Mystery Millionaires

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This week I was sitting nervously in my dentist’s waiting room flicking through old magazines when I came across an article called “Everyday Millionaires Tell Their Moneymaking Secrets!”

Talk about a toothache.

There was an old cravat-wearing dude (not Matt Preston) who made his dough in business. Fair enough.

Then there was a woman who’d apparently amassed 15 million bucks by investing in negatively geared (loss-making) properties. They’d been selected for her by The Investors Club – a property outfit that’s currently before the courts.

And finally there was a twenty-something property multimillionaire who claimed to own dozens of properties (and is presumably millions of dollars in debt). In any event, he broke Barefoot Rule No 238: “Always be suspicious of anyone under the age of 30 who claims to be a multimillionaire’ (unless it’s Mark Zuckerberg). A quick Google search showed that he runs a property investment education company. Right-y-o.

The ‘everyday millionaire’ story is the equivalent of the ‘weight-loss wonder’ in the diet game. It pulls people in no matter how many times it’s told, which is why it’s forever rehashed in the media.

And usually, of course, it’s rubbish.

The people who are compelled to promote themselves as ‘self-made millionaires’ in the media are either get-rich-quick spruikers, or people who didn’t get enough love when they were children, or both.

Each year I have hundreds of people contact me wanting to ‘share’ their amazing wealth-building story. Typically it’s a thinly disguised marketing ploy, and I respond exactly as I do when someone I meet at the pub talks obsessively about their income and possessions.

Yet I also receive hundreds of emails from people who’ve achieved genuinely significant amounts of wealth. They have plenty to tell but nothing to sell – and it’s these mysterious millionaires that you can really learn from.

There are 192,900 millionaires (described as having $1 million of investable assets – not including the family home, or super) in Australia according to Merrill Lynch. Let’s meet three of them.

The Salesman

He’s still in his twenties but he’s already well on his way to becoming a multimillionaire, probably well before his kids finish high school.

He doesn’t have lots of fancy letters after his name. In fact he doesn’t have any – he failed his high school exams and decided instead to educate himself in the highest-paid profession on earth: selling.

He took big risks early in his career – working harder and longer than his peers, actively seeking out the best in the business, and relentlessly refining his skills. It paid off. He now earns close to $300,000 a year, but lives off $60,000.
Try as I might, he did not want to be identified for this column. “I drive a really crappy old car and, to be truthful, no-one really knows that I’m wealthy. I like it that way.”

The Secretary

She’s now in her sixties, and she retired comfortably years ago. While she’s been married twice, she is at pains to point out that her money didn’t come from her marriages – she was bought up to believe that a man is certainly not a financial plan.

“My mother always told me to have my own money. When I entered the workforce as a 15-year-old kid, I started saving.

“I was a secretary, so I didn’t earn a lot of money. But I made sure that, when my savings got to a certain amount, I bought good-quality blue-chip shares. That was my very uncomplicated savings strategy for my entire working career.”

She has always had a deep-seated suspicion of debt, so much so that she’s only ever had the one small mortgage, which she and her first husband knocked over quickly. “I didn’t grow up with credit cards, and I didn’t have as much as a lay-buy. I kept it simple. I paid for things with cash.”

Try as I might, she did not want to be identified for this column. She didn’t want a fuss: “What I’ve done isn’t anything amazing. It’s just good honest common sense.”

The Second Hand Dealer

He got his start in business in the downturn of the 1970s, when he bought repossessed office furniture at auctions for ‘pennies on the dollar’.

When conditions improved he sold off the furniture for a huge mark-up and reinvested the money straight back into buying more second-hand stuff. Rinse, and repeat.

Thirty years have now passed but, while he’s long finished flogging furniture, the simple idea of working hard, buying low and selling high (known in the trade as ‘value investing’) has made him his fortune. He explains his process as being ‘dumb smart’:

“People try and sell me property that returns 4 per cent, when interest rates are 7 per cent. That doesn’t make sense. I tell them I’ll buy when those figures are reversed … and they look at me like I’m crazy.”

Throughout the years I’ve known him, he’s been a wonderful example of a true value investor: scooping up property bargains in Tasmania when properties were returning 10 per cent, and buying bank shares in the financial crisis when everyone else was selling.

Try as I might, he did not want to be identified for this column. He’s given over a million dollars to charity, and likes to keep his anonymity.

Mystery Millionaires

Even without photos, I’m fairly confident that if you met any of the three ‘mystery millionaires’ you’d get a sense they were rich. But not because of what they wore, or the car they drove.

They have a sense of confidence, a humble nature that stops them from boasting about their wealth. Anyone can shout from the rooftops that they’re rich. Few people can prove they really are wealthy.

Tread Your Own Path!



Photo: http://www.flickr.com/photos/7933170@N03/2592558951/

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