Our office went out to lunch the other day to celebrate the birthdays of a few of our people.  On our way to the restaurant, we drove through the heart of Newport Beach, and passed by a couple of Ferraris, a handful of Corvettes, and at least a dozen other cars with price tags at or above the $100,000 mark.  Living in Orange County, California, we’re constantly reminded that we are surrounded by millionaires.

Of course, not all of those drivers are millionaires (net of the debt they owe).  It’s a safe bet that most of them are, though.  And it’s frustrating to watch them drive around and flaunt their wealth right in your face.  It’s hard to fight back feelings of jealousy and stay focused on your own game when someone else is zooming by in a convertible that costs more than the average condo.

It’s doubly annoying when a huge percentage of the people driving those cars assume that because you drive a

[fill in the blank] or look like [fill in the blank], you’re beneath them.  I get so angry when I see well-to-do folks treating wait staff like inferiors, or cutting people off in traffic, or loudly describing their latest luxury vacation in hopes that people will overhear and be impressed.

Demographics aren’t everything.

Making Assumptions Based on Appearances

It’s about 2:30 pm on a Friday.  Most people are still at work.  An overweight woman walks into a hole-in-the-wall Chinese take-out place.  She’s wearing yoga cropped pants and a basic V-neck T-shirt.  It’s Old Navy quality gear, not Lululemon.  The whole outfit probably cost about $20.  It’s got some paint splatters on it and maybe a small hole or two.  She clearly didn’t just come from yoga class.

She walks in and places her order with the woman behind the counter.  The woman behind the counter is probably in her early forties.  She’s an immigrant from somewhere in Asia, and speaks with a fairly thick accent.

If you’re like most people, you’re already making assumptions about both of these people.  The woman in the shabby quasi-yoga getup?  She’s probably a low income earner.  Maybe she works part time at Old Navy, which would explain her being at a lunch place at 2:30 pm on a work day.  Or maybe she works full time, but at a fairly low paying retail job that gives her a work schedule that isn’t the regular 9-to-5.  Her outfit is likely not fitness related, because she’s overweight and because her clothes are pretty shabby.  Maybe it’s laundry day, or this is her equivalent of sweatpants.  She drives a fairly nice Toyota crossover vehicle, but it looks like it’s about 7 years old, so maybe she bought it used.  It is definitely filthy.  It’s probably financed, or refinanced.  She’s paying for her lunch with a credit card, so she probably lives with a lot of credit card debt.

The woman behind the counter probably immigrated here within the past 10 years.  She may be educated in her home country, but if she has a degree, it’s probably not be considered to be equivalent here.  At least that’s what potential employers think.  She probably works at this crappy Chinese place because it’s the only type of job she can really find.  That or working at a nail salon, or some other place where customers expect the workers to have a thick accent.  She certainly couldn’t qualify for a more important office job, where communication is a key part of the work.

The Overweight Lady

So in case you haven’t already guessed this, the overweight woman in shabby yoga attire is me.  I walked into the hole-in-the-wall Chinese place at 2:30 pm on a Friday to get lunch.  Not because I just woke up at noon and threw on the clothes that were lying on the floor from yesterday, but because I got up at around 5:30 a.m. and chose shabby clothes to go work at my fourplex.  I got to the building early to start installing new ranges before meeting with the deck repair contractor at 7 am.  I was planning to change clothes and go to my day job as an attorney right after that, but at 8:30 a.m., I called into work and asked if they really needed me that day,  or if I could use a vacation day to get more done at the property.  They said I could take the day off.

So I used up my vacation day installing stoves, driving around town and making phone calls to find a place to buy iron handrails, driving to the cabinet store to order more cabinets for the kitchens, and only when it got to be 2:30 pm did I decide I needed to stop and grab something fast to eat so I could keep going.

Yeah, my car is filthy, because I don’t have a lot of time to wash it, and because I’m too cheap to pay to get it washed regularly.  I do wax it about once a year to maintain the paint, but spending $20 a week to keep the dirt off is silly to me.  (That’s $1,000 per year!  And what does your car look like at the end of the year?  Still dirty.)  My car is 7 years old, and it’s been paid off for some time.  I intend to drive it for at least another 1.5 years, and maybe longer, so I don’t pay too much on new car purchases.  And yes, I paid for my meal with a credit card because I get cash back on purchases.  I never carry a credit card balance.

