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Wednesday, September 14, 2011

The Successful Habits of African-American Millionaires

Interesting. I normally pride myself on operating under the radar, but Dennis Kimbro, one of the two authors of Think and Grow Rich: A Black Choice, has figured me out…well almost. I imagine the bulk of Black millionaires are over 30, probably early 40′s, and embrace sports and golfing and tennis because they can’t move like they used to. Maybe they’re all family men and women, have or had positions of influence within a corporation, and left the hood so to speak; thus, subject to being under the influence of their Caucasian counterparts and suddenly love golf and tennis as sports.

I too, attend a local church at least twice weekly. Men’s bible study surely helps curb the usual, worldly temptations that power, prestige, and the ability to purchase property typically offer. I definitely slip in and out the back, low-key, and would rather have coworkers, family, and friends thinking I’m broke rather than affluent.

I hate to admit this, but Black folks can be a jealous, hateful bunch sometimes. I have family members that I haven’t seen in years talk trash behind my back, suggesting I’m living check to check because I don’t advertise my wealth in terms of clothing, cars, and jewelry. Image is not everything; stop watching BET videos.

In fact, I would argue that most millionaires are minimalists: financially, professionally, and personally. I genuinely embrace the concept of living lean because that’s how a millionaire runs his business, efficiently. Their checkbook and investment portfolio aren’t too far behind.Professionally, millionaires are often pretty good at calculating shortcuts. We’ll observe the business model and identify its cost driver and exploit it for success. Personally, it’s a lot cheaper to know someone that owns a yacht and condo in Maui, than owning it yourself-even if you’re a millionaire.

The Habits of African-American Millionaires (per Dr. Dennis Kimbrow, 3.5 years of data):
All surpassed SAT scores > 1000
Collegiate G.P.A. circa 2.9 (males) 3.4 (females)
At least 3.5 hours of physical activity per week
All earned at least a 100k/annually by 30
Appraised value of home valued at 300k or less (I bet nearly every American falls in the category!)
Attends church at 2x weekly
Attends a small church comprised of 2,500 people or less.
Get up at 5:30 and go retire by 11:00 p.m.
Most, modest, unassuming, and humble
Less than $10,000k in credit card debt
69% finished or attended college
One out of 5 Black millionaires were business majors.
Own 4 cars, one of which is a Lexus or Mercedes.
10-15% to charity (males) and 10-15% to church (females)
Men buy clothing off the rack, while women love the brands, St. John, Dolce & Gabbana, Gucci
Average Black millionaire is 52 years of age
Normally created 18 businesses or money-making ideas that are not successful until 18th attempt
3.2% of Black millionaires file for bankruptcy
Suits are often not worth more that $400 retail
Car is usually 5 years old
Married for at least 20 years

Most are confirmed. I’m not a business major though, but have always been interested in business. I always thought a bachelors degree in business, or anything else besides a STEM coursework (science, technology, engineering, and mathematics), would be too general and expendable in today’s struggling, competitive economy. I would only consider business in the form of an M.B.A. or 3 year joint M.B.A./.J.D. program.

Wow, 5:30 a.m.-11 p.m., not quite, but I’m a night owl and sleep when I have time. Sure, my car is about 5 years old, but it looks new. A $1,000 paint job would take care of any questions, but I’d rather let someone else drive off that depreciation and buy the vehicle at cost on a rainy day.

Not married, but why would I get married? Prenuptial agreements cost $20,000 and and barely enforceable, but the average weeding is $23,000. However, I’d be open to having a ceremony and honeymoon; I just don’t want to sign anything…lol. Who buys a stock (enter a marriage) that has a 50/50 chance of losing half its value within 5 years? Maybe when I’m 52…nah, I’ll pass.

Concerning credit card balances, it depends, I’ll borrow at 0% for 18 months (4% fee) an invest it hoping to make 100% over 12-18 months. Rinse, wash, and repeat until you reach your magical retirement number. For me, that’s a lot more than usual, due in part that a million dollars isn’t what is used to be.

Don’t get me wrong, golf, yoga, and lifting weights are great, but tennis? I love Serena and Venus too, but seriously, how many of us play tennis regularly? Hmm…I’d say none of us do, then again, I’m fortunate in that I’m a bit younger than most Black millionaires.

Buying clothes off the rack…check. Why? Because clothes don’t make me much money. I suppose if I was an attorney, financial consultant, or real estate professional by trade, I would think differently. Business meetings are the only exception, but how many people wear a $1,200 suit to a networking event? I can feel the hate as I walk through the door now. However, like cars and communication devices, items upon which African-Americans spend most of their disposable income, clothes are depreciating assets that quickly lose value after purchasing.

Expensive vehicles parked in a garage or nearby lot eat away at your bottom line in terms of costly insurance, gas, or the many upgrades you never use. I love that Lexus has a car, the LS 460, that can park itself, but should I drop another $10,000 for that feature. Nice clothes and expensive suits sort of hang in the closet, doing nothing, and immediately lose value upon wearing them in the local club: filled with smoke, soon to be spilled alcoholic drinks, and groupies that only want you because of your expensive gear.

“Oooh, who’s that? Girrrrl. Look at his watch-and did you see his car. He must be ballin’,” she says. Yes, the groupies, your future ex-wife awaits because those nice clothes and new car will cost you in the long run. The flesh is week bra and you will fall once she grinds you a few times and offers herself to you for the evening. Never mind the wear and tear to that Hugo Boss suit, you’ll drop $40-$60 for dry cleaning because you’re sure the red wine will wash right out. Avoid ‘groupie-grinding,’ as it’s the leading cause of divorce in this country. I suppose marriage is too if you think about it, 50/50 chance of success, but I digress.

When Dr. Kimbro mentions a Lexus and/or Mercedes as types of vehicles Black millionaire own, I was concerned. We own 4 cars, seriously? If it’s true, it must be related to media hype. If you’ve never had the pleasure of driving a 100k vehicle for awhile, trust me, the difference between a Mercedes sedan and Chysler 300 is negligible in terms of an $60,000 price difference. Let’s face it, you know that you’re not supposed to drive over 60 mph anyway and that both vehicles can reach that speed in less than 5 seconds.

Do you really expect to use all 8 horses in the engine in major traffic? I doubt it. Therefore, I urge you. No, I implore you…to not to purchase any vehicle over 20k. Mathematically, with respect to residual value, it doesn’t make millionaire-sense. Please observe the illustrations below:

According to, the above graph best represents what happens after two years of car ownership. This graph was generated using an automobile residual value tool from This particular chart is for a mix of American, Asian, and European mid-sized sedans, but the data trends look similar for almost any car type.

What we can glean from this information one should never buy a brand new vehicle. Purchase a car when it’s 2 years young and invest the money you would have spent on the car payment elsewhere (Rule of 72). Future posts on the Rule of 72 and How to Negotiate at a Car Dealership will come soon. Until then, I suppose you’re not going to listen to this advice, so I included a listing of the car models offer the best residual value.

I hate to live to up to a stereotype, but I listen hip-hop-still. Drake is one of my favorite lyricists at the moment and I thought he said it best when describing money in his hit “Successful,”

Ahh yeah Trey I fuckin’ feel ya…

They be starin’ at the money like it’s unfamiliar…

I get it-I live it to me there’s nothing realer…

just enough’ll solve your problems…

too much’ll kill you. —Drake

You should get it too, moderation in everything.

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