The Millionaire Next Door

Greetings from the Income Statement Affluent Capital of America

I have lived in Georgia for most of my adult life, one of
many New York transplants.  I would not want to live
anywhere else.  In fact, my success in studying how
people become wealthy as well as why so many people with high
incomes accumulate little or nothing is related to where I
live.  The metro area of Atlanta is a wonderful
laboratory-one that features a high concentration of income
statement affluent [IA] households, i.e. big income, small
net worth.  Or as I often refer to it- “big hat, no

One weekday morning [prior to the current economic meltdown],
I received a telephone call from the head of strategic market
planning for a manufacturer of foreign luxury motor
vehicles.   He asked, “What is with Atlanta? If we
could clone Atlanta [duplicate its per capita sales rate of
our cars in other cities] we would dominate the American
luxury car market.” I explained why there were so many
hyperconsumers in Atlanta.

Most of the high income generators who live in Atlanta are
transplants from other areas of the country.  Their move
to Atlanta was often associated with a job promotion and
increase in compensation.  Plus most found that they
were able to trade up to a much bigger and better appointed
home than they had had while living in LA, Chicago,
etc.  Ah, for many, a fine home in Atlanta led to a
myriad of increased expenses including a leased Lexus, a 5
Series BMW or mid-class Mercedes.  But, in spite of
this, they still found that it was difficult to distinguish
themselves from all those new neighbors who had recently
encountered similar good fortune.

More often than not geographic mobility, even coupled with
upward income changes, produces results that are just the
opposite of what many people expect.  Given these
changes, one might assume that an enhanced balance sheet
might result.  But too often hyperconsumption becomes a
competitive sport, like here in Atlanta.  Consumption
outstrips gains in income.  But then what happens when
the income of the IAs declines?  Read the Atlanta
headlines. “Malaise hitting Atlanta’s tony neighborhoods
…pushing hundreds of $1 million-plus homes into the market
. . . sellers agreeing to steep discounts,” (Atlanta Journal Constitution, August 2,

I have consistently found over the many years that there is a
significant inverse correlation between accumulating wealth
and geographic mobility.  All else being equal, the more
you move your household around, the more difficult it is to
accumulate wealth.  This is one of the reasons that
corporate middle managers and sales professionals rank low on
the wealth accumulation scale.  Conversely, among those
who have significantly higher levels of wealth that would be
expected given their age and income are self employed
business owners.  They rarely move out of their trade
area.  They know that geographic mobility is extremely
disruptive to family routines and can be extremely expensive
in terms of constantly upgrading, decorating, and convincing
your new neighbors that you are indeed superior. 

5 thoughts on “Greetings from the Income Statement Affluent Capital of America”

  1. Brilliant point of view, i am a example of wealthy family, and expect in the next years grab some millions over my name, not father/mother names. We have a small bussines looking to expand.

  2. Living on the South Side of Atlanta I see the same behavior you described in this week’s post. I thought your observations on what leads to this behavior (promotions and relocation to a lower cost of living environment) was very interesting, and a perspective I had not considered. It always amazes me the number of individuals that should have an easier time accumulating assets (high income earners) are more often than not living just like their lower paid counterparts… pay check to pay check. Thanks for the great post.

  3. ATL is like a mini hollywood. Everyone want to act rich as soon as they make a nice income instead of saving and paying off debt.

    I earn to invest and save not to consume

    I love ATL much it’s full of mcmansions and luxury cars and all I can say “I’m glad I don’t have that debt.

  4. Doctor, what would you say to an approach to wealth building espoused by Tim Ferris in “The Four Hour Work Week”?. Basically, he was traveling teathered only by a laptop and managed to outsource his way to significant income while living in the third world.

    Devil’s advocacy aside, I agree with the Rooted=wealthy correlation. I’m in Real Estate in LA and all of the big players are generations into it.

  5. I lived in the Atlanta suburbs for 10 years before moving to the Charlotte area. I travel to Atlanta every other week and have been perplexed by the differences in materialism between the two cities. The people in Charlotte appreciate nice things but Atlanta seems to take it to the next level. Every other car on the interstate is a newer model foreign luxury vehicle or luxury SUV. This article definitely helps to shed light on the social and financial trappings of Atlanta. Great to visit, but has gotten to be overwhelming to live in. Thanks.

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