Sunday, July 19, 2020
Millionaires circa 2020
The snapshot of the "typical" millionaire has changed drastically since Stanley and Danko wrote their groundbreaking book "The Millionaire Next Door"
Stanley and Danko contended that the typical millionaire did not look like Thurston Howell, III from Gilligan's Island. Howell was "old money".
Stanley's findings were that the millionaires of the 1990s were almost invisible, they were small business owners.
A typical 1990s millionaire lived a frugal lifestyle. He lived in the same, modest house he had bought 25 years ago. It was the second house he had ever purchased. He was a plumber and employed 6-to-12 people, or was an auctioneer or owned an insurance business. Nearly all of his assets were tied up in his business.
He was very conservative.
The typical millionaire of 2020 is an upper-mid level executive. He is in the top 5% of nation for income grossing $200,000 a year or more. A significant portion of his assets are tied up in his house. In some parts of the country skyrocketing properties meant that all somebody had to do to become a millionaire was to purchase a house ten years ago and not treat it like an ATM as values went up.
The millionaire of today s very cocooned, very protected from the hurly-burly of everyday life. His "business" is not on Main Street. It does not have expensive plate-glass windows. He is an anonymous minion on the 7th floor of HQ and his personal reputation has little influence on the economic performance of the corporation he works for.
The millionaire of 2020 is more likely to be a liberal than a conservative.
Do you suppose the disconnect between the millionaires' actions and his assets might have something to do with that?
Let's push the chess pieces a little farther out on the board
These upper-mid level executives are the Field Officers of Corporate America.
They take orders from the Generals and execute the Generals' direction by creating action items for large blocks of underlings. The Field Officers delegate those actions to Company Officers to execute.
Tied to the orders the Field Officer passes to the Company Officers are authorities to access the resources needed to execute the orders.
You do the same thing when you hand your kid $50 and the keys and tell him to take the truck down to the gas station to fill the gas tank. But instead of a single, 17 year-old kid we are talking hundreds or thousands of employees.
The primary motivations for a typical Field Officer are a sense of duty, patriotism and loyalty.
The primary motivators for the upper-mid executive are wealth and power.
When things go poorly for the Field Officer's organization he is unlikely to bolt even when working 20 hour days.
When things go south in a Silicon Valley enterprise the executive ranks puke like a bulemic 22-year-old after a wedding reception.
What will the Colonels-and-Captains of Corporate America do when their $400,000 in home equity flips upside-down?
What will they do when the value of their stock options evaporate and their portfolio of $900,000 drops to $175K?
The Generals will stay in place. Their egos demand it. The Company Grade officers don't have that investment in ego.
What what will happen to all of the people who are vital links in the operations/logistics/planning activities when one of their prime motivators (wealth) takes a torpedo below the water-line?
What happens when those anonymous minions discover that there is a linkage between their actions (supporting Marxist organizations) and their assets?
"We pretend to work and they pretend to pay us"My guess is that we already have the answer. They will continue to go through the motions of executing their responsibilities but they will be slower and far less effective.
Never underestimate the power of Denial.