Why do I profile auctioneers? It began almost by accident. Pouring over the Census data during several preceding economic downturns, I noticed that there was a large concentration of high income producers among full time, professional auctioneers. Historically, their income seems to vary in the opposite direction of the American economy in general. What I have found is that because of this auctioneers as a group are quite proficient at living below their means. Most of them are astute financial planners and as a consequence they are among the very best at transforming their incomes into wealth. In The Millionaire Next Door, I mentioned that auctioneers were 10 times more likely to be millionaires than the average American.
In 2012 I will produce several blogs which deal with the topic of small town millionaires in America. As a preview, let me say that most economically successful auctioneers live in small town America. The combination of a high income and the low cost of living in a small town is a powerful force underlying wealth accumulation.
Given the same level of income, who accumulates more wealth-an auctioneer residing in small town America or someone who lives in a high status urban or suburban neighborhood? As you can guess, it is the typical auctioneer.
But living in a small town and producing a good income are not the only reasons that auctioneers are wealthy.
The average millionaire auctioneer spends only 61% of the amount urban/suburban millionaires allocate for housing.
They are quite frugal in part because they see how little previously owned consumer products sell at an auction. They are significantly more likely to drive a dull normal make of vehicle than to own a prestige foreign make of car. Many auctioneers are also experts at appraising the value of certain assets. They often leverage this knowledge when they invest. For example, those auctioneers who have considerable experience with industrial real estate often invest their personal wealth in the same category.
Auctioneers are paid on the basis of performance like many other people who are in highly compensated vocations. To succeed in this profession, one needs to have experience and an enlightened and generous mentor. One must also be willing to take risks.