MBA at Wharton. You develop battle wounds as a business owner that no case study can account for. The failures are not theoretical, and thus the scars lead to a deeper type of learning. Burning your hand on a stove is much more effective as a deterrent than reading that the stove is hot.
If you don’t think that med school is for you, or if the CPA exam doesn’t quite get your rocks off, know that a trade exists out there for those who seek to take their skills elsewhere. The owner-employee earnings spread is real. Returns on a college degree have diminished severely, and most people are accepting society’s norms as a guide for what to do, instead of developing their own insights.
Even if you stay on a traditional path or thirst for it, take a whiff of the success around you. It can be detected in the most surprising of places.