Experts who speak with authority about wealthy Americans – a business professor and a leading consulting firm – have offered advice for minorities who seek success in their careers.
Actually, the strategies for minorities from Dennis P. Kimbro, Ph.D, and the Boston Consulting Group are applicable for any ambitious soul.
Dr. Kimbro, the professor who studied the wealthy and wrote the book, “What Makes the Great Great: Strategies for Extraordinary Achievement,” says knowledge is the most salient of what he calls the 10 forms of wealth.
He made the comments at a church forum in New Orleans, which also featured motivational comments from successful business role model and former basketball star Earvin “Magic” Johnson, Jr.
3 characteristics of wealthy people
Dr. Kimbro said the affluent generally have three characteristics:
1. They’re independent thinkers and they pursue their dreams.
2. They never stop learning. He says they’re hard workers and they read.
3. They’re tenacious – they keep on trying whenever they fail.
He added the well-to-do live debt-free and they pay themselves first.
That means after earning a paycheck or making a business profit, they save money and accumulate assets.
They’ve also generally been married for two decades or more.
His comments read like a page from the informative book, “The Millionaire Mind,” by Dr. Thomas J. Stanley, which explained how to think like a millionaire. His book is 406-pages of information easily worth a visit to the library or book store.
Insights for minorities
Boston Consulting Group said minority business owners aren’t competitive with their counterparts in the marketplace. The firm said the only way for minorities to succeed in business is to adapt with a new mindset and to expand their companies with aggressive strategies.
The consulting firm also said minorities have three shortfalls: They’re lacking in experience, networking capability, and in cash flow.
Entitled, “The New Agenda for Minority Business Development,” the report was sponsored by the Kansas City-based Ewing Marion Kauffman Foundation.
Minorities own about 15 percent of U.S. companies and comprise 28 percent of the population. The number of minority businesses increased 8.5 percent a year from 1982-1997, but they’re known to have a higher-than-average failure rate.
The study said minorities tend to be in low-growth businesses, such as food stores, personal services and restaurants. That’s 30 percent of all minority-owned firms. Non-minority firms comprise 17 percent.
The report suggested minorities need to get into added-value industries. Another way to explain it: Multiply your assets by developing an additional revenue stream – find a niche in which your earnings go to work for you, such as in manufacturing a product or investing in real estate.
However, manufacturing and real estate, of course, require a great deal of due diligence. Do your homework.
The report’s other recommendations: Embrace information technology; seek and utilize opportunities in acquisitions, mergers, alliances and partnerships; and investigate monetary sources.
A study by a partnership – the financial management company, Merrill Lynch, and the consulting-services firm, Capgemini – provided a definitive report on the global number and growth of high net worth individuals (HNWI). It showed a HNWI enjoyed growth rates.
But the report included an ominous warning: The housing markets in three-fourths of America’s top 52 markets were too hot and were primed for a bubble. Sound familiar?
An International Monetary Fund study concurred. It concluded regions in 15 states – representing 35 percent of the nation’s gross domestic product – were at risk.
Merrill Lynch also says house prices jumped 40 percent in just over four years early in the first decade of this century, which helped families to a $4 trillion increase in assets.
So, is it any secret why the Merrill Lynch-Capgemini study showed the affluent cut their real estate investment in the aggregate from 17 percent to 13 percent?
Overheated real estate markets underscored where the opportunities were and weren’t. But first, I’d read the book, “The Millionaire Mind.”
These days, a speculative rental investment frequently isn’t as feasible as buying real estate for the purpose of turning it over. A rental investment dictates investing in lower-cost housing, which will attract desirable renters capable of making adequate deposits but who also have requirements, such as nearby public transportation and elementary schools.
You’ll also want to be able to recoup your costs in principal, interest, insurance, repairs, and taxes with enough padding in the event of a renter’s default.
Concerns of the wealthy
What does the top 1 percent of wealthiest Americans worry about?
The 2005 findings by the U.S. Trust Survey of Affluent Americans showed 81 percent of Americans – earning an adjusted gross income of $300,000+ a year or having a net worth of $5.9 million – feared their children will have tough financial times in the future.
My sense is that it’s still true.
U.S. Trust, with more than $79 billion in assets and 32 offices including Portland and Seattle, has been serving the financial and investment needs of Americans since 1853.
A sampling of other affluent worries: Terrorism will hurt the economy; 77 percent; educational costs will increase, 74 percent; inflation will eat at investments, 73 percent; stock market gains will be lower, 72 percent; taxes will rise sharply, 67 percent; and unpredictable long-term returns, 67 percent.
Regarding Social Security, 90 percent of them wanted it fixed ASAP.
The portfolio of U.S. Trust’s average affluent client looked like this: Domestic blue-chip stocks, 24 percent; cash equivalents, 17 percent; domestic small-cap stocks, 12 percent; municipal bonds, 9 percent; corporate bonds, 5 percent; U.S. government securities, 5 percent; investment real estate, 15 percent; and international stocks, 5 percent.
So now you have an inkling of what the affluent know about achieving financial success. Good luck.
From the Coach’s Corner, here is related reading:
How to Obtain the Most Profit from Speaking Opportunities — It’s one thing to be invited to speak at your industry’s major event. But it’s another to create the right impression for your hosts, your audience and prospective customers or clients. There’s more to it than you might think.
Options to Navigate This Marketplace Bedlam — Part one of two-part series: “Solutions for a Roller Coaster Marketplace” OK, it’s been a wild ride, right? Uncertainties regarding Wall Street and funding often set off alarm bells. But if you’re looking for capital, there are reasons to hope, according to leading consultant Joey Tamer.
“Money is the best deodorant.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.