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The Millionaire Next Door Swims with the Economic Tide

By Thomas J. Stanley on Feb 5th, 2013 in Mentor's Corner
Some questions are asked so often that they deserve their own blog.   One such question has to do with career choice framed in the context of “the need to become wealthy.”  Early in my teaching career a distinguished senior professor and colleague once gathered all of the young faculty members together.  He told us that in life often just one single decision can be the difference between a stellar career and an average one.  His research findings were absolutely correct.   His wisdom applied to career building in general and also to building wealth.   He became very wealthy via his number one hobby, real estate.

About thirty years before he made this revelation to us he was a graduate student in business at The Ohio State University.  One day he walked into the demography department.  He asked several of its faculty members, “What city in America will have the greatest future growth in the next 20, 30 years?”  All of the professors said emphatically Atlanta!  That’s why this multi deca millionaire landed at Georgia State University in downtown Atlanta.

If you ever drive near Atlanta Airport take notice.  Some of the long term parking lots and hotels are situated on land that was once covered with trees and owned by my former colleague.  In one instance, he bought a parcel of land one year and the next year sold just the timber at a price that was more than he paid for the property.  Eventually he sold the land to a developer for more than five times the original purchase price.

If given the opportunity to start over again I would make few changes in my career.   But not many people would want to follow in my footsteps.  Most people who contact me have no interest in spending four years in college and in five years in graduate school as I did.  Nor do they have any interest in allocating  thousands upon thousands of hours doing research and writing books. That being said what do I tell those who only want to earn an undergraduate degree?  Fine with me, but what will you major in?  And, so in response here comes the” if I were you” program from Tom Stanley.  I might major in real estate but not just at any school nor in just any geographic location.  Great growth opportunities in real estate  are in Texas.   (See for yourself by googling “fastest growing states/cities).  So consider getting out of your comfort zone and think about attending college in Texas and eventually ending up as a permanent resident of the Lone Star State, aka “the land of significant economic opportunity.”  Texas abounds in outstanding colleges and universities that offer real estate as a major, i.e. the University of Texas (UT-Austin); UT-Dallas; The University of Houston, Texas A & M, et al.   Once enrolled you may wish to follow the steps listed below:

1.       Step One.  Get to know the faculty in the real estate department.  Volunteer to spend your time helping one or more of them with their research.  All productive faculty members  have a perpetual need for research assistants.  Also get your professors to notice you by exceling in the classroom.

2.       Step Two.  Seek part-time employment and/or possibly becoming an intern in the real estate industry.   There are several categories in real estate that rank in the top 20 among America’s most profitable businesses as well as in terms of the probability of success.   These include: real estate property management (average profit margin, 39.8%; 86.1% make a profit) from apartments to shopping centers, real estate brokering agency services both in residential and commercial real estate, and real estate operators and lessors of buildings.   You may also consider working for a real estate investment organization.

3.       Step Three.  When seeking full time employment, ask for referrals from both your professors and from the key contacts that you developed while interning.  Also keep in mind that many real estate professors  are also owners of real estate companies. Some serve as consultants and/or  partners in numerous organizations. One or more of them might even offer you full time employment.

4.       Step Four.  As a full time employee, learn, work hard and deliver more than your employer expects.  The more you contribute the greater the likelihood that you will eventually be offered a partnership position.

5.       Step Five.  Consider starting your own firm or at least invest in real estate opportunities.

6.       Step Six.  Establish yourself as an expert in your field.  Do so by publishing articles in the key trade journals that are read by your clients and prospective clients.  Also contribute your ideas in speeches delivered at targeted conferences.  Do this and a growing number of prospective clients will seek you out as opposed to the other way round.

What if your child is in high school today and is confused about his/her choice of vocation?  He/she may greatly benefit from writing a term paper, the biography of a successful real estate or  accounting or manufacturing business owner, just to name a few.  Interviewing the winners of the world can be an eye opener for most youngsters.  It is a great way to make an important contact and possibly find a mentor.  Plus some who have done so were offered part time jobs as well as summer employment.  A few, after completing college, ended up working for their mentor.  A great way to flatter and honor a successful business owner is to ask him to tell his story.

 

2 responses to “The Millionaire Next Door Swims with the Economic Tide”

  1. Sam Smith Pittsburgh says:

    In real estate, I tell friends to. 1) start with a duplex
    2) be able to drive by it nearly every day
    3) you must do the work yourself
    4) Screen tenants as carefully as you can.. It’s a business.. Always look ahead for the next project/ issue
    5) get it paid off
    6) enjoy your return on investment you’ve earned it..

  2. Danielle says:

    I’m interested in getting involved in real estate investing, and would like to start out with exactly the approach Sam has laid out. I have been trying to find someone to serve as a mentor for me in this area; any advice on how to find such a person? Are there professional organizations or something specific to look for?

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