Most millionaire next door types are contrarians. They think and act differently. They are savers and investors in a population of hyper consumers. Plus most have high creative intelligence. This helps to explain why many of them are in niche, backwater, low status type businesses where competition is light or nonexistent. In addition, as stated in The Millionaire Mind, four out of five (79%) millionaire business owners indicated that they chose their specific business type because it gave them a high probability of becoming financially independent.
K.C., a cultivator of wealth, recently wrote to me about his observations and concerns.
When I first read The Mill. Next Door I found it refreshing and enlightening because I noticed so many common traits between myself and the folks that you portray. I had always felt that I thought differently from my friends and co-workers and my approach to life was so different. Even though I recognized that I approached things much differently I was always happy and eager to jump into things. Even at a relatively young age I looked at items and asked myself ” Will this item appreciate in value or depreciate”? My wife of twenty years and I have a wonderful marriage and three great kids that we are desperately trying to raise with sound values and common sense when it comes to money. This is very difficult . . . neighbors who get new Mercedes Benzs every year and look down their noses at us because we live modestly (I drive a fifteen year old Buick!).
. . .I have never earned a large salary, have focused my efforts on building our net worth through investments and running the businesses that we have owned. Our newest venture is an auto salvage business which is difficult and expensive . . . much regulation and licensing. The previous owner went under in 2008 because he was over leveraged in other ventures and we were able to pick it up very cheaply in early 2009 because we were able to purchase it when no one was able to get money from a bank.[But] after about 18 months this venture is doing fairly well.
Auto salvage/scrap metal dealer has been on my top 20 blue collar millionaire business list since the first year I started conducting research on the millionaire next door. And here is some more good news for K.C.. There are approximately 250M motor vehicles registered in the United States. Just prior to the recent recent economic meltdown there were more than 16M vehicles sold per year. Now there are only about 11M sold. Today fewer people are able to purchase new cars. A growing number of drivers is forced to keep its cars running longer. As a consequence, there has never been a greater demand for used automobile parts such as engines, transmissions, air conditioning compressers, alternators, axles, fenders, etc. Therefore K.C.’s inventory of so-called junk cars is appreciating every day!
I wonder if the same niche business would work for computer salvage?
I find it fascinating (but not surprising) that in society today, a low-status business opportunity might go by the wayside even though it would be very often quite profitable. I guess this means more entrepreneurial opportunities for us!
@Aaron
I’ve seen a store in Austin TX that has a few locations called Discount Electronics that deals in used computers so it must be possible to make money at it.
However, computer salvage seems like it would be harder- with cars the components don’t typically change for many years thus the car parts retain value.
Also the value of most computer components depreciates rapidly because the technology advances so rapidly (Hard drives, memory, CPUs etc).
-Rick Francis
It probably will not work for computer salvage since Goodwill stores have recently opened up a division where they accept donations of used computers, printers and parts and sell them to the public. When your cost of goods sold is zilch, how can you expect to compete against them?
Any business where there is a need, requiring low overhead and a lot of hustle will eventually turn a profit
This is right. We all know that having a car is an investment. Selling my car will not just help eliminate waste in the garage at the same time I’ll be able to generate cash from such. Thanks for sharing.