Making the Weak Weaker
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Jeff Hicks, MAI
President
Dohring Group RealWired! |
Two Ph.D.'s, Thomas Stanley and William Danko, wrote The Millionaire Next Door, a book investigating the question of who they are and how did they get there. The book provides some general demographics; generally males in their mid-to-late 50's with three children. Their household total annual income varies from a low of $131,000 to an average of $247,000, with an upper end of ($500,000-$1.0 million) and > $1.0 million representing only 8% and 5% respectively.
The book identifies their businesses as "dull normal", including mobile home park owners, welding contractors, auctioneers, pest-control companies and paving contractors. Their net worth averages $3.7 million. Two thirds of the group is self-employed with about one in five retired. Most have never felt disadvantaged, did not receive any inheritance and about 80% are first-generation affluent.
Key to their wealth creation and maintenance is that they live well below their means. Most wear inexpensive suits and drive modest American-made cars. They are fastidious investors. They tend to invest with the goal of good returns and will consider riskier investments if they're worth the reward. Their investments range from the stock market, private businesses and venture capital. They tend to not gamble or speculate on long odds.
The high consumption lifestyle that is often on display generally reflects the antithesis of this group - basically those with little or no investments that some define as "Big Hat No Cattle". I'm sure some appraisers from Texas will tell me if I'm not using this slang correctly. These Under Accumulator of Wealth folks may earn a high income, let's say $250,000 for a doctor, but their net worth is less than the product of their age and one tenth of their realized pretax income.
The millionaire group is also very big on not giving too much to their children, as it typically promotes weakness. I think this is an important lesson for all of us, particularly in our appraisal business. Do we allow our appraisers to largely ignore office-wide business solutions? Do we promote weakness by allowing them to blow off office systems and procedures that increase productivity? Do we idly sit by and watch our appraisers float around the rules? If you're a staff appraiser, are you actively engaged in your firm's success or are you myopically focused on things that only benefit yourself?
Appraising is in the details. We spend an inordinate amount of time confirming, sorting, analyzing and presenting details. Watching your collective value diminish due to others in your office operating in selfish cat-mode is like the above doctor that fritters away their hard earned cash. Leverage your company's assets, specifically your appraisers and support staff, by making them stronger through true collaboration. Ask for new ideas of how to better prepare your appraisal product. As a staff appraiser, contribute to that conversation.
As an appraiser, view yourself as your own investment vehicle providing a great investment return, low risk and believe that you're worth the reward. It's time for a "new normal", a more productive world with a strong emphasis on collaboration, office systems/procedures and automation through technology.
If you would like to join a discussion about this topic or Appraisal Best Practices, go to our blog or contact Jeff Hicks. 
