The Millionaire Next Door

Taking Risks: A Recipe for Success

During these uncertain times, it pays to be vigilant in recognizing economic opportunities. Over the years, more than a few millionaires have told me that during one’s lifetime, major economic opportunities will confront most of us. Unfortunately, the majority of people don’t capitalize upon them. Some just don’t recognize “gold” when they stumble across it; others are too set in their ways, too rigid, to change. And some say they are just too old to transition into a different vocation. Also, the fear of taking economic risks tends to cloud one’s vision. 

It is unfortunate that most people have never considered self employment. Yet, in America, the typical self-employed business owner has a net worth that is more than 5 times that of those who work for others. Of course, there is a risk in going out on your own.  But those who are self employed see things differently. You may recall my blog, A Networking Pharmacist . . . a Millionaire Next Door, that detailed how Jerry, the neighborhood druggist, seized the opportunity to become a business broker. Also, you may remember the creative Murray, a high school teacher who became a millionaire largely because he began painting homes in his neighborhood. Both of these millionaires have high creative intelligence. They essentially created businesses that most others with their training would never have considered as opportunities.

Another millionaire, Florence, wrote the following: “Follow your dream no matter at what age…I didn’t follow mine until I was fifty-two years old [when my job was eliminated]…started my own business [home health care] because no one would hire me…[they said I was] too old! Now I have two offices and sixty employees….My regret is that I should have started it sooner.”

One of the major myths of becoming rich has to do with the so-called college experience. It is wrong to think that you can’t run a business if you did not major in business in college. Florence never took a single business course. In fact, 64% of the decamillionaires that I surveyed nationally reported that the vocation that made them rich was not related to courses that they took in college. In contrast, 75% said that they chose a vocation that fully allowed them to utilize their abilities and aptitudes.

Claire is an example of someone who eventually found her “ideal vocation.” But she never would have discovered it without seeking opportunities outside the parameters of her college major. “Be flexible; when one door closes, look for another open one. I thought I had life planned when I began to teach high school Spanish. I quit to raise a family while my husband worked. But layoffs [husband’s] and economic woes encouraged me to start part-time work in an unlikely profession, tax preparation (I always enjoyed math and puzzles). Later an opportunity availed itself to buy the business. Because we’d always saved, even in our leanest times, we had the down payment. We have to accept change as part of the plan and be ready to move with it.”

Last year, 86,518,718 taxpayers had their personal Federal tax returns completed by a tax preparation professional. The irony is that Claire, an amateur, always prepared her family’s tax returns, but never received payment for doing so. But now things are different. This gifted amateur became a well paid professional because she was forced due to adversity to venture outside the boundaries of her formal education and seize a new economic opportunity. I will wager that there are millions of “gifted amateurs” in a variety of situations who could leverage their abilities and aptitudes into the professional league.

There is an upside in every downturn in the economy. When the economic welfare of families is threatened, breadwinners must rely on their courage and creativity to seek out new opportunities for survival. I predict that there will be more self employed success stories now and in the future as a result of this “great recession.”

3 thoughts on “Taking Risks: A Recipe for Success”

  1. LOVE, LOVE, LOVE this post. My favorite line: In America, the typical self-employed business owner has a net worth that is more than 5 times that of those who work for others. As a newly minted self-employed person myself, I say here’s to courage, taking risk, and the upsides of economic downturns!

    (PS: Congratulations on STOP ACTING RICH, you’ve done it again… another highly thought-provoking book & a must read for anyone who cares about taking control of their personal finances)

  2. As a self-employed attorney, I am committed to be a under-consumer and over-accumulator of wealth. I started my own law practice early after college. My wife and others thought I was crazy. At times, I thought I was too. The first 2-3 years I made very little money. Fortunately, my wife was working so we got by. The silver lining was that we learned to live on very little money and continued to do so as my income rose.

    I’m still young (mid-30’s) and continue to work to accumulate real wealth. I am amazed at some of my classmates who have made far more money than me in terms of income, yet have nothing to show for it.

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