This article is an excerpt from the Shortform book guide to "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko. Shortform has the world's best summaries and analyses of books you should be reading.
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How can working for millionaires make you rich? What are the professions that serve the wealthy?
Working for millionaires can definitely make you rich because they spend a lot of money to get professional advice and services important to them. Lawyers, accountants, fund-raising experts, and healthcare specialists are some of the professions in demand among the wealthy.
Read more to further discover how working for millionaires can help you boost your income.
Benefits of Working for Millionaires
While they’re frugal in lifestyle, millionaires spend considerable money on things important to them. This creates opportunities for others to make money by catering to those needs. The wealthy need quality advice and services—for instance, accounting, tax advice, legal services, medical and dental care, education, and home services.
If you’re in a business or profession in demand among the wealthy, you can boost your income by working for millionaires. The opportunities are increasing as the number of millionaires continues to grow. (Shortform note: There are about 11.8 million millionaire households in the U.S. There were big jumps in the number in 2013 and 2017. The bull market has been a major factor.)
Besides needing personal services, millionaires who are self-employed also buy business and industrial supplies and services, office space, and technology.
Also, remember that the wealthy often aren’t frugal when spending on children and grandchildren. Nor are their children frugal in spending the subsidies they get from their wealthy parents. Each parent can give a child and grandchild up to $15,000 a year tax-free. This means a couple with three children and six grandchildren can give away $270,000 a year tax-free, in addition to tuition and medical care, which usually aren’t taxable.
Professions Serving the Wealthy
Professions and services in demand among the wealthy include:
While there may be too many law school graduates, there’s strong demand for high-powered attorneys in the following areas:
1) Estates: The wealthy need expert legal advice in handling their estates to minimize taxes and in distributing their wealth. In addition, attorneys working for millionaires will settle their estates, act as executors or administrators, and advise their surviving spouse.
2) Taxes: Income taxes are the largest income-consuming category for the wealthy. (Shortform note: The top 1% paid about 39% of all income taxes in 2017.) With income inequality growing, a concern of the wealthy is that the federal government may look for ways to tax wealth and raise income taxes. Tax attorneys are critical for building and maintaining their wealth.
3) Immigration: Increasing numbers of wealthy foreigners are looking to become U.S. citizens because of threats to their wealth in other countries as a result of lagging economies and government restrictions.
In countries such as China, many wealthy people also want to move their wealth out of the country to protect it. U.S. law allows foreign nationals to get visas and become U.S. citizens if they invest $1.8 million in a U.S. business and create at least 10 jobs. (Shortform note: this law was passed by Congress in 1990 and extended by President Trump in December 2019.)
As it becomes more difficult to immigrate to the U.S., more wealthy foreigners and entrepreneurs need the help of immigration attorneys. In addition, U.S. corporations need legal advice to recruit foreign professionals and scientists.
Health Care Specialists
A growing number of the wealthy pay for the health care of their children and grandchildren, creating a lucrative market for health care specialists working for millionaires. Many elective services and specialists are in demand, including cosmetic dentists, plastic surgeons, dermatologists, allergists, psychologists and psychiatrists, and chiropractors. Often, these expenses aren’t covered by health insurance.
In fact, an increasing number of specialists are focusing on the wealthy, self-paying market. It’s easier for them to deal directly with individual payers than with third-party bureaucrats. Further, medical specialists with the greatest reputations can charge high fees, while the wealthy avoid taxes by paying for their children’s and grandchildren’s health care directly.
Appraisers and Auctioneers
Millionaires often need appraisers and advisers to determine the value of assets—for example, family businesses; collections; guns; jewelry, gold, silver, and diamonds; and timber, farmland, and oil/gas rights.
They may seek advice from:
- Appraisers and auctioneers
- Coin, stamp, and antique dealers
- Pawn brokers (specialists in purchasing jewelry, diamonds, guns, and antiques)
- Real estate managers (those who provide assessment, rent collection, cleanup, and maintenance services)
Educational Institutions and Services
About 40% of the affluent pay for private schools, and the number is growing. So these schools are seeing enrollment growth, and the demand for counselors, teachers, and tutors is increasing. Demand may push up tuition costs and fees as well.
Along with attorneys, accountants play a role in the transfer of wealth. Accountants working for millionaires can be key advisors on how to distribute financial assets and other gifts, as well as how to minimize taxes. They can provide estate, trust, and gift tax advice; fiduciary services; asset valuation; and retirement planning. Accountants also may serve as co-executors (and receive a percentage of the estate).
In addition to the above, growth in the wealthy population means a bigger market for the following:
- Home-related services: Wealthy parents often provide homes or home-buying subsidies to children, which creates a need for: mortgage lenders, homebuilders and remodelers, real estate agents and developers, security consultants and systems, and interior design services.
- Fund-raising experts: Philanthropic and education organizations and foundations need development experts to identify and target wealthy donors.
- Travel consultants: There are marketing opportunities among the wealthy for resorts and planners and operators of cruises, safaris, and expensive vacations.
Finding the Opportunities
People interested in developing wealthy clients need to study the data on millionaire households, including states or regions with the highest concentrations of wealthy households. (Shortform note: The state with most millionaires per capita in 2018 was New Jersey, followed in order by the District of Columbia, Connecticut, Massachusetts, Hawaii, New Hampshire, California, Alaska, and Virginia. Source: MarketWatch)
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