The Conversation

I went to the counter and ordered my food.  While the woman behind the counter spooned it into a container for me, she asked if I was off of work already.  I said no, that I took a vacation day to work on a rental property.  She started asking me questions about it: where was it located?  How many units?  How much did I pay for it?  What was I doing to fix it up?  How much is the rent per unit?  What’s the mortgage payment?  How long until it’s paid off?

At first, I was a little shocked that she was asking such detailed questions, and I felt a little like my privacy was being invaded.  I’m not very shy about talking about money, but this was REALLY detailed.  I answered her questions, and I could see she was running numbers in her head.

“You own rental property, too, don’t you?” I asked her.  She brightened up, and said “Yes!”  I asked about her rental property.  She said it was located in Long Beach, and she told me the rents for each of her units.  She also told me her purchase price and mortgage amount, and how long until it was paid off.  At least she wasn’t being shy with her numbers after asking me to be so forthcoming.

She said she was having a really hard time getting her tenants to pay rent consistently.  I asked if it was in a good area of Long Beach, and she said it wasn’t.  I remember running the community demographics for certain areas of Long Beach when I was shopping for my own building, and some of those areas are ROUGH.  In certain zip codes or neighborhoods, the average income was somewhere around $10,000-20,000 per year, and unemployment and vacancy rates were very high.  It’s really critical to get a building in an area with good demographic numbers!

She said she had been having better success collecting rents now that she has a property manager.  It’s tough because it takes more of a bite out of her bottom line, but she said it just wasn’t working when she tried to manage it herself.  She said tenants would give her excuses and stories all the time about their rent payments.  I said “and I’ll bet they use your accent against you, too, claiming you didn’t understand what they were saying, or that they didn’t understand you, right?”  “Exactly!” she said.  That was one of the main reasons her property manager was getting more of the rents collected: the tenants didn’t have the language barrier excuse.  I felt bad for her for that.

I had to get going, so I thanked her for the conversation and went back to the building to get few hours’ worth of work in before heading home.

Surrounded by Millionaires

rich guy

Not all rich guys look like this.

Little interactions like this are a good reminder to me not to judge people by their appearances.  That’s true as applied to Ferrari drivers, as well as to Toyota drivers.  Not all people who appear to be rich are really that rich.  Not all of them are jerks, either.  Not all people who wear shabby clothes are poor, lazy, and uneducated.  Not all fast food workers do just that for a living.

The path to becoming a millionaire looks different for different people.  You can’t always look at the “after” and reverse-engineer how to get rich.  Look at Zuckerberg and how he got there.  Not everyone can start a company like Facebook.  Not everyone has the mental chops or financial ability to become a doctor or lawyer.  Not everyone can inherit a bunch of money from their parents or grandparents.

It’s tough to drive through Ferrari-land and not feel like it’s hopeless, and you’re never going to get there because you don’t have the same setup that those guys did when they first started out.  But those aren’t the only millionaires.  Start looking at the less-flashy folks and see how they did it.  Then look at what you’ve got to work with, and figure out what you can do.

Can you be the taxi cab driver who saved every dime he had to buy a tiny rental property, and saved every dime of the rental income and bought bigger and bigger properties, until he ended up with a $5 million building?  Maybe.  I’m referring to a real person, by the way.  He owned the 22-unit apartment building right next to our old building in La Habra.

Don’t compare yourself to others, and especially not to the uber-rich.  You have no idea what stage of life they’re in, or what their circumstances were.  Don’t let it discourage you.  Just figure out what you can do, and do your thing.  Keep your eyes and ears open, because there are millionaires all around you that you might learn from.  And try not to pre-judge other people, too.  You never know if the lady serving you cheap Chinese food is the one you’ll learn from that day.

Have you ever run into a stealth millionaire?  Are you one yourself?  What are your goals for financial freedom, and how are you planning to get there?